Chinese state media on Thursday accused the United States of a “mobster mentality” in its move to implement additional tariffs on Chinese goods and warned that Beijing had all the necessary means to fight back.

The comments marked a ratcheting up in tensions between the world’s two largest economies over a trade dispute, which is already affecting industries including steel and autos and is causing unease about which products could be targeted next.

Beijing late on Wednesday said it would slap additional tariffs of 25 percent on $16 billion worth of U.S. imports, in retaliation against news the United States plans to begin collecting 25 percent extra in tariffs on $16 billion worth of Chinese goods beginning August 23.

“The two countries’ trade conflict, which is merely push and shove at the moment, is likely to escalate into more than just a scuffle if the U.S. administration cannot marshal its mobster mentality,” state newspaper China Daily said in an editorial.

“China continues to do its utmost to avoid a trade war, but in the face of the U.S.’s ever greater demand for protection money, China has no choice but to fight back,” it said.

So far, China has now either imposed or proposed tariffs on $110 billion of U.S. goods, representing the vast majority of its annual imports of American products. Big-ticket U.S. items that are still not on any list are crude oil and large aircraft.

“China has confidence in protecting its own interests [and] has many means,” state broadcaster CCTV said on its early-morning news show.

Another commentary, written by China Institute of International Studies research fellow Jia Xiudong and published in the overseas edition of the People’s Daily newspaper, said the United States was trying to “suppress China’s development.”

China should consider “unconventional methods” such as the stimulus plan used by Beijing during the global financial crisis if needed to sustain economic growth, the Global Times newspaper, a tabloid published by the ruling Communist Party’s People’s Daily, said in a commentary.
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New York’s city council on Wednesday dealt a blow to Uber and other car-for-hire companies, passing a bill to cap the number of vehicles they operate and impose minimum pay standards on drivers.

The city of 8.5 million is the biggest app-ride market in the United States, where public transport woes and astronomical parking costs have helped fuel years of untamed growth by the likes of Lyft, Uber and Via.

But that growth has brought New York’s iconic yellow cabs to their knees. Since December, six yellow cab drivers have committed suicide. Those deaths have been linked, at least in part, to desperation over plummeting income.

The bill stipulates a 12-month cap on all new for-hire-vehicle licenses, unless they are wheelchair accessible, as well as minimum pay requirements for app drivers — regulated by the Taxi and Limousine Commission (TLC).

It makes New York the first major city in the United States to limit the number of app-based rides and to impose pay rules for drivers.

A recent TLC-commissioned study recommended a guaranteed income of $17.22 an hour for drivers — $15, plus a supplement to mitigate against rest time.

New York Mayor Bill de Blasio, a progressive Democrat, vowed to sign the bill into law, proclaiming that it would “stop the influx of cars contributing to the congestion grinding our streets to a halt.”

“More than 100,000 workers and their families will see an immediate benefit from this legislation,” de Blasio said.

Around 80,000 drivers work for at least one of the big four app-based companies in New York, compared to 13,500 yellow cab drivers, according to the recent TLC-commissioned study.

The increased competition has slashed the value of yellow cab taxi licenses, from more than $1 million in 2014 to and less than $200,000 today.
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China and Germany defended their business ties with Iran on Wednesday in the face of President Donald Trump’s warning that any companies trading with the Islamic Republic would be barred from the United States.

The comments from Beijing and Berlin signaled growing anger from partners of the United States, which reimposed strict sanctions against Iran on Tuesday, over its threat to penalize businesses from third countries that continue to operate there.

“China has consistently opposed unilateral sanctions and long-armed jurisdiction,” the Chinese foreign ministry said.

“China’s commercial cooperation with Iran is open and transparent, reasonable, fair and lawful, not violating any United Nations Security Council resolutions,” it added in a faxed statement to Reuters.

“China’s lawful rights should be protected.”

The German government said U.S. sanctions against Iran that have an extra-territorial effect violate international law, and Germany expects Washington to consider European interests when coming up with such sanctions.

The reimposition of U.S. sanctions followed Trump’s decision earlier this year to pull out of a 2015 deal to lift the punitive measures in return for curbs on Iran’s nuclear program designed to prevent it from building an atomic bomb.

Iran’s highest authority, Supreme Leader Ayatollah Ali Khamenei, said meanwhile the country had nothing to be concerned about, a report on his official website said in an apparent reference to the imposition of the U.S. sanctions

“With regard to our situation do not be worried at all. Nobody can do anything,” Khamenei said recently, the website reported. “There is no doubt about this.”

Iranian President Hassan Rouhani, speaking in a meeting with North Korea’s foreign minister, said that America could not be trusted, according to the Islamic Republic News Agency.

“Today, America is identified as an unreliable and untrustworthy country in the world which does not adhere to any of its obligations,” Rouhani said.

Tuesday’s sanctions target Iran’s purchases of U.S. dollars, metals trading, coal, industrial software and the auto sector.

Trump tweeted on Tuesday: “These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States.”

Europeans withdraw

European countries, hoping to persuade Tehran to continue to respect the deal, have promised to try to lessen the blow of sanctions and to urge their firms not to pull out. But that has proved difficult: European companies have quit Iran, arguing that they cannot risk their U.S. business.

Among those that have suspended plans to invest in Iran are France’s oil major Total, its big carmakers PSA and Renault, and their German rival Daimler.

Danish engineering company Haldor Topsoe, one of the world’s leading industrial catalyst producers, said on Wednesday it would cut around 200 jobs from its workforce of 2,700 due to the new U.S sanctions on Iran, which made it very hard for its customers there to finance new projects.

The chief executive of reinsurance group Munich Re said it may abandon its Iran business under pressure from the United States, but described the operation as very small.

Turkey, however, said it would continue to buy natural gas from Iran.

“Simplistic idea”

In Tehran, Iranian Foreign Minister Mohammad Javad Zarif was quoted by an Iranian newspaper as saying that a U.S. plan to reduce Iran’s oil exports to zero would not succeed.

U.S. officials have said in recent weeks that they aim to pressure countries to stop buying oil from Iran in a bid to force Tehran to halt its nuclear and missile programs and involvement in regional conflicts in Syria and Iraq.

“If the Americans want to keep this simplistic and impossible idea in their minds they should also know its consequences,” Zarif told the Iran newspaper. “They can’t think that Iran won’t export oil and others will export.”

Rouhani hinted last month that Iran could block the Strait of Hormuz, a major oil shipping route, if the U.S. attempted to stop the Islamic Republic’s oil exports.

Trump responded by noting that Iran could face serious consequences if it threatened the United States.

“The Americans have assembled a war room against Iran,” Zarif said. “We can’t get drawn into a confrontation with America by falling into this war room trap and playing on a battlefield.”

Iran has dismissed a last-minute offer from the Trump administration for talks, saying it could not negotiate while Washington had reneged on the 2015 deal to lift sanctions.

In a speech hours before the sanctions were due to take effect on Tuesday, Rouhani rejected negotiations as long as Washington was no longer complying with the deal.

“If you stab someone with a knife and then you say you want talks, then the first thing you have to do is remove the knife,” Rouhani said in a speech broadcast live on state television.
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China’s exports to the United States surged last month as its merchants rushed to fill orders ahead of a jump in U.S. tariffs on Chinese goods.

Its shipments to the United States climbed 13 percent in July from a year earlier, to $41.5 billion, after a roughly similar rise in June, customs data show.

At the same time, Beijing’s trade surplus with the United States — a frequent source of anger and threats from President Donald Trump — grew 11 percent to $28 billion.

Chinese exporters appear to be trying to ship their goods to the United States before tariffs that Trump is imposing in a fight over technology policy take full effect. The trade war between the world’s two biggest economies has forced many multinational companies to reschedule purchases and rethink where they buy materials and parts to try to dodge or blunt the effects of tit-for-tat tariffs between Washington and Beijing.

Beijing has warned that its exporters face “rising instabilities” after Washington slapped 25 percent duties on $34 billion of Chinese goods last month in response to complaints that China steals or pressures foreign companies to hand over technology. Beijing has retaliated against the U.S. tariffs with higher duties on a similar amount of American goods.

On Tuesday, the Trump administration announced that it would proceed with previously announced 25 percent tariffs on an additional $16 billion of Chinese imports starting Aug. 23. On Wednesday, China hit back by saying it would impose identical 25 percent punitive duties on $16 billion of U.S. goods, including cars, crude oil and scrap metal, also to take effect Aug. 23.

A Commerce Ministry statement labeled Trump’s decision to go ahead with the latest U.S. tariffs “very unreasonable.” Beijing’s retaliatory move was a “necessary response” to “safeguard its legitimate interests,” the ministry said on its website.

Escalating its tensions with Beijing, the Trump administration has also threatened to impose penalties on an additional $200 billion in Chinese exports to the United States. Beijing says it is ready to retaliate against $60 billion of American imports. (Beijing cannot tax an equal amount of U.S. products, because the United States exports far fewer goods to China than it imports.)

Tariffs are taxes on imports. They are meant to protect homegrown businesses and put foreign competitors at a disadvantage. But the taxes also exact a price on domestic businesses and consumers who buy imports and end up paying more for them.

In July, China’s global exports surged 12 percent, even faster than an 11 percent increase in June. At the same time, overall imports to China jumped 27 percent last month.

Exports to the rest of the world might have been boosted by a weaker Chinese currency. The yuan has declined by 8 percent this year against the dollar and by about 4 percent against a basket of global currencies. A weakening currency makes a nation’s goods more affordable for overseas buyers.

China’s trade conflict with the United States, coupled with weakening global demand, has compounded the challenges for Beijing. Economic growth has slowed since regulators tightened controls on bank lending to rein in surging debt.

The unusually strong July import figures reflected higher prices, according to Julian Evans-Pritchard of Capital Economics.

“We expect export growth to cool in the coming months, though this will primarily reflect softer global growth rather than U.S. tariffs,” Evans-Pritchard said in a report. “Import growth is likely to slow as domestic headwinds continue to weigh on economic activity.”

China’s global trade surplus narrowed by 40 percent from a year earlier to $28 billion. In the meantime, its trade gap with the 28-nation European Union contracted 8 percent to $11.2 billion.

China is running out of American goods to hit with retaliatory tariffs given the two nations’ lopsided trade balance. Last year’s imports from the United States totaled about $130 billion. That leaves only about $20 billion for penalty tariffs after increases that have already been imposed or threatened on U.S. goods are counted.

Beijing has stepped up efforts, so far without success, to recruit governments including Germany and France as allies. Those nations have criticized Trump’s tactics, but they share U.S. complaints about Chinese industrial policy and market barriers.
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U.S. President Donald Trump predicted Tuesday the United States and China will have a “fantastic trading relationship” but one that will be different from the way it has been under previous presidents.

Speaking to a group of invited business leaders, Trump said he wants China to do well, but also wants Chinese policies to treat the United States fairly.

Trump has frequently highlighted China as a target of what he says are unbalanced trade relationships he wants to alter in order to benefit American workers. He has implemented more than $30 billion in new tariffs on Chinese goods, and on Tuesday his administration said another $16 billion in tariffs would go into effect later this month.

China has said it plans to counter with tens of billions of dollars in tariffs on U.S. exports. It also released its latest trade figures Tuesday showing a surge in exports in July despite the U.S. actions.

Paul Hanke, a professor of applied economics at the Johns Hopkins University and a former Reagan Administration trade official, told VOA the U.S. trade deficit with China is “really not a problem.”

He compared the situation to the trade deficit the United States had with Japan in the 1980s that prompted President Ronald Reagan to institute the type of protectionist policies Trump is now supporting. But Hanke said he expects China to have a stronger response than the Japanese did.

“China is a big power and they’re going to play hard ball with the United States, so this will get worse, not better,” he said.

Trump said Tuesday his administration has already used tax cuts, deregulation and trade policies to boost the U.S. economy, which grew by 4.1 percent in the second quarter of this year.

The president falsely asserted that level of growth was a record, or close to a record. Since 2011, the U.S. economy has posted three separate quarters above 4.7 percent growth.

Trump predicted his policies would push growth even higher, surpassing percent in the next quarter “as trade deals come in” that are “sane and fair for our country.”

He also said that next week the White House would make an announcement regarding his goal of making prescription drugs more affordable.

Trump gave no details other than to say the coming action would “get them down really, really substantially.”

During Tuesday’s event he highlighted his objection last month to planned price increases by pharmaceutical giant Pfizer, which quickly rolled back it prices to prior levels. Pfizer said it would keep the old prices until Trump can put in place a plan to strengthen the healthcare system, or the at the end of the year, whichever comes first.

Victor Beattie contributed to this report.
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New York City’s iconic but imperiled yellow cab industry may be getting help from lawmakers who want to pump the brakes on fast-expanding ride-hailing services like Uber and Lyft.

In what would be a first-in-the-nation step if passed, the City Council on Wednesday is set to vote on proposals that would cap new licenses for car service drivers for one year while officials study the massive changes rippling through the taxi industry.

Other proposals would set minimum pay levels for all drivers and minimum fares, which are now regulated for traditional cabs but not their multitudes of new competitors.

The legislation is a reaction to stories of financial hardship told by drivers, who complain that there are so many Uber cars on the road now that it is getting hard for anyone to make a decent living.

“There has to be a pause button that’s going to give people some breathing room,” said Bhairavi Desai, of the New York Taxi Workers Alliance.

City Council Speaker Corey Johnson said lawmakers aren’t against the ride-hailing newcomers. “We think they’ve actually filled a need,” he said. “We also believe there needs to be a regulatory framework in place.”

For generations, taxi drivers in New York were protected by rules that restricted competition. Around 13,500 yellow cabs had the special licenses, called medallions, needed to pick up passengers on the street. Several thousand more drivers worked for black car companies that dispatched vehicles by phone, mostly in the outer boroughs of Bronx, Queens, Staten Island and Brooklyn, where yellow cabs generally wouldn’t travel.

That system was smashed when the city began allowing passengers to use smartphone apps to hail cars almost anywhere.

The change kicked off a dizzying increase in the number of car service drivers from about 65,000 in 2015 to 100,000 now.

$1 million taxi medallions

One unforeseen development has been plunging value of the traditional taxi medallions. As recently as four years ago, they were changing hands at prices reaching $1 million. They were considered such a ticket to guaranteed income, banks allowed owners to borrow huge sums against them for home mortgages or school loans.

Now, many of those loans are coming due. Drivers no longer have the income to pay them off. And with medallions now trading at $200,000 or less, owners don’t have the collateral to refinance.

Driver Lal Singh said he owes $312,000 on a medallion he thought would be his ticket to middle-class comfort. But he can’t sell at a price high enough to cover his debt. So at age 62, he’s still driving 14-hour shifts, despite having high blood pressure and diabetes, with every penny going to pay off his debt.

“Everybody say, ‘This is my retirement. Some income will come in from the medallion. We will survive,'” he said. “But now we have no hope and I don’t see any place, which direction I should go.”

Six drivers have taken their own lives in the last year, including one who shot himself in his car in front of City Hall after railing against politicians and Uber in a newsletter column.

“I will not be a slave working for chump change,” Douglas Shifter wrote. “I would rather be dead.”

Drivers previously pushed for a cap on new competition in 2015, but were beaten back by ride-hailing companies. The same companies are now pushing back on the new proposals, saying they would prevent them from replacing drivers who quit and lead to reduced service.

“We’re really concerned about the process and the speed with which the council is trying to ram this through,” said Joseph Okpaku, vice president of public policy at Lyft.

Racial profiling argument

Uber spokesman Josh Gold said a cap on new licenses would reverse the progress made extending service to neighborhoods poorly served by traditional taxis.

That argument has gotten support from some civil rights activists like the Rev. Al Sharpton, who have long criticized the yellow cab industry for discrimination and profiling of minorities.

“They’re talking about putting a cap on Uber, do you know how difficult it is for black people to get a yellow cab in New York City?” Sharpton wrote on Twitter.

The level of upheaval in the industry hasn’t been seen on this scale since the first half of the 20th century, when the medallion system was put in place to deal with issues of competition, said Graham Hodges, a professor at Colgate University.

Flaws in that system, like racial profiling and inadequate demand, “made it easy for Uber, Lyft and the others to come in, say, ‘We’re going to provide a much better service,”‘ he said.

“That doesn’t mean those flaws couldn’t be remedied without destroying the system,” he said.
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Venezuela’s state-run oil company PDVSA has limited the damage from an unprecedented slump in crude exports by transferring oil between tankers at sea and loading vessels in neighboring Cuba to avoid asset seizures.

But the OPEC member nation is still fulfilling less than 60 percent of its obligations under supply deals with customers. Venezuela has been pumping oil this year at the lowest rate in three decades after years of underinvestment and a mass exodus of workers. The state-run firm’s collapse has left the country short of cash to fund its embattled socialist government and triggered an economic crisis.

PDVSA’s problems were compounded in May when U.S. oil firm ConocoPhillips began seizing PDVSA assets in the Caribbean as payment for a $2 billion arbitration award. An arbitration panel at the International Chamber of Commerce (ICC) ordered PDVSA to pay the cash to compensate Conoco for expropriating the firm’s Venezuelan assets in 2007.

The seizures left PDVSA without access to facilities such as Isla refinery in Curacao and BOPEC terminal in Bonaire that accounted for almost a quarter of the company’s oil exports. Conoco’s actions also forced PDVSA to stop shipping oil on its own vessels to terminals in the Caribbean, and then onto refineries worldwide, to avoid the risk the cargoes would be seized in international waters or foreign ports.

Instead, PDVSA asked customers to charter tankers to Venezuelan waters and load from the company’s own terminals or from anchored PDVSA vessels acting as floating storage units.

The state-run company told some clients in early June it might impose force majeure, a temporary suspension of export contracts, unless they agreed to such ship-to-ship transfers. PDVSA also requested the customers stop sending vessels to its terminals until it could load those that were already clogging Venezuela’s coastline.

Initially, customers were reluctant to undertake the transfers because of costs, safety concerns and the need for specialist equipment and experienced crew.

But PDVSA has managed to export about 1.3 million barrels per day (bpd) of oil since early July, up from just 765,000 bpd in the first half of June, according to Thomson Reuters data and internal PDVSA shipping data seen by Reuters.

That was still 59 percent of the country’s 2.19 million bpd in contractual obligations to customers for that period, and some vessels are still waiting for weeks in Venezuelan waters to load oil.

There were about two dozen tankers waiting this week to load over 22 million barrels of crude and refined products at the country’s largest ports, according to Reuters data.

“We are not tied to one option or a single loading terminal,” PDVSA President Manuel Quevedo said on Tuesday of the company’s exports. “We have several (terminals) in our country and we have some in the Caribbean, which of course facilitate crude shipping to fulfill our supply contracts.”

Cuban connection 

PDVSA has also used a route through Cuba to ease the impact of the Conoco seizures. That route is for fuel rather than crude.

The Venezuelan company has used a terminal at the port of Matanzas as a conduit mostly for exporting fuel oil, according to two people familiar with the operations and Thomson Reuters shipping data. Venezuela’s fuel oil is burned in some countries to generate electricity.

Two tankers set sail from the Matanzas terminal for Singapore between mid-May and early July, Reuters data showed. Each ship carried around 500,000 barrels of Venezuelan fuel, Reuters data shows.

In recent months, Venezuela has been shipping fuel to Matanzas in small batches, according to the data.

PDVSA and Cuba’s state-run oil firm Cupet have used Matanzas to store Venezuelan crude and fuel in the past but exports from the terminal to Asian destinations are rare.

That is in part because vessels that use Cuban ports cannot subsequently dock in the United States due to the U.S. commercial embargo on Cuba.

Cupet did not respond to requests for comment. PDVSA has also used ship-to-ship transfers to fulfill an unusual supply contract it has with Cuba’s Cienfuegos refinery.

The refinery dates from the 1980s — when Cuba was a close ally of the Soviet Union during the Cold War — and the facility was built to process Russian crude.

PDVSA typically uses its own or leased tankers to bring Russian crude from storage in the nearby Dutch Caribbean island of Curacao to Cienfuegos. But it is now discharging the imported Russian oil at sea in Cayman Islands’ waters via these seaborne transfers.

ConocoPhillips last month ratcheted up its collection efforts by moving to depose officials from Citgo Petroleum, PDVSA’s U.S. refining arm, arguing it had improperly claimed ownership of some PDVSA cargoes. Citgo declined to comment.

ConocoPhillips is also preparing new legal actions to get Caribbean courts to recognize its International Chamber of Commerce arbitration award. If it succeeds in those efforts, it would be able to sell the assets to help satisfy the ruling.
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Already threatened by escalating U.S. taxes on its goods, China is about to find it much harder to invest in U.S. companies or to buy American technology in such cutting-edge areas as robotics, artificial intelligence and virtual reality.

President Donald Trump is expected as early as this week to sign legislation to tighten the U.S. government’s scrutiny of foreign investments and exports of sensitive technology.

The law, which Congress passed in a rare show of unity among Republicans and Democrats, doesn’t single out China. But there’s no doubt the intended target is Beijing. The Trump administration has accused China of using predatory tactics to steal American technology.

“As a policy signal, it speaks with a very loud voice,” said Harry Clark, head of the international trade practice at the law firm Orrick. “Leading decision makers and Congress are very concerned about technology transfer to China.”

The Trump administration has already imposed tariffs on $34 billion in Chinese exports, is preparing taxes on a further $16 billion and has threatened to target an additional $200 billion of Beijing’s exports and maybe still more.

As part of the same punitive campaign, Trump had initially ordered the Treasury Department to draft investment restrictions aimed specifically at China. But in late June, Trump decided instead to back Congress’ effort to tighten existing investment restrictions and export controls on all countries, rather than China alone.

The new law strengthens reviews of foreign investment by the existing Committee on Foreign Investment in the United States, or CFIUS, which is led by Treasury Secretary Steven Mnuchin. The committee can now review any investments that grant foreigners access to a U.S. company’s high-tech trade secrets. Before the change, such reviews were done only when a foreigner gained control of a company.

The new law also gives the committee oversight of real estate deals that are deemed to pose a national security risk by putting foreigners in “close proximity” to government offices and military bases. The legislation will also crack down on deals that appear structured to evade such oversight.

Congress is also directing the committee to go beyond specific cases to identify patterns in foreign investment — if, for example, Chinese companies are acquiring a specific technology — and to work with U.S. allies that share its concerns about Beijing’s high-tech ambitions.

“Treasury can now share information,” said Rod Hunter, a partner at the Baker McKenzie law firm and a former White House economic adviser. “They used to have to do all kinds of backflips and workarounds with allied governments to deal with this sort of issue.”

The new law also strengthens the Commerce Department’s oversight of high-tech exports. Government agencies will identify sensitive “emerging and foundational technologies” that will be subject to tougher export controls.

Hunter said he thought the stricter oversight of high-tech exports could potentially impose a bigger impact on China than the tariffs the Trump administration has imposed on Beijing’s exports to the United States.

Still, the new measures could burden U.S. companies that will find it harder to attract Chinese investment or to share with Chinese partners or customers technology that the U.S. government might deem sensitive.

“It could be that we’re pushing American tech firms out of China,” said Derek Scissors, China specialist at the conservative American Enterprise Institute.

The crackdown reflects a sharp reversal in U.S. attitudes toward Chinese investment. From virtually nothing in 2000, Chinese direct investment in the United States (including new plants and offices and acquisitions of American companies) reached a record $46 billion in 2016, according to the Rhodium Group research firm.

Chinese investors sank money into U.S. companies involved in artificial intelligence, robotics and blockchain technology, which is used to do business in cryptocurrencies. U.S. policymakers began to worry about what the Chinese were up to, especially after leaders in Beijing made their ambitions clear: They intend to nurture homegrown Chinese companies that will contend for global dominance in such fields as electric cars, robotics and medical devices.

In March, the Office of the U.S. Trade Representative reported that Chinese investors were using money provided by Beijing to outbid private companies and pay above-market rates for technology and talent. And last year, a Defense Department report sounded the alarm about China obtaining technology that could have military uses.

“The line demarcating products designed and used for commercial versus military purposes is blurring,” said the report from the Pentagon’s Defense Innovation Unit Experimental.

It noted that virtual-reality gaming was becoming as sophisticated as what the armed forces use for battlefield simulations and that facial recognition technology used in social media can track terrorists.

Even before the new law, U.S. reviews of Chinese investments were becoming stricter. In January, the government effectively blocked the acquisition of the Dallas-based money transfer service MoneyGram by the Chinese firm Ant Financial. Its concern was that the deal would give China access to the financial records of millions of Americans, including members of the military.

The result has been a deepfreeze in direct Chinese investment in the United States: It tumbled 36 percent last year to $29 billion. In the first half of this year, such investment dropped to its lowest level in seven years — $1.8 billion — down 90 percent from the first six months of 2017, according to Rhodium Group.
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China appears poised to fill the gap in Iran left by French automakers who closed their Iranian operations before the reimposition of U.S. sanctions on Tehran.

The Chinese move could open yet another dispute between Washington and Beijing, adding to the acrimony between the two, which are locked in an escalating trade dispute.

European automakers

French automaker Renault, which had an eight percent share of the Iranian automotive market, the 12th largest in the World, announced last month that it would join more than 100 international companies that have pulled out of Iran to comply with U.S. sanctions, reimposed beginning Tuesday, despite the fact Renault has no operations in the United States.

Peugeot announced its departure in June, it had a 34 percent market share in Iran, selling about 500,000 cars a year.

German automaker Daimler has also announced it has “suspended [its] activities in Iran, which were anyway very limited, until further notice according to applicable sanctions.”

President Trump’s decision in May to withdraw from the 2015 nuclear deal, signed by his predecessor Barack Obama, in which Tehran agreed to nuclear curbs in return for sanctions relief, has paved the way for the restoration of unilateral American economic penalties on Iran beginning Tuesday.

The U.S. sanctions come in two phases, the next phase kicks in on November 4. While ratcheting up pressure on Tehran, the sanctions are worsening rifts with European allies and other world powers.

First phase sanctions

The first phase of U.S. sanctions prohibit any transactions with Iran involving dollar bank notes, gold, precious metals, aluminum, steel, commercial passenger aircraft, shipping and Iranian seaports. The Trump administration blames Iran for fomenting instability in the Middle East and encouraging terrorism.

In a statement, Monday Trump repeated his description of the 2015 nuclear deal as a “horrible, one sided” agreement. He said the Iranian government “faces a choice: Either change its threatening, destabilizing behavior and reintegrate with the global economy, or continue down a path of economic isolation.”

“For Renault to explicitly express their desire to comply with U.S. law, even though they do not have any existing American operations, suggests that even the prospect of future U.S. business is far more enticing than anything they currently have in Iran,” said David Ibsen of United Against Nuclear Iran, an advocacy group chaired by former U.S. Senator Joe Lieberman.

Renault has said it will increase operations in Africa to try to offset what it loses by exiting Iran.

State-owned and private auto companies currently assembling or importing Chinese models have a nearly 10 percent share of the Iranian market, which analysts say will likely expand rapidly in the wake of the French departure. Chinese enterprises currently command a 50 percent share of auto parts imported into Iran.

China’s strategy

China has made no formal announcement of an intention to expand its auto trade in Iran. But the al-Monitor news site reported Iran Khodro, the country’s largest car manufacturer and assembler of foreign cars, recently told its salesmen to promote to customers China’s H30 Cross, made by Dongfeng Fengshen, as a replacement for Renault’s Tondar 90.

Other Chinese car manufacturers present in Iran include Chery and Brilliance, whose H330, assembled in Iran by Saipa, is among the top 10 best-selling cars in the country.

China’s ambassador to Tehran, Pang Sen, met Monday with influential lawmaker Alaeddin Boroujerd and reiterated Beijing’s opposition to U.S. sanctions on Iran. According to the Tehran Times, the Chinese envoy said closer cooperation between Tehran and Beijing would help neutralize the impact of the sanctions.

Expected impact

In a briefing for reporters Monday in Washington, senior U.S. administration officials didn’t directly address China’s auto trade with Iran, but asked specifically about China, they said they remained confident U.S. diplomatic and economic pressure on Beijing would have an impact and already had, they suggested, considering the dire economic plight Iran has found itself in since the reimposition of sanctions was announced.

“If the sanctions were not going to be effective, I don’t think you would have seen the trajectory of Iran’s economy over the last 90 days. I mean, it would have been the opposite, if China were going to rescue them,” said one of the officials, who undertook the briefing on the conditions of anonymity.

But China has rebuffed President Trump’s efforts to persuade Beijing to cut Iranian oil imports, Bloomberg reported four days ago. But U.S. officials said the Chinese had agreed not to increase purchases of Iranian crude, although last month China lifted monthly oil imports from the country by 26 percent. China is the world’s top crude oil buyer and Iran’s biggest customer.

 

 
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The baobab tree dots the dry African savannah from Senegal to Madagascar. It yields a fruit that’s been described as a superfood popular in the United States and Europe. With an increasing global appeal, local farmers say business is booming… but some worry that worldwide sales of the crop are not sustainable. Arash Arabasadi reports.
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President Donald Trump has been busy on the congressional campaign trail lately, eager to tout the strong U.S. economy on behalf of Republican candidates leading up to this year’s midterm elections in November. But the president has also repeatedly launched Twitter attacks over the Russia probe, his border wall, and what he believes is unfair media coverage — attacks Republicans fear will distract from his economic message. VOA national correspondent Jim Malone has more from Washington.
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Chinese state media are reacting to U.S. President Donald Trump’s trade actions against China in diverse ways. While denouncing the U.S. leader’s actions, Beijing is also using its media to calm markets and express concern about the impact on the Chinese economy.

An editorial in the Communist Party’s People’s Daily said that by raising tariffs and then offering negotiations, the Trump administration is trying to use “carrot-and-stick diplomacy to bully China into unilateral trade concessions.” The paper went on to say “China will eventually defeat the trade blackmail of the U.S. and it is impossible to force China into surrender to the U.S. coercion.”

However, a Chinese senior official attached to the country’s Supreme Court recently expressed worry that the trade friction with the U.S. would result in bankruptcies for state-owned companies.

“It is hard to predict how this trade war will develop and to what extent,” Du Wanhua, deputy director of an advisory committee to the Supreme People’s Court said in an article also in the People’s Daily.

“But one thing is sure: if the U.S. imposes tariffs on Chinese imports following an order of $60 billion, $200 billion, or even $500 billion, many Chinese companies will go bankrupt,” he said.

Ineffective retaliation

Beijing recently slapped additional duties ranging from five to 25 percent on $60 billion worth of American goods. This was in response to Trump administration’s proposal of a 25 percent tariff on $200 billion worth of Chinese imports.

Experts said China has realized that retaliatory action would not persuade the U.S. President to stop his trade actions.

“They switched gear a bit because, I think, they realized that they have the weaker hand here in terms of their ability to retaliate, partly because they import far less from the U.S. than the U.S. imports from China, but also [because] a portion of [goods] they import from the United States is, you know, high-tech that are quite difficult to import from elsewhere,” Julian Evans-Pritchard, senior China economist at Capital Economics told VOA.

Washington says its actions are aimed at correcting the level playing field because the U.S. suffers from a severe trade deficit in its business with China.

Reassuring markets

Chinese officials are trying to reassure markets and the local population that the U.S. moves would have little impact. Huang Libin, a spokesman for the Ministry of Industry and Information Technology recently said there has not been any significant impact on industrial output.

“We hear complaints from [Chinese] companies that U.S. clients have requested a suspension of orders and deliveries, but so far it has had only a limited impact on the industrial sector,” he said.

The state-run Global Times, responded to White House economic adviser Larry Kudlow’s remarks that China should not underestimate Trump’s resolve, saying that China was not afraid of “sacrificing short-term interests”. “China has time to fight to the end. Time will prove that the U.S. eventually makes a fool of itself,” the paper said.

The official China Daily has joined government officials in an effort to reassure the market. “Market participants foresee a relatively stable Chinese currency in the near term, without fear of impacts from the U.S.-China trade dispute. They expect solid economic growth momentum amid policy fine-tuning,” it said.

“Leading China’s economy on a stable and far-reaching path, we have confidence and determination,” another commentary in the main edition of the People’s Daily said.

Another reason China is worried is because Washington’s actions have come when the domestic Chinese economy is going through a bad time. The last three months have seen a series of corporate defaults besmirching China’s reputation for many fewer loan defaults as compared to most developed countries.

“[The] economy is now slowing and balance sheets are coming under strain after they tightened monetary policy last year and pushed up borrowing costs. This is the main reason why we are seeing this uptrend in bankruptcies and uptrend in corporate bond defaults,” Evans-Pritchard said. “I think the main driver is domestic. Obviously, the U.S. tariffs won’t help and they are going to cause some damage,” he said.

In its latest report, Capital Economics said that it would be naive to dismiss the possibility of financial instability given the rapid rise in debt levels in the country over the past decade. Chinese banks face the grave emerging scenario of bad loans and non-performing assets weighing heavily on their balance sheets, it said.

 
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Longtime PepsiCo CEO Indra Nooyi will step down as the top executive and the world’s second-largest food and beverage company.

Nooyi, who was born in India, is a rarity on Wall Street as a woman and a minority leading a Fortune 100 company. She oversaw the company during a turbulent time in the industry that has forced PepsiCo, Coca-Cola Co., Campbell Soup Co. and Mondelez International Inc. to shake up product portfolios that had been the norm for decades as families seek healthier choices.

 

Nooyi, 62, has been with PepsiCo Inc. for 24 years and has held the top job for 12.

 

Ramon Laguarta, who has been with the company for more than two decades, will take over as CEO in October, the company said Monday. Nooyi will remain as chairman until early next year.

 

“Today is a day of mixed emotions for me. This company has been my life for nearly a quarter century and part of my heart will always remain here,” Nooyi said in a prepared statement. “But I am proud of all we’ve done to position PepsiCo for success, confident that Ramon and his senior leadership team will continue prudently balancing short-term and long-term priorities, and excited for all the great things that are in store for this company.”

 

Nooyi took over as CEO in October 2006. Between 2007 and 2017, revenue at Pepsico has risen about 61 percent.

 

The 54-year-old Laguarta has held various positions in his 22 years at PepsiCo, which is based in Purchase, New York. He currently serves as president, overseeing global operations, corporate strategy, public policy and government affairs. He previously served as CEO of the Europe Sub-Saharan Africa region. Prior to joining PepsiCO, Laguarta worked at confectionary company Chupa Chups.

 

Laguarta will be the sixth CEO in PepsiCo’s history, with all of them coming from within the company.

 

 
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Russia engaged in more extensive oil exports to North Korea than had been previously reported, by setting up an illicit trade network that is likely still being used today to evade United Nations sanctions, according a South Korean research organization.

A recent report issued by the Asan Institute for Policy Studies in Seoul used Russian customs data to document how “one North Korean state enterprise purchased 622,878 tons of Russian oil worth $238 million,” between 2015 and 2017.”

While China is North Korea’s main oil supplier, the ASAN estimate for Russian oil exports to North Korea is significantly higher than the $25 million in sales for the same period that was reported by the Korea International Trade Association (KITA) in Seoul.

“Smuggling has always been an important element in the cross-border trade between North Korea and it’s important allies. What the Chinese government and the Russian government to a lesser extent have been doing is to turn a blind eye to these activities,” said Go Myong-Hyun, a North Korea analyst with the Asan Institute For Policy Studies in Seoul.

Russian evasions

The Asan report comes amid allegations that Russia potentially violated international sanctions imposed on North Korea by granting thousands of new work permits to North Korean laborers. Moscow had denied any such actions.

The Trump administration also imposed targeted U.S sanctions on a Russian bank for allegedly doing business with a person blacklisted for involvement with North Korea’s nuclear weapons program.

On Friday U.S. Ambassador to the United Nations Nikki Haley called the allegations against Russia, “very troubling.” U.S. Secretary of State Mike Pompeo called on “the Russians and all countries to abide by the U.N. Security Council resolutions and enforce sanctions on North Korea,” while attending the ASEAN Regional Forum in Singapore on Saturday.

United Nations sanctions imposed in September of 2017 prohibit member countries from “providing work authorizations” permits to North Korean workers.

In December of 2017 the U.N. Security Council further strengthened the sanctions to cut North Korean oil imports by a third, and to impose a total export ban on North Korea’s $3 billion coal and other mineral industries, its $800 million clothing manufacturing output, and its lucrative seafood industry.

Shell companies

The ASAN report is centered on the activities of the Independent Petroleum Company (IPC), a Russian firm that the U.S. Treasury Department targeted in June 2017 for violating restrictions on selling oil to North Korea. IPC has since changed its name. 

IPC was found to have sold large quantities of oil to Russian affiliated companies, such as the Pro-Gain Group Corporation (PGGC) that was actually operating on behalf of North Korea’s state owned Foreign Trade Bank. The North Korean bank has been under U.S. sanctions since 2013.

“The entities involved tried to cover up the transactions by falsifying destination countries for the purchases,” said the ASAN report entitled The Rise of Phantom Traders.

The report notes that PGGC is owned by Taiwan citizen Tsang Yung Yuan. Tsang was sanctioned earlier this year by the U.S. for facilitating North Korean coal exports using a Russia-based North Korean broker. PGGC has headquarters listed both in Taipei and Samoa.

North Korea has also been accused of conducting illicit ship-to-ship transfers of oil, and to conceal these operations by disabling the Automatic Identification System (AIS) transponder of vessels in order to hide their location. There have also been reports of North Korea changing vessel names and identification numbers, even painting over or altering the numbers on the ships’ exteriors.

Rajin-Khasan Exemption

A large number of oil shipments were also delivered to the Russian-North Korean border village of Khasan, which is connected by rail to the North Korean port terminal at Rajin.

The Rajin-Khasan rail project was exempted from U.N. sanctions to allow Russia to use the North Korean seaport to export Russian coal.

Trade records show that oil deliveries arriving in Khasan were on their way to China, but the report suggests it is more likely North Korea was the final destination. Since 2015, the ASAN report says, only PGGC and Velmur, two companies with ties to North Korea, listed Khasan as the point of delivery for oil shipments. 

According to the ASAN report, Moscow and Pyongyang are likely exploiting the Rajin-Khasan rail exemption to evade restrictions on North Korean oil imports.

In 2016, South Korea suspended its participation in the Rajin-Khasan rail project to comply with U.S. unilateral sanctions imposed on North Korea trade.

Recently some officials in Seoul have called for these sanctions affecting the Rajin-Khasan Project to be lifted, so that investment can proceed in connecting South Korean rail both to North Korea, and to the intentional railway system beyond that can reach Europe.

Sanctions effectiveness

The sanctions are intended to cut North Korea off from foreign currency and materials needed for weapons production, and to impose economic pain on the leadership to persuade Pyongyang to give up its nuclear and ballistic missile development programs.

Despite increased reports of sanctions evasions, Cheong Seong-chang, a North Korea analyst with the Sejong Institute in South Korea, says the recent report of an 88 percent decline in North Korean trade in the first quarter of this year indicates the economic situation there is in dire condition.

“If the sanctions from the U.N. Security Council continue, economic breakdown in North Korea will be inevitable,” said Cheong.

Talks between Washington and Pyongyang have made little significant progress toward ending the North’s nuclear program since June, when North Korean leader Kim Jong Un reaffirmed his commitment to denuclearization during his meeting with U.S. President Donald Trump in Singapore.

The U.S. insists that the North completely end it nuclear weapons program before any concessions are granted, while Pyongyang wants early sanctions relief.

On Sunday Pompeo said that North Korean Foreign Minster Ri Yong Ho reiterated a “very clear” commitment to denuclearize when the two met at the ASEAN conference in Singapore.

Lee Yoon-jee contributed to this report.
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Washington is observing the latest escalation in tensions between the United States and its trading partners, with China threatening to slap tariffs on more than 5,000 American-made products totaling $60 billion. VOA’s Michael Bowman reports, Beijing’s announcement came after the Trump administration proposed raising tariffs on $200 billion of Chinese goods, continuing a tit-for-tat trade battle that is alarming many in the U.S. business community and dividing the Republican Party.
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British Trade Minister Liam Fox said “intransigence” from the European Union was pushing Britain toward a no-deal Brexit, in an interview published on Saturday by the Sunday Times.

With less than eight months until Britain quits the EU, the government has yet to agree a divorce deal with Brussels and has stepped up planning for the possibility of leaving the bloc without any formal agreement.

Fox, a promiment Brexit supporter in Prime Minister Theresa May’s cabinet, put the odds of Britain leaving the European Union without agreeing upon a deal over their future relationship at 60-40.

“I think the intransigence of the commission is pushing us towards no deal,” Fox told the Times after a trade mission in Japan.

“We have set out the basis in which a deal can happen, but if the EU decides that the theological obsession of the unelected is to take priority over the economic well-being of the people of Europe, then it’s a bureaucrats’ Brexit — not a people’s Brexit — [and] then there is only going to be one outcome.”

It was up to the EU whether it wanted to put “ideological purity” ahead of the real economy, Fox said.

If Britain fails to agree the terms of its divorce with the EU and leaves without even a transition agreement to smooth its exit, it would revert to trading under World Trade Organization rules in March 2019.

Most economists think this would cause serious harm to the world’s No. 5 economy as trade with the EU, Britain’s largest market, would become subject to tariffs.

Supporters of Brexit say there may be some short-term pain for Britain’s $2.9 trillion economy, but that in the long term it will prosper when cut free from the EU, which some of them cast as a failing German-dominated experiment in European integration.

On Friday, Bank of England Governor Mark Carney said the chances of a no-deal Brexit had become “uncomfortably high.”
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Honeybees are essential to our food supply, but bee colonies around the world are declining. Among the main culprits are insecticides containing chemicals known as neonicotinoids, which are highly toxic to honeybees. In Europe, where about 80 percent of crops rely to some degree on insect pollination, the chemical is banned but exceptions allowed. Poland’s agriculture ministry has temporarily approved it for use in rapeseed crops, worrying the country’s beekeepers. VOA’s Julie Taboh has more.
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China’s targeting of U.S. liquefied natural gas and crude oil exports opens a new front in the trade war between the two countries, at a time when the White House is trumpeting growing U.S. energy export  prowess.

China included LNG for the first time in its list of proposed tariffs on Friday, the same day that its biggest U.S. crude oil buyer, Sinopec, suspended U.S. crude oil imports due to the dispute, according to three sources familiar with the situation.

On Friday, China announced retaliatory tariffs on $60 billion worth of U.S. goods, and warned of further measures, signaling it will not back down in a protracted trade war with Washington.

That could cast a shadow over U.S. President Donald Trump’s energy dominance ambitions. The administration has repeatedly said it is eager to expand fossil fuel supplies to global allies, while Washington is rolling back domestic regulations to encourage more oil and gas production.

“The juxtaposition here is clear: It is hard to become an energy superpower when one of the biggest energy consumers in the world is raising barriers to consume that energy. It makes it very difficult,” said Michael Cohen, head of energy markets research at Barclays.

The U.S. is the world’s largest exporter of fuels such as gasoline and diesel, and is poised to become one of the largest exporters of LNG by 2019. U.S. LNG exports were worth $3.3 billion in 2017. China is the world’s biggest crude oil importer.

China had curtailed its imports of U.S. LNG over the last two months, even before its formal inclusion in the list of potential tariffs. It had also become the largest buyer of U.S. crude oil outside of Canada, but Kpler, which tracks worldwide oil shipments, shows crude cargoes to China have also dropped

off in recent months.

It comes at a time when the United States has several large-scale LNG export facilities under construction, and after Trump’s late 2017 trip to China that included executives from U.S. LNG companies.

China became the world’s second-biggest LNG importer in 2017, as it buys more gas in order to wean the country off dirty coal to reduce pollution.

“This will not affect the trade but will simply make gas more expensive to Chinese consumers,” said Charif Souki, chairman of Tellurian Inc, one of several companies seeking to build a new LNG export terminal.

China, which purchased almost 14 percent of all U.S. LNG shipped between February 2016 and May 2018, has taken delivery from just one vessel that left the United States in June and none so far in July, compared with 17 in the first five months of the year.

“The U.S. gas industry will be much harder hit by this as China imports only a small volume whereas U.S. suppliers see China as a major future market,” said Lin Boqiang, professor on energy studies at Xiamen University in China.

Crude exports to China

Meanwhile, according to Kpler, crude exports to China dropped to an estimated 226,000 barrels per day (bpd) in July, after reaching a record 445,000 bpd in March. Sinopec, through its Unipec trading arm, is the largest buyer of U.S. crude.

China would likely hike purchases from Saudi Arabia, Russia, the United Arab Emirates and Iraq if the tariffs slowed U.S. flows, said Neil Atkinson, head of the oil industry and markets division at the International Energy Agency.

There will be “others who will be offering barrels to China, so it could find itself able to replace lost volumes from the U.S.,” Atkinson said.

With LNG demand expected to skyrocket over the next 12 to 18 months, there are still some two dozen firms seeking to build new LNG export terminals in the United States and tariffs may limit their ability to secure sufficient buyers to finance their proposed projects.

“Cheniere continues to see China as an important growth market and LNG as a “win-win” between the United States and China,” said Eben Burnham-Snyder, a spokesman at Cheniere Energy Inc, which owns one of the two LNG export terminals currently operating in the United States. He added they do not see tariffs as productive.
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George Kamau Githome uses a feather duster to clean off hardware and bootleg movies displayed for sale at his kiosk in Mathare, one of Nairobi, Kenya’s largest slums.

Githome and his family of 10 kids recently lost everything they owned in a fire. But he was able to rebuild because he had purchased micro-insurance, a new product making inroads among small-scale African farmers and business owners.

“When they came, they took photos, and saw how helpless I was. I had nothing,” he said. “Then they paid off my loan and supported me with something small. I started this business you see out here and the result you see inside.”

Most African farmers and small businesses operate with no way to protect themselves if disaster strikes. Insurers have been slow to tailor their products to the African continent, experts say, and their methods of operation, using complex contracts distributed through networks of agents, tends to only reach the urban elite.

But that may be starting to change. A handful of companies are now offering inexpensive, tech-driven micro-insurance and are making it easy for ordinary Africans to sign up.

 

The company Githome used, MicroEnsure, offers micro-insurance to small-business owners, ranging from farmers in the bush to small kiosk owners in downtown Nairobi.

 

The East Africa regional director for MicroEnsure, Kiereini Kirika, says mobile technology makes micro-insurance cheaper and easy to use.

“We enable them to be able to enroll as simple as using their mobile phone just by dialing a particular short code on their phone and then registering their product just by using their first name and their last name,” he said.

Henry Jaru, a smallholder farmer in northern Nigeria, is buying micro-insurance from another company, Pula, to protect his family farm from the impacts of poor rainfall, army worm infestations and other threats to their crops.

“Normally by this time the crops would have gone far but you see we’re still planting some of them,” he said. “So I think, we’re hoping that [will protect us if] we experience any shortcoming from the rain or the worms this year.”

 

Pula insures groups of farmers, using publicly available satellite data to track weather patterns, assess the risk and set prices.

 

“When Pula came into the country, they came with the idea of an index insurance, which means that you don’t need to necessarily visit every smallholder farmers,” said Samson Ajibola, Pula’s senior project manager in Nigeria. “You can insure aggregation of farmers under just one policy without necessarily needing to visit each of them.”

Pula also bundles the policies into small loans or purchases of fertilizer so small-hold farmers are automatically insured.

 

But older farmers, like Jaru’s father Thomas, are still skeptical because of bad experiences with insurance companies.

 

“Generally when the time comes for them to pay you, indemnify you, you will not find them,” said Thomas Jaru. “They begin to show you the small print — you didn’t do this, you didn’t do that out of the policy. So, it can ruin the whole thing and people get discouraged.”

 

Micro-insurance providers hope their services can change that perception  and turn a profit while giving Africa’s small farmers and businesses some protection if and when things go wrong.
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The U.S. unemployment rate dropped slightly in July, while job gains were lower than many analysts predicted.

Friday’s report from the Labor Department shows the jobless rate fell one-tenth of a percent to 3.9 percent, one of the lowest figures in years.

The world’s largest economy also had a net gain of 157,000 jobs, which is less than the monthly average so far this year.

Experts blamed some of the change on closing retail stores, but said the labor market remains tight, with more openings than jobs overall.

A jobless rate of under 4 percent usually prompts employers to raise wages to attract and keep good workers; but, the newest figures show wages grew just 2.7 percent over the past year, which is slightly lower than the inflation rate, meaning that real wages are actually falling slightly.

Peter Cramer, senior portfolio manager of Prime Advisors, says one reason wages are not growing faster is the large but shrinking pool of part-time workers who are getting longer hours or full-time work. 

In a VOA interview via Skype, Cramer says so far, there is little evidence that Washington’s many trade disputes have hurt employment, but that could change if the bickering goes on for “six or eight months.”

PNC Bank chief economist Gus Faucher says the U.S. unemployment rate will probably fall to 3.5 percent by the end of the year. Faucher writes that as that happens, job growth will slow down because businesses will find it more difficult to recruit new hires. 

‘Strong’ economy

On Wednesday, the U.S. Federal Reserve, the nation’s central bank, said the economy was “strong,” an upgrade from its June assessment, which dubbed the economy “solid.”

The Fed also made clear it expects to raise interest rates in the coming months, going against President Donald Trump’s demands for the independent body to keep rates steady. “I think the economy’s in a really good place,” Federal Reserve chairman Jerome Powell told NPR in July.

Ahead of November’s midterm elections, Trump likely will tout a strong economy as his Republican Party looks to maintain its grasp on the U.S. legislative chambers, the Senate and House of Representatives. Yet analysts warned this may not be a winning strategy.

“If this was a prez [presidential election] year, these strong jobs reports would matter so much more for the elections,” CNN election analyst Harry Enten said Friday on Twitter. “As is, the economy is not strongly correlated with midterm outcomes.”
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The rolling fields of green soybean plants growing on Fred Grieder’s Illinois farm would be a welcome sign most years … an indicator of a promising harvest in the fall.

But this isn’t most years.

Tariffs are turning away potential customers overseas, and Grieder estimates he could lose around $100 an acre if the trade war continues.

“It’s a squeeze,” he told VOA from his farm outside Bloomington, Illinois.

​Lose $100, get $14 in aid

It’s a squeeze the Trump administration has acknowledged, prompting the U.S. Department of Agriculture to plan a $12 billion aid package to help farmers like Grieder.

“If you take the $12 billion, assuming it will all go to beans, which it won’t, and divide that by our planted acreage, that’s about $14 an acre” in government aid, he said.

Grieder says the aid does not even come close to making up for the $100 loss per acre he expects.

Since May, the price per bushel for soybeans has dropped almost 20 percent over the escalating trade war between the United States and China. Tariffs threaten to cut off important export markets, cutting into profits even as U.S. farmers brace for a fifth year of declining farm income.

It’s not that Grieder isn’t grateful for the aid package, but he says he would just rather have “trade over aid.”

“We appreciate the fact that the USDA is concerned about us, and want to make us whole,” he explained. “But the reality is the numbers, in a large trade war like this, are overwhelming.”

Man-made disaster

“This is not a natural disaster; this is a man-made disaster. It’s not an act of God, some would call it an act of foolishness,” said Mark Albertson, director of strategic market development for the Illinois Soybean Association.

Albertson said he believes the trade dispute with China is a greater threat to farmers than the drought of 2012.

“We had mechanisms in place to deal with that, and we always knew that the very next year we would be able to plant our crops again and hope for the best. In this case, we don’t know that,” he said. “We don’t know what the next year brings. We don’t have necessarily hope of the trade war going away very soon, and it looks like Brazil is all too eager to take away our market share with China.

“If they get used to purchasing more and more Brazilian soybeans, that spells bad news for us. That’s the overall concern, and an aid package does nothing to solve that problem,” Albertson said.

​Biggest worry: Competitors

It’s also farmer Grieder’s biggest concern.

“Brazil, one of our largest competitors, they are always expanding,” he said. “So this could affect our markets years down the road, and I’m probably more worried about that than I am the short wash out here.”

Albertson said another major challenge is what to do with the soybeans that can’t be sold.

“It looks like we may end up putting a record amount of soybeans in storage, and when that happens, we know from history the prices will go south,” he added.

As the trade war continues, Grieder’s routine remains the same. He hopes strong global demand for soybeans outside China will make up for decreasing prices. He’s waiting to see if President Donald Trump’s trade tactics will work before permanent damage is done to the reputation — and reliability — of U.S. grain products.

“I support what he’s trying to do. I can’t say that I support his methods,” Grieder said.
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Since May, the price per bushel of soybeans has dropped almost 20 percent in the wake of an escalating trade war between the United States and China. As VOA’s Kane Farabaugh reports, despite plans for a massive aid package by the Trump administration, what producers want most is reliable access to the world’s largest markets.
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