Category Archives: Business

economy and business news

World Bank: Remittance Flows Rising After Years of Decline

After two consecutive years of decline, remittances, the money migrant workers send home, increased in 2017 according to figures released by the World Bank. Remittances are a significant financial contribution to the well-being of families of migrant workers and to the sustainable development of their countries of origin. The U.N. recognizes their importance every year on June 16, designated International Day of Family Remittances. VOA’s Cristina Caicedo Smit reports on this vital lifeline.

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Poll: Ticked at Trump, Canadians Say They’ll Avoid US Goods

Seventy percent of Canadians say they will start looking for ways to avoid buying U.S.-made goods in a threat to ratchet up a trade dispute between Prime Minister Justin Trudeau and U.S. President Donald Trump, an Ipsos Poll showed Friday.

The poll also found a majority of Americans and Canadians are united in support of Trudeau and opposition to Trump in their countries’ standoff over the renegotiation of the 1994 North American Free Trade Agreement (NAFTA).

Amid the spat, Trump pulled out of a joint communique with six other countries last weekend during a Quebec summit meeting of the Group of Seven industrialized democracies and called Trudeau “very dishonest and weak.”

Trump was reacting to Trudeau’s having called U.S. steel and aluminum tariffs insulting to Canada. Trudeau has said little about the matter since a Trump Twitter assault. 

Despite the tensions, 85 percent of Canadians and 72 percent of Americans said they support being in NAFTA, and 44 percent of respondents in both countries said renegotiation of the deal would be a good thing for their country.

While the poll showed support for a boycott of U.S. goods in Canada, pulling it off could be difficult in a country that reveres U.S. popular culture and consumer goods over all others.

Canada is the largest market for U.S. goods.

Trudeau over Trump

The poll showed 72 percent of Canadians and 57 percent of Americans approved of the way Trudeau had handled the situation, while 14 percent of Canadians and 37 percent of Americans approved of Trump’s behavior.

More than eight in 10 Canadians and seven in 10 Americans worry the situation has damaged bilateral relations.

Canada has vowed to retaliate against U.S. tariffs on steel and aluminum with tariffs against a range of U.S. goods, a move supported by 79 percent of Canadians, according to the poll.

By contrast, Americans opposed escalating the situation.

Thirty-one percent of Americans said they favored even stronger tariffs, and 61 percent said other elected U.S. officials should denounce Trump’s statements.

Canadian respondents also signaled approval of the united front their politicians have shown, with 88 percent saying they welcomed the support of politicians from other parties for the Liberal government’s decision to push back on tariffs.

While Canadian consumers appeared ready to boycott U.S. goods, 57 percent of Canadians and 52 percent of Americans said Canada should not overreact to Trump’s comments because it was just political posturing.

The Ipsos Poll of 1,001 Canadians and 1,005 Americans — including 368 Democrats, 305 Republicans and 202 independents — was conducted June 13-14. It has a credibility interval of 3.4 percentage points.

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US Lobsters Are a Target of China’s Threatened Tariffs

A set of retaliatory tariffs released by China on Friday includes a plan to tax American lobster exports, potentially jeopardizing one of the biggest markets for the premium seafood. 

Chinese officials announced the planned lobster tariff along with hundreds of other tariffs amid the country’s escalating trade fight with the United States. China said it wants to place new duties on items such as farm products, autos and seafood starting July 6.

The announcement could have major ramifications for the U.S. seafood industry and for the economy of the state of Maine, which is home to most of the country’s lobster fishery. China’s interest in U.S. lobster has grown exponentially in recent years, and selling to China has become a major focus of the lobster industry.

“Hopefully cooler heads can prevail and we can get a solution,” said Matt Jacobson, executive director of the Maine Lobster Marketing Collaborative. “It’s a year-round customer in China. This isn’t good news at all.”

A Chinese government website on Friday posted a list of seafood products that will be subject to the tariffs, and it included live, fresh and frozen lobster. The website stated that the items would be taxed at 25 percent.

The announcement came in response to President Donald Trump’s own increase in tariffs on Chinese imports in America. The Republican president announced a 25 percent tariff on up to $50 billion worth of Chinese goods on Friday.

The news raised alarms around the Maine lobster industry, as China’s an emerging market for U.S. lobster, which has gained popularity with the growing middle class. Maine lobster was worth more than $430 million at the docks last year, and the industry is a critical piece of the state’s economy, history and heritage.

The U.S. isn’t the only country in the lobster trade. Canada also harvests the same species of lobster and is a major trading partner with China.

“Anything that affects the supply chain is obviously not a great thing,” said Kristan Porter, president of the Maine Lobstermen’s Association. “The lobstermen obviously are concerned with trade and where they go.”

The value of China’s American lobster imports grew from $108.3 million in 2016 to $142.4 million last year. The country barely imported any American lobster a decade ago.

China and the U.S. are major seafood trading partners beyond just lobster, and the new tariffs would apply to dozens of products that China imports from the U.S., including salmon, tuna and crab. The U.S. imported more than $2.7 billion in Chinese seafood last year, and the U.S. exported more than $1.3 billion to China.

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Trump OKs Plan to Impose Tariffs on Billions in Chinese Goods

President Donald Trump has approved a plan to impose punishing tariffs on tens of billions of dollars worth of Chinese goods as early as Friday, a move that could put his trade policies on a collision course with his push to rid the Korean Peninsula of nuclear weapons.

Trump has long vowed to fulfill his campaign pledge to clamp down on what he considers unfair Chinese trading practices. But his calls for billions in tariffs could complicate his efforts to maintain China’s support in his negotiations with North Korea.

Trump met Thursday with several Cabinet members and trade advisers and was expected to impose tariffs on at least $35 billion to $40 billion of Chinese imports, according to an industry official and an administration official familiar with the plans. The amount of goods could reach $55 billion, said the industry official. The officials spoke on condition of anonymity in order to discuss the matter ahead of a formal announcement.

Stage set for retaliation

If the president presses forward as expected, it could set the stage for a series of trade actions against China and lead to retaliation from Beijing. Trump has already slapped tariffs on steel and aluminum imports from Canada, Mexico and European allies, and his proposed tariffs against China risk starting a trade war involving the world’s two biggest economies.

The decision on the Chinese tariffs comes in the aftermath of Trump’s summit with North Korean leader Kim Jong Un. The president has coordinated closely with China on efforts to get Pyongyang to eliminate its nuclear arsenal. But he signaled that whatever the implications, “I have to do what I have to do” to address the trade imbalance.

Trump, in his press conference in Singapore on Tuesday, said the U.S. has a “tremendous deficit in trade with China and we have to do something about it. We can’t continue to let that happen.” The U.S. trade deficit with China was $336 billion in 2017.

Administration officials have signaled support for imposing the tariffs in a dispute over allegations that Beijing steals or pressures foreign companies to hand over technology, according to officials briefed on the plans. China has targeted $50 billion in U.S. products for potential retaliation.

​Pompeo in China

Secretary of State Mike Pompeo raised the trade issue directly with China Thursday, when he met in Beijing with President Xi Jinping and other officials, the State Department said. Officials would not say whether Pompeo explicitly informed the Chinese that the tariffs would be coming imminently.

“I stressed how important it is for President Trump to rectify that situation so that trade becomes more balanced, more reciprocal and more fair, with the opportunity to have American workers be treated fairly,” Pompeo said Thursday during a joint news conference with Foreign Minister Wang Yi.

Wall Street has viewed the escalating trade tensions with wariness, fearful that they could strangle the economic growth achieved during Trump’s watch and undermine the benefits of the tax cuts he signed into law last year.

“If you end up with a tariff battle, you will end up with price inflation, and you could end up with consumer debt. Those are all historic ingredients for an economic slowdown,” Gary Cohn, Trump’s former top economic adviser, said at an event sponsored by The Washington Post.

Bannon: Trump economic message

But Steve Bannon, Trump’s former White House and campaign adviser, said the crackdown on China’s trade practices was “the central part of Trump’s economic nationalist message. His fundamental commitment to the ‘deplorables’ on the campaign trail was that he was going to bring manufacturing jobs back, particularly from Asia.”

In the trade fight, Bannon said, Trump has converted three major tools that “the American elites considered off the table” — namely, the use of tariffs, the technology investigation of China and penalties on Chinese telecom giant ZTE.

“That’s what has gotten us to the situation today where the Chinese are actually at the table,” Bannon said. “It’s really not just tariffs, it’s tariffs on a scale never before considered.”

Chinese counterpunch

The Chinese have threatened to counterpunch if the president goes ahead with the plan. Chinese officials have said they would drop agreements reached last month to buy more U.S. soybeans, natural gas and other products.

“We made clear that if the U.S. rolls out trade sanctions, including the imposition of tariffs, all outcomes reached by the two sides in terms of trade and economy will not come into effect,” foreign ministry spokesman Geng Shuang said Thursday.

Beijing has also drawn up a list of $50 billion in U.S. products that would face retaliatory tariffs, including beef and soybeans, a shot at Trump’s supporters in rural America.

Scott Kennedy, a specialist on the Chinese economy at the Center for Strategic and International Studies, said the Chinese threat was real and helped along by recent strains exhibited among the U.S. and allies.

“I don’t think they would cower or immediately run to the negotiating table to throw themselves at the mercy of Donald Trump,” Kennedy said. “They see the U.S. is isolated and the president as easily distracted.”

Ron Moore, who farms 1,800 acres of corn and soybeans in Roseville, Illinois, said soybean prices have started dropping ahead of what looks like a trade war between the two economic powerhouses. 

“We have to plan for the worst-case scenario and hope for the best,” said Moore, who is chairman of the American Soybean Association. “If you look back at President Trump’s history, he’s been wildly successful negotiating as a businessman. But it’s different when you’re dealing with other governments.”

The U.S. and China have been holding ongoing negotiations over the trade dispute. The United States has criticized China for the aggressive tactics it uses to develop advanced technologies, including robots and electric cars, under its “Made in China 2025” program. The U.S. tariffs are designed specifically to punish China for forcing American companies to hand over technology in exchange for access to the Chinese market.

The administration is also working on proposed Chinese investment restrictions by June 30. So far, Trump has yet to signal any interest in backing away. 

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AT&T to Close Time Warner Deal, But Government May Appeal

AT&T Inc may close its $85 billion deal to buy Time Warner Inc under an agreement reached on Thursday with the U.S. government, which might still appeal a case seen as a turning point for the media industry.

AT&T said it could close the deal by Friday. The government has not ruled out an appeal and has 60 days to file.

AT&T agreed to temporarily manage Time Warner’s Turner networks separately from DirecTV, including setting prices and managing personnel, as part of the deal approved by Judge Richard Leon late Thursday.

The conditions agreed to by AT&T would remain in effect until Feb. 28, 2019, the conclusion of the case or an appeal.

Leon of the U.S. District Court for the District of Columbia ruled on Tuesday that the deal to marry AT&T’s wireless and satellite businesses with Time Warner’s movies and television shows was legal under antitrust law. The Justice Department had argued the deal would harm consumers.

U.S. President Donald Trump, a frequent critic of Time Warner’s CNN coverage, denounced the deal when it was announced in October 2016.

The fact that Turner, which includes CNN, will be run separately from DirecTV makes a stay unnecessary, said Seth Bloom, a veteran of the Justice Department’s Antitrust Division who is now in private practice.

In its lawsuit aimed at stopping the deal, filed in November 2017, the Justice Department said that AT&T’s ownership of both DirecTV and Time Warner, especially its Turner subsidiary, would give AT&T unfair leverage against rival pay TV providers that relied on content like CNN and HBO’s “Game of Thrones.”

“This is clearly leaving open the door for the DOJ (Justice Department) to appeal,” Bloom said. “If Turner is run separately, they don’t really need a stay.”

The AT&T ruling is expected to trigger a wave of mergers in the media sector, which has been upended by companies like Netflix Inc and Alphabet Inc’s Google.

The first to come was Comcast Corp’s $65 billion bid on Wednesday for the entertainment assets of Twenty-First Century Fox Inc.

AT&T had been worried about closing its deal ahead of a June 21 deadline if the government won a stay pending an appeal. Any stay could take the deal beyond a June 21 deadline for completing the merger, which could allow Time Warner to walk away or renegotiate the proposed transaction with AT&T.

The government may have a difficult time winning on appeal because of the way Judge Leon wrote his opinion, four antitrust experts said.

“I don’t think this would be overturned. It is so rooted in the facts that I would be surprised if an appellate court overturned such a fact-laden opinion,” said Michael Carrier, who teaches law at Rutgers.

In a scathing opinion after a six-week trial, Leon found little to support the government’s arguments that the deal would harm consumers, calling the evidence for one argument against the deal “gossamer thin” and another “poppycock.”

The merger, including debt, would be the fourth largest deal ever attempted in the global telecom, media and entertainment space, according to Thomson Reuters data. It would also be the 12th largest deal in any sector, the data showed.

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Supreme Court Answers Question of Foreign Law in US Courts

Nyet. Non. Nein. No. That’s the answer the Supreme Court gave Thursday to the question of whether federal courts in the United States must accept statements from foreign governments about their own laws as binding.

Justice Ruth Bader Ginsburg wrote for a unanimous court that a “federal court should accord respectful consideration to a foreign government’s submission,” but is not required to treat it as conclusive.

Given “the world’s many and diverse legal systems and the range of circumstances in which a foreign government’s views may be presented,” there is no single formula on how to treat the information a foreign government provides, Ginsburg wrote.

Ginsburg said the appropriate weight given to a government’s statement in each case will depend on the circumstances. Among the factors that U.S. courts should weigh in looking at what a foreign government has said about its own law are: the statement’s clarity, thoroughness and support as well as the transparency of the foreign legal system and the role and authority of the statement’s author.

Trade case

The ruling came in a case that involves trade with China, a class action lawsuit filed by two U.S.-based purchasers of vitamin C: Nacogdoches, Texas-based Animal Science Products and Elizabeth, New Jersey-based The Ranis Company. The companies sued vitamin C exporters in China. They alleged the exporters had violated U.S. antitrust laws by fixing the prices and amounts of vitamin C exported to the United States.

The vitamin C exporters argued that Chinese law had required their actions and that the lawsuit should therefore be dismissed. China’s Ministry of Commerce filed a brief arguing the same.

US rulings

A federal trial court said the ministry was entitled to “substantial deference” in its interpretation of its own law but didn’t find its statements conclusive. The judge ruled that Chinese law did not require the companies to fix the price or quantity of vitamin C exports, and after a jury found against the exporters, the judge awarded the U.S. companies $147 million.

The New York-based U.S. Court of Appeals for the 2nd Circuit reversed the award and dismissed the lawsuit, saying when a foreign government participates in U.S. court proceeding and submits a statement about its laws and regulations the U.S. court is “bound to defer to those statements.” The Supreme Court disagreed.

The Trump administration had urged the court to side, as it did, with the Vitamin C purchasers.

The case is 16-1220, Animal Science Products v. Hebei Welcome Pharmaceutical Co.

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AP Investigation: Local Fish Isn’t Always Local

Caterers in Washington tweeted a photo of maroon sashimi appetizers served to 700 guests attending the governor’s inaugural ball last year. They were told the tuna was from Montauk.

But it was an illusion. It was the dead of winter and no yellowfin had been landed in the New York town.

An Associated Press investigation traced the supply chain of national distributor Sea To Table to other parts of the world, where fishermen described working under slave-like conditions with little regard for marine life.

In a global seafood industry plagued by deceit, conscientious consumers will pay top dollar for what they believe is local, sustainably caught seafood. But even in this fast-growing niche market, companies can hide behind murky dealings, making it difficult to know the story behind any given fish.

Sea To Table said by working directly with 60 docks along U.S. coasts it could guarantee the fish was wild, domestic and traceable — sometimes to the fisherman.

The New York-based company quickly rose in the sustainable seafood movement. While it told investors it had $13 million in sales last year, it expected growth to $70 million by 2020. The distributor earned endorsement from the Monterey Bay Aquarium and garnered media attention from Bon Appetit, Forbes and many more. Its clientele included celebrity chef Rick Bayless, Roy’s seafood restaurants, universities and home delivery meal kits such as HelloFresh.

As part of their investigation, reporters staked out America’s largest fish market, followed trucks and interviewed fishermen who worked on three continents. During a bone-chilling week, they set up a time-lapse camera at Montauk harbor that showed no tuna boats docking. The AP also had a chef order $500 worth of fish sent “directly from the landing dock to your kitchen,” but the boat listed on the receipt hadn’t been there in at least two years.

Preliminary DNA tests suggested the fish likely came from the Indian Ocean or the Western Central Pacific. There are limitations with the data because using genetic markers to determine the origins of species is still an emerging science, but experts say the promising new research will eventually be used to help fight illegal activity in the industry. 

Some of Sea To Table’s partner docks on both coasts, it turned out, were not docks at all. They were wholesalers or markets, flooded with imports. 

The distributor also offered species that were farmed, out of season or illegal to catch.

“It’s sad to me that this is what’s going on,” said chef Bayless, who hosts a PBS cooking series. He had worked with Sea To Table because he liked being tied directly to fishermen — and the “wonderful stories” about their catch. “This throws quite a wrench in all of that.”

Other customers who responded to AP said they were frustrated and confused.

Sea To Table response

Sea To Table owner Sean Dimin stressed that his suppliers are prohibited from sending imports to customers and added violators would be terminated.

“We take this extremely seriously,” he said.

Dimin also said he communicated clearly with chefs that some fish labeled as freshly landed at one port were actually caught and trucked in from other states. But customers denied this, and federal officials described it as mislabeling.

The AP focused on tuna because the distributor’s supplier in Montauk, the Bob Gosman Co., was offering chefs yellowfin tuna all year round, even when federal officials said there were no landings in the entire state.

Almost nightly, Gosman’s trucks drove three hours to reach the New Fulton Fish Market, where they picked up boxes of fish bearing shipping labels from all over the world.

Owner Bryan Gosman said some of the tuna that went to Sea To Table was caught off North Carolina and then driven 700 miles to Montauk. That practice ended in March, he said, because it wasn’t profitable. While 70 percent of his yellowfin tuna is imported, he said that fish is sold to local restaurants and sushi bars and kept separate from Sea To Table’s products.

“Can things get mixed up? It could get mixed up,” he said. “Is it an intentional thing? No, not at all.”

Some of Gosman’s foreign supply came from Land, Ice and Fish, in Trinidad and Tobago.

Indonesian fishermen

The AP interviewed and reviewed complaints from more than a dozen Indonesian fishermen who said they earned $1.50 a day, working 22 hours at a time, on boats that brought yellowfin to Land, Ice and Fish’s compound. They described finning sharks and occasionally cutting off whale and dolphin heads, extracting their teeth as good luck charms.

“We were treated like slaves,” said Sulistyo, an Indonesian who worked on one of those boats and gave only one name, fearing retaliation. “They treat us like robots without any conscience.”

Though it’s nearly impossible to tell where a specific fish ends up, or what percentage of a company’s seafood is fraudulent, even one bad piece taints the entire supply chain.

Dimin said the labor and environmental abuses are “abhorrent and everything we stand against.”

For caterers serving at the ball for Washington Governor Jay Inslee, who successfully pushed through a law to combat seafood mislabeling, knowing where his fish came from was crucial.

The Montauk tuna came with a Sea To Table leaflet describing the romantic, seaside town and the quality of the fish. A salesperson did send them an email saying the fish was caught off North Carolina. But the boxes came from New York and there was no indication it had landed in another state and was trucked to Montauk. A week later, the caterer ordered Montauk tuna again. This time the invoice listed a boat whose owner later told AP he didn’t catch anything for Sea To Table at that time.

“I’m kind of in shock right now,” said Brandon LaVielle of Lavish Roots Catering. “We felt like we were supporting smaller fishing villages.”

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US Central Bank Raises Interest Rates

Leaders of the U.S. central bank raised interest rates slightly Wednesday and signaled that rates are likely to go higher as the economy continues to strengthen.

At the end of two days of deliberation in Washington, the Federal Reserve set the key interest rate a quarter of a percent higher, at a range between 1.75 and 2 percent. They say the labor market continues to improve, spending is rising, and inflation is rising closer to the modest 2 percent annual rate that experts say helps the economy grow predictably.

Fed officials work to maximize employment while maintaining stable prices. With that in mind, they slashed interest rates to nearly zero during the recession in 2008 to boost economic activity. Now, they judge that it is time to continue raising rates because holding rates too low for too long could spark inflation, and such rapidly rising prices could harm the economy.

“The economy is doing very well,” Fed Chairman Jerome Powell told journalists. “Most people who want to find jobs are finding them and unemployment and inflation are low.”

He said the Fed’s efforts to manage the economy work best when the public is told what is being done, what is being considered, and why certain decisions are made. Consequently, Powell said he will begin holding press conferences more often beginning next year. 

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Volkswagen Fined Nearly $1.2 Billion in Emissions Scandal

German authorities fined Volkswagen nearly $1.2 billion Wednesday for its role in a diesel emissions scandal that first surfaced in the United States in 2015.

Prosecutors found the German automaker failed to properly monitor its engine development department. The lack of oversight resulted in global sales of nearly 11 million diesel vehicles with illegal emissions-controlling software.

U.S. authorities previously imposed billions of dollars in penalties on the automaker, which said Wednesday it would accept the fine announced by prosecutors in the city of Braunschweig.

Volkswagen said paying the latest fine would hopefully have “positive effects on other official proceedings being conducted in Europe” against the company and its subsidiaries.

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Bourbon Tariffs a Blow to Bourgeoning Craft Booze Businesses

As the trade dispute escalates between the United States and its global trading partners, American bourbon whiskey is among the U.S. exports in the crosshairs. It will soon be subject to a 25 percent tariff imposed by a growing number of countries as a retaliatory measure for U.S. tariffs on steel and aluminum. As VOA’s Kane Farabaugh reports, the retaliation is a blow to smaller craft distilleries in the U.S. trying to expand overseas.

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