Last-minute changes to a new North American trade deal sank U.S. hopes of making Canada and Mexico allow higher-value shipments to the countries by online retailers, such as Amazon.com, a top Mexican official said on Friday.

The revised pact was set to double the value of goods that could be imported without customs duties or taxes from the United States through shipping companies to Mexico.

But Canada’s adoption of a more restrictive threshold during its efforts last month to salvage a trilateral deal prompted Mexican negotiators to follow Canada’s lead, Economy Minister Ildefonso Guajardo said on Friday.

The final version of the trade agreement will insulate retailers in both countries from facing greater competition from e-commerce companies like Amazon.com Inc and eBay Inc.

“It was the solution liked much more by Mexican businesses,” Guajardo told local television.

The change was came so last-minute that it was not written into the agreement published last weekend.

The new deal, called the United States-Mexico-Canada Agreement (USMCA), was meant by U.S. President Donald Trump to create more jobs in the United States. Trump had been highly critical of the prior NAFTA agreement since before he ran for president.

U.S. negotiators originally pushed Mexico and Canada to raise import limits to the U.S. level of $800 from current thresholds of $50 and C$20, respectively.

Traditional retailers in Mexico opposed such a big hike, fearing online companies would sell cheap imports from Asia through the United States. Even so, Mexico initially agreed in August to raise the threshold on customs duties and taxes to $100 in its bilateral deal with the United States.

Guajardo said that Canada, after Mexico had finished negotiations, set its sales tax exemption at just C$40, about $30, and put a ceiling of C$150, about $117, on custom duties exemptions.

The Retail Council of Canada said the deal will protect retailers against a “massive change in the competitive landscape.”

Mexico decided to follow suit, Guajardo said, favoring local clothing, footwear and textile industries, as well as the finance ministry that collects duties and taxes.

Mexican negotiators lowered the sales tax exemption back to the $50 level, while raising the customs duties limit to $117, matching Canada, Guajardo said.

“Mexico offered a deal where it really didn’t concede anything,” said Adrian Correa, a senior lawyer at FedEx Corp.

Mike Dabbs, eBay’s government relations director for the Americas, said separate tax and custom duty thresholds could create confusion.

“That does not help the experience for small businesses and consumers,” he said.
…

U.S. job growth slowed sharply in September likely as Hurricane Florence depressed restaurant and retail payrolls, but the unemployment rate fell to near a 49-year low of 3.7 percent, pointing to a further tightening in labor market conditions.

The Labor Department’s closely watched monthly employment report on Friday also showed a steady rise in wages, suggesting moderate inflation pressures, which could ease concerns about the economy overheating and keep the Federal Reserve on a path of gradual interest rate increases.

Nonfarm payrolls increased by 134,000 jobs last month, the fewest in a year, as the retail and leisure and hospitality sectors shed employment. Data for July and August were revised to show 87,000 more jobs added than previously reported.

The economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population.

“The weaker gain in payrolls in September may partly reflect some hit from Hurricane Florence,” said Michael Pearce, senior U.S. economist at Capital Economics in New York. “There is little in this report to stop the Fed continuing to raise interest rates gradually.”

Economists polled by Reuters had forecast payrolls increasing by 185,000 jobs in September and the unemployment rate falling one-tenth of a percentage point to 3.8 percent.

Fed Chairman Jerome Powell said on Tuesday that the economy’s outlook was “remarkably positive” and he believed it was on the cusp of a “historically rare” era of ultra-low unemployment and tame inflation.

The U.S. central bank raised rates last week for the third time this year and removed the reference in its post-meeting statement to monetary policy remaining “accommodative.”

The Labor Department said it was possible that Hurricane Florence, which lashed South and North Carolina in mid-September, could have affected employment in some industries. It said it was impossible to quantify the net effect on employment.

Payrolls are calculated from a survey of employers, which treats any worker who was not paid for any part of the pay period that includes the 12th of the month as unemployed. The average workweek was unchanged at 34.5 hours in September. The smaller survey of households from which the jobless rate is derived regards persons as employed regardless of whether they missed work during the reference week and were unpaid as result. It showed 299,000 people reported staying at home in September because of bad weather. About 1.5 million employees worked part-time because of the weather last month.

U.S. stock index futures briefly turned positive after the data before reversing course. The dollar was trading lower against a basket of currencies while U.S. Treasury yields were higher.

Diminishing slack

The drop of two-tenths of a percentage point in the unemployment rate from 3.9 percent in August pushed it to levels last seen in December 1969 and matched the Fed’s forecast of 3.7 percent by the end of this year.

Average hourly earnings increased 0.3 percent in September after a similar rise in August.

With September’s increase below the 0.5 percent gain notched during the same period last year, the annual rise in wages fell to 2.8 percent from 2.9 percent in August, which was the biggest advance in more than nine years.

Wage growth remains sufficient to keep inflation around the Fed’s 2 percent target. As more slack is squeezed out of the labor market, economists expect annual wage growth to hit 3 percent.

Last month, employment in the leisure and hospitality sector fell by 17,000 jobs, the first drop since September 2017. Retail payrolls dropped by 20,000 jobs in September. Manufacturing payrolls increased by 18,000 in September after rising by 5,000 in August.

Construction companies hired 23,000 more workers last month after increasing payrolls by 26,000 jobs in August. Professional and business services employment increased by 54,000 jobs last month and government payrolls rose 13,000.

While surveys have shown manufacturers growing more concerned about an escalating trade war between the United States and China, it does not appear to have affected hiring. In fact, the Fed’s latest survey of national business conditions reflected concerns about labor shortages that are extending into non-skilled occupations as much as about tariffs.

Washington last month slapped tariffs on $200 billion worth of Chinese goods, with Beijing retaliating with duties on $60 billion worth of U.S. products. The United States and China had already imposed tariffs on $50 billion worth of each other’s goods. The trilateral trade agreement between the United States, Canada and Mexico was salvaged in an 11th-hour deal on Sunday.

Despite the Trump administration’s protectionist trade policy, the trade deficit continues to deteriorate. The trade gap increased 6.4 percent to a six-month high of $53.2 billion in August, the Commerce Department reported on Friday. The politically sensitive goods trade deficit with China surged 4.7 percent to a record high of $38.6 billion.

 
…

U.S. job growth slowed sharply in September likely as Hurricane Florence depressed restaurant and retail payrolls, but the unemployment rate fell to near a 49-year low of 3.7 percent, pointing to a further tightening in labor market conditions.

The Labor Department’s closely watched monthly employment report on Friday also showed a steady rise in wages, suggesting moderate inflation pressures, which could ease concerns about the economy overheating and keep the Federal Reserve on a path of gradual interest rate increases.

Nonfarm payrolls increased by 134,000 jobs last month, the fewest in a year, as the retail and leisure and hospitality sectors shed employment. Data for July and August were revised to show 87,000 more jobs added than previously reported.

The economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population.

“The weaker gain in payrolls in September may partly reflect some hit from Hurricane Florence,” said Michael Pearce, senior U.S. economist at Capital Economics in New York. “There is little in this report to stop the Fed continuing to raise interest rates gradually.”

Economists polled by Reuters had forecast payrolls increasing by 185,000 jobs in September and the unemployment rate falling one-tenth of a percentage point to 3.8 percent.

Fed Chairman Jerome Powell said on Tuesday that the economy’s outlook was “remarkably positive” and he believed it was on the cusp of a “historically rare” era of ultra-low unemployment and tame inflation.

The U.S. central bank raised rates last week for the third time this year and removed the reference in its post-meeting statement to monetary policy remaining “accommodative.”

The Labor Department said it was possible that Hurricane Florence, which lashed South and North Carolina in mid-September, could have affected employment in some industries. It said it was impossible to quantify the net effect on employment.

Payrolls are calculated from a survey of employers, which treats any worker who was not paid for any part of the pay period that includes the 12th of the month as unemployed. The average workweek was unchanged at 34.5 hours in September. The smaller survey of households from which the jobless rate is derived regards persons as employed regardless of whether they missed work during the reference week and were unpaid as result. It showed 299,000 people reported staying at home in September because of bad weather. About 1.5 million employees worked part-time because of the weather last month.

U.S. stock index futures briefly turned positive after the data before reversing course. The dollar was trading lower against a basket of currencies while U.S. Treasury yields were higher.

Diminishing slack

The drop of two-tenths of a percentage point in the unemployment rate from 3.9 percent in August pushed it to levels last seen in December 1969 and matched the Fed’s forecast of 3.7 percent by the end of this year.

Average hourly earnings increased 0.3 percent in September after a similar rise in August.

With September’s increase below the 0.5 percent gain notched during the same period last year, the annual rise in wages fell to 2.8 percent from 2.9 percent in August, which was the biggest advance in more than nine years.

Wage growth remains sufficient to keep inflation around the Fed’s 2 percent target. As more slack is squeezed out of the labor market, economists expect annual wage growth to hit 3 percent.

Last month, employment in the leisure and hospitality sector fell by 17,000 jobs, the first drop since September 2017. Retail payrolls dropped by 20,000 jobs in September. Manufacturing payrolls increased by 18,000 in September after rising by 5,000 in August.

Construction companies hired 23,000 more workers last month after increasing payrolls by 26,000 jobs in August. Professional and business services employment increased by 54,000 jobs last month and government payrolls rose 13,000.

While surveys have shown manufacturers growing more concerned about an escalating trade war between the United States and China, it does not appear to have affected hiring. In fact, the Fed’s latest survey of national business conditions reflected concerns about labor shortages that are extending into non-skilled occupations as much as about tariffs.

Washington last month slapped tariffs on $200 billion worth of Chinese goods, with Beijing retaliating with duties on $60 billion worth of U.S. products. The United States and China had already imposed tariffs on $50 billion worth of each other’s goods. The trilateral trade agreement between the United States, Canada and Mexico was salvaged in an 11th-hour deal on Sunday.

Despite the Trump administration’s protectionist trade policy, the trade deficit continues to deteriorate. The trade gap increased 6.4 percent to a six-month high of $53.2 billion in August, the Commerce Department reported on Friday. The politically sensitive goods trade deficit with China surged 4.7 percent to a record high of $38.6 billion.

 
…

U.S. job growth slowed sharply in September likely as Hurricane Florence depressed restaurant and retail payrolls, but the unemployment rate fell to near a 49-year low of 3.7 percent, pointing to a further tightening in labor market conditions.

The Labor Department’s closely watched monthly employment report on Friday also showed a steady rise in wages, suggesting moderate inflation pressures, which could ease concerns about the economy overheating and keep the Federal Reserve on a path of gradual interest rate increases.

Nonfarm payrolls increased by 134,000 jobs last month, the fewest in a year, as the retail and leisure and hospitality sectors shed employment. Data for July and August were revised to show 87,000 more jobs added than previously reported.

The economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population.

“The weaker gain in payrolls in September may partly reflect some hit from Hurricane Florence,” said Michael Pearce, senior U.S. economist at Capital Economics in New York. “There is little in this report to stop the Fed continuing to raise interest rates gradually.”

Economists polled by Reuters had forecast payrolls increasing by 185,000 jobs in September and the unemployment rate falling one-tenth of a percentage point to 3.8 percent.

Fed Chairman Jerome Powell said on Tuesday that the economy’s outlook was “remarkably positive” and he believed it was on the cusp of a “historically rare” era of ultra-low unemployment and tame inflation.

The U.S. central bank raised rates last week for the third time this year and removed the reference in its post-meeting statement to monetary policy remaining “accommodative.”

The Labor Department said it was possible that Hurricane Florence, which lashed South and North Carolina in mid-September, could have affected employment in some industries. It said it was impossible to quantify the net effect on employment.

Payrolls are calculated from a survey of employers, which treats any worker who was not paid for any part of the pay period that includes the 12th of the month as unemployed. The average workweek was unchanged at 34.5 hours in September. The smaller survey of households from which the jobless rate is derived regards persons as employed regardless of whether they missed work during the reference week and were unpaid as result. It showed 299,000 people reported staying at home in September because of bad weather. About 1.5 million employees worked part-time because of the weather last month.

U.S. stock index futures briefly turned positive after the data before reversing course. The dollar was trading lower against a basket of currencies while U.S. Treasury yields were higher.

Diminishing slack

The drop of two-tenths of a percentage point in the unemployment rate from 3.9 percent in August pushed it to levels last seen in December 1969 and matched the Fed’s forecast of 3.7 percent by the end of this year.

Average hourly earnings increased 0.3 percent in September after a similar rise in August.

With September’s increase below the 0.5 percent gain notched during the same period last year, the annual rise in wages fell to 2.8 percent from 2.9 percent in August, which was the biggest advance in more than nine years.

Wage growth remains sufficient to keep inflation around the Fed’s 2 percent target. As more slack is squeezed out of the labor market, economists expect annual wage growth to hit 3 percent.

Last month, employment in the leisure and hospitality sector fell by 17,000 jobs, the first drop since September 2017. Retail payrolls dropped by 20,000 jobs in September. Manufacturing payrolls increased by 18,000 in September after rising by 5,000 in August.

Construction companies hired 23,000 more workers last month after increasing payrolls by 26,000 jobs in August. Professional and business services employment increased by 54,000 jobs last month and government payrolls rose 13,000.

While surveys have shown manufacturers growing more concerned about an escalating trade war between the United States and China, it does not appear to have affected hiring. In fact, the Fed’s latest survey of national business conditions reflected concerns about labor shortages that are extending into non-skilled occupations as much as about tariffs.

Washington last month slapped tariffs on $200 billion worth of Chinese goods, with Beijing retaliating with duties on $60 billion worth of U.S. products. The United States and China had already imposed tariffs on $50 billion worth of each other’s goods. The trilateral trade agreement between the United States, Canada and Mexico was salvaged in an 11th-hour deal on Sunday.

Despite the Trump administration’s protectionist trade policy, the trade deficit continues to deteriorate. The trade gap increased 6.4 percent to a six-month high of $53.2 billion in August, the Commerce Department reported on Friday. The politically sensitive goods trade deficit with China surged 4.7 percent to a record high of $38.6 billion.

 
…

U.S. job growth slowed sharply in September likely as Hurricane Florence depressed restaurant and retail payrolls, but the unemployment rate fell to near a 49-year low of 3.7 percent, pointing to a further tightening in labor market conditions.

The Labor Department’s closely watched monthly employment report on Friday also showed a steady rise in wages, suggesting moderate inflation pressures, which could ease concerns about the economy overheating and keep the Federal Reserve on a path of gradual interest rate increases.

Nonfarm payrolls increased by 134,000 jobs last month, the fewest in a year, as the retail and leisure and hospitality sectors shed employment. Data for July and August were revised to show 87,000 more jobs added than previously reported.

The economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population.

“The weaker gain in payrolls in September may partly reflect some hit from Hurricane Florence,” said Michael Pearce, senior U.S. economist at Capital Economics in New York. “There is little in this report to stop the Fed continuing to raise interest rates gradually.”

Economists polled by Reuters had forecast payrolls increasing by 185,000 jobs in September and the unemployment rate falling one-tenth of a percentage point to 3.8 percent.

Fed Chairman Jerome Powell said on Tuesday that the economy’s outlook was “remarkably positive” and he believed it was on the cusp of a “historically rare” era of ultra-low unemployment and tame inflation.

The U.S. central bank raised rates last week for the third time this year and removed the reference in its post-meeting statement to monetary policy remaining “accommodative.”

The Labor Department said it was possible that Hurricane Florence, which lashed South and North Carolina in mid-September, could have affected employment in some industries. It said it was impossible to quantify the net effect on employment.

Payrolls are calculated from a survey of employers, which treats any worker who was not paid for any part of the pay period that includes the 12th of the month as unemployed. The average workweek was unchanged at 34.5 hours in September. The smaller survey of households from which the jobless rate is derived regards persons as employed regardless of whether they missed work during the reference week and were unpaid as result. It showed 299,000 people reported staying at home in September because of bad weather. About 1.5 million employees worked part-time because of the weather last month.

U.S. stock index futures briefly turned positive after the data before reversing course. The dollar was trading lower against a basket of currencies while U.S. Treasury yields were higher.

Diminishing slack

The drop of two-tenths of a percentage point in the unemployment rate from 3.9 percent in August pushed it to levels last seen in December 1969 and matched the Fed’s forecast of 3.7 percent by the end of this year.

Average hourly earnings increased 0.3 percent in September after a similar rise in August.

With September’s increase below the 0.5 percent gain notched during the same period last year, the annual rise in wages fell to 2.8 percent from 2.9 percent in August, which was the biggest advance in more than nine years.

Wage growth remains sufficient to keep inflation around the Fed’s 2 percent target. As more slack is squeezed out of the labor market, economists expect annual wage growth to hit 3 percent.

Last month, employment in the leisure and hospitality sector fell by 17,000 jobs, the first drop since September 2017. Retail payrolls dropped by 20,000 jobs in September. Manufacturing payrolls increased by 18,000 in September after rising by 5,000 in August.

Construction companies hired 23,000 more workers last month after increasing payrolls by 26,000 jobs in August. Professional and business services employment increased by 54,000 jobs last month and government payrolls rose 13,000.

While surveys have shown manufacturers growing more concerned about an escalating trade war between the United States and China, it does not appear to have affected hiring. In fact, the Fed’s latest survey of national business conditions reflected concerns about labor shortages that are extending into non-skilled occupations as much as about tariffs.

Washington last month slapped tariffs on $200 billion worth of Chinese goods, with Beijing retaliating with duties on $60 billion worth of U.S. products. The United States and China had already imposed tariffs on $50 billion worth of each other’s goods. The trilateral trade agreement between the United States, Canada and Mexico was salvaged in an 11th-hour deal on Sunday.

Despite the Trump administration’s protectionist trade policy, the trade deficit continues to deteriorate. The trade gap increased 6.4 percent to a six-month high of $53.2 billion in August, the Commerce Department reported on Friday. The politically sensitive goods trade deficit with China surged 4.7 percent to a record high of $38.6 billion.

 
…

Russian President Vladimir Putin on Wednesday strongly defended a prospective Russia-Germany natural gas pipeline as economically feasible and voiced hope that European Union nations will be able to resist U.S. pressure to thwart the project.

U.S. officials have warned that Washington could impose sanctions on the undersea Nord Stream 2 pipeline. The U.S. and some EU nations oppose it, warning it would increase Europe’s energy dependence on Russia. The U.S. is also interested in selling more of its liquefied natural gas in Europe.

Speaking Wednesday after talks with Austrian Chancellor Sebastian Kurz in St. Petersburg, Putin noted that Bulgaria caved in to pressure and dumped the Russian South Stream pipeline.

He added that he hopes that “Europe as a whole won’t look like Bulgaria and won’t demonstrate its weakness and inability to protect its interests.”

“Russia always has been and will remain the most reliable supplier,” Putin said, adding that the Russian gas supplied via pipelines is significantly cheaper than U.S. liquefied gas. “Supplies come directly from Yamal in Siberia. There are no transit risks.”

It would be “silly and wasteful” if Europe opts for a more expensive option, hurting its consumers and its global competitiveness, Putin charged.

Ukraine, which has served as the main transit route for Russian gas supplies to Europe, has strongly opposed the Russian pipeline, fearing that it would leave its pipeline empty. The two ex-Soviet neighbors have been locked in a bitter tug-of-war after Russia’s 2014 annexation of Ukraine’s Crimean Peninsula.

Kurz spoke in support of Nord Stream 2 but also emphasized the importance to continue supplies via Ukraine.

“It’s very important that Ukraine’s interests as a key transit country be upheld,” he said.

Putin has previously pledged to consider the continuation of gas supplies via Ukraine if it settles a commercial dispute with Russia over previous gas supplies.
…

Russian President Vladimir Putin on Wednesday strongly defended a prospective Russia-Germany natural gas pipeline as economically feasible and voiced hope that European Union nations will be able to resist U.S. pressure to thwart the project.

U.S. officials have warned that Washington could impose sanctions on the undersea Nord Stream 2 pipeline. The U.S. and some EU nations oppose it, warning it would increase Europe’s energy dependence on Russia. The U.S. is also interested in selling more of its liquefied natural gas in Europe.

Speaking Wednesday after talks with Austrian Chancellor Sebastian Kurz in St. Petersburg, Putin noted that Bulgaria caved in to pressure and dumped the Russian South Stream pipeline.

He added that he hopes that “Europe as a whole won’t look like Bulgaria and won’t demonstrate its weakness and inability to protect its interests.”

“Russia always has been and will remain the most reliable supplier,” Putin said, adding that the Russian gas supplied via pipelines is significantly cheaper than U.S. liquefied gas. “Supplies come directly from Yamal in Siberia. There are no transit risks.”

It would be “silly and wasteful” if Europe opts for a more expensive option, hurting its consumers and its global competitiveness, Putin charged.

Ukraine, which has served as the main transit route for Russian gas supplies to Europe, has strongly opposed the Russian pipeline, fearing that it would leave its pipeline empty. The two ex-Soviet neighbors have been locked in a bitter tug-of-war after Russia’s 2014 annexation of Ukraine’s Crimean Peninsula.

Kurz spoke in support of Nord Stream 2 but also emphasized the importance to continue supplies via Ukraine.

“It’s very important that Ukraine’s interests as a key transit country be upheld,” he said.

Putin has previously pledged to consider the continuation of gas supplies via Ukraine if it settles a commercial dispute with Russia over previous gas supplies.
…

Seven-year-old Ryan drew millions of views reviewing toys on YouTube. Now, he’s become a toy himself.

Walmart is selling action figures in his likeness, putty with his face on the packaging and other toys under the Ryan’s World brand. It’s a bet that kids, who are spending more time tapping tablets, will recognize Ryan from YouTube and want the toys he’s hawking.

The new line may also help Walmart lure former Toys R Us shoppers, as many chains make a play for those customers ahead of the holiday shopping season.

The first-grader, who’s been making YouTube videos for three years, has become a major influencer in the toy industry. The clips typically show him unboxing a toy, playing with it and then waving goodbye to viewers. His most watched video, in which Ryan hunts for large plastic eggs, has more than 1.5 billion views.

Toys featured in the videos can see a spike in sales, says Jim Silver, editor of toy review site TTPM.com. “Ryan is a celebrity,” he said. “Kids watch his videos. He’s entertaining.”

So much so that toymakers have paid Ryan and his parents to feature their products. Forbes magazine estimated that the Ryan ToysReview YouTube channel brought in $11 million last year, but his parents, Shion and Loann, declined to confirm that number or give any financial details about Ryan’s deals. They also do not give their last name or say where they live for privacy and safety reasons.

Ryan’s path from reviewer to tiny toy mogul started last year when his parents signed with Pocket.watch, a two-year-old company that works with several YouTube personalities to get their names on clothing, books and other products. Ryan is the first with a product line because of his large audience, Pocket.watch says.

Last month, Walmart started selling Ryan’s World bright-colored slime for $4, 5-inch Ryan action figures for $9 and french fry-shaped squishy toys for $18. The retailer is the exclusive seller of some of the line, including T-shirts and stuffed animals.

Whether kids will want them “all comes down to the toy,” says Silver, adding that hits are made on the playground, where youngsters show off their toys and tell others about it.

What Ryan does have is a built-in audience. A video of him searching the aisles of Walmart for Ryan’s World toys has nearly 10 million views in a month, and his YouTube page has more than 16 million subscribers. Anne Marie Kehoe, who oversees Walmart’s toy department, says a couple of thousand people showed up to a recent appearance at an Arkansas store just to see a kid “jumping around and acting crazy.”

Ryan, in a phone interview, says a lot of those people wanted his picture. He then left the phone call to play.

His parents, who stayed on the line, say Ryan spends about 90 minutes a week recording YouTube videos. They say he helped with the creation of some of the toys, like when he asked for an evil twin version of himself for a figurine.

“I’m always amazed at the point of view Ryan has,” said his dad, Shion.

Chris Williams, Pocket.watch’s founder and CEO, sees Ryan as a franchise, like how “Nickelodeon looks at SpongeBob.”

But unlike a cartoon sponge, Ryan will grow up. Williams says he expects the products to evolve with Ryan’s taste. And Ryan’s parents agree, saying they’re prepared to follow his interests as he gets older, like to video games.

“We can change,” Shion said.
…

China’s hopes of negotiating a free trade pact with Canada or Mexico were dealt a sharp setback by a provision deep in the new U.S.-Mexico-Canada trade agreement that aims to forbid such deals with “non-market” countries, trade experts said on Tuesday.

The provision specifies that if one of the current North American Free Trade Agreement partners enters a free trade deal with a “non-market” country such as China, the others can quit in six months and form their own bilateral trade pact.

The clause, which has stirred controversy in Canada, fits in with U.S. President Donald Trump’s efforts to isolate China economically and prevent Chinese companies from using Canada or Mexico as a “back door” to ship products tariff-free to the United States.

The United States and China are locked in a spiraling trade war that has seen them level increasingly severe rounds of tariffs on each other’s imports.

Under the clause, the countries in the updated NAFTA, renamed the U.S.-Mexico-Canada Agreement (USMCA), must notify the others three months before entering into such negotiations.

Derek Scissors, a China scholar at the American Enterprise Institute in Washington, said the provision gave the Trump administration an effective veto over any China trade deal by Canada or Mexico.

If repeated in other U.S. negotiations with the European Union and Japan, it could help isolate Beijing in the global trading system.

“For both Canada and Mexico, we have a reason to think an FTA with China is a possibility. It’s not imminent, but this is a very elegant way of dealing with that,” Scissors said.

“There’s no China deal that’s worth losing a ratified USMCA,” Scissors added.

After months of bashing its Western allies on trade, the Trump administration is now trying to recruit them to join the United States in pressuring China to shift its trade, subsidy and intellectual property practices to a more-market driven focus.

Beijing has demanded that the World Trade Organization recognize it as a “market economy” since its WTO accession agreement expired in December 2016, a move that would severely limit Western trade defenses against cheap Chinese goods.

But the United States and European Union are challenging the declaration, arguing that Chinese state subsidies fueling excess industrial capacity, the exclusion of foreign competitors and other practices are signs it is still a non-market economy.

Canadian Sovereignty Questioned

Canadian Prime Minister Justin Trudeau’s Liberal government, seeking to diversify Canada’s export base, held exploratory talks with China on trade in 2016, but a launch of formal negotiations has failed to materialize.

Tracey Ramsey, a legislator for Canada’s left-leaning New Democrats, said in the House of Commons on Tuesday that the clause was “astonishing” and a “severe restriction on Canadian independence.”

“Part of Canada’s concessions in this deal was to include language that holds Canada hostage to the Americans if we decide to trade with another country,” Ramsey said. “Why did the Liberal (Party) give the go-ahead for the U.S. to pull us into their trade wars?”

Canadian Finance Minister Bill Morneau downplayed the provision, arguing it was not significantly different from NAFTA’s clause that allows any member to leave the pact in six months’ time for any reason.

“It is largely the same. It recognizes though that the non-market economy is of significant importance as we move forward. But I don’t think it’s going to make a material difference in our activities,” Morneau told a business audience.

Mexico’s business community sided with the Trump administration in endorsing the pact.

“We are associating ourselves with countries that promote market freedom and that promote free trade in the world, free trade under equal circumstances,” said Juan Pablo Castañon, head of the Consejo Coordinador Empresarial (CCE), which represented Mexico’s private sector during the NAFTA trade talks.
…

China’s hopes of negotiating a free trade pact with Canada or Mexico were dealt a sharp setback by a provision deep in the new U.S.-Mexico-Canada trade agreement that aims to forbid such deals with “non-market” countries, trade experts said on Tuesday.

The provision specifies that if one of the current North American Free Trade Agreement partners enters a free trade deal with a “non-market” country such as China, the others can quit in six months and form their own bilateral trade pact.

The clause, which has stirred controversy in Canada, fits in with U.S. President Donald Trump’s efforts to isolate China economically and prevent Chinese companies from using Canada or Mexico as a “back door” to ship products tariff-free to the United States.

The United States and China are locked in a spiraling trade war that has seen them level increasingly severe rounds of tariffs on each other’s imports.

Under the clause, the countries in the updated NAFTA, renamed the U.S.-Mexico-Canada Agreement (USMCA), must notify the others three months before entering into such negotiations.

Derek Scissors, a China scholar at the American Enterprise Institute in Washington, said the provision gave the Trump administration an effective veto over any China trade deal by Canada or Mexico.

If repeated in other U.S. negotiations with the European Union and Japan, it could help isolate Beijing in the global trading system.

“For both Canada and Mexico, we have a reason to think an FTA with China is a possibility. It’s not imminent, but this is a very elegant way of dealing with that,” Scissors said.

“There’s no China deal that’s worth losing a ratified USMCA,” Scissors added.

After months of bashing its Western allies on trade, the Trump administration is now trying to recruit them to join the United States in pressuring China to shift its trade, subsidy and intellectual property practices to a more-market driven focus.

Beijing has demanded that the World Trade Organization recognize it as a “market economy” since its WTO accession agreement expired in December 2016, a move that would severely limit Western trade defenses against cheap Chinese goods.

But the United States and European Union are challenging the declaration, arguing that Chinese state subsidies fueling excess industrial capacity, the exclusion of foreign competitors and other practices are signs it is still a non-market economy.

Canadian Sovereignty Questioned

Canadian Prime Minister Justin Trudeau’s Liberal government, seeking to diversify Canada’s export base, held exploratory talks with China on trade in 2016, but a launch of formal negotiations has failed to materialize.

Tracey Ramsey, a legislator for Canada’s left-leaning New Democrats, said in the House of Commons on Tuesday that the clause was “astonishing” and a “severe restriction on Canadian independence.”

“Part of Canada’s concessions in this deal was to include language that holds Canada hostage to the Americans if we decide to trade with another country,” Ramsey said. “Why did the Liberal (Party) give the go-ahead for the U.S. to pull us into their trade wars?”

Canadian Finance Minister Bill Morneau downplayed the provision, arguing it was not significantly different from NAFTA’s clause that allows any member to leave the pact in six months’ time for any reason.

“It is largely the same. It recognizes though that the non-market economy is of significant importance as we move forward. But I don’t think it’s going to make a material difference in our activities,” Morneau told a business audience.

Mexico’s business community sided with the Trump administration in endorsing the pact.

“We are associating ourselves with countries that promote market freedom and that promote free trade in the world, free trade under equal circumstances,” said Juan Pablo Castañon, head of the Consejo Coordinador Empresarial (CCE), which represented Mexico’s private sector during the NAFTA trade talks.
…

China’s hopes of negotiating a free trade pact with Canada or Mexico were dealt a sharp setback by a provision deep in the new U.S.-Mexico-Canada trade agreement that aims to forbid such deals with “non-market” countries, trade experts said on Tuesday.

The provision specifies that if one of the current North American Free Trade Agreement partners enters a free trade deal with a “non-market” country such as China, the others can quit in six months and form their own bilateral trade pact.

The clause, which has stirred controversy in Canada, fits in with U.S. President Donald Trump’s efforts to isolate China economically and prevent Chinese companies from using Canada or Mexico as a “back door” to ship products tariff-free to the United States.

The United States and China are locked in a spiraling trade war that has seen them level increasingly severe rounds of tariffs on each other’s imports.

Under the clause, the countries in the updated NAFTA, renamed the U.S.-Mexico-Canada Agreement (USMCA), must notify the others three months before entering into such negotiations.

Derek Scissors, a China scholar at the American Enterprise Institute in Washington, said the provision gave the Trump administration an effective veto over any China trade deal by Canada or Mexico.

If repeated in other U.S. negotiations with the European Union and Japan, it could help isolate Beijing in the global trading system.

“For both Canada and Mexico, we have a reason to think an FTA with China is a possibility. It’s not imminent, but this is a very elegant way of dealing with that,” Scissors said.

“There’s no China deal that’s worth losing a ratified USMCA,” Scissors added.

After months of bashing its Western allies on trade, the Trump administration is now trying to recruit them to join the United States in pressuring China to shift its trade, subsidy and intellectual property practices to a more-market driven focus.

Beijing has demanded that the World Trade Organization recognize it as a “market economy” since its WTO accession agreement expired in December 2016, a move that would severely limit Western trade defenses against cheap Chinese goods.

But the United States and European Union are challenging the declaration, arguing that Chinese state subsidies fueling excess industrial capacity, the exclusion of foreign competitors and other practices are signs it is still a non-market economy.

Canadian Sovereignty Questioned

Canadian Prime Minister Justin Trudeau’s Liberal government, seeking to diversify Canada’s export base, held exploratory talks with China on trade in 2016, but a launch of formal negotiations has failed to materialize.

Tracey Ramsey, a legislator for Canada’s left-leaning New Democrats, said in the House of Commons on Tuesday that the clause was “astonishing” and a “severe restriction on Canadian independence.”

“Part of Canada’s concessions in this deal was to include language that holds Canada hostage to the Americans if we decide to trade with another country,” Ramsey said. “Why did the Liberal (Party) give the go-ahead for the U.S. to pull us into their trade wars?”

Canadian Finance Minister Bill Morneau downplayed the provision, arguing it was not significantly different from NAFTA’s clause that allows any member to leave the pact in six months’ time for any reason.

“It is largely the same. It recognizes though that the non-market economy is of significant importance as we move forward. But I don’t think it’s going to make a material difference in our activities,” Morneau told a business audience.

Mexico’s business community sided with the Trump administration in endorsing the pact.

“We are associating ourselves with countries that promote market freedom and that promote free trade in the world, free trade under equal circumstances,” said Juan Pablo Castañon, head of the Consejo Coordinador Empresarial (CCE), which represented Mexico’s private sector during the NAFTA trade talks.
…

China’s hopes of negotiating a free trade pact with Canada or Mexico were dealt a sharp setback by a provision deep in the new U.S.-Mexico-Canada trade agreement that aims to forbid such deals with “non-market” countries, trade experts said on Tuesday.

The provision specifies that if one of the current North American Free Trade Agreement partners enters a free trade deal with a “non-market” country such as China, the others can quit in six months and form their own bilateral trade pact.

The clause, which has stirred controversy in Canada, fits in with U.S. President Donald Trump’s efforts to isolate China economically and prevent Chinese companies from using Canada or Mexico as a “back door” to ship products tariff-free to the United States.

The United States and China are locked in a spiraling trade war that has seen them level increasingly severe rounds of tariffs on each other’s imports.

Under the clause, the countries in the updated NAFTA, renamed the U.S.-Mexico-Canada Agreement (USMCA), must notify the others three months before entering into such negotiations.

Derek Scissors, a China scholar at the American Enterprise Institute in Washington, said the provision gave the Trump administration an effective veto over any China trade deal by Canada or Mexico.

If repeated in other U.S. negotiations with the European Union and Japan, it could help isolate Beijing in the global trading system.

“For both Canada and Mexico, we have a reason to think an FTA with China is a possibility. It’s not imminent, but this is a very elegant way of dealing with that,” Scissors said.

“There’s no China deal that’s worth losing a ratified USMCA,” Scissors added.

After months of bashing its Western allies on trade, the Trump administration is now trying to recruit them to join the United States in pressuring China to shift its trade, subsidy and intellectual property practices to a more-market driven focus.

Beijing has demanded that the World Trade Organization recognize it as a “market economy” since its WTO accession agreement expired in December 2016, a move that would severely limit Western trade defenses against cheap Chinese goods.

But the United States and European Union are challenging the declaration, arguing that Chinese state subsidies fueling excess industrial capacity, the exclusion of foreign competitors and other practices are signs it is still a non-market economy.

Canadian Sovereignty Questioned

Canadian Prime Minister Justin Trudeau’s Liberal government, seeking to diversify Canada’s export base, held exploratory talks with China on trade in 2016, but a launch of formal negotiations has failed to materialize.

Tracey Ramsey, a legislator for Canada’s left-leaning New Democrats, said in the House of Commons on Tuesday that the clause was “astonishing” and a “severe restriction on Canadian independence.”

“Part of Canada’s concessions in this deal was to include language that holds Canada hostage to the Americans if we decide to trade with another country,” Ramsey said. “Why did the Liberal (Party) give the go-ahead for the U.S. to pull us into their trade wars?”

Canadian Finance Minister Bill Morneau downplayed the provision, arguing it was not significantly different from NAFTA’s clause that allows any member to leave the pact in six months’ time for any reason.

“It is largely the same. It recognizes though that the non-market economy is of significant importance as we move forward. But I don’t think it’s going to make a material difference in our activities,” Morneau told a business audience.

Mexico’s business community sided with the Trump administration in endorsing the pact.

“We are associating ourselves with countries that promote market freedom and that promote free trade in the world, free trade under equal circumstances,” said Juan Pablo Castañon, head of the Consejo Coordinador Empresarial (CCE), which represented Mexico’s private sector during the NAFTA trade talks.
…

As trade tensions between Beijing and Washington worsen, a debate is intensifying in China over the role private and state-owned enterprises play in the economy. The debate has even stoked fears that the communist-led government is preparing to nationalize private industries, analysts say.

Under Xi Jinping’s leadership and especially over the past year, after he scrapped rules on term limits for the president, allowing him to potentially carry on as China’s ruler for life, the communist party has begun re-asserting its dominance over all segments of society, including business.

Party on top

In June, the party announced it was mandating all listed companies set up party organizations for their employees. Over the past two weeks, as tensions with Washington have ratcheted up, there have been articles posted online suggesting it was time private enterprises step aside and that China should move toward a large scale centralized private-public mixed economy.

“The private economy has accomplished its mission to help the public economy develop and it should gradually step aside,” said Wu Xiaoping, a veteran financier, in one article.

Despite a backlash, even from state media, the fact that the article was not immediately taken down was a sign the government was testing the waters to see the public’s response, said said Frank Xie, an associate professor at the University of South Carolina Aiken.

“In China when there is something that the government doesn’t want people to hear, it won’t survive, as soon as it surfaces on the internet, on Wechat, it will be deleted and removed, right away” Xie said. “And yet this thing, the call by this guy stayed there for so long.”

A more recent comment from the Qiu Xiaoping, deputy secretary of the Ministry of Personnel and Social Affairs, was also met with a backlash. In recent remarks, Qiu said private enterprises need to be more democratic, allow for more participation in management and help strengthen the leadership of the party.

Private assurances

Chinese officials have given assurances that private companies would be looked after. During a visit to the northeastern province of Liaoning late last week, President Xi urged private companies to be confident.

He also pledged that the party would unswervingly develop, support, guide and protect the private sector. Whether Xi’s remarks meant getting more involved in private companies’ affairs was unclear.

Clearly, the private sector is deeply concerned.

“Against the backdrop of the U.S.-China trade war there are concerns that the Chinese economy will contract and that Chinese leaders may sacrifice private enterprises to prop up state-owned enterprises,” said Lu Suiqi, an associate professor of economics at Peking University.

Lu said that despite assurances, the commanding role that state-owned enterprises enjoy is unlikely to change.

State-owned enterprises have long enjoyed a monopoly over key lucrative industries in China. They’ve also long been a hotbed for corruption. And yet, despite their access to 70 percent of the country’s financial resources, they account for around 30 percent of the economy.

Private enterprises receive less access to capital and yet account for 80 percent of employment as well as contributing to 60 percent of the economic growth.

But while many in and outside of China see SOEs dragging China’s economy down and as an obstacle to free trade — state owned enterprises are a key part of Washington’s trade complaints — the party is likely to continue its effort to expand the size of state-controlled enterprises.

“Whether it is nationalizing private enterprises or making state owned enterprises bigger, it is all about expanding control,” said Darson Chiu, a research fellow at the Taiwan Institute of Economic Research. From China’s point of view, “expanding the size of SOEs, will make it easier to promote a planned economy and manage risks.”

That is the opposite of what President Donald Trump is asking China to do and if Beijing does press forward, the two will be on a collision course, said Frank Xie.

“It’s only going to encourage Trump to move to the next step, with another $267 billion in tariffs,” Xie said.

Survive

But serious risks are what China is facing, and it is not just the trade war. China’s stock market is at its lowest point in nearly four years and industrial growth has slowed for four consecutive months.

The Chinese economy is facing a range of problems, including massive government and corporate debt combined with tightening liquidity.

Just last week, the head of China’s biggest real estate firm Vanke created a stir online when he announced at a regular meeting that the company’s main goal is to “survive.”

Speaking at an internal meeting, where red banners with the same words “survive” were hung, Vanke Chairman Yu Liang said China is currently at a turning point and no industry will be spared the from negative economic impacts.
…

As trade tensions between Beijing and Washington worsen, a debate is intensifying in China over the role private and state-owned enterprises play in the economy. The debate has even stoked fears that the communist-led government is preparing to nationalize private industries, analysts say.

Under Xi Jinping’s leadership and especially over the past year, after he scrapped rules on term limits for the president, allowing him to potentially carry on as China’s ruler for life, the communist party has begun re-asserting its dominance over all segments of society, including business.

Party on top

In June, the party announced it was mandating all listed companies set up party organizations for their employees. Over the past two weeks, as tensions with Washington have ratcheted up, there have been articles posted online suggesting it was time private enterprises step aside and that China should move toward a large scale centralized private-public mixed economy.

“The private economy has accomplished its mission to help the public economy develop and it should gradually step aside,” said Wu Xiaoping, a veteran financier, in one article.

Despite a backlash, even from state media, the fact that the article was not immediately taken down was a sign the government was testing the waters to see the public’s response, said said Frank Xie, an associate professor at the University of South Carolina Aiken.

“In China when there is something that the government doesn’t want people to hear, it won’t survive, as soon as it surfaces on the internet, on Wechat, it will be deleted and removed, right away” Xie said. “And yet this thing, the call by this guy stayed there for so long.”

A more recent comment from the Qiu Xiaoping, deputy secretary of the Ministry of Personnel and Social Affairs, was also met with a backlash. In recent remarks, Qiu said private enterprises need to be more democratic, allow for more participation in management and help strengthen the leadership of the party.

Private assurances

Chinese officials have given assurances that private companies would be looked after. During a visit to the northeastern province of Liaoning late last week, President Xi urged private companies to be confident.

He also pledged that the party would unswervingly develop, support, guide and protect the private sector. Whether Xi’s remarks meant getting more involved in private companies’ affairs was unclear.

Clearly, the private sector is deeply concerned.

“Against the backdrop of the U.S.-China trade war there are concerns that the Chinese economy will contract and that Chinese leaders may sacrifice private enterprises to prop up state-owned enterprises,” said Lu Suiqi, an associate professor of economics at Peking University.

Lu said that despite assurances, the commanding role that state-owned enterprises enjoy is unlikely to change.

State-owned enterprises have long enjoyed a monopoly over key lucrative industries in China. They’ve also long been a hotbed for corruption. And yet, despite their access to 70 percent of the country’s financial resources, they account for around 30 percent of the economy.

Private enterprises receive less access to capital and yet account for 80 percent of employment as well as contributing to 60 percent of the economic growth.

But while many in and outside of China see SOEs dragging China’s economy down and as an obstacle to free trade — state owned enterprises are a key part of Washington’s trade complaints — the party is likely to continue its effort to expand the size of state-controlled enterprises.

“Whether it is nationalizing private enterprises or making state owned enterprises bigger, it is all about expanding control,” said Darson Chiu, a research fellow at the Taiwan Institute of Economic Research. From China’s point of view, “expanding the size of SOEs, will make it easier to promote a planned economy and manage risks.”

That is the opposite of what President Donald Trump is asking China to do and if Beijing does press forward, the two will be on a collision course, said Frank Xie.

“It’s only going to encourage Trump to move to the next step, with another $267 billion in tariffs,” Xie said.

Survive

But serious risks are what China is facing, and it is not just the trade war. China’s stock market is at its lowest point in nearly four years and industrial growth has slowed for four consecutive months.

The Chinese economy is facing a range of problems, including massive government and corporate debt combined with tightening liquidity.

Just last week, the head of China’s biggest real estate firm Vanke created a stir online when he announced at a regular meeting that the company’s main goal is to “survive.”

Speaking at an internal meeting, where red banners with the same words “survive” were hung, Vanke Chairman Yu Liang said China is currently at a turning point and no industry will be spared the from negative economic impacts.
…

Amazon is boosting its minimum wage for all U.S. workers to $15 per hour starting next month.

The company said Tuesday that the wage hike will benefit more than 350,000 workers, which includes full-time, part-time, temporary and seasonal positions. It includes Whole Foods employees. Amazon’s hourly operations and customer service employees, some who already make $15 per hour, will also see a wage increase, the Seattle-based company said.

Amazon has more than 575,000 employees globally.

Pay for workers at Amazon can vary by location. Its starting pay is $10 an hour at a warehouse in Austin, Texas, and $13.50 an hour in Robbinsville, New Jersey. The median pay for an Amazon employee last year was $28,446, according to government filings, which includes full-time, part-time and temporary workers.

Amazon said its public policy team will start pushing for an increase in the federal minimum wage of $7.25 per hour.

“We intend to advocate for a minimum wage increase that will have a profound impact on the lives of tens of millions of people and families across this country,” Jay Carney, senior vice president of Amazon global corporate affairs, said in a statement.

 
…

Auto parts output in Mexico will jump about 10 percent over the next three years as automakers scramble to adhere to stricter content rules laid out in a new North American trade deal, a top industry executive said on Monday.

The United States and Canada reached an agreement on Sunday after weeks of tense bilateral talks to update the 1994 North American Free Trade Agreement (NAFTA). Mexico and the United States first brokered a bilateral accord in late August.

The new trilateral deal, called the United States-Mexico-Canada Agreement (USMCA), will raise the minimum North American content threshold for cars needed to qualify for duty-free market access to 75 percent from 62.5 percent.

“Carmakers, especially Asian and European carmakers, will have to invest more in tools, in North American components to comply with the new content rules,” Oscar Albin, head of Mexican auto parts industry association INA, said in an interview.

The so-called rules of origin dictate what percentage of a car needs to be built in North America in order to avoid tariffs in the trade deal.

General Motors Co., Ford Motor Co., Fiat Chrysler Automobiles Germany’s Volkswagen AG, Japan’s Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. all build autos in Mexico.

“The American carmakers already have a very well-established footprint in the United States and Mexico” and will more easily adhere to the stricter content rules, Albin told Reuters.

The new rules should boost auto parts production from about $90 billion annually at present to “around $100 billion” over the next three years, he added. In the course of that period, the sector should add about 80,000 new jobs, Albin said.

Stocks in auto parts firms were lifted by the deal.

Shares in Nemak, the auto parts unit of Mexican industrial conglomerate Alfa, closed up by more than 8.5 percent. Stock in Mexican auto parts maker Rassini rose by more than 4.5 percent.

“The United States and Canada will also grow since the three countries will benefit (from the new agreement),” said Albin.

The deal set a five-year transition period once the accord enters into force to meet the new content requirements.

That looked like a tough deadline, Albin said.

“I think (time) is a bit short because any adjustment or change of the supply (chain) for cars already being assembled is practically impossible,” he said.

U.S. President Donald Trump had put creating more manufacturing jobs at the heart of his desire to rework NAFTA.
…

Auto parts output in Mexico will jump about 10 percent over the next three years as automakers scramble to adhere to stricter content rules laid out in a new North American trade deal, a top industry executive said on Monday.

The United States and Canada reached an agreement on Sunday after weeks of tense bilateral talks to update the 1994 North American Free Trade Agreement (NAFTA). Mexico and the United States first brokered a bilateral accord in late August.

The new trilateral deal, called the United States-Mexico-Canada Agreement (USMCA), will raise the minimum North American content threshold for cars needed to qualify for duty-free market access to 75 percent from 62.5 percent.

“Carmakers, especially Asian and European carmakers, will have to invest more in tools, in North American components to comply with the new content rules,” Oscar Albin, head of Mexican auto parts industry association INA, said in an interview.

The so-called rules of origin dictate what percentage of a car needs to be built in North America in order to avoid tariffs in the trade deal.

General Motors Co., Ford Motor Co., Fiat Chrysler Automobiles Germany’s Volkswagen AG, Japan’s Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. all build autos in Mexico.

“The American carmakers already have a very well-established footprint in the United States and Mexico” and will more easily adhere to the stricter content rules, Albin told Reuters.

The new rules should boost auto parts production from about $90 billion annually at present to “around $100 billion” over the next three years, he added. In the course of that period, the sector should add about 80,000 new jobs, Albin said.

Stocks in auto parts firms were lifted by the deal.

Shares in Nemak, the auto parts unit of Mexican industrial conglomerate Alfa, closed up by more than 8.5 percent. Stock in Mexican auto parts maker Rassini rose by more than 4.5 percent.

“The United States and Canada will also grow since the three countries will benefit (from the new agreement),” said Albin.

The deal set a five-year transition period once the accord enters into force to meet the new content requirements.

That looked like a tough deadline, Albin said.

“I think (time) is a bit short because any adjustment or change of the supply (chain) for cars already being assembled is practically impossible,” he said.

U.S. President Donald Trump had put creating more manufacturing jobs at the heart of his desire to rework NAFTA.
…

American dairy farmers get more access to the Canadian market. U.S. drug companies can fend off generic competition for a few more years. Automakers are under pressure to build more cars where workers earn decent wages.

The North American trade agreement hammered out late Sunday between the United States and Canada, following an earlier U.S.-Mexico deal, shakes up — but likely won’t revolutionize — the way businesses operate within the three-country trade bloc.

The new United States-Mexico-Canada Agreement replaces the 24-year-old North American Free Trade Agreement, which tore down trade barriers between the three countries. But NAFTA encouraged factories to move to Mexico to take advantage of low-wage labor in what President Donald Trump called a job-killing “disaster” for the United States.

Sunday’s agreement is meant to bring manufacturing back to the United States. The president, never known for understatement, said the new deal would “transform North America back into a manufacturing powerhouse.”

But America had to make some concessions, too. For example, it agreed to retain a NAFTA dispute-resolution process that it wanted to jettison but Canada insisted on keeping.

Overall, financial markets were relieved the countries reached a deal. For a time, it had looked like Trump might pull out of a regional free trade pact altogether — or strike one without Canada, America’s No. 2 trading partner. At noon Monday, the Dow Jones industrial average was up more than 240 points.

Economists, trade attorneys and businesses are still parsing the agreement. But here’s an early look at what it means for different players.

How dairy farmers are affected

Trump has raged about Canada’s tariffs on dairy imports, which can approach 300 percent. American dairy farmers have also complained about Canadian policies that priced the U.S. out of the market for some dairy powders and allowed Canada to flood world markets with its own versions.

The new agreement ends the discriminatory pricing and restricts Canadian exports of dairy powders.

It also expands U.S. access to up to 3.75 percent of the Canadian dairy market (versus 3.25 percent in the Trans-Pacific Partnership agreement the Obama administration negotiated but Trump nixed his first week in office). Above that level, U.S. dairy farmers will still face Canada’s punishing tariffs. And the “supply management” system Canada uses to protect its farmers is still largely in place.

Still, trade attorney Daniel Ujczo of the Dickinson Wright law firm said that “the U.S. dairy industry seems happy … for now.”

Shaking things up for automakers

NAFTA remade the North American auto market. Automakers built complicated supply chains that straddled NAFTA borders. In doing so, they took advantage of each country’s strengths — cheap labor in Mexico, and skilled workers and proximity to customers in the United States and Canada.

The new agreement changes things up. For one thing, the percentage of a car’s content that must be built within the trade bloc to qualify for duty-free status rises to 75 percent from 62.5 percent. A bolder provision requires that 40 percent to 45 percent of a car’s content be built where workers earn $16 an hour. That is meant to bring production back to the United States or Canada and away from Mexico (and perhaps to put some upward pressure on Mexican wages).

The provisions could drive up car prices for consumers.

The new deal also provides some protection to Canada and Mexico if Trump goes ahead with his threat to slap 20 percent to 25 percent taxes on imported cars, trucks and auto parts. It would exclude from the proposed tariffs 2.6 million passenger vehicles from both Canada and Mexico.

The impact on multinational companies  

Like other U.S. trade agreements, NAFTA allowed multinational companies to go to private tribunals to challenge national laws they said discriminated against them and violated the terms of the trade agreement. Critics charged the process gave companies a way to get around environmental and labor laws and regulations they didn’t like, overruling democratically elected governments in the process.

U.S. Trade Rep. Robert Lighthizer, who negotiated the new deal, had another complaint: The tribunals took some of the risk out of investing in unstable or corrupt countries such as Mexico. Why, Lighthizer argued, should the United States negotiate deals that encourage investment in other countries?

The new pact scales back provisions protecting foreign investment. Lori Wallach, director of Public Citizen’s Global Trade Watch and a sharp critic of NAFTA, praised the new agreement for reining in what she called NAFTA’s “outrageous” tribunal system that had allowed big companies to launch “attacks on environmental and health policies.”

Windfall for drug companies

The new trade pact delivers a windfall to pharmaceutical companies that make biologics — ultra-expensive drugs produced in living cells. It gives them 10 years of protection from generic competition, up from eight the Obama administration had negotiated in the TPP.

But good news for the pharmaceutical industry could be bad news for users of the drugs and for government policymakers trying to hold down health-care costs.

“New monopoly privileges for pharmaceutical firms … could undermine reforms needed to make medicine more affordable here and increase prices in Mexico and Canada, limiting access to lifesaving medicines,” Wallach said.

Some retailers benefit, other do not

The United States pressured Canada and Mexico to raise the dollar amount that shipments must reach before they become subject to import duties. Canada, for instance, will allow tax- and duty-free shipments worth up to 40 Canadian dollars (about $31), up from 20 Canadian dollars ($16) under NAFTA.

The change makes U.S. products more competitive in Canada because they will be subject to less tax at the border — and delivers savings to Canadians who shop online. However, trade attorney Ujczo notes, the higher threshold poses a threat to Canadian retailers. 
…

American dairy farmers get more access to the Canadian market. U.S. drug companies can fend off generic competition for a few more years. Automakers are under pressure to build more cars where workers earn decent wages.

The North American trade agreement hammered out late Sunday between the United States and Canada, following an earlier U.S.-Mexico deal, shakes up — but likely won’t revolutionize — the way businesses operate within the three-country trade bloc.

The new United States-Mexico-Canada Agreement replaces the 24-year-old North American Free Trade Agreement, which tore down trade barriers between the three countries. But NAFTA encouraged factories to move to Mexico to take advantage of low-wage labor in what President Donald Trump called a job-killing “disaster” for the United States.

Sunday’s agreement is meant to bring manufacturing back to the United States. The president, never known for understatement, said the new deal would “transform North America back into a manufacturing powerhouse.”

But America had to make some concessions, too. For example, it agreed to retain a NAFTA dispute-resolution process that it wanted to jettison but Canada insisted on keeping.

Overall, financial markets were relieved the countries reached a deal. For a time, it had looked like Trump might pull out of a regional free trade pact altogether — or strike one without Canada, America’s No. 2 trading partner. At noon Monday, the Dow Jones industrial average was up more than 240 points.

Economists, trade attorneys and businesses are still parsing the agreement. But here’s an early look at what it means for different players.

How dairy farmers are affected

Trump has raged about Canada’s tariffs on dairy imports, which can approach 300 percent. American dairy farmers have also complained about Canadian policies that priced the U.S. out of the market for some dairy powders and allowed Canada to flood world markets with its own versions.

The new agreement ends the discriminatory pricing and restricts Canadian exports of dairy powders.

It also expands U.S. access to up to 3.75 percent of the Canadian dairy market (versus 3.25 percent in the Trans-Pacific Partnership agreement the Obama administration negotiated but Trump nixed his first week in office). Above that level, U.S. dairy farmers will still face Canada’s punishing tariffs. And the “supply management” system Canada uses to protect its farmers is still largely in place.

Still, trade attorney Daniel Ujczo of the Dickinson Wright law firm said that “the U.S. dairy industry seems happy … for now.”

Shaking things up for automakers

NAFTA remade the North American auto market. Automakers built complicated supply chains that straddled NAFTA borders. In doing so, they took advantage of each country’s strengths — cheap labor in Mexico, and skilled workers and proximity to customers in the United States and Canada.

The new agreement changes things up. For one thing, the percentage of a car’s content that must be built within the trade bloc to qualify for duty-free status rises to 75 percent from 62.5 percent. A bolder provision requires that 40 percent to 45 percent of a car’s content be built where workers earn $16 an hour. That is meant to bring production back to the United States or Canada and away from Mexico (and perhaps to put some upward pressure on Mexican wages).

The provisions could drive up car prices for consumers.

The new deal also provides some protection to Canada and Mexico if Trump goes ahead with his threat to slap 20 percent to 25 percent taxes on imported cars, trucks and auto parts. It would exclude from the proposed tariffs 2.6 million passenger vehicles from both Canada and Mexico.

The impact on multinational companies  

Like other U.S. trade agreements, NAFTA allowed multinational companies to go to private tribunals to challenge national laws they said discriminated against them and violated the terms of the trade agreement. Critics charged the process gave companies a way to get around environmental and labor laws and regulations they didn’t like, overruling democratically elected governments in the process.

U.S. Trade Rep. Robert Lighthizer, who negotiated the new deal, had another complaint: The tribunals took some of the risk out of investing in unstable or corrupt countries such as Mexico. Why, Lighthizer argued, should the United States negotiate deals that encourage investment in other countries?

The new pact scales back provisions protecting foreign investment. Lori Wallach, director of Public Citizen’s Global Trade Watch and a sharp critic of NAFTA, praised the new agreement for reining in what she called NAFTA’s “outrageous” tribunal system that had allowed big companies to launch “attacks on environmental and health policies.”

Windfall for drug companies

The new trade pact delivers a windfall to pharmaceutical companies that make biologics — ultra-expensive drugs produced in living cells. It gives them 10 years of protection from generic competition, up from eight the Obama administration had negotiated in the TPP.

But good news for the pharmaceutical industry could be bad news for users of the drugs and for government policymakers trying to hold down health-care costs.

“New monopoly privileges for pharmaceutical firms … could undermine reforms needed to make medicine more affordable here and increase prices in Mexico and Canada, limiting access to lifesaving medicines,” Wallach said.

Some retailers benefit, other do not

The United States pressured Canada and Mexico to raise the dollar amount that shipments must reach before they become subject to import duties. Canada, for instance, will allow tax- and duty-free shipments worth up to 40 Canadian dollars (about $31), up from 20 Canadian dollars ($16) under NAFTA.

The change makes U.S. products more competitive in Canada because they will be subject to less tax at the border — and delivers savings to Canadians who shop online. However, trade attorney Ujczo notes, the higher threshold poses a threat to Canadian retailers. 
…

General Electric ousted its CEO, took a $23 billion charge and said it would fall short of profit forecasts this year, further signs that the century-old industrial conglomerate is struggling to turn around its vastly shrunken business.

H. Lawrence Culp Jr. will take over immediately as chairman and CEO from John Flannery, who had been on the job for just over a year. Flannery began a restructuring of GE in August 2017, when he replaced Jeffrey Immelt, whose efforts to create a higher-tech version of GE proved unsuccessful.

However, in Flannery’s short time, GE’s value has dipped below $100 billion and shares are down more than 35 percent this year, following a 45 percent decline in 2017.

The company was booted from the Dow Jones Industrial Average this summer and, last month, shares tumbled to a nine-year low after revealing a flaw in its marquee gas turbines, which caused the metal blades to weaken and forced the shutdown of a pair of power plants where they were in use.

GE warned Monday that it will miss its profit forecasts this year and it’s taking a $23 billion charge related to its power business.

The 55-year-old Culp was CEO and president of Danaher Corp. from 2000 to 2014. During that time, Danaher’s market capitalization and revenues grew five-fold. He’s already a member of GE’s board.

It’s a track record that GE appears to need after a series of notable changes under Flannery failed to gain momentum immediately, although some analysts wonder whether Culp’s history of accomplishments will be enough to reverse the direction of the company.

The challenges GE faces — including the power sector’s cyclical, structural and operational challenges — are not easily or quickly fixable, but “GE should be commended for selecting a credible, seasoned GE outsider as chairman/CEO who is likely to more candidly and quickly identify how bad things may be and what needs to be done about it,” said Gautam Khanna, an analyst at Cowen Inc., in a note to investors.

Investors will want Culp to “clean house, and fast,” said Scott Davis, founding partner of Melius Research, in a research note where he compared GE’s recent history to a slow but fatal train wreck.

“If I’m a GE employee today, I’m happy for the turnaround, but expectations are about to get a whole lot higher…GE employees will either step up or will be replaced,” Davis said.

Flannery faced a titanic task in redirecting General Electric, which was founded in 1892 in Schenectady, New York.

Just six months after taking over as CEO, Flannery said the company would be forced to pay $15 billion to make up for the miscalculations of an insurance subsidiary. While Wall Street was aware of the issues at GE’s North American Life & Health, the size of the hit caught many off guard.

Flannery on the same day said that GE might take the radical step of splitting up the main company’s three main components — aviation, health care and power — into separate businesses.

In June GE said it would spin off its health-care business and sell its interest in Baker Hughes, a massive oil services company. It’s been selling off assets and trying to sharpen its focus since the recession, when it’s finance division was hammered.

“GE still has too much debt and plenty to fix, but at least we have an outsider with an accelerated mandate to fix it,” Davis said.

Flannery vowed to give GE more of a high-tech and industrial focus by honing in on aviation, power and renewable energy — businesses with big growth potential. The shift is historic for a company that defined the phrase “household name.”

GE traces its roots to Thomas Edison and the invention of the light bulb, and the company grew with the American economy. At the start of the global financial crisis in 2008, it was one of the nation’s biggest lenders, its appliances were sold by the millions to homeowners around the world and it oversaw a multinational media powerhouse including NBC television.

But the economic crises revealed how unwieldy General Electric had become, with broad exposure damage during economic downturns.

Shares of General Electric Co., based in Boston, surged 11 percent in midday trading.

Massachusetts Gov. Charlie Baker, who helped lure GE to Boston from Connecticut in 2016 with incentives like state grants and property tax relief, said he’s not too concerned about GE’s latest travails. He noted that the company is still worth about $100 billion and has what he called a “huge footprint” in Massachusetts in health care, green technology, and renewable energy.

He said the state “did not write a big check to GE based on job projections or anything like that.”
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General Electric ousted its CEO, took a $23 billion charge and said it would fall short of profit forecasts this year, further signs that the century-old industrial conglomerate is struggling to turn around its vastly shrunken business.

H. Lawrence Culp Jr. will take over immediately as chairman and CEO from John Flannery, who had been on the job for just over a year. Flannery began a restructuring of GE in August 2017, when he replaced Jeffrey Immelt, whose efforts to create a higher-tech version of GE proved unsuccessful.

However, in Flannery’s short time, GE’s value has dipped below $100 billion and shares are down more than 35 percent this year, following a 45 percent decline in 2017.

The company was booted from the Dow Jones Industrial Average this summer and, last month, shares tumbled to a nine-year low after revealing a flaw in its marquee gas turbines, which caused the metal blades to weaken and forced the shutdown of a pair of power plants where they were in use.

GE warned Monday that it will miss its profit forecasts this year and it’s taking a $23 billion charge related to its power business.

The 55-year-old Culp was CEO and president of Danaher Corp. from 2000 to 2014. During that time, Danaher’s market capitalization and revenues grew five-fold. He’s already a member of GE’s board.

It’s a track record that GE appears to need after a series of notable changes under Flannery failed to gain momentum immediately, although some analysts wonder whether Culp’s history of accomplishments will be enough to reverse the direction of the company.

The challenges GE faces — including the power sector’s cyclical, structural and operational challenges — are not easily or quickly fixable, but “GE should be commended for selecting a credible, seasoned GE outsider as chairman/CEO who is likely to more candidly and quickly identify how bad things may be and what needs to be done about it,” said Gautam Khanna, an analyst at Cowen Inc., in a note to investors.

Investors will want Culp to “clean house, and fast,” said Scott Davis, founding partner of Melius Research, in a research note where he compared GE’s recent history to a slow but fatal train wreck.

“If I’m a GE employee today, I’m happy for the turnaround, but expectations are about to get a whole lot higher…GE employees will either step up or will be replaced,” Davis said.

Flannery faced a titanic task in redirecting General Electric, which was founded in 1892 in Schenectady, New York.

Just six months after taking over as CEO, Flannery said the company would be forced to pay $15 billion to make up for the miscalculations of an insurance subsidiary. While Wall Street was aware of the issues at GE’s North American Life & Health, the size of the hit caught many off guard.

Flannery on the same day said that GE might take the radical step of splitting up the main company’s three main components — aviation, health care and power — into separate businesses.

In June GE said it would spin off its health-care business and sell its interest in Baker Hughes, a massive oil services company. It’s been selling off assets and trying to sharpen its focus since the recession, when it’s finance division was hammered.

“GE still has too much debt and plenty to fix, but at least we have an outsider with an accelerated mandate to fix it,” Davis said.

Flannery vowed to give GE more of a high-tech and industrial focus by honing in on aviation, power and renewable energy — businesses with big growth potential. The shift is historic for a company that defined the phrase “household name.”

GE traces its roots to Thomas Edison and the invention of the light bulb, and the company grew with the American economy. At the start of the global financial crisis in 2008, it was one of the nation’s biggest lenders, its appliances were sold by the millions to homeowners around the world and it oversaw a multinational media powerhouse including NBC television.

But the economic crises revealed how unwieldy General Electric had become, with broad exposure damage during economic downturns.

Shares of General Electric Co., based in Boston, surged 11 percent in midday trading.

Massachusetts Gov. Charlie Baker, who helped lure GE to Boston from Connecticut in 2016 with incentives like state grants and property tax relief, said he’s not too concerned about GE’s latest travails. He noted that the company is still worth about $100 billion and has what he called a “huge footprint” in Massachusetts in health care, green technology, and renewable energy.

He said the state “did not write a big check to GE based on job projections or anything like that.”
…

Fresh from clinching an updated North American commerce pact, U.S. President Donald Trump on Monday criticized Indian and Brazilian trade tactics, describing the latter as being “maybe the toughest in the world” in terms of protectionism.

Addressing reporters at a White House event to celebrate the agreement of an updated trilateral trade deal between the United States, Mexico and Canada, Trump added India and Brazil to a growing list of countries that, he argues, treat the world’s top economy unfairly in terms of commerce.

“India charges us tremendous tariffs. When we send Harley Davidson motorcycles, other things to India, they charge very, very high tariffs,” Trump said, adding that he had brought up the issue with Indian Prime Minster Narendra Modi, who he said was “going to reduce them very substantially.”

Modi’s office could not immediately be reached for a request for comment. India’s government has become more protectionist in recent months, raising import tariffs on a growing number of goods as it promotes its ‘Make in India’ program.

After criticizing India, Trump turned to Brazil, the second-largest economy in the Americas behind the United States.

“Brazil’s another one. That’s a beauty. They charge us whatever they want,” he said. “If you ask some of the companies, they say Brazil is among the toughest in the world – maybe the toughest in the world.”

Brazil is one of the world’s most closed major economies, and in recent months has tussled with the Trump administration over trade in sectors such as ethanol and steel.

After Trump’s comments, Brazil’s Foreign Trade Minister, Abrão Neto, defended the relationship, saying it was “very positive.” He added that over the last 10 years, the United States has enjoyed a trade surplus with Brazil of $90 billion in goods, and of $250 billion in goods and services.

Neto pointed out that the United States was Brazil’s second-largest trading partner, behind China, and that the two countries had a “complementary and strategic” commercial relationship that could, nonetheless, be improved.

Trump’s “America First” trade policies, particularly his escalating trade war with China, are aimed at boosting U.S. manufacturing, but they have spooked investors who worry that supply lines could be fractured and global growth derailed.

There are now U.S. tariffs active on $250 billion worth of Chinese goods, with threats on additional goods worth $267 billion.
…

Fresh from clinching an updated North American commerce pact, U.S. President Donald Trump on Monday criticized Indian and Brazilian trade tactics, describing the latter as being “maybe the toughest in the world” in terms of protectionism.

Addressing reporters at a White House event to celebrate the agreement of an updated trilateral trade deal between the United States, Mexico and Canada, Trump added India and Brazil to a growing list of countries that, he argues, treat the world’s top economy unfairly in terms of commerce.

“India charges us tremendous tariffs. When we send Harley Davidson motorcycles, other things to India, they charge very, very high tariffs,” Trump said, adding that he had brought up the issue with Indian Prime Minster Narendra Modi, who he said was “going to reduce them very substantially.”

Modi’s office could not immediately be reached for a request for comment. India’s government has become more protectionist in recent months, raising import tariffs on a growing number of goods as it promotes its ‘Make in India’ program.

After criticizing India, Trump turned to Brazil, the second-largest economy in the Americas behind the United States.

“Brazil’s another one. That’s a beauty. They charge us whatever they want,” he said. “If you ask some of the companies, they say Brazil is among the toughest in the world – maybe the toughest in the world.”

Brazil is one of the world’s most closed major economies, and in recent months has tussled with the Trump administration over trade in sectors such as ethanol and steel.

After Trump’s comments, Brazil’s Foreign Trade Minister, Abrão Neto, defended the relationship, saying it was “very positive.” He added that over the last 10 years, the United States has enjoyed a trade surplus with Brazil of $90 billion in goods, and of $250 billion in goods and services.

Neto pointed out that the United States was Brazil’s second-largest trading partner, behind China, and that the two countries had a “complementary and strategic” commercial relationship that could, nonetheless, be improved.

Trump’s “America First” trade policies, particularly his escalating trade war with China, are aimed at boosting U.S. manufacturing, but they have spooked investors who worry that supply lines could be fractured and global growth derailed.

There are now U.S. tariffs active on $250 billion worth of Chinese goods, with threats on additional goods worth $267 billion.
…

Adam Mosseri, a veteran 10-year Facebook executive, will become the new head of Instagram, outgoing co-founders Kevin Systrom and Mike Krieger announced Monday.

“We are thrilled to hand over the reins to a product leader with a strong design background and a focus on craft and simplicity,” Systrom and Krieger said in a press release.The pair announced their resignation last week without giving a clear explanation.

Mosseri, 35, has been Instagram’s head of product since May. He began as a designer at Facebook in 2008, and recently ran its News Feed. His appointment comes among fears that with the departure of Instagram’s independent-minded founders, the app will become more like Facebook: Cluttered with features, and invasive of user’s personal data.

Instagram was founded in 2010 and bought by Facebook two years later for $1 billion. While Facebook has struggled to hold onto younger users, Instagram remains popular with teens. It has also remained scandal-free, while Facebook has taken heat for numerous scandals including the spread of fake news, alleged exploitation of user data with third parties, electoral interference, and its use as a platform for radical leaders to spread propaganda in developing countries.
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