Cindy Saine at the State Department contributed to this report. 

 

U.S. President Donald Trump said late Friday that the United States and Mexico had reached a deal on migration to avert tariffs.

“I am pleased to inform you that The United States of America has reached a signed agreement with Mexico. The Tariffs scheduled to be implemented by the U.S. on Monday, against Mexico, are hereby indefinitely suspended,” he tweeted.

“Mexico, in turn, has agreed to take strong measures to stem the tide of Migration through Mexico, and to our Southern Border. This is being done to greatly reduce, or eliminate, Illegal Immigration coming from Mexico and into the United States,” Trump said.

Earlier Friday, Trump had tweeted that there was a “good chance” the two sides would reach a deal to avert tariffs over the surge of migrants across the U.S. border. However, he added, “If we are unable to make the deal, Mexico will begin paying Tariffs at the 5% level on Monday!”  

U.S. and Mexican officials returned to the negotiating table Friday for a third day of talks to find a way to stem the migrant flow.

Effect on hiring?

Trump’s trade wars with Mexico and other countries appeared to have spooked American companies into putting the brakes on hiring. They added just 75,000 jobs in May, far fewer than the 180,000 economists expected, the Labor Department reported Friday.  

 

Although the jobless rate held steady at a 50-year low of 3.6%, Friday’s figures were the latest signal that the U.S. economy, while healthy, is weakening. Manufacturers, which are particularly sensitive to trade disputes, added only 3,000 jobs, extending an anemic streak of hiring in the sector.

U.S. and Mexican officials discussed a deal calling for Mexico to sharply increase patrols of its border with Guatemala to curb migration, The Washington Post reported, with the deployment of 6,000 National Guard troops. The newspaper said Mexico and the U.S. could overhaul asylum rules throughout the region, requiring Central Americans to first seek refuge in Mexico rather than traveling through it to reach the U.S. 

 

With such a plan in place, the United States could send Guatemala asylum seekers to Mexico, and those from Honduras and El Salvador to Guatemala.  

Earlier Friday in Mexico City, President Andres Manuel Lopez Obrador reiterated his own optimistic position. 

Causes of ‘chaos’

 

“There is dialogue and an agreement can be reached,” Lopez Obrador said. “I’m optimistic we can achieve that.” He added it was a mistake, though, for the U.S. to link migration with trade, saying again that migration must be addressed by solving social and economic problems in Central America.

“The causes of the migratory chaos aren’t being analyzed, only the effects,” he said.  

U.S. authorities have said more than 100,000 undocumented migrants, mostly from the three Central American countries, have crossed into the United States in recent months. The U.S. government announced Wednesday that in May, 144,000 migrants were detained at the border, up 32% from April. It was the highest monthly figure in 13 years. 

 

Some Republican lawmakers, normally close political allies of Trump, had said they would try to block any potential tariffs with legislation, which would have drawn wide support from opposition Democrats. Numerous lawmakers feared rising consumer costs for Americans if the tariffs were imposed on Mexican goods, including cars and numerous food products exported to the U.S.
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Uber is parting ways with two of its top executives less than a month after the company’s rocky stock market debut.

CEO Dara Khosrowshahi told employees in an email Friday that he plans to be more involved in day-to-day operations now that the initial public offering of stock has passed. He said the heads of the company’s global rides and food-delivery teams will report directly to him, and Chief Operating Officer Barney Harford will leave the company.

Khosrowshahi said he plans to combine the marketing, communications and policy teams, and Chief Marketing Officer Rebecca Messina also will leave the company.

“It’s increasingly clear that it’s crucial for us to have a consistent, unified narrative to consumers, partners, the press and policymakers,” Khosrowshahi said.

Stock struggling

San Francisco-based Uber’s stock has struggled since its initial public offering last month. The company posted strong revenue growth in its first quarter as a public company, but also $1 billion in losses.

The stock closed Friday down 76 cents, or 1.7%, at $44.16. It went public at $45 a share.

“This is Dara asserting more control over the company and taking over the wheels at a time the company really needs to execute in the eyes of the public investors,” said Dan Ives, managing director of equity research at Wedbush Securities. “It’s a double-edged sword for him, because it’s going to put that much more pressure on the success of Uber riding on his shoulders.”
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Two key U.S. legislators want answers from Boeing and federal regulators about why the company waited more than a year to disclose that a safety alert in its 737 Max plane wasn’t working properly. 

 

U.S. Reps. Peter DeFazio of Oregon and Rick Larsen of Washington sent letters to Boeing and the Federal Aviation Administration seeking details on what they knew when, and when airlines were told. 

 

The feature is designed to warn pilots when a sensor provides incorrect information about the pitch of the plane’s nose. 

 

Boeing admitted in May that within months of the plane’s 2017 debut, engineers realized that the sensor warning light worked only when paired with a separate, optional feature. 

 

The sensors malfunctioned during flights in Indonesia and Ethiopia. Both planes crashed, killing 346 people in all.
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Finance ministers and central bank governors meeting in Japan this weekend will try to make headway on long-standing issues such as how much global giants like Facebook and Amazon should pay in taxes. 

 

They’re likely to end up focusing a large share of their attention on how to keep global growth on track when the world’s two biggest economies are entrenched in an escalating trade war. 

 

U.S. Treasury Secretary Steven Mnuchin, who has headed trade talks with Beijing along with U.S. Trade Representative Robert Lighthizer, was due to meet with Yi Gang, governor of China’s central bank, on the sidelines of the G-20’s annual financial gathering in Fukuoka in southern Japan. 

 

But it was unclear if their meeting, a possible prelude to talks at the G-20 summit later this month between President Donald Trump and Chinese President Xi Jinping, might lead to a restart of those talks after weeks of stalemate. 

China’s ability to endure

 

As the Trump administration prepares to expand retaliatory tariff hikes of up to 25% to another $300 billion of Chinese products, Beijing has sought to highlight China’s capacity to endure and overcome hardship.  

 

Yi told Bloomberg Television in an interview broadcast Friday that he expected the meeting with Mnuchin to be “difficult.” But he said China’s central bank, the People’s Bank of China, had plenty of room to maneuver to help keep the economy growing despite the pounding the country’s export manufacturers are taking as the toll from higher tariffs mounts. 

 

Speaking Thursday in France, Trump said he plans to make a decision about ramping up tariffs on China after speaking with Xi at the summit in Osaka at the month’s end.

“I will make that decision, I would say, over the next two weeks — probably right after the G-20,” he said.

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

Trade deficit

Trump has also complained repeatedly about America’s huge trade deficit with China — a record $379 billion last year — which he blames on weak and naive negotiating by previous U.S. administrations.

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

Unease over trade tensions and their potential impact on other economies has deepened since Trump announced he would impose a 5% tax on Mexican products starting Monday — a tax that would reach 25% by Oct. 1 if the Mexican government fails to stop the flow of Central American migrants into the United States.

While the tariffs have taken a minor toll on the U.S. economy, the uncertainty and slowing demand are rippling across the globe. Earlier this week, the World Bank downgraded its forecast for the global economy in light of trade conflicts, financial strains and unexpectedly sharp slowdowns in wealthier countries.

Slashing rates

The weakness has prompted central banks, most recently in Australia and India, to slash interest rates to fend off recession. 

 

Japan, hosting the G-20 for the first time since it was founded in 1999, has plumbed the limits of that strategy. The Bank of Japan’s policy interest rate has been at minus 0.1% for years, to keep credit cheap and support a modest pace of expansion.

As the trade conflicts percolate, the officials gathering in Fukuoka, a bustling port city on the southern main island of Kyushu, will carry on chipping away at financial reforms and other perennial issues. 

 

Some European members of the G-20, especially, want to see minimum corporate tax rates for big multinationals. 

 

Japan’s Kyodo News service reported Friday, citing a draft communique, that the finance leaders are also discussing the issue of how developing countries are handling debts incurred through major construction projects, efforts to combat money laundering, and efforts to prevent terrorist groups from using cybercurrencies as a source of funding.
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Russian President Vladimir Putin has criticized the United States for using pressure and sanctions to maintain its economic supremacy.

Speaking Friday at an investment forum in St. Petersburg, Putin said the U.S. attempt to “spread its jurisdiction to the entire world” challenges the global order.

He said globalization “becomes a parody of itself when common international rules are replaced with laws, administrative and judicial mechanisms of one country or a group of countries.”

Flanked by Chinese President Xi Jinping at the forum’s panel, Putin said the U.S. action against Chinese telecom giant Huawei represented an attempt to “blatantly squeeze it out of the global market.”

It is, he said, “the first technological war of the digital era.”

Putin warned that the “fragmentation of the global economic space, the policy of unrestrained political egoism” paves the way to “endless conflicts and trade wars … fights without rules between all.”

He specifically criticized U.S. attempts to hamper the construction of the Nord Stream 2 pipeline intended to carry Russian natural gas to Germany and further on in Europe, saying it reflects the U.S. desire to win advantages for itself.

Xi said Russia and China would coordinate their efforts in the energy sphere more closely.
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Italian-U.S. carmaker Fiat Chrysler on Thursday pulled the plug on its proposed merger with Renault, saying negotiations had become “unreasonable” because of  political resistance in Paris.  

 

Fiat Chrysler Automobiles, or FCA, had stunned the markets last week with a proposed “merger of equals” with the French group that would — together with Renault’s Japanese partners, Nissan and Mitsubishi Motors — create an auto giant spanning the globe.  

 

The French government, which controls 15 percent of Renault, gave the deal a conditional green light, with analysts suggesting it wanted more control over the combined group alongside Fiat’s Agnelli family. 

 

FCA said late Wednesday that it “remains firmly convinced of the compelling, transformational rationale” of the tie-up, which it said was “carefully balanced to deliver substantial benefits to all parties.”

 

“However it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully,” it said in a statement.  

 

On Thursday, FCA chief John Elkann stood by the decision to start, and then leave, the merger talks. 

 

“When it becomes clear that the conversations have been brought to the point beyond which it becomes unreasonable to go, it is necessary to be equally brave to interrupt them,” Elkann wrote in a letter to employees published by Italian media.  

Renault expressed its “disappointment” at the turnabout. 

 

“We view the [Fiat] opportunity as timely, having compelling industrial logic and great financial merit, and which would result in a European-based global auto powerhouse,” it said in a statement. 

 

The combined group, including Nissan and Mitsubishi, would have been by far the world’s biggest, with total sales of 15 million vehicles, compared with both Volkswagen and Toyota, which sell around 10.6 million apiece. 

 

Shares in Renault plunged by more than 6 percent on the Paris stock exchange. In Milan, FCA shares also initially slid but then recovered to close up 0.1 percent.

Nissan holds key

Despite the verbal sparring that erupted after FCA’s announcement, industry experts did not rule out talks being resumed.  

 

“The collapse of the proposed Fiat Chrysler/Renault merger leaves both firms exposed to the shifting dynamics of a sector at a crossroads,” Ilana Elbim, credit analyst for Hermes Investment Management, said in a note.  

 

Pointing to falling sales volumes in major auto markets, she said “mega-mergers designed to save on capital expenditures remain inevitable.” 

 

On Tuesday, Renault’s board had said it was studying FCA’s offer “with interest,” but held off final approval pending further deliberations.  

 

By Wednesday, all Renault directors had come around in favor of the merger, with the exception of the employee representative affiliated with the powerful CGT union and two from Nissan who abstained, according to a source close to Renault.   

The two Nissan directors were said to have asked for more time to approve the deal. There was no official comment from Nissan headquarters in Tokyo. 

 

Relations between Renault and Nissan have come under strain since the arrest in November of their joint boss, Carlos Ghosn, who awaits trial in Japan on charges of financial misconduct. 

 

French Finance Minister Bruno Le Maire had laid down conditions for the tie-up with FCA, insisting there be no plant closures and that the Renault-Nissan alliance be preserved.  

 

The Renault source said Le Maire had asked for another board meeting next Tuesday following his return from a trip to Japan, where he was to discuss the proposal with his Japanese counterpart at a meeting of G-20 finance ministers.  

Blame game

A source close to FCA said it was the “sudden and incomprehensible” objections by Le Maire’s ministry that had caused the deal to collapse. 

 

Italian Deputy Prime Minister Luigi Di Maio said: “When politics tries to intervene in economic procedures, they don’t always behave correctly, I don’t want to say any more.”   

But Le Maire stressed that, of his conditions, only the explicit approval of Nissan remained to be secured, while aides denied that the ministry had played politics with the deal. 

 

A source close to the finance ministry said the French government “regrets the hasty decision of FCA.” 

 

“Despite significant progress, a short delay was still necessary so that all conditions set by the state could be met,” it said. 

 

Le Maire indicated the French government was amenable to changes at Renault despite FCA’s U-turn. 

 

“We remain open to the prospect of industrial consolidation, but once again, in calmness, without haste, to guarantee the industrial interests of Renault and the industrial interests of the French nation,” he told the French parliament. 

 

For his part, Elkann said FCA “will continue to be open to opportunities of all kinds that offer the possibility of strengthening and accelerating the realization of this strategy and creating value.” 
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The U.S. economy could be weakened by escalating trade wars or a sudden downturn in global financial markets, the International Monetary Fund (IMF) warns.

In an annual review of the U.S. economy, the IMF said it was on a 2.6 percent growth track this year, greater than the 2.3 percent growth rate forecast in April.

But the report also said the U.S. economy appears to be increasingly vulnerable amid investor concern over America’s trade wars, noting they could trigger worsening global financial conditions.

The IMF criticized U.S. President Donald Trump’s administration for efforts to remake global trade relationships through higher tariffs and said it was “especially important” to resolve the trade dispute with China.

The report said the U.S. economy has recovered from the financial crisis that began in 2008, but millions of Americans did not benefit from the recovery. Household income increased a meager 2.2 percent from the end of the last century, the report said, while the U.S. economy expanded 23 percent per capita during the same period.

“The poorest 40 percent of households have a level of net wealth that is lower today than it was in 1983,” the report said.

The report called on the Trump administration to avert an economic slowdown by adopting measures to cut public and corporate debt and address inequality.

On Wednesday, the IMF warned the U.S.-China trade war could cut world economic growth next year.

IMF Managing Director Christine Lagarde said Trump’s threat to tax all trade between the two countries would shrink the global Gross Domestic Product (GDP) by one-half-of-one percent.

“This amounts to a loss of about about $455 billion, larger than the size of South Africa’s economy,” Lagarde said in a briefing note for the Group of Twenty (G-20), a collection of the world’s largest advanced and emerging economies. “These are self-inflicted wounds that must be avoided… by removing the recently implemented trade barriers and by avoiding further barriers in whatever form,” she added.

The warning came as G-20 finance ministers and central bankers prepare to meet in Japan later this month. They will gather just weeks after U.S.-China talks collapsed amid claims of broken promises and another round of punishing tariffs.
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Liz Hung supports a lot of the imaginative concepts being discussed to make Vietnam “greener” economically and in terms of urban planning.

 

Consider traffic lights. Hung described how government authorities could collect smartphone data to see which streets are crowded, and then calibrate the stoplights to optimize traffic flow.

 

Hung and others in the private sector are giving Vietnamese officials their wish list for a green economy, from more renewable energy to buildings that collect rain water for use.

 

“Road congestion costs us at least 2 to 5% of our [gross domestic product] growth every year because of the time we lost or the high transportation cost, so that is why being smart [in] mobility is very crucial,” said Hung, who is CBRE associate director of Asia Pacific Research.

 

Hung’s comment highlights the link between good city planning and economic benefits.

Emulating China, Australia

 

There is also a larger debate about whether the economic benefits outweigh the costs of going green.

 

There is a financial cost of technology to make Vietnam more efficient. But there also is a security cost, as “smart devices,” like lights connected to the internet, have looser security settings that make them easier to hack.

 

In looking for inspiration for Vietnam’s future, Hung looked at places from Hangzhou, China, where she heard about the traffic data, to Adelaide, Australia, where authorities installed smart sensors in trash bins, which alert garbage collectors when the bins are nearly full.

 

If the idea is to increase efficiency, Vietnam should think about energy use, said Tomaso Andreatta, vice chair at the European Chamber of Commerce in Vietnam.

 

Last month, the chamber held a forum on sustainable cities. In addition to rooftop solar panels and wind turbines, some cities are exploring ways to create energy from things that would otherwise be tossed out.

 

Trash can be burned, for example, to boil water for steam generators that produce electricity, a process known as waste-to-energy. This does risk increasing carbon emissions or decreasing incentives for recycling, however.

Aiming for zero waste

 

“More and more we realize that resources are limited, and producing waste destroys the quality of life,” Andreatta said. “Therefore, there’s been a movement worldwide to reducing waste to an absolute minimum, ideally zero.”

 

He went on to say, “The rapid development of the middle class and its lifestyle, which includes intensive air conditioning use, accounts for a considerable proportion of energy consumption growth.”

 

It may be the middle class that benefits most from a greener Vietnam, where the private sector steps in to create greater efficiencies, when the government is not involved.

 

Property developers are building enclosed communities where sustainability is part of the design, whether it’s motion-detecting lights, or insulation that keeps indoor temperatures manageable. One developer introduced pollution warnings. Another made a transportation app just for its residents.

 

But what about those who are not lucky enough to live in a gated community?

 

Government officials say they are listening to proposals across all sectors. They say that as Vietnam faces a major threat from climate change, it needs to make greater efforts at green planning.

 

“Climate change will have a big impact on the region,” said Huynh Xuan Thu, deputy chief officer of the Ho Chi Minh City Department of Architecture and Urban Planning.

 

Some of the ideas, such as a country full of electric cars, may be a pipe dream or years down the road. But Vietnam is getting started on some of the proposals.

 

In Ho Chi Minh City, officials are looking at traffic sensors and gathering data on congestion, which they hope to reduce through technology in the near future.

 
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U.S. productivity grew at a strong 3.4% rate in the January-March quarter, the best showing in more than four years, the Labor Department reported Thursday. It was an encouraging sign that productivity may finally be improving after a long stretch of weakness.

 

The first quarter gain was more than double the 1.3% increase in the fourth quarter, although it was slightly lower than an initial estimate of 3.6% made a month ago. Labor costs fell during the first quarter, declining by 1.6% following a 0.4% drop in the fourth quarter.

 

Productivity, the amount of output per hour of work, is a key factor determining an economy’s growth potential. If the current rebound continues, it would provide support for President Donald Trump’s efforts to achieve sustained 3% growth rates.

 

The slight downward revision in productivity reflected the fact that overall output, as measured by gross domestic product, was revised down from an initial estimate of 3.2% growth to 3.1% growth in the first quarter.

 

The 3.4% advance in productivity was the strongest increase since a 3.7% rise in the third quarter of 2014. Productivity has risen 2.4% over the past four quarters, the best performance since a 2.7% four-quarter gain in 2010.

 

Productivity gains over the past decade have been lackluster, averaging just 1.3% annually from 2007 through 2018. That was less than half the 2.7% gains seen from 2000 to 2007, a period when the economy was benefiting from technology improvements in computers and the internet. From 1947 through 2018, annual productivity gains averaged 2.1%.

 

Economists see the slowdown in productivity over the past decade as one of the country’s biggest economic challenges. But recent signs indicate that may be turning around. The economy’s potential to grow is governed by two major factors, growth of the labor force and growth in productivity.

 

For all of 2018, GDP growth was 2.9%. The Trump administration has projected sustained GDP gains of 3% or better over the next decade, well above the 2.2% average GDP gains seen since the current expansion began in June 2009.

 

In a separate report Thursday, the Labor Department said that applications for unemployment benefits, a proxy for layoffs, held steady at 218,000 last week. That is a low level that indicates a strong job market. The government will release its May jobs report on Friday.

 

 
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A rising share of older Americans is forgoing the concept of a traditional retirement at the age of 65, a trend that some younger workers aren’t particularly thrilled to see.

A recent poll by The Associated Press-NORC Center for Public Affairs Research found that workers under the age of 50 were significantly more likely to view America’s aging workforce as a negative development when compared with their older counterparts. About 4 in 10 respondents ages 18 to 49 and 44% of the youngest respondents ages 18 to 29 said they consider the trend to be a bad thing for American workers. Just 14% of those age 60 and over said the same.

“I don’t think in things like IT and medicine you’re as effective a worker (at 65 years old) as you are at 50,” says Katie Otting, a 29-year-old living in Southern California. “If some 65-year-old is in a position that he’s not ready to quit because he wants a better pension and there’s someone else ready to take that job, they’re not going to replace him.”

An aging population, elevated health care costs and lingering financial uncertainty following the Great Recession all are believed to be contributing to America’s steadily graying workforce. Nearly 20% of Americans over the age of 65 were employed or actively looking for work last year, up from less than 12% two decades prior, according to the Bureau of Labor Statistics.

But the increased prevalence of older workers has led some to believe seniors are holding back the country’s economic momentum by remaining in the workforce. Men were slightly more likely than women to cite the aging workforce as a problem for U.S. workers (32% to 27%). And about a third (34%) of more affluent respondents earning more than $100,000 annually said the same, slightly more than the 24% of those earning less than $30,000 who said so.

By contrast, about 6 in 10 Americans age 60 and over say the trend has actually been a good thing for the economy, compared with 3 in 10 Americans under 30 who think that.

About a third of Americans under 50 who have noticed the trend in their own workplace believe the aging workforce has negative implications for their own careers.

“One of the myths that’s out there causing younger and older people to butt heads is the idea that `Oh, it’s because these older people are on the job preventing me from getting the job I want,”’ says Steve Burghardt, a 74-year-old professor of social work at the City University of New York who thinks Americans are “looking for someone younger or someone older to blame” for inequality, job displacement and other economic problems.

Research is mixed on the aging workforce’s overall impact on the U.S. economy. Adam Ozimek, a senior economist at Moody’s Analytics, says his prior research efforts have suggested a growing population of older workers can slow productivity and ultimately hamper wage growth for the rest of the labor market.

But he says there’s little evidence to suggest that the presence of older workers is “crowding younger workers out of promotions,” noting that many of the workers who would naturally move up and replace positions currently held by baby boomers are not millennials but rather middle-aged members of Generation X.

“In anxious times, we look for scapegoats. And old people are a ready scapegoat, especially if you are forced out of having a public presence or are forced (out of a job),” says Ashton Applewhite, a New York-based writer and ageism activist.

The idea that older workers are keeping jobs away from younger Americans, preventing them from moving up the corporate ladder into higher-ranking, higher-paying positions, is not a new one. But economists say it doesn’t have much basis in economic reality.

“The more of those seniors continue to work, that means they’re also spending. And that spending helps build a rich economy that gives you jobs and lots of opportunities,” says Andrew Chamberlain, chief economist at employment hub Glassdoor.

But Chamberlain and Ozimek say it might be easier to believe older workers are holding back their younger counterparts when looking at the economy on a smaller scale. One particular company, for example, may only employ one chief of marketing. Should that person choose to remain in the workforce until he or she is 80 years old, lower ranking employees may perceive a lack of upward mobility.

A comparable job may be ripe for the taking elsewhere, Chamberlain says, but it may be at another company or in another city that would require a move that many employees may be unwilling to make.

“They feel like their opportunities are only within that firm,” Chamberlain says. “I think it’s just simple confusion. I think people are mixing up (opportunities) just inside one company versus the overall job market.”

Meanwhile, many older workers are coming to terms with the fact that they’ll need to remain in the workforce to keep their heads above water or maintain their current lifestyles. Mitch Rothschild, 61, lives and works in New York City and says he expects he is “probably going to have to work until I die.”

He says the aging workforce is less of an economic problem and more of a financial reality to which workers of all ages need to adapt.

“Hey, look, I wished I’d been skiing in the Alps since I was 40,” he says. “But you think I’m going to stop working a year from now and rely on Social Security for the next 20 years? No.”

 
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In a double blow for Mexico, credit ratings agency Fitch downgraded the nation’s sovereign debt rating on Wednesday, citing risks posed by heavily indebted oil company Pemex and trade tensions, while Moody’s lowered its outlook to negative.

The Mexican peso weakened as much as 1.3% on the news.

Cutting Mexico’s rating to BBB, nearing junk status, Fitch said the financial woes of state oil company Pemex were taking a toll on the nation’s prospects.

Fitch said mounting trade tensions influenced its view, according to a statement issued shortly after the end of a meeting in the White House in which Mexican officials tried to stave off tariffs U.S. President Donald Trump has vowed to impose next week.

Following a surge in mostly Central American migrants arriving at the U.S. border, Trump threatened blanket tariffs on Mexican imports if it did not do more to stem the flow.

“Growth continues to underperform, and downside risks are magnified by threats by U.S. President Trump,” Fitch said.

Mexican President Andres Manuel Lopez Obrador took office in December with ambitious plans to build a $8 billion refinery, a decision ratings agencies and investors warned would divert funds from its more profitable production and exploration business.

“Further evidence that medium-term growth is in decline, whether as a result of policies that actively undermine growth or because of continued policy unpredictability, would put downward pressure,” Moody’s said in a statement.

Mexico’s finance ministry declined to comment.

Lopez Obrador has said the ratings agencies were punishing Mexico for the “neo-liberal” policies of previous administrations.

A Reuters analysis of Pemex accounts from the past decade shows debt increased by 75% during the term of Lopez Obrador’s predecessor, Enrique Pena Nieto, amid a landmark energy reform.

Pemex

Moody’s highlighted the risks posed by Pemex, formally known as Petroleos Mexicanos, the world’s most indebted oil company.

“The impact of the contingent liability represented by Pemex weighs increasingly heavily on the sovereign credit profile,” Fitch said in a statement.

The latest moves by the ratings agencies on Mexico’s sovereign rating could also ratchet up pressure on the oil company’s own rating, which is teetering on the brink being downgraded from investment grade.

In March, S&P cut its stand-alone assessment of Pemex by three notches, following Fitch’s move to downgrade its credit in January. S&P pegs the rating of Pemex to that of the sovereign rating and the stand-alone assessment does not equal a rating.
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U.S. refiners warned the Trump administration that tariffs on imports from Mexico could deliver a punishing blow to refiners and raise the cost of gasoline just as the U.S. driving season kicks into high gear, according to sources familiar with the discussions.

Trump surprised Mexico last week with a threat to impose 5% tariffs on all its exports to the United States unless the Mexican government took measures to stem the flow of illegal immigrants into the United States.

The United States imports more than 650,000 barrels of crude per day from Mexico, about 10% of total crude imports, according to U.S. government data. Refiners are also worried that Mexico could retaliate with tariffs on its imports of U.S. fuel, a major source of revenue for the U.S. industry.

“If these tariffs take hold, particularly if they’re able to get up to 25%, that could really impact the overall competitiveness of the U.S. refining industry,” said Chet Thompson, chief executive of the American Fuel and Petrochemical Manufacturers trade association. The group has had discussions with the administration and Congress on the issue, Thompson said.

​Mexico oil complements US oil

Mexico’s oil is heavy and refiners need it to blend with lighter U.S. oil to produce diesel fuel, gasoline and other products. Tariffs would drive up the cost of those imports — and Trump has said he would increase levies by 5% monthly until they reach 25% in October.

Mexico is a prime supplier of heavy crude, which has been harder to come by since the United States imposed sanctions on Venezuela in January.

Gasoline prices have remained subdued as global oil prices have declined because of worries about worldwide economic demand. But without enough heavy crude, U.S. refineries could run plants at lower rates to save money if heavy crude feedstock becomes too costly, lobbyists said.

“The heavy crude market is tight and it’s only Mexico at the moment. The tariff would essentially make the crude uneconomical and we may have no choice but to consider run cuts,” said one Washington-based refinery lobbyist.

Refiners have said that could drive up the price of gasoline at the pump, just as American drivers take to the road in the period of the highest gasoline demand in the United States.

Texas lawmakers alarmed

International crude prices are near a six-month low, so any rise in gasoline prices is unlikely to be prohibitive.

Right now a regular gallon of gasoline in the United States averages $2.80, according to the American Automobile Association, but it tends to rise in the summer months.

“We are trying to educate the administration on what this means for gas prices,” the lobbyist said. The potential for tariffs has alarmed lawmakers of both major U.S. parties, including members of Congress from Texas, a reliably Republican state that voted for Donald Trump in 2016 but depends on the oil industry and cross-border trade with Mexico, which accounts for 39 percent of the state’s exports, according to the Texas-Mexico Trade Coalition.

“We shouldn’t be imposing tariffs on Mexico,” said Senator Ted Cruz, Republican of Texas. He told Reuters that Republican senators “had a vigorous and frank discussion” with White House officials on the issue.

Texas has 5.7 million barrels of daily refining capacity, more than any other state.

U.S. refiners are also concerned about retaliatory actions by Mexico, which buys about one-quarter of U.S. refined product exports. In March, Mexico bought about 1.3 million bpd of oil products from the United States, according to U.S. Energy Department data.

“It would be pretty devastating to us,” a second Washington-based lobbyist said.
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Lazaro Hernandez, who has made a good living showing U.S. cruise ship passengers around Havana in his pink 1950s Chevrolet, says the new U.S. ban on cruises to Cuba will wipe out 90% of his business overnight.

Hernandez is one of thousands of Cubans who benefited from the boom in American visitors to the Caribbean’s largest island following the loosening of travel restrictions under former U.S. President Barack Obama during the short-lived 2014-2016 detente between the Cold War foes.

Obama’s successor, President Donald Trump, aims to punish Cuba’s Communist government, especially for its alliance with Venezuela, by tightening the rules once more. Yet Cubans say those who will really suffer are the people, including the private-sector workers the United States purports to support.

“This is a fatal blow for us,” said Hernandez, 27, who makes $30 an hour — the equivalent of the average monthly state salary — doing tours of Havana. “If there’s no tourism, we don’t have work.”

​Second-biggest group of tourists

U.S. travelers excluding Cuban-Americans became the second-biggest group of tourists on the island in recent years after Canadians, with cruise travelers making up half of those.

Although they typically contributed less to the economy as they stayed on ships rather than in hotels or bed-and-breakfasts, they hired drivers and tour guides and spent at private shops, bars and restaurants.

“We bought T-shirts as souvenirs and bags,” said Sarah Freeman, 42, one of the passengers on the last U.S. cruise ship to sail from Havana, using a handcrafted wooden Cuban fan to fend off the Caribbean heat.

The new restrictions on U.S. travel to Cuba also include the elimination of so-called group people-to-people educational travel, one of the most popular exemptions to the overall ban on U.S. tourism to Cuba.

‘Negative perceptions’

William LeoGrande, a Cuba expert at American University in Washington, estimated the measures could reduce the number of non-Cuban-American U.S. visitors by two-thirds or more.

That could cut overall tourist arrivals in Cuba by about 10%, he said. Another expert, John Kavulich, said the drop could be as much as 20%.

“Optically, not having Carnival, Norwegian and Royal Caribbean in the marketplace will recreate negative perceptions about Cuba,” said Kavulich, president of the U.S.-Cuba Trade and Economic Council Inc., referring to the three main cruise lines forced to cancel service.

Earlier restrictions cut revenues

Tourism revenues, the country’s second-biggest source of hard currency, already slumped nearly 5% last year, according to official data.

That was partly the result of an earlier round of Trump administration restrictions.

Washington says it is pressuring Cuba to reform and tamp down its support for socialist Venezuelan President Nicolas Maduro, whom Trump has been seeking to force out in favor of opposition leader Juan Guaido, who is backed by most Western countries.

Critics say Trump is seeking to drum up support from the Cuban-American community in the swing state of Florida ahead of next year’s election.

Starting Thursday, many Cubans will be feeling the sudden absence in revenue from cruise passengers.

“For me, it will have a domino effect,” said Nichdaly Gonzalez, who earns her living posing for photos, dressed up in her colorful colonial garb, adding she expected to have to rein in her spending. As such, it will have a trickle-down impact on the local economy, especially in the ports of Havana, Santiago de Cuba and Cienfuegos that received the U.S. cruise ships.

The Cuban government has said it is aiming for tourism income to increase 5.8% this year, but it is hard to see how it can reach that goal now.

“We’ve lived with U.S. hostility now for 60 years, since the revolution, so we’ll get by,” said Abel Amador, 46, selling sketches to tourists on a cobbled street. “But this new move will still affect us.”
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Democratic presidential hopeful Elizabeth Warren on Wednesday criticized U.S. President Donald Trump’s decision to impose tariffs on Mexico as “random dart throwing” that lacks a coherent strategy.

Trump unexpectedly told Mexico last week to take a harder line on curbing illegal immigration or face 5% tariffs on all its exports to the United States, rising to as much as 25% later in the year. On Tuesday, Trump said he expected to impose the tariffs as of Monday.

“Trump’s random dart throwing ain’t helping anybody,” Warren, a U.S. Senator from Massachusetts, told reporters after a campaign event in Elkhart, Indiana.

Moments earlier, before a crowd of about 600 in the town with a large manufacturing sector, Warren assailed companies that are moving production abroad. While that echoed Trump’s criticism, she faulted his approach.

“Lets be clear — tariff policy by tweet does not work,” Warren said. “Randomly raising tariffs on a handful of goods with no coherent policy and doing it nation by nation makes no sense at all.”

Warren is one of more than 20 Democrats vying for the Democratic nomination to challenge Trump in the November 2020 election.

Mexican officials will seek to persuade the White House in talks hosted by U.S. Vice President Mike Pence on Wednesday that their government has done enough to stem immigration and avoid looming tariffs. The tariff fight merges two of Trump’s biggest campaign promises, on immigration and fair trade.

“Nobody goes into battle by themselves when they can be stronger by having allies in it,” Warren said, calling for a “coherent trade policy.”

Other Candidates Weigh In

U.S. Senator Amy Klobuchar, who is also running to be a Democratic presidential nominee, criticized Trump for creating “chaos” by creating the tariffs and promising more.

“That’s the kind of chaos he likes,” Klobuchar said in an appearance on CNN on Tuesday. “And I just think that’s not how you embark on international diplomacy with one of our best allies.

U.S. Senator Kirsten Gillibrand, another Democratic presidential hopeful, had a similar criticism.

“This president has no plan and no ability to have a thoughtful approach towards trade or the economy,” Gillibrand said on Monday in a town hall on Fox News. “Because if he wanted to reduce the trade deficit, he’s only grown it.”
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Ghana could end child labor on cocoa farms by increasing the prices it pays impoverished farmers by about 50%, a U.S. study said on Wednesday, as global efforts to end child labor stall.

Paying just 3% more at the farm gate could stop children in Ghana doing the most hazardous tasks, like using machetes, or working more than 42 hours a week, researchers said, as the illegal practice is driven by poverty and rarely prosecuted.

“We figured there has to be some kind of incentive, on top of the laws, to get the farmers to stop using child labor,” said Jeff Luckstead, an agricultural economist at the University of Arkansas, co-author of the study in the journal PLoS ONE.

“It’s a really difficult issue because these are very poor farmers … They don’t have many options – they can’t just go and hire people,” he told the Thomson Reuters Foundation.

A PLoS spokeswoman later added that while the underlying conclusions of the report were all accurate, some of the numbers cited in the study were under review with an update to follow shortly. No further details were given.

Ghana is the world’s second largest cocoa grower, with more than 700,000 children producing the crop, often doing dangerous jobs on family farms like carrying heavy loads or using sharp tools, the anti-slavery group Walk Free Foundation says.

Big chocolate makers have been under pressure to clean up their supply chains since reports of child labor on West African cocoa farms emerged in the 1990s, with major names like Mars and Hershey promising to only buy ethical cocoa by 2020.

The International Labor Organization has said the world is unlikely to meet a target of ending child labor by 2025, which is part of 17 global development goals agreed in 2015 at the United Nations.

Researchers came up with the price premiums by analyzing data between 2003 and 2015, including household budgets, cocoa prices and production and children’s education and leisure time.

While recognizing a 50% price increase was “implausible,” the study suggested that Ghana could become more competitive globally if it could certify its cocoa as “child labor-free”.

All cocoa produced in Ghana is sold to the regulator, COCOBOD, which paid farmers 7,600 cedi ($1,435) per ton last year. Ghana exports almost 20% of global cocoa output of some 4.8 million tons a year.

Most cocoa farming families live below the World Bank’s poverty line of $2 a day, according to the charity International Cocoa Initiative (ICI), fueling child labor.

But Genevieve LeBaron of Britain’s Sheffield University, who was not part of the study, said the key to ending poverty among cocoa farmers was not necessarily raising COCOBOD’s prices but fairer distribution of profits within the chocolate sector.

The global chocolate industry was worth about $85 billion in 2018, and is projected to jump to $102 billion by 2022, according to leading research firm Mintel.

“If you look at the annual profits of the largest cocoa and chocolate confectionary companies in the world, there’s plenty of money in that supply chain that could be redistributed downwards along the value chain,” said the politics professor.
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The trade war between the United States and China could cut world economic growth next year, the International Monetary Fund (IMF) warned Wednesday.

IMF Managing Director Christine Lagarde said U.S. President Donald Trump’s threat to tax all trade between the two countries would shrink the global Gross Domestic Product (GDP) by one-half of one percent.

This amounts to a loss of about about $455 billion, larger than the size of South Africa’s economy,” Lagarde said in a briefing note for the Group of Twenty (G-20), a collection of the world’s largest advanced and emerging economies. “These are self-inflicted wounds that must be avoided… by removing the recently implemented traded barriers and by avoiding further barriers in whatever form,” she added.

The warning came as G-20 finance ministers and central bankers prepare to meet in Japan this weekend. They will gather just weeks after U.S.-China talks collapsed amid claims of broken promises and another round of punishing tariffs.

Lagarde urged governments to adopt policies that support economic growth to avoid a global economic decline. “Should growth substantially disappoint,” she wrote, policymakers must do more, including “making use of conventional and unconventional monetary policy and fiscal stimulus.”

The GDP is a monetary measure of the value of all goods and services produced in an economy during a specific period of time.
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Christy Lee of VOA’s Korean Service contributed to this report.

The escalating trade dispute between the United States and China could distract Beijing from dealing with nuclear North Korea and undermine its efforts to enforce international sanctions, potentially hampering the U.S. attempt to denuclearize the country, experts said.

Even as the Trump administration pursues its “maximum pressure” campaign to push North Korea to denuclearize, Washington has engaged in rounds of talks with China that have turned into a bitter tit-for-tat trade war. 

With the aim of making American-made goods competitive in the United States relative to cheaper Chinese imports, the U.S. launched an investigation into Chinese trade policies in 2017. Washington imposed tariffs on more than $250 billion out of total $539 billion worth of Chinese goods the United States imported in 2018.

Beijing retaliated by raising tariffs on $110 billion of a total $120 billion U.S. goods imported last year. 

The latest hike came earlier in May when the Trump administration raised U.S. tariffs on $200 billion in Chinese imports from 10% to 24%. Trump threatened to add a 24% tariff on the remaining $325 billion worth of imports from China.

This was followed by Beijing’s retaliatory tariff hike on American goods as high as 25% from 10%, affecting $60 billion in American imported goods starting June 1. 

China has accused the United States of starting what it called “the largest war in economic history” and an “economic terrorism.” On Sunday, China said it will “not back down’ in the escalating trade war with the United States.

Tension between Beijing and Washington over a trade deal has caused concern among North Korean watchers wondering if the dispute will affect the U.S. effort to denuclearize North Korea. 

China, as North Korea’s largest trading partner, is responsible for approximately 90% of its imports and exports. As such, Beijing could play a pivotal role in denuclearizing the nation on its southeastern border, because according to William Overholt, a senior research fellow and Asia expert at Harvard’s Kennedy School of Government, “China is very determined to eliminate North Korea’s nuclear weapons.”

The consuming battles in the U.S.-China bilateral trade agreements could distract China from the North Korean nuclear issue, said Scott Snyder, director of the U.S.-Korea policy program at the Council of Foreign Relations.

“The main impact of trade tensions between the U.S. and China is (lowering) the priority of North Korea as an issue on the agenda of U.S.-China relations,” said Snyder. “And so, it’s going to be harder to get China to cooperate as much as the United States would like because they’re focused on other issues in the relationship.”

The biggest role China could play in denuclearizing North Korea is enforcing international sanctions issued since 2016. Targeting Pyongyang’s key export commodities such as coal and seafood, the sanctions were designed to cut off foreign income that could be used to support its nuclear weapons and missile programs.

Joseph DeTrani, a former U.S. special envoy for nuclear talks with North Korea, emphasized China’s role in enforcing sanctions, saying, “Failure to work in concert (with China) in sanctions implementation would weaken our efforts to succeed with North Korea and its nuclear and missile programs.”

But a drawn-out trade war could make Beijing do less to enforce the sanctions, according to Ryan Hass, who served as the director for China, Taiwan and Mongolia at the National Security Council from 2013 to 2017. 

“The level of rigor that sanctions are enforced (with) depends upon the level of manpower and the level of resources that are devoted to the task,” said Hass.“It isn’t necessarily the case that China would turn its back on the sanctions, but it may just choose to allocate its resources and its manpower to other priorities.”

After all, Beijing is more concerned with achieving its chief objective of stability than it is with sanctions, said Robert Manning, a senior fellow at the Atlantic Council.

“While the sour climate and rising tensions in U.S.-China relations complicates U.S. diplomacy on North Korea, China’s cooperation was never a favor to the U.S.,” said Manning. “Beijing’s interests on the Korean Peninsula toward North Korea (have) been based on a sober assessment of China’s desire to see a non-nuclear Korea and stability on the Korean Peninsula.”

China, as one of five permanent members of the United Nations Security Council (UNSC), joined the rest of the UNSC members in issuing stronger sanctions on North Korea in response to multiple missile and nuclear tests it conducted in 2016 and 2017. 

When Washington and Pyongyang began engaging diplomatically in 2018, culminating in their first historical summit in Singapore in June 2018, Beijing suggested international sanctions on North Korea be eased. Several months after the Singapore summit, a report by the U.S.-China Economic and Security Review Commission came out indicating China has relaxed enforcing sanctions on North Korea.

Diplomatic efforts have been stalled since the breakdown of their second summit in Hanoi in February. At issue were conflicting demands and expectations: Pyongyang wanted all sanctions lifted before undertaking a step-by-step denuclearization process, while Washington wanted full denuclearization before lifting sanctions. Given that, the trade disagreements between Washington and Beijing could push China to truncate its support on sanctions, said Stapleton Roy, former U.S. ambassador to China during the George H.W. Bush and Bill Clinton administrations.

“Under those circumstances, it’s not clear whether China will be as willing as it was before to support very strong sanctions on North Korea,” said Roy.

Bruce Klingner, former CIA deputy division chief for Korea and current senior research fellow at the Heritage Foundation, said Beijing could not threaten outright to refuse to implement sanctions as a trade negotiations tactic since doing so would be defying the U.N. But “Beijing could, however, be less vigilant in implementing and enforcing U.N. sanctions,” said Klingner.

Complicating the matter, Snyder said if Beijing views Washington attempting to prevent China’s economic ascendency over the U.S. while engaged in the trade war, its interpretation of the U.S. attitude could induce it to curtail “the amount of cooperation that (it could) provide the United States on North Korea.”

 
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Vietnam is likely to make concessions to the United States so it can escape a U.S. watch list of possible currency manipulators and head off a hit to its fast-growing economy led by exchange rate-sensitive exports, analysts who follow the country say.

The Southeast Asian country, they forecast, will probably talk to the U.S. side over the next six to nine months, consider approving fewer changes in its foreign exchange rate and accept more high-value American imports.

Those measures would help Vietnam get off the U.S. Treasury’s list of nine countries that Washington will examine further for whether those states are currency “manipulators.” Manipulation implies deliberate state-driven currency rate changes that favor a country’s own exporters and make trade more costly for importers. The U.S. list released in late May added Vietnam, Malaysia and Singapore.

The policy changes might place a speed bump in the economy, which has grown around 6% every year since 2012, but a “manipulator” label could lead to tariffs on Vietnamese goods shipped to the United States and choke economic expansion.

“I think they’ll definitely (take action), because they’re extremely worried about this matter, so they’ll carry out some necessary communications and make some adjustments,” said Tai Wan-ping, Southeast Asia-specialized international business professor at Cheng Shiu University in Taiwan. “If they keep going, to be on this list is disadvantageous for Vietnam.”

Exports and the local currency

Vietnam, a growing manufacturing powerhouse that reels in factory investors from around Asia for its lost costs, posted a $39.5 billion surplus in trade with the United States last year and a $13.5 billion surplus in the first quarter this year.

The same country also adjusts its dong currency exchange rate within a band but trending toward weakness versus the U.S. dollar. That trend favors exporters, a majority of the $238 billion Vietnamese economy.

“The reality is, it’s what we call in economics a dirty float currency. It’s not grossly manipulated — it basically reflects market rate for the dong,” said Adam McCarty, chief economist with Mekong Economics in Hanoi. 

“But it’s sort of controlled to stop big fluctuations, so that the change in the exchange rate month to month is rather small, but it’s always been slowly and steadily in the direction of depreciation of the Vietnamese dong,” McCarty said.

​Inflows of “hot money” into Vietnam, which could hurt exports eventually, sometimes require the country to adjust its foreign exchange rate, Tai said.

Measures to get off the list

Vietnam’s limiting of any further fluctuations would put the U.S. government more at ease, said Rajiv Biswas, Asia-Pacific chief economist at the market research firm IHS Markit.

“The U.S. Treasury did say that Vietnam should reduce its intervention in the exchange rate and let the currency move in line with economic fundamentals,” Biswas said. “If you’re not intervening in your currency, that automatically reduces the risk of being named a currency manipulator.”

But Vietnamese net purchases of foreign currency last year came to just 1.7% of GDP, below the 2% that Washington uses to define “persistent one-sided intervention in the foreign exchange market,” Hanoi-based SSI Research said in a note Monday. Governments can adjust exchange rates by buying or selling foreign currency.

Vietnam, where many of the top companies are state-invested, could reduce the trade balance by buying more “capital intensive equipment” and aerospace goods such as aircraft from the United States, Biswas said.

India left the U.S. list in May after easing a trade surplus, though China – in the thick of a trade dispute with Washington – was kept on it.

There are few other “policy levers” Vietnam can use to answer the U.S. Treasury concerns, said Gene Fang, an associate managing director with Moody’s Investors Service in Singapore.

Negotiations with Washington

Vietnam will probably remain on the U.S. list over at least the next half a year, when the document is due for an update, analysts believe. The two sides are likely to discuss the currency rate and the trade imbalance as Vietnam deliberates its response measures, they say.

Eventually the U.S. government could seek negotiations with Vietnam and place tariffs on Vietnamese exports if it sees fit, Fang said.

“I guess one of the things we could see as a result would be that the U.S. places higher tariffs on Vietnamese exports to the U.S., and that would be certainly negative from a growth perspective,” he said.
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The U.S. Commerce Department on Tuesday recommended urgent steps to boost domestic production of rare earths and other critical minerals, warning that a halt in Chinese or Russian exports could cause “significant shocks” in global supply chains.

The report includes 61 specific recommendations — including low-interest loans and “Buy American” requirements for defense companies — to boost domestic production of minerals essential for the manufacture of mobile phones and a host of other consumer goods, as well as fighter jets.

It also called for closer cooperation with allies such as Japan, Australia and the European Union, and directed reviews of government permitting processes to speed up domestic mining.

U.S. reliance on foreign minerals has worried U.S. officials since 2010, when China embargoed exports of so-called rare earth minerals to Japan during a diplomatic row. The issue took on new urgency in recent weeks after Chinese officials suggested rare earths and other critical minerals could be used as leverage in the trade war between the world’s largest economic powers.

“The United States is heavily dependent on foreign sources of critical minerals and on foreign supply chains resulting in the potential for strategic vulnerabilities to both our economy and military,” the Commerce Department said in a long-awaited report outlining a new federal strategy on critical minerals.

“If China or Russia were to stop exports to the United States and its allies for a prolonged period — similar to China’s rare earths embargo in 2010 — an extended supply disruption could cause significant shocks throughout U.S. and foreign critical mineral supply chains,” the report said.

Boosting trade with other countries could reduce U.S. reliance on sources of critical minerals that could be disrupted, and robust enforcement of U.S. trade laws and international agreements could also help address adverse impacts of market-distorting foreign trade measures, it said.

The report was cheered by U.S. miners, including MP Materials, which owns California’s Mountain Pass mine, the only current rare earths facility in the United States.

For now, it must pay a 25 percent tariff to ship its rare earths to China for processing, collateral damage in the U.S.-China trade war.

“We welcome this report and hope that the Commerce Department’s ‘Call to Action’ results in some real action from Washington,” said James Litinsky, co-chairman of MP Materials.

Recommendations

The report called for a combination of short-term measures, such as stockpiling, and longer-term moves to catalyze exploration, design and construction of new mines, as well as re-establishing domestic downstream manufacturing supply chains.

It recommended several measures for the Interior Department and its subagencies, including the Bureau of Land Management and the Forest Service, to remove obstacles to critical mineral development and make it easier to get permits.

It said the BLM and Forest Service should review all areas that are currently “withdrawn” — or protected — from development and assess whether those restrictions should be lifted or reduced to allow for critical mineral development.

Commerce also proposed altering how the Interior Department and its agencies review mining projects under the bedrock National Environmental Policy Act, urging expedited environmental studies and identifying minerals which can be excluded from environmental reviews.

The report drew immediate fire from Democrats who said the new strategy would harm the environment and amounted to fresh concessions to multinational corporations.

“This administration has set shameful new records for industry giveaways, and this is one of the worst,” said Raul Grijalva, Democratic chairman of the House of Representatives Natural Resources Committee.

The industry applauded the report, however.

“The steps outlined in this report will go a long way in unlocking the value of all our domestic mineral resources while continuing strict environmental protections,” said Hal Quinn, president of the National Mining Association.

The Buy American recommendation, which would require defense weapons and related products be built with domestically-sourced rare earths, could make it easier to secure financing if investors knew there would be a guaranteed revenue source for new projects, prospective U.S. rare earth miners said.

“I would encourage the federal government to move as quickly as possible, and ‘buy American’ is one way to do that,” said Anthony Marchese, chairman of Texas Mineral Resources Corp, which is seeking $300 million to develop the Round Top rare earth deposit in Texas.
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The U.S. Internal Revenue Service is auditing Uber Technologies’s taxes for 2013 and 2014 and the ride-hailing company expects unrecognized tax benefits to be reduced within the next year by at least $141 million.

In its full quarterly report on Tuesday, Uber said various state and foreign tax authorities were also looking into its taxes and that it was currently unable to put a definite timeline or estimate on the overall adjustments that might result.

The $141 million amount related only to its transfer pricing positions, which refers to the common multinational practice of charging for services between wholly-owned businesses in different countries or jurisdictions to reduce the tax it pays.

Earlier this year, the company had said in a regulatory filing that it expected unrecognized tax benefits related to the audit to be reduced within the next year by at least $127 million.

Industry experts characterize transfer pricing as a relatively risky strategy, which typically is among multinationals’ top tax concerns and has been used by authorities in the past to go after Apple and Amazon.

“Although the timing of the resolution and/or closure of the audits is highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits could significantly change in the next 12 months,” the company said.

The announcement came on a day when at least 11 of the brokerages, whose underwriting arms backed Uber’s Wall Street debut last month, weighed in with “buy” recommendations on the company’s shares as a statutory embargo lifted. Citi, however, initiated coverage with a “neutral” rating.

Uber shares gained 2.8% in afternoon trading as the technology sector bounced back from a sell-off on Monday.

The company’s stock has struggled since its market debut on May 10 and is trading below its IPO price of $45.

Still, the shares have outperformed rival Lyft, which have fallen by a third in value since its own debut in March, and analysts from Deutsche Bank said Uber’s stock remained the best internet IPO for investors since Facebook’s launch in 2012.

“Uber should trade at a premium to LYFT given Uber’s larger global scale and reach, cross product growth opportunity and larger ability for long-term leverage,” said analysts at Morgan Stanley. “It is still in the early innings in its core and emerging opportunities.”

In its first quarterly report as a public company last week, Uber reported a $1 billion loss as it spent heavily to build up its food delivery and freight businesses.

But many of the analysts covering the stock on Tuesday said they believed Uber had the scale and time to develop into another powerful U.S. global tech player.

RBC analysts believe the market under-appreciates Uber’s profit potential while analysts at Mizuho Securities expect the intense competition to rationalize over the next few years due to continued consolidation and listings of private peers.

“…Uber has ample room to gain operating leverage from economies of scale,” analysts at Mizuho said.
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Democratic U.S. presidential hopeful Elizabeth Warren proposed on Tuesday spending $2 trillion on a new “green manufacturing” program to address climate change that would invest in research and exporting American clean energy technology.

The manufacturing program is the first in a new series of “economic patriotism” proposals Warren is unveiling intended to create American jobs and help U.S. industry.

“This is going to be a big plan for bold structural changes,” Warren said at a campaign rally in Detroit, Michigan.

Warren told the crowd of about 500 in a facility that teaches manufacturing skills that her proposal would be paid for by cutting subsidies in the oil and gas industry. Additionally, by all companies paying more taxes, she said, singling out Amazon.com.

Among the more than 20 Democrats in the field hoping to challenge Republican President Donald Trump in November 2020, Warren has distinguished herself as the most prolific proposer of new policy positions.

Several candidates have offered climate-related policy proposals, including Washington Governor Jay Inslee, who has made it the singular focus of his campaign, and former Vice President Joe Biden, who also announced a climate plan on Tuesday.

Warren said she had not read Biden’s proposal when asked by reporters after her campaign event.

The newest proposal from Warren, a U.S. senator from Massachusetts, lays out how she would carry out some of the policy goals outlined in the Green New Deal, which has the backing of liberal members of her party.

Warren began touting the proposal in a campaign trip to Michigan, a Midwestern state with a large manufacturing sector that shocked political observers in 2016 when voters backed Trump and helped propel him to the White House.

“When we’re talking about manufacturing, when we’re talking about real expertise, we’re talking about Detroit,” Warren said.

The plan is likely to draw criticism from opponents who will argue the price tag is too high and that trying to quickly overhaul the U.S. energy sector would have crippling economic effects.

But Warren also released an evaluation of her three-part proposal conducted by Moody’s economist Mark Zandi, who argued the plan would help the economy on a large scale.

“There is no free lunch, and big businesses, oil and gas companies, and multinationals pay for the cost of this plan,” Zandi wrote. “The economy benefits, although it would take more than a decade for this benefit to be fully realized.”

The first part of Warren’s plan calls for spending $400 billion over 10 years on clean energy research and development.

Warren said she believes the United States could one day use no fossil fuels. “It’s part of our technological bandwidth,” she said in a brief news conference after the Detroit rally.

Next, Warren proposed increasing the amount the United States spends on “American-made clean, renewable, and emission-free energy products for federal, state, and local use, and for export.”

Warren said the United States currently spends $1.5 trillion on defense procurement, which she called “bloated,” and argued that an equal amount should be spent on clean energy.

As part of this proposal, Warren would require companies that sell to the federal government pay their employees at least $15 an hour, that employees receive 12 weeks paid family and medical leave and be able to form unions. Labor practices were included in Green New Deal proposals.

Finally, Warren called for creating a new federal office responsible for trying to get foreign countries to purchase U.S. clean energy technology.

Likening it to programs that help foreign countries buy U.S.-made weapons, Warren would allocate $100 billion to assist countries buying U.S. energy technologies.

While acknowledging ambitious goals that liberal advocates have supported to reduce greenhouse gas emissions to net-zero by 2050, Warren said it was important that other countries cut emissions as well.

“We need other countries to slash their emissions, and that means we need to supply the world with clean energy products (at low enough prices to displace dirty alternatives) to put us on the right path,” Warren wrote on Medium.
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VOA’s Michael Bowman contributed to this story.

President Donald Trump said Tuesday he is “more likely” than not to impose a new 5% tariff on imported products from Mexico next week.

Trump offered his assessment at a London news conference with British Prime Minister Theresa May.

He made his comments even as U.S. and Mexican officials were in Washington talking about tariffs and the surge of Central American migrants traveling through Mexico to reach the United States.

“Mexico should step up and stop this invasion into our country,” Trump said, contending that “millions and millions” of undocumented migrants from Guatemala, Honduras and El Salvador are entering the U.S. to escape poverty and violence in their homelands.

“I think Mexico will step up and do what they need to,” Trump said. “I want to see security at our border and great trade. We are going to see if we can do something, but I think it’s more likely the tariffs go on, and we will probably be talking during the time that the tariffs are on.” 

Trump has threatened to increase the tariffs monthly in 5% increments if the migration is not curbed.

Some Republican lawmakers, normally political allies of Trump, are wondering whether to try to pass legislation to block his imposition of the tariff. They fear the extra taxation would be passed on to U.S. consumers in the form of higher retail prices on an array of goods, including automobiles and farm produce.

But Trump said, “I think if they do that, it’s foolish,” citing his high political standing among Republican voters, even as surveys in the U.S. show that overall, American voters disapprove of his performance as president.

Bob Carter, Toyota’s head of sales for North America, said in a letter sent to news agencies that the new tariffs on Mexico could cost the U.S. car industry billions.

Sixty-five percent of the popular Tacoma pickup truck that Toyota plans to sell in the United States is imported from a Mexican plant.

Talks between the U.S. and Mexico started Monday. Secretary of State Mike Pompeo plans to meet with Mexican Foreign Minister Marcelo Ebrard on Wednesday at the White House. 

Ebrard says he believes a deal can be reached to avoid tariffs, but if not, Mexico plans to announce its response Thursday. It is unclear exactly what the Trump administration considers sufficient migration control to cancel the tariffs. 

Mexican officials say they could only go so far in meeting Trump’s demand to block migrants’ passage through Mexico. The officials specifically ruled out a “third safe country” agreement requiring U.S. asylum-seekers to first apply for refuge in Mexico.

“There is a clear limit to what we can negotiate, and the limit is Mexican dignity,”said Mexico’s ambassador to the United States, Martha Barcena.

U.S. lawmakers sharply criticized Trump’s latest tariff tactic aimed at a major U.S. trading partner.

“This [tariffs] is not a popular concept,” said Republican Sen. John Cornyn of Texas, adding that his state is Mexico’s biggest export market.

Another Republican, Missouri Sen. Roy Blunt, expressed concerns that trade friction could harm a newly negotiated free trade pact between the United States, Mexico and Canada.

“I’m not a big advocate of tariffs, and I’d like to get the USMCA agreement approved. I don’t see how the addition of a tariff [on Mexican goods] right now helps make that happen,” Blunt told VOA.

“Mexico is a critical trading partner of the United States,” Democratic Sen. Ben Cardin of Maryland said. “You put up barriers, it’s going to end up costing us jobs, and it’s going to cost consumers.”

Cardin added that Trump’s threatened tariff “would be counterproductive,” as far as boosting U.S. border security.

“If we need cooperation on the southern border, they [Mexican officials] are not going to give us cooperation. Why bother if we’re going to have an antagonistic relationship?” Cardin said.
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