Starbucks and other employers in California must pay workers for minutes they routinely spend off the clock on tasks such as locking up or setting the store alarm, the state Supreme Court ruled Thursday.

The unanimous ruling was a big victory for hourly workers in California and could prompt additional lawsuits against employers in the state.

The ruling came in a lawsuit by a Starbucks employee, Douglas Troester, who argued that he was entitled to be paid for the time he spent closing the store after he had clocked out.

Troester said he activated the store alarm, locked the front door and walked co-workers to their cars — tasks that he said required him to work for four to 10 additional minutes a day.

Starbucks said it was disappointed with the ruling. In a brief filed with the California Supreme Court, attorneys for Starbucks said Troester’s argument could lead to “innumerable lawsuits over a few seconds of time.” The U.S. Chamber of Commerce in a court filing also warned of the possibility of “significant liability” to businesses in the state.

A U.S. District Court rejected Troester’s lawsuit on the grounds that the time he spent on those tasks was minimal. But the California Supreme Court said a few extra minutes of work each day could “add up.”

Troester was seeking payment for 12 hours and 50 minutes of work over a 17-month period. At $8 an hour, that amounts to $102.67, the California Supreme Court said.

“That is enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares,” Associate Justice Goodwin Liu wrote. “What Starbucks calls ‘de minimis’ is not de minimis at all to many ordinary people who work for hourly wages.”

Trivial and not trivial

The ruling also applies to tasks done before the workday begins, said Bryan Lazarski, an attorney in Los Angeles who handles wage claims against employers.

Lazarski said he expects the ruling to open the door to additional lawsuits by workers in similar situations as Troester. But he also expects lawsuits that “test the boundary of what this case says” to determine how much time spent doing work off the clock is enough to get paid.

The court in Thursday’s ruling said it was not closing the door on all claims by employers that the amount of additional work was too negligible.

“The court is saying, ‘We haven’t really drawn a line with regard to what is trivial and what is not trivial, but in this case, the time that the employee was not compensated was significant,'” said Veena Dubal, a labor law expert at the University of California, Hastings College of the Law.

Associate Justice Leondra Kruger wrote separately to say that there may be some periods of time that are “so brief, irregular of occurrence, or difficult to accurately measure or estimate,” that requiring an employer to account for them would not be reasonable.

She cited as examples a glitch that delays logging in to a computer to start a shift or having to read and acknowledge an email or text message about a schedule change while off the clock.

Tracking time

The federal court that threw out Troester’s lawsuit also said it would be hard for an employer to track the additional time that he worked. But Liu said employers could use technology for that or restructure employees’ work so they don’t have any tasks after they clock out.

Employers can also estimate the additional time, he said.

Troester appealed the U.S. District Court’s decision to the 9th U.S. Circuit Court of Appeals. The appeals court asked the California Supreme Court to determine whether a federal rule permitting employers under some circumstances to require employees to work as much as 10 minutes a day without compensation applied under state law.

The lawsuit now returns to the 9th Circuit. 
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The Director General of the World Trade Organization, Roberto Azevedo warns the global economy will run out of steam and millions of jobs will be lost if political leaders do not reach a negotiated settlement to end the trade war.

WTO reports there has been a significant rise in protectionist measures since mid-October, with countries imposing an average of 11 restrictive trade measures every month.  

WTO chief, Roberto Azevedo says the major negative impacts resulting from trade restrictions should set off a few alarm bells.

“It threatens the recovery of the global economy.  It threatens growth.  It threatens jobs,” said Azevedo. “Our concern about anything is that this dynamic of an eye-for-an-eye or tit-for-tat or whatever you call it, it may be perceived as the new normal if countries begin to take this as a normal way of behaving.”

He says this would be very harmful for the global economy down the road.  Azevedo says the trade war is not a technical issue.  It is a political situation, which he says will have to be resolved by political means.

“So, leaders have to talk to themselves.  At some point in time, they have to begin to listen to each other,” said Azevedo. “It is not only also about responding.  It is not only about making threats to each other.  At some point in time, the question is going to be—okay, so we have all these problems, how do we fix them?”

That process appears to have begun.  During a meeting Wednesday at the White House, U.S. President Donald Trump and European Commission Chief Jean-Claude Juncker pulled back from the brink of an all-out trade war.  They agreed to work together to lower tariffs.
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Mattel, home of Barbie dolls and Hot Wheels, is cutting 2,200 jobs in order to save money after the closing of U.S. toy retail giant Toys R Us.

The toymaker said the cuts amount to 22 percent of its nonmanufacturing employees worldwide. Mattel has about 28,000 employees.

It also plans to sell factories in Mexico as part of a $650 million cost-saving plan.

Mattel’s stock fell nearly 9 percent to $14.85 in after-hours trading Wednesday, after dropping 1 percent during the regular trading day.

Mattel reported a loss of $240.9 million in the second quarter, bigger than the $56.1 million loss in the same period a year ago.

Revenues fell nearly 14 percent to $840.7 million, below the $863.1 million analysts had predicted.

Ynon Kreiz, who was named CEO in April, said Wednesday that he expects the negative impact of Toys R Us closing to subside by next year.

The toymaker has lagged behind its competitors in digital media, analysts say, and is trying to catch up with other brands that have spawned apps, movies and TV shows.

Kreiz said the company is working closely with other retailers and looking for more ways to sell its toys online.
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Mexican and Canadian officials are stressing that talks on the North American Free Trade Agreement will remain a three-way negotiation, despite suggestions by U.S. President Donald Trump that he might pursue separate trade deals with both countries.

Mexican Foreign Minister Luis Videgaray says “Canada and Mexico not only share geography, history and friendship, but also principles and common goals, and we are a team and act as a team.”

Visiting Canadian Foreign Affairs Minister Chrystia Freeland also stressed that NAFTA is a three-country agreement. She said that Canada also opposes a “sunset” clause proposed by Trump that would allow countries to opt out of the pact every five years.

Freeland also met Wednesday with Mexican President-elect Andres Manuel Lopez Obrador, who will take office on December 1.
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Leaders from the five BRICS nations sounded the alarm Wednesday about what South Africa’s president described as recent threats to multilateralism and sustainable global growth — a not-so-coded reference to a brewing trade war between the United States and BRICS’ wealthiest member, China.

Chinese President Xi Jinping raised his concerns as the three-day summit began in South Africa.

“A trade war should be rejected because there will be no winner,” he said. “Economic hegemony is even more objectionable, because it will undermine the collective interest of the international community. Those who pursue this cause will only hurt themselves.”

South African President Cyril Ramaphosa echoed his sentiments.

“We are meeting here, ladies and gentlemen, at a time when the multilateral trading system is facing unprecedented challenges,” Ramaphosa said. “We are concerned by the rise in unilateral measures that are incompatible with World Trade Organization rules, and we are worried about the impact of these measures, especially as they impact developing countries and economies.

“These developments call for thorough discussion on the role of trade in growing and in promoting sustainable development, particularly inclusive growth.”

BRICS admitted South Africa in 2010 as part of the bloc’s aim of leveling the global playing field by representing nontraditional powers.

U.S. President Donald Trump has threatened to slap tariffs on all $505 billion worth of Chinese imports to his country, a move that has caused global concern. Summit watchers say his blunt rhetoric will influence this year’s summit.

“I think that something that is pertinent that relates to the United States and President Trump’s administration is, of course, their protectionist measures that they have put on in terms of trade, and the trade wars that have every country in the globe speaking,” analyst Luanda Mpungose told VOA. “But something that the BRICS have actually come out and actually spoken about quite strongly is that they want to support multilateralism and a rules-based world order.”

But, she said, BRICS may use that adversity to seek to build a new world order, even beyond the five-member bloc.

“Something that’s different about BRICS this year, specifically about South Africa as a host country, is that this initiative is not only about the BRICS member countries, the five countries, but actually, we’ve seen an outreach of neighborhood countries being invited,” she said. “So this is taking along the Africa developmental agenda and bringing it into the BRICS agenda. countries like Rwanda, like Senegal, like Togo have been invited to come and attend.”

The summit continues through Friday. 
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U.S. President Donald Trump attacked China on Wednesday for targeting American farm products with new tariffs in what he said would be a failed effort to gain a trade advantage over the United States.

“China is targeting our farmers, who they know I love & respect, as a way of getting me to continue allowing them to take advantage of the U.S.,” Trump said on Twitter. “They are being vicious in what will be their failed attempt. We were being nice – until now!”

Beijng recently imposed new tariffs on an array of American farm produce, including soy beans, corn, wheat, cotton, rice, sorghum, beef, pork, poultry, fish, dairy products, nuts and vegetables.

It is part of a tit-for-tat tariff battle that Trump is waging with China in an effort to get Beijing to further open up its markets and end what the U.S. views as onerous requirements that American companies hand over proprietary technology information in order to do business in China.

The U.S. has chronically run a trade deficit with China, although Trump overstated the 2017 figure as $517 billion. The U.S. government says the deficit actually was $375.6 billion.

With the new tariffs in China, some U.S. farmers, many of them among Trump’s biggest political supporters in the 2016 election, have voiced their dismay at declining sales.

With the agricultural financial fallout occurring less than four months before nationwide congressional elections in November, the Trump administration said Tuesday it would provide up to $12 billion in aid to farmers who have been hurt by the president’s tariff policies. He has said the tariffs he has imposed are needed to force foreign governments to improve their trade deals with the U.S.

U.S. Agriculture Secretary Sonny Perdue said the compensation to U.S. farmers was “a firm statement that other nations cannot bully our agricultural producers to force the United States to cave in. This administration will not stand by while our hardworking agricultural producers bear the brunt of unfriendly and illegal tariffs.”

White House officials contend the tariffs inflict some necessary minor, domestic short-term pain in order to achieve long-term large gains for the U.S. economy.

However, several lawmakers, including farm-state Republicans, attacked Trump’s compensation plan for U.S. farmers.

“Our farmers want trade, not aid,” declared Congressman Kevin Cramer, a Republican from North Dakota, a Midwestern state where agriculture alone accounts for one-fourth of the revenue base.

“This trade war is cutting the legs out from under farmers, and the White House’s ‘plan’ is to spend $12 billion on gold crutches,” said Sen. Ben Sasse of Nebraska, where beef and corn are the top agricultural products. “This administration’s tariffs and bailouts aren’t going to make America great again. They’re just going to make it 1929 again.”

Sen. Bob Corker, a Republican from Tennessee, where soybeans are the top row crop, said, “You have a terrible policy that sends farmers to the poorhouse. And then you put them on welfare. And we borrow the money from other countries. It’s hard to believe there isn’t an outright revolt right now in Congress.”

A Democratic House member, Jackie Speier, whose prosperous California district is known for its Brussels sprouts and grape production, wrote on Twitter: “OK @POTUS — you created this mess with your trade war and now you are going to spend $12 billion to placate the farmers that voted for you.”

The American Soybean Association said in a statement, “While soybean growers appreciate the administration’s recognition that tariffs have caused reduced exports and lower prices, the announced plan provides only short-term assistance.” It called “for a longer-term strategy to alleviate mounting soybean surpluses and continued low prices, including a plan to remove the harmful tariffs.”

Mark Santucci, a farmer of tart cherries in the state of Michigan, told VOA that while the relief programs will not directly benefit him, “I am glad the president has decided to implement it. I think we are in for a long battle with the Chinese government, so this program will go a long way in helping our farmers who are on the front line.”

 
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Sergio Marchionne, a charismatic and demanding CEO who engineered two long-shot corporate turnarounds to save carmakers Fiat and Chrysler from near-certain failure, died Wednesday. He was 66.

The holding company of Fiat’s founders, the Agnelli family, announced Marchionne had died after unexpected complications from surgery in Zurich. That came days after a deterioration in his health led the company to hastily appoint a successor.

 

At Fiat Chrysler Automobiles headquarters in the Italian city of Turin, corporate flags flew at half-staff while inside the building, Marchionne’s successor led a minute of silence ahead of an earnings presentation. Workers at a plant near Naples that Marchionne had brought back to life halted production for 10 minutes in tribute.  

 

“Unfortunately what we feared has come to pass,” said John Elkann, Fiat heir and head of the Exor holding company. “Sergio Marchionne, man and friend, is gone.”

The news agency ANSA reported the cause of death as cardiac arrest. He suffered one while recovering from shoulder surgery late last month, landing him in intensive care, followed by a second, fatal event. Fiat Chrysler declined to comment, citing privacy issues.

 

The Italian-Canadian had planned to step down after first-quarter earnings next year, but the transition was accelerated after the company announced that the complications, which it did not detail, would prevent his return. He also was replaced as CEO of sportscar maker Ferrari and heavy truck and equipment maker CNH Industrial.

 

Marchionne turned around the dysfunctional Fiat and Chrysler, merging them into the world’s seventh-largest carmaker, Fiat Chrysler Automobiles, almost by personal force of will, living on a corporate jet crossing the Atlantic to push employees to accomplish what most people thought was impossible amid a devastating global recession.

 

Marchionne, who was born in Italy and emigrated to Canada at age 14, had revived Fiat by 2009 when he was picked by the U.S. government to save U.S.-based Chrysler from its trip through bankruptcy protection after being owned by a private equity company.

 

 “It’s highly unlikely that Chrysler would exist today had he not taken that gamble,” said Autotrader.com analyst Michelle Krebs. “The company was in such bad shape, being stripped of any kind of resources by the previous owners.”

 

Marchionne met most of his goals, even though at times he was doubted by nearly everyone in the automobile business. But he didn’t live long enough to complete his last two: personally hand over the reins of Fiat Chrysler to a hand-picked protege and lay out plans for transforming supercar maker Ferrari.

 

The manager, known for his folksy, colorful turns of phrase and for his dark cashmere sweaters no matter the occasion, was the darling of the automotive analyst community. Even when expressing doubts at his audacious targets, they showed admiration for his adept deal-making. That included getting General Motors to pay $2 billion to sever ties with Fiat, key to relaunching the long-struggling Italian brand, and the deal with the U.S. government to take Chrysler without a penny down in exchange for Fiat’s small-car technology.

 

Marchionne joined Fiat after being tapped by the Agnelli family to save the company. Fiat had for generations been a family-run enterprise and having someone at the helm from outside Italy’s clubby management circles — even a dynamo like Marchionne — was an enormous change.

 

Other key corporate moves included the spinoff of the heavy industrial vehicle and truck maker CNH and of the Ferrari supercar maker. Both deals unlocked considerable shareholder value for Agnelli family heirs led by Elkann. Elkann, 42, came into his own under Marchionne’s stewardship, taking over as chairman in 2010 having been tapped more than a decade earlier by his grandfather, the late Gianni Agnelli, to run the family business.

 

As Marchionne’s health failed following surgery, a clearly emotional Elkann delivered what amounted to an impromptu eulogy and message of gratitude to a man he called his mentor.

 

“He taught us to think differently and to have the courage to change, often in unconventional ways, always acting with a sense of responsibility for the companies and their people,” Elkann said over the weekend. “He taught us that the only question that’s worth asking oneself at the end of every day is whether we have been able to change something for the better, whether we have been able to make a difference.”

 

It was Marchionne’s success in turning around a pair of Swiss businesses that drew the attention of the Agnelli family. He joined Fiat’s board in May 2003, four months after the death of Fiat scion Gianni Agnelli. He became CEO in June 2004, after the death of Gianni Agnelli’s brother, Umberto, Fiat’s chairman, left a family void in the company.

 

As an outsider, Marchionne was unfettered by local loyalties and he set about cutting jobs and expenses, slimming management ranks and increasing shareholder value along the way. He brought in other outsiders to key positions and relaunched the iconic 500, which became one of the new Fiat’s calling cards and a sign of rebirth as it expanded abroad.

 

While he started small with limited industrial alliances, his ambitions soon grew. The bankruptcy of Chrysler gave him the opportunity to create a global car company with brands including Jeep, Ram, Alfa Romeo, Ferrari and Maserati that he envisioned would grow to 6 million cars a year. A global economic crisis that bottomed out car sales in key U.S. and European markets prevented him from reaching that goal, but his industrial vision never faltered as he spun off CNH and Ferrari into stand-alone entities.

 

His most quoted presentation to analysts, titled “Confessions of a Capital Junkie,” argued that consolidation was inevitable in the investment-heavy car industry. But though he tried for another merger with General Motors, talks never led to a deal. Still, newspaper photographs of a chain-smoking Marchionne awaiting talks with German Chancellor Angela Merkel outside the Chancellery in Berlin on the role of GM’s then-subsidiary, Opel, made clear just how personally he took the negotiations.

 

Marchionne had always insisted that his successor would come from inside — so it was no surprise when British manager Mike Manley, who helped boost Jeep to global success and get Fiat a foothold in Asia, was named CEO.

 

“Clearly, this is a very sad and difficult time, and our thoughts and prayers go to Sergio’s family, friends and colleagues,” Manley told an analyst conference call presenting second quarter result. “Personally, having spent the last nine years of my life seeing or talking to Sergio almost on a daily basis this morning’s news is heartbreaking.”

 

“There is no doubt Sergio was a very special, unique man and there is no doubt that he’s going to be sorely missed.”

 

Marchionne had never indicated plans to leave either Ferrari or CNH, leaving many to speculate that the tireless manager known for his short sleep cycles and globe-trotting style would use those positions to keep a foothold in the automotive world.

 

In June, he laid out Fiat Chrysler’s five-year plan, which included launching electrified powertrains across Fiat brands — a tacit acknowledgement that the company had lagged in introducing hybrid, hybrid-electric and full-electric engines. They also were to put Ferrari engines in Maserati cars as Marchionne sought to take on electric-car pioneer Tesla.

 

Marchionne’s penchant for numbers was always clear in his attentive quarterly presentations. He let his real satisfaction show during the June 2018 presentation when he announced the company had reached zero debt, by briefly donning a necktie for the first time in a decade.

 

Other automotive leaders paid tribute to Marchionne’s skill, creativity and determination.

 

General Motors CEO Mary Barra praised his “remarkable legacy in the automotive industry.” Ford Executive Chairman Bill Ford called Marchionne “one of the most respected leaders in the industry whose creativity and bold determination helped to restore Chrysler to financial health and grow Fiat Chrysler into a profitable global automaker.”

 

At his last public appearance as CEO, Marchionne in June attended a ceremony in Rome where a Jeep was presented to the paramilitary Carabinieri police. Marchionne began his brief remarks noting that his father had been a Carabinieri officer.

 

He said he recognized in the Carabinieri “the same values at the basis of my own education: seriousness, honesty, sense of duty, discipline and spirit of service.”

 

Marchionne was divorced. He is survived by his companion, Manuela Battezzato, and two grown sons, Alessio and Tyler.
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Tariffs are set to top the agenda in a meeting Wednesday between U.S. President Donald Trump and European Commission President Jean-Claude Juncker.

Juncker is coming to Washington with the hopes the European Union can avoid an all-out trade war by convincing Trump to hold off punitive tariffs on European cars. The potential car tariffs would hurt Germany’s thriving automobile industry and come on top of hefty tariffs that Trump has already imposed on aluminum and steel imports.

But on the eve of the meeting, Trump appeared pessimistic the two sides would come to any agreement after the U.S. leader threatened more tariffs on U.S. trading partners. In a tweet late Tuesday, Trump said both the United States and the European Union should drop all tariffs, barriers and subsidies.

“That would finally be called Free Market and Fair Trade!” Trump said. “Hope they do it, we are ready — but they won’t!” he added.

Earlier Tuesday, the U.S. president declared “Tariffs are the greatest!” and threatened to impose additional penalties on U.S. trading partners. “Either a country which has treated the United States unfairly on trade negotiates a fair deal, or it gets hit with tariffs. It’s as simple as that.”

Trump again complained the world uses the United States as a “piggy bank” that everyone likes to rob. 

The European Commission has responded with retaliatory tariffs, but new levies on cars could prompt Europe to take further action.

German Foreign Minister Heiko Maas said Tuesday Europe won’t cave in to Trump’s threats.

“No one has an interest in having punitive tariffs, because everyone loses in the end,” Maas wrote on Twitter. “Europe will not be threatened by President Trump If we cede once, we will often have to deal with such behavior in the future.”

Republican Speaker of the House Paul Ryan told reporters Tuesday he does not think “the tariff route is the smart way to go.”

Ryan said he understands Trump is seeking “a better deal for Americans” but added the U.S. should instead “work together to reduce trade barriers and trade restrictions between our countries.”
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Qian Zhiya may be Starbucks’ worst nightmare.

The 42-year-old Chinese entrepreneur says she is betting that her fledgling Luckin Coffee brand will eventually have more cafes in China than Starbucks, and she has Singapore’s sovereign wealth fund and other investors bankrolling her plan.

Luckin, which only officially launched in January, has opened more than 660 outlets in 13 Chinese cities thanks to a supercharged growth plan based on cheap delivery, online ordering, big discounts and premium pay for its staff.

Its assault comes at a crucial time for Starbucks, which has 3,400 stores in China — its second biggest market after the U.S. — and plans to almost double that number by 2022.

And the speed of the attack is a warning to other established consumer brands in China that they too could be vulnerable to a start-up’s attempt to reinvent a market, brand consultants say.

Starbucks’ shares were pummeled in June after it warned same store sales growth in China had plunged to zero or worse last quarter, against 7 percent growth a year earlier.

Its fiscal third-quarter results are due out on Thursday.

Starbucks said some new café openings were cannibalizing customer visits at nearby stores and it also blamed a drop-off in orders through delivery firms.

While it did not mention increased competition, investors and analysts said it is clear that Luckin does represent a threat.

However, they also point out that Starbucks’ brand has been very resilient to challenges from rivals around the world over the years, largely because of the ambience of its stores, its service and the consistent quality of the coffee served.

There is also no sign that Chinese consumers have turned against such a very American brand as a protest over U.S. President Donald Trump’s imposition of punitive tariffs on Chinese exports.

Big Promotions

Reuters spoke to 30 consumers in Beijing Yintai Center, a shopping mall that has a Starbucks, Costa Coffee and Luckin outlet, among others. Half of those polled said they had tried Luckin; most said they liked it, though more than two-thirds said their top choice remained Starbucks.

The majority drank coffee in-store or bought to take away, with only a small number saying they had coffee delivered, a potential challenge for Luckin’s delivery-focused strategy.

Taste, convenience and environment were their top three priorities, more than price.

Luckin’s customers can order coffee via an app, watch a livestream of their coffee being made, and have it delivered to their door in an average of 18 minutes, the company says.  A regular latte, roughly the size of a Starbucks grande, costs 24 yuan plus 6 yuan for delivery (free delivery for orders of more than 35 yuan), but can be half price after promotions. A grande latte at Starbucks costs 31 yuan.

More than half of Luckin’s stores are larger “relax” outlets or pick-up stores with some seating. The rest are delivery kitchens.

The speed of Luckin’s growth is extraordinary — it took Starbucks about 12 years to open as many stores. In many ways it echoes the way in which some major Chinese technology firms, such as ride hailing platform Didi Chuxing, have burned through cash to grab market share and been valued highly as a result.

Qian, who was previously chief operating officer at Chinese ride hailing firm Ucar, says Luckin’s focus now is all about increasing customers.

“I don’t have a timeline for profit,” Qian told Reuters at the firm’s Beijing headquarters as she sipped her third Luckin coffee of the day. “For us, what we care about now is the number of users and if they are coming back to us, whether they recognize us, whether we can take market share.”

The firm raised $200 million this month to help fund its expansion, including an undisclosed sum from Singapore government fund GIC, a funding round which Luckin said valued the firm at $1 billion.

“In the future we will have more cafes than Starbucks,” she declared.

One of the investors in the latest fundraising said it is the logical time for there to be a shake-up of the coffee world in China.

“This model will appeal to young customers amid the country’s consumption upgrade,” said David Li, former head of Warburg Pincus Asia Pacific. He led the financing round for Luckin via his new investment firm Centurium Capital.

The use of online ordering and delivery should be  enough to unnerve many established brands, said Bruno Lannes, Shanghai-based partner with consultancy Bain & Co.

“It’s a big threat, that’s why western brands need to pay attention,” he said.

“Flash Mob”

Still, not everyone agrees the internet model translates easily to the coffee business, given the need for costly stores and quality control.

“It remains to be seen if they can really hook consumers in and create a monopoly in the market, like those we see in sectors like cab-hailing,” said Liu Xingliang, president of tech consultancy China Internet Data Center.

And some of the consumers Reuters spoke to in the Beijing mall saw hurdles ahead for Luckin.

Liu Xu, 23, an advertising professional, who compares Luckin to a “flash mob” that came out of nowhere, said he tried the firm’s coffee out of curiosity but prefers hand-drip single-origin coffee.

And Lian Yiheng, 22, a student, said she was attracted by Luckin’s promotions and the convenience of delivery, but felt it needed to improve its selection of coffees and store decoration to lure people in the longer run.

Qian said the plan was to have more sit-in stores and reduce the proportion of delivery-only outlets, which would require higher spending on setting up in better locations and on décor.

On the question of quality, she says that it uses select arabica beans from Ethiopia.

Luckin’s expansion comes as Starbucks’ global rivals, like Canadian chain Tim Hortons, are also pushing hard in China. Tim Hortons plans to open 1,500 outlets in China over the next 10 years, while smaller local chains are also popping up fast.

As China’s middle class continues to increase in size and the coffee chains move into many smaller towns and cities, the market is growing at 5-7 percent a year, according to research firm Mintel.

Li Yibei, owner of Double Win Café, which has a chain of eight coffee shops in Shanghai, said Luckin would have an impact on the market, but there was plenty of space left.

“Maybe they will hit Starbucks to some extent, but remember Starbucks has many die-hard fans. Maybe they can grab some followers from them, but I don’t think that many,” she said.

Starbucks may also soon be moving more formally into online delivery in China.

Howard Schultz, Starbucks’ departing executive chairman, said in Shanghai this month that he was close friends with Jack Ma, the head of Alibaba Group Holding Ltd., which controls food delivery platform Ele.me., and suggested the two could work together on Starbuck’s online delivery in China.

Schultz also said he isn’t wasn’t worried about the China slowdown.

“The more good coffee and competition that comes into the market, the more the Chinese people will be exposed to good coffee,” he said. “Emerging new players that are coming into the market will actually benefit Starbucks.”

($1 = 6.8142 Chinese yuan renminbi)
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El Salvador on Tuesday began taking emergency measures in a drought that has plagued the country for a month and cost tens of thousands of farmers their corn crops, the civil protection agency said.

The east of the Central American country has gone 33 days without rain and temperatures have hit a record 41 Celsius (107.6 Fahrenheit), leaving many families without water.

The government declared a “red alert,” meaning it will seek to use public funds to ensure food supplies and help farmers sow their crops again.

Jorge Melendez, head of Civil Protection, said that the lack of rain had affected more than half of El Salvador’s municipalities and resulted in the loss of the equivalent of 1.5 million 60-kg bags of corn, a staple grain.

Authorities are also exploring whether other industries have been affected, such as coffee or cattle raising.
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Argentina’s economy contracted 5.8 percent in May compared to the same period a year ago, the official INDEC statistics agency said Tuesday, raising concerns the country could fall into recession in 2018.

Argentina has been hit by a recent currency crisis. That led the government to seek a $50 billion financing deal with the International Monetary Fund aimed at strengthening the sputtering economy as the country fights double-digit inflation.

Turning to the IMF has brought back bad memories for Argentines who blame its policies for the country’s worst economic crisis in 2001.

President Mauricio Macri has told Argentines that they will not suffer another economic implosion. But they continue to lose purchasing power to one of the world’s highest inflation rates, and many have staged protests against Macri’s belt-tightening policies, which include layoffs of government workers and the slashing of subsidies on transportation and utility rates.

The INDEC also said that economic activity shrank 1.4 percent in May versus April. The statistics agency said agriculture and livestock were among the most-affected industries contributing to the slowdown. Manufacturing and transportation and communications also retrenched.

“The decline of activity in May reflects not only the adverse weather shock over agricultural production but also the impact of tighter financial conditions over the broader economy,” Goldman Sachs economist Alberto Ramos said in a research note. “Overall, we see a very significant risk that the economy will experience a recession in 2018.”
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At Luxury Time, a restaurant in the Kurdish city of Irbil, there are no man-size portions.

The women-only restaurant, with its all-female staff, was opened this month by 23-year-old business graduate Tara Mohammed Ihssan who was fed up of unwanted attention on nights out with friends in northern Iraq.

“If you want to go out, it is so uncomfortable because everyone is starring at you,” she told Reuters.

“So I have always thought about doing something like this for me and for the rest of the girls to feel comfortable.”

The restaurant’s sleek, modern interior, with hanging chandeliers and colorful couches, has drawn unwanted attention, however, with some men coming to the door to see what the fuss is all about.

“I have been thinking, if it stays this way I will put security on the door,” Ihssan said. “I find it unfair as all the cafes here are just for men, why can’t you accept that there is this cafe for ladies.”
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President Donald Trump is declaring that “Tariffs are the greatest!” and threatening to impose additional penalties on U.S. trading partners as he prepares for negotiations with European officials at the White House.

 

Trump is tweeting that trade partners need to either negotiate a “fair deal, or it gets hit with Tariffs. It’s as simple as that.”

 

The president writes that the U.S. is a ” ‘piggy bank’ that’s being robbed.” He notes that countries “that have treated us unfairly on trade for years” are coming to Washington to negotiate.

 

Trump is meeting with European Commission President Jean-Claude Juncker on Wednesday. The U.S. and European allies have been at odds over the president’s tariffs on steel imports and are meeting as the trade dispute threatens to spread to automobile production.

 

 
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Egypt raised natural gas prices for households and businesses on Saturday by between 33.3 and 75 percent, the latest among tough austerity measures aimed at rebuilding the country’s economy battered by years of unrest since a 2011 uprising.

The government’s decision, published in the official gazette on Saturday, should come into effect starting in August. It sets the price for gas consumption of up to 30 cubic meters to 1.75 Egyptian pounds up from 1 pound per cubic meter, an increase of 75 percent.

Meanwhile, gas consumption between 30-60 cubic meters went up by 42.8 percent, from 1.75 Egyptian pounds to 2.50 pounds per cubic meter. Consumption of over 60 cubic meters was upped by 33.3 percent, from 2.25 pounds to 3.00 pounds per cubic meter.

The move is likely to further fan the flames of popular discontent, especially among poor and middle-class Egyptians who have borne the brunt of the government’s economic reform program.

In recent months, Egypt introduced its latest wave of price hikes for fuel, drinking water and electricity. It also raised the price of new cellular phone lines and monthly cellular phone bills. Charges for issuing passports and car licenses also went up steeply.

The austerity policies are part of measures taken to meet demands by the International Monetary Fund for a $12 billion bailout loan to support the government’s reform plan. Egypt secured the three-year loan in 2016.

President Abdel-Fattah el-Sissi says the reforms, he implemented after he took office in 2014, have put Egypt on “the right track” and that they will spur economic growth by over seven percent in the coming years.

He urged Egyptians to be patient with the reforms, which the government says should start benefiting citizens within two years.

 
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U.S. President Donald Trump spoke warmly of Mexico’s incoming leftist president on Monday, saying he expected to get “something worked out” on NAFTA, while a top Mexican official said there was scope to revive the trade talks this week.

“We’re talking to Mexico on NAFTA, and I think we’re going to have something worked out. The new president, terrific person,” Trump said in a speech at the White House about American manufacturing.

“We’re talking to them about doing something very dramatic, very positive for both countries, he said, without giving more details.

Talks to reshape the 1994 trade accord have been underway since last August. But they stalled in the run-up to the July 1 presidential election in Mexico, which produced a landslide victory for veteran leftist Andres Manuel Lopez Obrador.

The United States, Mexico and Canada have been at odds over U.S. demands to impose tougher content rules for the auto industry, as well as several other proposals, including one that would kill NAFTA after five years if it is not renegotiated.

Mexican Economy Minister Ildefonso Guajardo, who last week expressed hope an agreement in principle on NAFTA could be reached by the end of August, is due to hold talks with U.S. Trade Representative Robert Lighthizer at the end of the week in Washington.

He will be accompanied by Jesus Seade, the designated chief NAFTA negotiator of the incoming Mexican administration.

“There’s clearly a window of opportunity to be able to bed down a series of open issues which are not numerous, but are very complex,” Guajardo said on the sidelines of a summit of the Pacific Alliance trade bloc in the western coastal city of Puerto Vallarta.

Guajardo is due to meet his Canadian counterpart Chrystia Freeland on Wednesday, also to discuss NAFTA.

After the election, top officials from both the outgoing and new Mexican governments met in Mexico City with senior Trump administration officials led by Secretary of State Mike Pompeo.

Seade said the visit had sent out “excellent” signals.

“We hope these signals translate into a willingness to move forward,” Seade told reporters in Puerto Vallarta.

The talks have been clouded by tit-for-tat measures over trade after the Trump administration slapped tariffs on U.S. steel and aluminum imports.

The United States is also exploring the possibility of imposing tariffs on auto imports, though Guajardo said it was too early to speculate on how that would play out.

Mexico’s foreign ministry said on Monday that South Korea had initiated the process of seeking associate membership in the Pacific Alliance, which comprises Colombia, Chile, Mexico and Peru and is seeking to deepen free trade.

Singapore, Australia, New Zealand and Canada were last year admitted as associate members by the alliance. For Mexico, the expansion is part of a push to diversify its trading partners in the wake of Trump’s previous threats to pull out of NAFTA.

Guajardo indicated that despite his optimism about reaching a deal, risks still exist.

“The biggest risk is that instead of moving forward with an agenda of opening and integration, we move backwards, closing our economy and really undoing what we’ve built in the last two and a half decades,” Guajardo said.
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Inflation in Venezuela could top 1 million percent by year’s end as the country’s historic crisis deepens, the International Monetary Fund said Monday.

Venezuela’s economic turmoil compares to Germany’s after World War I and Zimbabwe’s at the beginning of the last decade, said Alejandro Werner, head of the IMF’s Western Hemisphere department.

“The collapse in economic activity, hyperinflation, and increasing deterioration … will lead to intensifying spillover effects on neighboring countries,” Werner wrote in a blog post.

The once wealthy oil-producing nation of Venezuela is in the grips of a five-year crisis that leaves many of its people struggling to find food and medicine, while driving masses across the border for relief into neighboring Colombia and Brazil.

Shortages in electricity, domestic water and public transportation plague millions of Venezuelans, who also confront high crime, the IMF noted.

If the prediction holds, Venezuela’s economy will contract 50 percent over the last five years, Werner said, adding that it would be among the world’s deepest economic falls in six decades.

Socialist President Nicolas Maduro often blames Venezuela’s poor economy on an economic war that he says is being waged by the United States and Europe.

Maduro won a second six-year term as president despite the deep economic and political problems in a May election that his leading challenger and many nations in the international community don’t recognize as legitimate.

The IMF estimates Venezuela’s economy could contract 18 percent this year, up from the 15 percent drop it predicted in April. This will be the third consecutive year of double-digit decline, the IMF said.

Werner said the projections are based on calculations prepared by IMF staff, but he warned that they have a degree of uncertainty greater than in other countries.

“An economy throwing you these numbers is very difficult to project,” Werner said at a news conference. “Any changes between now and December may include significant changes.”
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Checking out a speedboat, a fighter jet and a giant industrial magnet parked on the White House driveway, President Donald Trump showcased an array of “Made in America” products Monday as his administration pushes back aggressively against critics who say his punishing tariffs on imported goods threaten to harm the U.S. economy.

Trump’s event with a smorgasbord of American goods came at the start of a week in which trade discussions are expected to dominate, including talks with European officials and a trip to Illinois in which the president is planning to visit a community helped along by his steel tariffs.

Trump has vowed to force international trading partners to bend to his will as he seeks to renegotiate a series of trade deals he has long argued hurt American workers. But as he deepens the U.S. involvement in trade fights, it raises questions on whether American consumers will feel the pain of retaliatory tariffs — and whether the president will incur a political price for his nationalistic trade policies in the 2018 midterm elections.

“Our leaders in Washington did nothing, they did nothing. They let our factories leave, they let our people lose their jobs,” Trump said at the White House. “That’s not free trade, that’s fool’s trade, that’s stupid trade and we don’t do that kind of trade anymore.”

Trump noted that he would be meeting Wednesday with European officials, including European Commission President Jean-Claude Juncker. The U.S. and European allies have been at odds over the president’s tariffs on steel imports and are meeting as the dispute threatens to spread to the lucrative automobile business. “Maybe we can work something out,” he said.

On Thursday, the president will visit Granite City, Illinois, the home of a U.S. Steel Corp. mill that has reopened after he imposed tariffs on steel imports.

On the South Lawn, the president walked among a number of products manufactured across the nation, including a Lockheed Martin F-35 aircraft from Maryland, a Ford F-150 pickup truck from Michigan, a Newmar recreational vehicle from Indiana and a Ranger speedboat from Arkansas.

National security

Trump has already put taxes on imported steel and aluminum, saying they pose a threat to U.S. national security, an argument that enrages staunch U.S. allies such as the European Union and Canada.

He’s threatening to use the national security justification again to slap tariffs on imported cars, trucks and auto parts, potentially targeting imports that last year totaled $335 billion.

And he’s already imposed tariffs on $34 billion in Chinese imports in a separate dispute over Beijing’s high-tech industrial policies. He has threatened to ratchet that up past $500 billion.

“He likes tariffs,” said William Reinsch, a former U.S. trade official under President Bill Clinton now at the Center for Strategic and International Studies. “His preferred remedy is always tariffs, whether it makes any sense or not.”

“It’s a policy of victimization: ‘Other people have been taking advantage of the United States for years. … Now they have to pay,”‘ Reinsch said, echoing the president’s argument.

Trade analysts say the United States has not pursued such aggressive trade policies in decades.

“I can’t think of another time when you had as many battles and, particularly, as many battles with no resolution in sight,” said Edward Alden, senior fellow at the Council on Foreign Relations.

Trade war

In 1971, President Richard Nixon imposed a broad 10 percent import tax for four months to pressure Japan and European countries to drive up the value of their currencies. The idea: provide relief to American exporters, who were being put at a price disadvantage by a strong dollar.

In 1930, the U.S. raised tariffs dramatically to protect American industry, encouraging other countries to do the same in a global trade war that made the Great Depression worse.

Economists said the tariffs that Trump has imposed so far — and the resulting retaliation — are unlikely to do much economic damage. But things could escalate rapidly.

“If you look at what’s teed up, particularly with China and with the auto tariffs, pretty soon you are talking about some pretty large numbers. Those will do some real damage,” Alden said.

Oxford Economics has calculated that a full-blown U.S.-China trade war — in which each country taxes all the other’s imports — would shave 1 percent off the U.S. economy and wipe out 700,000 jobs in the United States by 2020.

The Peterson Institute for International Economics has estimated that a trade war over autos could cost up to 1.2 million American jobs.

Critics said Trump’s aggressive approach makes it tough for other countries to offer concessions, lest they be seen by their own people as caving in to bullying.

“The Trump administration has not left an easy path to walk away from the fights they’ve created,” Alden said.
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“Heightened trade and geopolitical tensions” are putting global economic growth at risk, G-20 finance ministers said after two days of meetings in Buenos Aires on Sunday.

In their final communique, the Group of 20 ministers stressed the need to “step up dialogue and actions to mitigate risks and enhance confidence.”

The ministers, representing industrial and emerging-market nations, described the overall world economic growth as “robust,” but expressed concerns over what they call the increased risks of the “short and medium term.”

They did not mention the United States by name in their closing statement. But some decried President Donald Trump’s tough trade rhetoric and tariffs on Chinese and European imports.

European Union finance chief Pierre Moscovici urged the U.S. to act like allies, not foes. French finance minister Bruno Le Marie accused Trump of creating a “survival of the fittest” trade mentality and called on Washington to “de-escalate.”

Trump has imposed tariffs on imports of European steel (25 percent) and aluminum (10 percent) while also slapping billions of dollars in tariffs on Chinese goods and threatening more.

He has also accused China and the EU of keeping their interests rates and currencies low, damaging the U.S. dollar on the world market.

 
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Prime Minister Theresa May’s plans to leave the European Union are overwhelmingly opposed by the British public and more than a third of voters would support a new right-wing political party committed to quitting the bloc, according to a new poll.

May’s political vulnerability was exposed by the survey which found voters would prefer Boris Johnson, who quit as her foreign minister two weeks ago, to negotiate with the EU and lead the Conservative Party into the next election.

Only 16 percent of voters say May is handling the Brexit negotiations well, compared with 34 percent who say that Johnson would do a better job, according to the poll conducted by YouGov for The Sunday Times newspaper.

With a little more than eight months to go before Britain is due to leave the EU on March 29, 2019, May’s government, parliament, the public and businesses remain deeply divided over what form Brexit should take.

May’s plans to keep a close trading relationship with the EU on goods thrust her government into crisis this month and there is speculation she could face a leadership challenge after two of her most senior ministers, including Johnson, resigned in protest.

Only one in 10 voters would pick the government’s proposed Brexit plans if there were a second referendum, according to the poll. Almost half think it would be bad for Britain.

The new Brexit minister Dominic Raab said on Sunday the prime minister was still trying to persuade members of the cabinet that her strategy was the best way forward.

Raab also warned that Britain could refuse to pay a 39 billion pound ($51 billion) divorce bill to the EU if it does not get a trade deal – a threat used before by ministers.

No deal Brexit

Speaking to the BBC, Raab refused to deny reports the government is planning to stockpile food or use a section of motorway in England as a lorry park to deal with increased border checks if Britain leaves the EU without a deal.

Asked about a story in The Sun newspaper that the government was planning to stockpile processed food, Raab initially replied “no” and then added: “That kind of selective snippet that makes it into the media, to the extent that the public pay attention to it, I think is unhelpful.”

The possibility of leaving without a trade deal has increased with May facing rebellions from different factions in her party. She only narrowly won a series of votes on Brexit in parliament last week.

The Sunday Times poll found voters are increasingly polarized, with growing numbers of people alienated from the two main political parties.

Thirty-eight percent of people would vote for a new right-wing party that is committed to Brexit, while almost a quarter would support an explicitly far-right anti-immigrant, anti-Islam party, the poll found.

Brexit campaigner Nigel Farage and U.S. President Donald Trump’s former adviser Steve Bannon are in discussions about forming a new right-wing movement, according to The Sunday Times.

Half of voters would support remaining in the EU if there were a second referendum, the poll found, a level of support found in other surveys this year.

YouGov spoke to 1,668 adults in Britain on July 19 and 20, according to The Sunday Times, which did not provide other details about how the poll was conducted.
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German industry groups warned Sunday, ahead of a meeting between European Commission President Jean-Claude Juncker and U.S. President Donald Trump, that tariffs the United States has recently imposed or threatened risk harming the U.S. itself.

The U.S. imposed tariffs on EU steel and aluminum June 1, and Trump is threatening to extend them to EU cars and car parts. Juncker will discuss trade with Trump at a meeting Wednesday.

Dieter Kempf, head of Germany’s BDI industry association, told the Welt am Sonntag newspaper it was wise for the European Union and United States to continue their discussions.

German auto industry

“The tariffs under the guise of national security should be abolished,” Kempf said, adding that Juncker needed to make clear to Trump that the United States would harm itself with tariffs on cars and car parts.

He added that the German auto industry employed more than 118,000 people in the United States and 60 percent of what they produced was exported to other countries from the U.S. 

“Europe should not let itself be blackmailed and should put in a confident appearance in the United States,” he added.

Lowered expectations

EU officials have sought to lower expectations about what Juncker can achieve and downplayed suggestions that he will arrive in Washington with a novel plan to restore good relations.

Eric Schweitzer, president of the DIHK Chambers of Commerce, told Welt am Sonntag he welcomed Juncker’s attempt to persuade the U.S. government not to impose tariffs on cars.

“All arguments in favor of such tariffs are … ultimately far-fetched,” he said.

The German economy had for decades counted on there being open markets and a reliable global trading system, Schweitzer said, but he added of the current situation: “Every day German companies feel the transatlantic rift getting wider.”
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Fiat Chrysler named on Saturday its Jeep division boss, Mike Manley, to take over immediately for Chief Executive Sergio Marchionne, who is seriously ill after suffering major complications following surgery.

The carmaker said British-born Manley, who also takes responsibility for the North America region, will push ahead with the midterm strategy outlined last month by Marchionne, who had been due to step down next April.

Marchionne, 66, was credited with rescuing Fiat and Chrysler from bankruptcy after taking the Italian carmaker’s wheel in 2004. On Saturday, he was also replaced as chairman and CEO of Ferrari and chairman of tractor maker CNH Industrial — both spun off from Fiat Chrysler Automobiles in recent years.

“FCA communicates with profound sorrow that during the course of this week unexpected complications arose while Mr. Marchionne was recovering from surgery and that these have worsened significantly in recent hours,” the statement said.

FCA disclosed earlier this month that Marchionne, a renowned dealmaker and workaholic, was recovering from a shoulder operation. But his condition deteriorated sharply in recent days when he suffered massive complications that were not divulged.

Ferrari named FCA Chairman and Agnelli family scion John Elkann as new chairman, while board member Louis Camilleri becomes chief executive. CNH appointed Suzanna Heywood to replace Marchionne as chairman. All three companies remain controlled by the Agnellis.

Marchionne had previously said he planned to stay on as Ferrari chairman and CEO until 2021.

Deal focus

One of the auto industry’s longest-serving CEOs, Marchionne has advocated tie-ups to share the growing cost burden of developing cleaner, electrified and autonomous vehicles.

He resisted the comparatively easy option of selling off coveted brands such as Jeep, saying that would leave too big a problem with Fiat as “the stump that is left behind.”

But after being rejected by his preferred partner General Motors, he turned back to the task of cutting FCA’s debt — a goal he achieved last month — while maintaining that a merger for FCA was “ultimately inevitable.”

Investor hopes for a transformative deal had largely dwindled and are unlikely to hit the shares on Marchionne’s departure, according to Evercore analyst George Galliers.

“The valuation doesn’t suggest expectations of a buyout are high,” Galliers said.

Even without Marchionne, FCA will remain “culturally more open to dealmaking and savvy to potential capital market opportunities than much of the competition,” he added.

“A lot of that’s now ingrained, so I don’t think you lose everything he’s brought to the company overnight.”

Yet, Manley will have a tough act to follow.

Marchionne resurrected one of Italy’s biggest corporate names and revitalized Chrysler, succeeding where the U.S. company’s two previous owners — Mercedes parent Daimler and private equity group Carberus — both failed.

He has multiplied Fiat’s value 11 times since taking charge, helped by moves such as the spinoffs of CNH Industrial and Ferrari. The planned separation of parts maker Magneti Marelli, due this year, should further increase that value-generation.

He also flattened an inflexible hierarchy, replacing layers of middle management with a meritocratic leadership style. He slashed costs by reducing the number of vehicle architectures and creating joint ventures to pool development and plant costs.
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The International Monetary Fund warned world economic leaders on Saturday that a recent wave of trade tariffs would significantly harm global growth, a day after U.S. President Donald Trump threatened a major escalation in a dispute with China.

IMF Managing Director Christine Lagarde said she would present the G-20 finance ministers and central bank governors meeting in Buenos Aires with a report detailing the impacts of the restrictions already announced on global trade.

“It certainly indicates the impact that it could have on GDP [gross domestic product], which in the worst case scenario under current measures … is in the range of 0.5 percent of GDP on a global basis,” Lagarde said at a joint news conference with Argentine Treasury Minister Nicolas Dujovne.

In the briefing note prepared for G-20 ministers, the IMF said global growth might peak at 3.9 percent in 2018 and 2019, while downside risks have increased because of the growing trade conflict.

Her warning came shortly after the top U.S. economic official, Treasury Secretary Steven Mnuchin, told reporters in the Argentine capital there was no “macro” effect yet on the world’s largest economy.

Long-simmering trade tensions have burst into the open in recent months, with the United States and China — the world’s largest and second-largest economies — slapping tariffs on $34 billion worth of each other’s goods so far.

The weekend meeting in Buenos Aires comes amid a dramatic escalation in rhetoric on both sides. Trump on Friday threatened tariffs on all $500 billion of Chinese exports to the United States.

Mnuchin said that while there were some “micro” effects, such as retaliation against U.S.-produced soybeans, lobsters and bourbon, he did not believe that tariffs would keep the United States from achieving sustained 3 percent growth this year.

“I still think from a macro basis we do not see any impact on what’s very positive growth,” Mnuchin said, adding that he was closely monitoring prices of steel, aluminum, timber and soybeans.

G-7 allies

The U.S. dollar fell the most in three weeks on Friday against a basket of six major currencies after Trump complained again about the greenback’s strength and about Federal Reserve interest rate increases, halting a rally that had driven the dollar to its highest level in a year.

Mnuchin will try to rally G-7 allies over the weekend to join the United States in more aggressive action against China, but they may be reluctant to cooperate because of U.S. tariffs on steel and aluminum imports from the European Union and Canada, which prompted retaliatory measures.

Mnuchin said he would tell G-7 allies that the Trump administration was ready to make a trade deal with them and had placed a high priority on completing the North American Free Trade Agreement (NAFTA) with Mexico and Canada.

“If Europe believes in free trade, we’re ready to sign a free-trade agreement,” he said, adding that a deal would require the elimination of tariffs, nontariff barriers and subsidies.

“It has to be all three issues.”

French Finance Minister Bruno Le Maire, however, said at the G-20 meeting that the European Union could not consider negotiating a free-trade agreement with the United States unless Washington withdrew its steel

and aluminum tariffs first.

Le Maire said there was no disagreement between France and Germany over how and when to start trade talks with the United States. Both agreed Washington needs to take the first step by eliminating tariffs, he said.

Previous session

The last G-20 finance meeting in Buenos Aires in late March ended with no firm agreement by ministers on trade policy, except for a commitment to “further dialog.”

German Finance Minister Olaf Scholz said he would use the meeting to advocate for a rules-based trading system, but that expectations were low.

“I don’t expect tangible progress to be made at this meeting,” Scholz told reporters on the plane to Buenos Aires.

The U.S. tariffs will cost Germany up to 20 billion euros ($23.44 billion) in income this year, according to the head of German think-tank IMK.

Bank of Japan Governor Haruhiko Kuroda said he hoped the debate at the G-20 gathering would lead to an easing of retaliatory trade measures.

“Trade protectionism benefits no one involved,” he said. “I think restraint will eventually take hold.”​

​Protests

Host country Argentina is one of the world’s most closed economies, after a string of populist leaders implemented tariffs and restrictions on foreign capital to protect domestic industry. Market-friendly President Mauricio Macri has removed many of those barriers, generating popular backlash as factory

employment has nosedived.

A currency crisis this year prompted Argentina to seek IMF financing, a political risk for Macri since many Argentines blame Fund-imposed austerity for making its 2001-02 economic collapse worse. Opposition politicians led a protest against Lagarde’s presence on Saturday.

“This deal will mean a tougher, more severe adjustment for working people,” said Nicolas del Cano, a lawmaker for the Socialist Workers’ Party, calling for a national strike to “defeat” the IMF deal.

Lagarde said on Saturday that Argentina was “unequivocally” making progress on its deficit reduction targets agreed to as part of the $50 billion deal.
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