Iran’s currency has hit another record low against the dollar, six weeks before the United States is due to reimpose sanctions on Iranian oil exports that are Tehran’s main revenue source.

The Bonbast.com website, which tracks Iran’s unofficial exchange rates, showed a new low of 16,000 tomans, or 160,000 rials, to the dollar Monday.

The rial has weakened to a series of record lows against the U.S. currency in recent weeks. Bonbast.com displayed the rial at a record low of 128,000 to the dollar on Sept.  3.

Iran’s official exchange rate, set by its central bank, has stood at 42,000 to the dollar since April.

The Trump administration has vowed to reinstate sanctions on Iranian oil exports on Nov. 4, in a bid to pressure Tehran to give up what the U.S. says is its nuclear weapons ambitions.

Iran denies seeking nuclear weapons. Washington reimposed a first set of economic sanctions on Iran last month as part of the pressure campaign. The moves reverse the previous U.S. administration’s suspension of those sanctions under terms of a 2015 nuclear deal between Iran and six world powers.

Speaking to VOA Persian last Friday in an interview broadcast Monday, U.S. economist Steve Hanke of Johns Hopkins University said Iranians should expect more of the same with their currency.

“The Iranian people already have anticipated the problems that will befall them after the sanctions go back on, and they react much more rapidly, of course, than anyone,” Hanke said. “That is why the rial has been plummeting and inflation has been soaring.”

A weakening rial makes dollar-denominated imports more expensive for Iranians.

In a Monday tweet, Hanke said Iran’s annual inflation rate has hit a record high of 293 percent.

In a graphic posted with the tweet, Hanke said he calculated the rate using data from Bonbast.com, Iran’s central bank and the U.S. Bureau of Labor Statistics. 

“It is impossible to predict how low the Iranian currency will go,” Hanke said. “We just know it is dying. And when currencies die, inflation goes up, the economy tends to be completely destabilized, and society in general becomes destabilized because [people] can’t trust their own money.”

This article originated in VOA’s Persian Service.
…

A gluten-free grain that grows in Africa’s impoverished and semi-arid Sahel region is taking off as a health food in New York, the Senegalese chef who masterminded its revival said Monday, outlining plans to almost double production by 2023.

Pierre Thiam began exporting fonio to New York last year, hoping to help smallholder communities in the Sahel, which stretches from Mauritania and Mali in the west to Sudan and Eritrea in the east and is home to more than 100 million people.

The grain is now on the menus of more than 60 New York restaurants and will soon be in all the city’s Whole Foods stores, according to an executive at Yolele Foods, the company he co-founded.

“It’s a grain that could play an important role in some of the poorest regions in the world. The Sahel, nothing grows in that region, but fonio grows abundantly,” Thiam said at the international Slow Food festival in the Italian city of Turin.

“It’s also great for the environment. It matures in 60 days and grows with very little water. There’s even a nickname they have for fonio — the lazy farmers’ crop,” he said.

Thiam told Reuters he hoped to expand annual production from 600,000 tons to a million tons over the next five years.

He wants to have 7,000 families in Senegal producing the crop by 2020, and also plans to expand production to Burkina Faso.

Yolele Foods describes fonio as a “gluten-free, nutrient rich, ancient grain that takes just 5 minutes to cook.” Its website includes recipes for everything from fonio breakfast cereal to kimchi with fonio.

“When we rolled out at Whole Foods Harlem they built a display for us within the first couple weeks because we were selling out so quickly,” said the company’s director of business development Claire Alsup.

Thiam, who opened his first restaurant in New York in 1997, said changing weather patterns had hit the crops commonly grown in the Sahel, but fonio grew quickly even in poor soil and dry conditions.

The crop was largely abandoned under French rule when local farmers were made to grow peanuts and grains such as wheat were imported, but is now being rediscovered, he said.

Thiam said he was aware that popular demand for traditional grains such as fonio and millet could push up prices, putting them out of reach of local consumers.

“We’re conscious of that. We definitely want the first beneficiaries to be the smallholder communities of West Africa,” he said.
…

The United Nations, the World Bank and the International Committee of the Red Cross are partnering with technology powerhouses to launch a global initiative aimed at preventing famines.

“The fact that millions of people — many of them children — still suffer from severe malnutrition and famine  in the 21st century is a global tragedy,” World Bank President Jim Young Kim said announcing the initiative.

The global organization will work with Microsoft, Google and Amazon Web Services to develop the Famine Action Mechanism (FAM), a system capable of identifying food crisis area that are most likely to turn into a full-blown famine.

“If we can better predict when and where future famines will occur, we can save lives by responding earlier and more effectively,” Microsoft President Brad Smith said in a statement.

The tech giants will help develop a set of analytical models that will use the latest technoligies like Artificial Intelligence and machine learning to not only provide early warnings but also trigger pre-arranged financing for crisis management.

“Artificial intelligence and machine learning hold huge promise for forecasting and detecting early signs of food shortages, like crop failures, droughts, natural disasters and conflicts,” Smith said.

According to the U.N. and World Bank, there are 124 million people experiencing crisis-level food insecurity in the world today.

FAM will be at first rolled out in five countries that “exhibit some of the most critical and ongoing food security needs,” according to the World Bank, which didn’t identify the nations. It will ultimately be expanded to cover the world.
…

Comcast beat Rupert Murdoch’s Twenty-First Century Fox in the battle for Sky after offering 30.6 billion pounds ($40 billion) for the British broadcaster, in a dramatic auction to decide the fate of the pay-television group.

U.S. cable giant Comcast bid 17.28 pounds a share for control of London-listed Sky, bettering a 15.67 offer by Fox, the Takeover Panel said in a  statement shortly after final bids were made Saturday.

Comcast’s final offer was significantly higher than its bid going into the auction of 14.75 pounds, and compares with Sky’s closing share price of 15.85 pounds on Friday.

Brian Roberts, chairman and chief executive of Comcast, coveted Sky to expand its international presence as growth slows in its core U.S. market.

Owning Sky will make Comcast the world’s largest pay-TV operator with around 52 million customers.

“This is a great day for Comcast,” Roberts said on Saturday. “This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally.”

Comcast, which also owns the NBC network and movie studio Universal Pictures, encouraged Sky shareholders to accept its offer. It said it wanted to complete the deal by the end of October.

Comcast, which requires 50 percent plus one share of Sky’s equity to win control, said it was also seeking to buy Sky shares in the market.

A spokesman for Fox, which has a 39 percent holding in Sky, declined to comment.

The quick-fire auction marked a dramatic climax to a protracted transatlantic bidding battle waged since February, when Comcast gate-crashed Fox’s takeover of Sky.

It is a blow to media mogul Murdoch, 87, and the U.S. media and entertainment group that he controls, which had been trying to take full ownership of Sky since December 2016.

It is also a setback for U.S. entertainment giant Walt Disney, which agreed on a separate $71 billion deal to buy the bulk of Fox’s film and TV assets, including the Sky stake, in June and would have taken ownership of the British broadcaster following a successful Fox takeover.
…

British Prime Minister Theresa May’s aides have begun contingency planning for a snap election in November to save both Brexit and her job, the Sunday Times reported.

The newspaper said that two senior members of May’s Downing Street political team began “war-gaming” an autumn vote to win public backing for a new plan, after her Brexit proposals were criticized at a summit in Salzburg last week.

Downing Street was not immediately available to comment on the report.

Meanwhile, opposition Labor leader Jeremy Corbyn said Saturday that his party would challenge May on any Brexit deal she could strike with Brussels, and he said there should be a national election if the deal fell short.

The British government said Saturday that it would not “capitulate” to European Union demands in Brexit talks and again urged the bloc to engage with its proposals after May said Brexit talks with the EU had hit an impasse.

“We will challenge this government on whatever deal it brings back on our six tests, on jobs, on living standards, on environmental protections,” Corbyn told a rally in Liverpool, northern England, on the eve of Labor’s annual conference.

“And if this government can’t deliver, then I simply say to Theresa May the best way to settle this is by having a general election.”

Labor’s six tests consist of whether a pact would provide for fair migration, a collaborative relationship with the EU, national security and cross-border crime safeguards, even treatment for all U.K. regions, protection of workers’ rights, and maintenance of single-market benefits.
…

Tensions between China and the United States escalated Saturday as China’s Foreign Ministry summoned U.S. Ambassador to China Terry Branstad to issue a harsh protest against U.S. sanctions set for the purchase of Russian fighter jets and surface-to-air missiles.

The move came hours after China canceled trade talks with the U.S. following Washington’s imposition of new tariffs on Chinese goods.

The statement on the Chinese Foreign Ministry’s website called the imposition of sanctions “a serious violation of the basic principles of international law” and a “hegemonic act.” The ministry also wrote, “Sino-Russian military cooperation is the normal cooperation of the two sovereign states, and the U.S. has no right to interfere.” The U.S. actions, it said, “have seriously damaged the relations” with China. 

China had earlier called on the U.S. to withdraw the sanctions, and speaking to reporters Friday, Foreign Ministry spokesman Geng Shuang said Beijing had lodged an official protest with the United States.

China’s purchase of the weapons from Russian arms exporter Rosoboronexport violated a 2017 U.S. law intended to punish the government of Russian President Vladimir Putin for interfering in U.S. elections and other activities. The U.S. action set in motion a visa ban on China’s Equipment Development Department and director Li Shangfu, forbids transactions with the U.S. financial system, and blocks all property and interests in property involving the country within U.S. jurisdiction.

Meanwhile, The Wall Street Journal reported that China had planned to send Vice Premier Liu He to Washington next week for trade talks, but canceled his trip, along with that of a midlevel delegation that was to precede him.

Earlier Friday, a senior White House official had said the U.S. was optimistic about finding a way forward in trade talks with China.

The official told reporters at the White House that China “must come to the table in a meaningful way” for there to be progress on the trade dispute. 

The official, speaking on condition of anonymity, said that while there was no confirmed meeting between the United States and China, the two countries “remain in touch.”

“The president’s team is all on the same page as to what’s required from China,” according to the official.

The Trump administration has argued that tariffs on Chinese goods would force China to trade on more favorable terms with the United States. 

It has demanded that China better protect American intellectual property, including ending the practice of cybertheft. The Trump administration has also called on China to allow U.S. companies greater access to Chinese markets and to cut its U.S. trade surplus.

Earlier this week, the United States ordered duties on another $200 billion of Chinese goods to go into effect on Sept. 24. China responded by adding $60 billion of U.S. products to its import tariff list.

The United States already has imposed tariffs on $50 billion worth of Chinese goods, and China has retaliated on an equal amount of U.S. goods.
…

America’s rediscovered prowess in oil production is shaking up old notions about the impact of higher crude prices on the U.S. economy.

It has long been conventional wisdom that rising oil prices hurt the economy by forcing consumers to spend more on gasoline and heating their homes, leaving less for other things.

Presumably that kind of run-up would slow the U.S. economy. Instead, the economy grew at its fastest rate in nearly four years during the April-through-June quarter.

President Donald Trump appears plainly worried about rising oil prices just a few weeks before mid-term elections that will decide which party controls the House and Senate.

“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!” Trump tweeted Thursday. “We will remember. The OPEC monopoly must get prices down now!”

Members of The Organization of the Petroleum Exporting Countries, who account for about one-third of global oil supplies, are scheduled to meet this weekend with non-members including Russia.

The gathering isn’t expected to yield any big decisions — those typically come at major OPEC meetings like the one set for December. Oil markets, however, were roiled Friday by a report that attendees were considering a significant increase in production to offset declining output from Iran, where exports have fallen ahead of Trump’s re-imposition of sanctions.

OPEC and Russia have capped production since January 2017 to bolster prices. Output fell even below those targets this year, and in June the same countries agreed to boost the oil supply, although they didn’t give numbers.

Rising oil prices

Oil prices are up roughly 40 percent in the past year. On Friday, benchmark U.S. crude was trading around $71 a barrel, and the international standard, Brent, was closing in on $80.

The national average price for gasoline stood at $2.85 per gallon, up 10 percent from a year ago, according to auto club AAA. That increase likely would be greater were it not for a slump in gasoline demand that is typical for this time of year, when summer vacations are over.

The United States still imports about 6 million barrels of oil a day on average, but that is down from more than 10 million a decade ago. In the same period, U.S. production has doubled to more than 10 million barrels a day, according to government figures.

“Because the U.S. now is producing so much more than it used to, [the rise in oil prices] is not as big an impact as it would have been 20 years ago or 10 years ago,” said Michael Maher, an energy researcher at Rice University and a former Exxon Mobil economist.

The weakening link between oil and the overall economy was seen — in reverse — three years ago. Then, plunging oil prices were expected to boost the economy by leaving more money in consumers’ pocket, yet GDP growth slowed at the same time that lower oil prices took hold during 2015.

Other economists caution against minimizing the disruption caused by energy prices.

“Higher oil prices are unambiguously bad for the U.S. economy,” said Philip Verleger, an economist who has studied energy markets. “They force consumers to divert their income from spending on other items to spending on fuels.”

Since energy amounts to only about 3 percent of consumer spending, a cutback in that other 97 percent “causes losses for those who sell autos, restaurants, airlines, resorts and all parts of the economy,” Verleger said.

Pack leader

The federal Energy Information Administration said this month that the U.S. likely reclaimed the title of world’s biggest oil producer earlier this year by surpassing the output of Saudi Arabia in February and Russia over the summer. If the agency’s estimates are correct, it would mark the first time since 1973 that the U.S. has led the oil-pumping pack.

And that has made the impact of oil prices on the economy a more complicated calculation.

When oil prices tumbled starting in mid-2014, U.S. energy producers cut back on drilling. They cut thousands of jobs and they spent less on rigs, steel pipes and railcars to ship crude to refineries. That softened the bounce that economists expected to see from cheaper oil.

Now, with oil prices rising, energy companies are boosting production, creating an economic stimulus that offsets some of the blow from higher prices on consumers. Oil- and gas-related investment accounted for about 40 percent of the growth in business investment in the April-June quarter this year.

Moody’s Analytics estimates that every penny increase at the pump reduces consumer spending by $1 billion over a year, and gasoline has jumped 24 cents in the past year, according to AAA. That is “a clear-cut negative,” but not deeply damaging, said Ryan Sweet, director of real-time economics at Moody’s.

“Usually with gasoline prices, speed kills — a gradual increase [like the current one], consumers can absorb that,” Sweet said. Consumers have other factors in their favor, he added, including a tight job market, wage growth, better household balance sheets, and the recent tax cut.

Sweet said the boon that higher prices represent to the growing energy sector, which can invest in more wells, equipment and hiring, means that the run-up in crude has probably been “a small but net positive” for the economy.

“That could change if we get up to $3.50, $4,” he said.
…

The United States is optimistic about finding a way forward in trade talks with China, but no date has yet been determined for further talks between the two countries, according to a senior White House official. 

The official told reporters Friday at the White House that China “must come to the table in a meaningful way” for there to be progress on the trade dispute. 

The official, speaking on condition of anonymity, said while there is no confirmed meeting between the United States and China, the two countries “remain in touch.”

“The president’s team is all on the same page as to what’s required from China,” according to the official. 

The Trump administration has argued that tariffs on Chinese goods would force China to trade on more favorable terms with the United States.

It has demanded that China better protect American intellectual property, including ending the practice of cybertheft. The Trump administration has also called on China to allow U.S. companies greater access to Chinese markets and to cut its U.S. trade surplus.

Earlier this week, the United States ordered duties on another $200 billion of Chinese goods to go into effect on September 24. China responded by adding $60 billion of U.S. products to its import tariff list.

The United States already has imposed tariffs on $50 billion worth of Chinese goods, and China has retaliated on an equal amount of U.S. goods.

Earlier this month, President Donald Trump threatened even more tariffs on Chinese goods — another $267 billion worth of duties that would cover virtually all the goods China imports to the United States.

“That changes the equation,” he told reporters.

China has threatened to retaliate against any potential new tariffs. However, China’s imports from the United States are $200 billion a year less than American imports from China, so it would run out of room to match U.S. sanctions.
…

Canada and the United States showed scant sign on Thursday of closing a deal to revamp NAFTA, and Canadian officials made clear Washington needed to withdraw a threat of possible autos tariffs, sources said.

The administration of U.S. President Donald Trump wants to be able to agree on a text of the three-nation North American Free Trade Agreement by the end of September, but major differences remain.

“We discussed some tough issues today,” Canadian Foreign Minister Chrystia Freeland told reporters after meeting with U.S. Trade Representative Robert Lighthizer.

Freeland, who has visited Washington four weeks in a row to discuss NAFTA, gave no further details.

Market fears over the future of the 1994 pact, which underscores $1.2 trillion in trade, have been regularly hitting stocks in all three nations, whose economies are now highly integrated.

While multiple deadlines have passed during the more than year-long negotiations to renew NAFTA, pressure on Canada to agree to a deal is growing, partly to push it through the U.S. Congress before Mexico’s new government takes office on Dec. 1.

Canada says it does not feel bound by the latest deadline.

Asked whether time was running out, Freeland said her focus was getting a deal that was good for Canadians.

Trump came to power last year vowing to tear up NAFTA unless major changes were made to a pact he blames for the loss of U.S. manufacturing jobs.

Trump struck a side-deal on NAFTA with Mexico last month and has threatened to exclude Canada if necessary. He also said he might impose a 25 percent tariff on Canadian autos exports, which would badly hurt the economy.

​Jerry Dias, president of Unifor, Canada’s largest private-sector union, who was briefed on the talks by Canada’s negotiating team, said Ottawa insisted that the tariff threat be withdrawn.

“Why would Canada sign a trade agreement with the United States … and then have Donald Trump impose a 25 percent tariff on automobiles?” Dias told reporters.

“That for us is a deal breaker. It doesn’t make a stitch of sense. … We are a small nation, we’re not a stupid nation,” added Dias.

Freeland said she would return to Canada on Thursday ahead of a two-day meeting of female foreign ministers she is co-hosting in Montreal. Early next week she will be in New York for a United Nations session.

Ottawa is under pressure from some sectors to abandon its insistence that a bad NAFTA is worse than no NAFTA.

Jim Wilson, the trade minister of Ontario — Canada’s most populous province and heart of the country’s auto industry — met federal negotiators on Wednesday and tweeted on Thursday, “It is imperative that the feds reach a deal.”

The Globe and Mail newspaper on Thursday reported that U.S. negotiators want Ottawa to agree to capping its auto exports to the United States at 1.7 million vehicles a year, something that Canadian industry sources dismissed as unacceptable.

Separately, a Canadian source directly familiar with the negotiations said, “We have not discussed a cap.”

Reuters and other outlets reported in August that a side letter with Mexico would cap tariff-free or nearly duty-free Mexican imports to the United States at 2.4 million vehicles.

U.S. automakers privately question why the United States would seek to cap Canadian exports to the United States, given that companies are unlikely to expand production in Canada compared with lower-cost Mexico.
…

Seven years after the Arab Spring, little has been done to address youth unemployment in Tunisia, a key factor in extremist groups’ ability to recruit marginalized youth, rights groups and experts warn.

“Someone who is marginalized with nothing to lose, no stability in life, no vision of the future, no hope for change, can become a very easy target for terrorist groups,” Amna Guellali, director of Human Rights Watch’s Tunisia office, told VOA.

The Arab Spring was ignited in Tunisia, in part because of deteriorating economic conditions. A frustrated street vendor set himself on fire outside a local municipal office in Sidi Bouzid to protest repeated harassment from authorities, who often confiscated his goods or fined him for selling without a permit. 

Although economic conditions that force people to eke out a living on society’s margins play a big role in the unrest, Guellali said that unemployment is the central issue in Tunisia.

 “Unemployment stands at 15 percent, rising to 36 percent for Tunisians under 24 years old. Unemployed youths with diplomas are 25 percent, according to the last statistic of 2017,” Guellali added.

The World Bank, which has been helping Tunisia in its development, has also warned that unemployment among young people is a serious issue that needs to be addressed.

Economic growth 

The World Bank says Tunisia has made progress in its transition to democracy and good governance practices, compared with other countries in the Middle East, but still grapples with growing its economy and providing economic opportunities. 

Tunisia’s economic growth in the post-Arab Spring era remains weak despite a modest increase in 2017. According to World Bank data, the economy grew by 1.9 percent in 2017 compared with 1.0 percent in 2016. Since the revolution, the economy has been growing by an average 1.5 percent annually, lower than previous years.

“Tunisian youth don’t see improvement; they actually see that the economic conditions have worsened more than the previous regime,” Darine El Hage, a regional program manager at the United States Institute of Peace (USIP), told VOA. 

El Hage added that the institute’s field research indicates that Tunisian youth are both frustrated and feel hopeless, with some appreciating the previous government of Zine al-Abidine Ben Ali for its relative stability. 

Mohamed Malouche, founder of the Tunisian American Young Professionals organization, agrees. He believes that ordinary Tunisians feel betrayed by the country’s politicians.

“The Tunisian public has been very patient, but they are not seeing that democracy is paying off. They all feel that they have been cheated by politicians,” Malouche said. 

Ripe for extremism

Terror groups such as the Islamic State group and al-Qaida have large numbers of Tunisians among their ranks and are active in various countries in the region.

Youssef Cherif, an independent Tunisian analyst, believes that when young people join militant groups, it is not due to ideological or religious preferences.

“Tunisian youth are trying to find a space where they can feel that they are important and feel a sense of identity and sense of belonging,” Cherif said.

Malouche agrees. “The lack of economic opportunities, the feeling of injustice and the lack of trust in the government institutions force Tunisian youth to take the extremism route,” he said. 

“Tunisia is becoming a fertile ground to extremism recruiters who are taking advantage of vulnerable young men by offering them money and promises,” he added.

Malouche said lack of political representation is also a factor.

“The Tunisian youth are not [seeing] themselves in the political process. They don’t feel that they are truly represented by the current people in power,” he said.

Root causes

Since the toppling of autocrat Ben Ali in 2011, nine Cabinets have been elected, none of which fully addressed high inflation and unemployment.

“The government has not addressed the root causes of the situation. They haven’t adopted comprehensive policies. They only adopted some cosmetic measures,” Human Rights Watch’s Guellali said.

The government is trying to encourage foreign investment, but continued instability has deterred investors, she said. 

Political division

Political differences between President Beji Caid Essebsi and Prime Minister Youssef Chahed further complicate efforts to bring about reforms.

In July, Essebsi urged the prime minister to step down, citing the country’s political and economic problems. Chahed ignored the call.

“A change of government will shake the confidence of Tunisia’s international partners … as economic data will begin to improve by the end of this year [2018],” Chahed told state news agency TAP, responding to the president’s call for his resignation.

The Tunisian government has taken a number of steps to try to address  inflation and unemployment, including efforts to strengthen small businesses in the country and exemption of foreign companies from taxation to encourage more foreign investment. But analysts, like USIP’s El Hage, believe that these solutions are at best easy fixes.

“There are some mobilizations at the level of the government. However, these mobilizations are short-lived and don’t reflect long-term and comprehensive economic reform policy,” El Hage said. 

Some of the information in this report came from Reuters.
…

New U.S. claims for jobless benefits fell for the third week in a row, hitting their lowest level in nearly 49 years for the third straight week, the Labor Department reported Thursday.

The new figures suggest the U.S. economy’s vigorous job creation continued unabated this month as the data were collected during the survey week for the department’s more closely watched monthly jobs report, due out next week.

Amid a widely reported labor shortage, employers are reluctant to lay off workers who are difficult to replace.

For the week ended September 12, new claims for unemployment insurance fell to 201,000, down 3,000 from the prior week. Economists had instead been expecting a result of 209,000.

The result was the lowest level since November of 1969, whereas the prior week’s level had been the lowest since December 1969.

However, economists say that in reality the levels are likely the lowest ever, given demographic changes in the United States in the past half century.

Claims have now held below the symbolic level of 300,000 for more than 3.5 years, the longest such streak ever recorded.

Though they can see big swings from week to week, jobless claims are an indication of the prevalence of layoffs and the health of jobs markets.

In a decade of economic recovery, the United States has seen uninterrupted job creation, driving the unemployment rate to historical lows.

In light of these trends, the Federal Reserve is widely expected to raise interest rates next week to prevent inflation from rising too quickly.

 
…

Alibaba Chairman Jack Ma said Wednesday that the Chinese e-commerce giant had canceled plans to create 1 million jobs in the U.S., blaming the ongoing trade war for the decision, according to Chinese news agency Xinhua.

“This commitment is based on friendly China-U.S. cooperation and the rational and objective premise of bilateral trade,” Ma told Xinhua. “The current situation has already destroyed the original premise. There is no way to deliver the promise.”

Ma originally pledged to spur job growth by letting American small businesses and farmers sell their goods on Alibaba, which is one of the world’s largest online retailers, when he visited then-President-elect Donald Trump early 2017.

Trump imposed 10 percent tariffs on $200 billion worth of Chinese imports on Monday, threatening to place taxes on an additional $267 billion worth of Chinese imports if China attempts to retaliate.

China placed tariffs on about $60 billion worth of U.S. products the next day as previously planned, though it reduced the size of the tariffs.

At an Alibaba investor conference Tuesday, Ma described the state of economic relations between the two countries as a “mess” with consequences that could last for decades.

Some experts said Ma’s plan to bring 1 million jobs to the U.S. might have been overly ambitious in the first place.
…

Canada said on Wednesday that it would need to see movement from the United States if the two sides are to reach a deal on renewing NAFTA, which Washington insists must be finished by the end of the month.

Although the administration of U.S. President Donald Trump and its allies are increasing pressure on Canada to make the concessions they say are needed for the North American Free Trade Agreement, Canadian Prime Minister Justin Trudeau made clear he also wanted to see flexibility.

“We’re interested in what could be a good deal for Canada but we’re going to need to see a certain amount of movement in order to get there and that’s certainly what we’re hoping for,” he told reporters in Ottawa.

Shortly afterwards, Canadian Foreign Minister Chrystia Freeland met U.S. Trade Representative Robert Lighthizer for their fourth set of talks in four weeks with the two sides still disagreeing on major issues.

Trump has already wrapped up a side deal with Mexico and is threatening to exclude Canada if necessary. Canadian officials say they do not believe the U.S. Congress would agree to turn NAFTA into a bilateral treaty.

U.S. Chamber of Commerce President Thomas Donohue said it would be extremely complicated, if not impossible, for the administration to pull off a Mexico-only agreement.

“If Canada doesn’t come into the deal there is no deal,” Donohue told a media breakfast in Washington.

Donohue said he believed that if the administration wanted to end the current NAFTA, such a move would be subject to a vote in Congress, which would be difficult to get.

The Chamber, the most influential U.S. business lobby, wants NAFTA to be renegotiated as a tri-lateral agreement, citing how highly integrated the three member nations’ economies have become since the pact came into force in 1994.

Negotiators are arguing over cultural protections, dispute resolution, and a U.S. demand for more access to Canada’s protected dairy market. Sources say Ottawa has made clear it is prepared to make concessions, which would anger the influential dairy lobby.

“For American farmers the Canadian market is a drop in the bucket. For us it’s our livelihood,” Dairy Farmers of Canada vice president David Wiens told reporters in Ottawa. Concessions in past trade deals had already hurt Canadian farmers, he said.

“The dairy sector cannot be negatively impacted again by a new trade agreement,” he said. “Enough is enough.”
…

Kenya’s Finance Minister Henry Rotich has cut the government’s spending budget by 55.1 billion shillings ($546.90 million), or 1.8 percent, for the fiscal year from July this year, a Treasury document showed on Wednesday.

The government is facing a tough balancing act after a public outcry over a new 16 percent value added tax on all petroleum products forced President Uhuru Kenyatta to suggest to parliament to keep the VAT and cut if by half.

In the document detailing the new spending estimates, Rotich said the budget had to be adjusted because of the amendments to tax measures brought by lawmakers when they first debated it and passed it last month.

The proposed halving of the VAT rate on fuel has left the government with a funding shortfall, hence the cuts in spending.

Parliament will vote on a raft of proposals, including the 1.8 percent cut on spending, in a special sitting on Thursday.

Kenya’s economy is expected to grow by 6 percent this year, recovering from a drought, slowdown in lending and election-related worries that cut growth in 2017, but investors and the IMF have expressed concerns over growing public debt.

While the next election is still four years away, the government’s economic policies are chafing with citizens angered by increasing costs of living. Fuel dealers protested when the VAT on fuel kicked in this month and citizen groups have gone to court to try to block new or higher taxes.

Separate documents sent by Kenyatta to parliament ahead of Thursday’s sitting underscored the debate in government over how to boost revenues without hurting the poor.

His government has to reduce a gaping fiscal deficit while boosting spending on priority areas such as healthcare and affordable housing.

In order to balance the government’s books after the reduction of the fuel tax, he is trying to reinstate several tax measures struck out by parliament, including a 2 percentage hike on excise duty for mobile phone money transfers to 12 percent.

Kenya’s biggest mobile phone operator Safaricom said in June it was opposed to any tax rise on mobile phone-based transfers, arguing that it would mainly hurt the poor, most of whom do not have bank accounts and rely on services such as its M-Pesa platform.

The president also asked parliament to double the excise duty on the fees charged by banks, money transfer services, and other financial institutions to 20 percent.

Parliament in August threw out an earlier version of proposed fees on bank transfers, a so-called “Robin Hood” tax of 0.05 percent on transfers of more than 500,000 shillings.

The president has not yet signed the budget due to the dispute over the planned tax hikes. Kenyatta’s Jubilee party and its allies have a comfortable majority in parliament.

The Kenya National Chamber of Commerce and Industry this month said the government should widen the tax base. It also urged the state to cut expenditure, reduce wastage of public funds and deal with corruption, which some studies have found lose the government about a third of its annual budget.

 
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Several cryptocurrency exchanges are plagued by poor market surveillance, pervasive conflicts of interest and lack sufficient customer protections, the New York Attorney General’s office said in a report published on Tuesday.

The study found that online platforms where virtual currencies such as bitcoin can be bought and sold by individuals operate with lower safeguards than traditional financial markets, are vulnerable to market manipulation and put customer funds at risk.

“As our report details, many virtual currency platforms lack the necessary policies and procedures to ensure the fairness, integrity, and security of their exchanges,” Attorney General Barbara Underwood said in a statement.

As a result of the findings, the attorney general asked New York’s Department of Financial Services (NYDFS) to review whether three exchanges might be operating unlawfully in the state.

The attorney general’s office launched its Virtual Markets Integrity Initiative in April 2018, asking 13 platforms to voluntarily share information about their practices.

Four platforms did not participate, claiming they did not allow trades from within New York State. The Attorney General’s office investigated whether the platforms did operate in the state, and has referred three – Binance, Kraken and Gate.io – to NYDFS. The three platforms could not immediately be reached for comment.

U.S. and international regulators have begun clamping down on malpractices in the cryptocurrency market over the past year as trading in the nascent asset class boomed.

Two Wall Street regulators last week announced a series of actions, including levying fines, against companies involved with cryptocurrencies, while a New York federal judge ruled a case could proceed in which U.S. securities law was being used to prosecute fraud cases involving cryptocurrency offerings.

The attorney general’s report detailed how some of these platforms conduct overlapping lines of business that present “serious conflicts of interest,” including trading for their own account on their own venues. Some platforms also issue their own virtual currencies or charge companies to list their tokens.

The study also found that “trading platforms lack a consistent and transparent approach to independently auditing the virtual currency purportedly in their possession”, making it “difficult or impossible” to confirm that the exchanges are responsibly holding customer accounts.

Although some platforms police their markets for trading abuses, others do not, the report found.

“Platforms lack robust real-time and historical market surveillance capabilities, like those found in traditional trading venues, to identify and stop suspicious trading patterns,” the report said.
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Argentina’s ex-President Cristina Fernandez said on Tuesday that she never received corrupt payments and challenged investigators to scour her home region of Patagonia if they believed she had hidden cash, a day after she was indicted on graft charges.

Using her immunity as a senator to refuse to answer any questions, Fernandez handed a written statement to the federal judge investigating a sprawling bribery scandal that has ensnared dozens of former officials and construction company executives. The statement was published on her party’s website.

“They can dig up all of Patagonia, but they will never find anything because I never received any illicit money,” the statement said, citing official allegations that cash was kept in underground vaults at Fernandez’s private residence or hidden in containers in the southern Argentina countryside.

Federal Judge Claudio Bonadio said in the indictment that officials had found empty vaults under the house, but no money.

Fernandez, president from 2007 through 2015, is accused of heading a network in which officials in her administration accepted bribes from construction companies in exchange for public works contracts.

Known as the “notebooks” scandal, the allegations arose in August after a local newspaper published diaries kept by a former government chauffeur, who said his notes documented hundreds of millions of dollars delivered to the offices of Fernandez and her late husband and presidential predecessor Nestor Kirchner.

“There is no evidence that links me to this alleged network,” Fernandez’s statement said.

Fernandez was previously indicted on corruption charges in 2016 after her former public works secretary was caught trying to hide bags of cash in a convent.

Fernandez’s current position as a senator grants her immunity from arrest, but not from investigation.

The probe has implications for next year’s presidential election. President Mauricio Macri is expected to run for a second term in October 2019, and his arch political rival Fernandez is among his possible challengers from the country’s Peronist movement. But the scandal is expected to limit her chances.

Some 85 percent of Argentines expect corruption to “decrease substantially within the next five years,” a recent survey by the International Federation of Accountants said.

“The optics do not look good for Fernandez’s re-election prospects,” said Jose Arnoletto, President of the Argentine Federation of Professional Economic Scientists.
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Venezuelan President Nicolas Maduro said Tuesday that new investments from China will help his country dramatically boost its oil production, doubling down on financing from the Asian nation to turn around its crashing economy.

Already a major economic partner, China has agreed to invest $5 billion more in Venezuela, Maduro said following a recent trip to Beijing, adding that the money would help it nearly double its oil production.

“We are taking the first steps into a new economic era,” he said. “We are on track to have a new economy, and the agreements with China will strengthen it.”

A once-wealthy oil nation, Venezuela is gripped by a historic crisis deeper than the Great Depression in the United States. Venezuelans struggle to afford scarce food and medicine, many going abroad in search of a better life.

Venezuela’s inflation this year could top 1 million percent, economists predict.

After two decades of socialist rule and mismanagement, Venezuela’s oil production of 1.2 million barrels a day is a third of what it was two decades ago before the late President Hugo Chavez launched the socialist revolution.

Maduro says under the deal, Venezuela will increase production and the export of oil to China by 1 million barrels a day.

However, China is taking a strong role in its new agreements. Over the last decade China has given Venezuela $65 billion in loans, cash and investment. Venezuela owes more than $20 billion.

The head of the National Petroleum Corporation of China will soon travel to Venezuela to finalize plans on increasing oil exports.

Russ Dallen, a Miami-based partner at brokerage Caracas Capital Markets, said the influx of money appears to be investments China will control.

“The Chinese are reluctant to throw good money after bad,” Dallen said. “They do want to get paid back. The only way they can get paid back is to get Venezuela’s production back up.”

Venezuela also agreed to sell 9.9 percent of shares of the joint venture Sinovensa, giving a Chinese oil company a 49 percent stake. The sale will expand exploitation of gas in Venezuela, the president said.

Maduro also recently launched sweeping economic reforms aimed at rescuing the economy that include a creating new currency, boosting the minimum wage more than 3,000 percent and raising taxes.

Economist Asdrubal Oliveros of Caracas-based firm Econalitica said he doubts that Venezuela can reach the aggressive goal to boost oil exports to China by one million barrels a day given problems faced by the state corporation PDVSA.

“Increased production I see as quite limited,” Oliveros said. “The Chinese companies alone have neither the muscle nor the size to prop up production.”
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Dozens of European countries are backing a plan to increase the use of hydrogen as an alternative to fossil fuels to cut the continent’s carbon emissions.

Energy officials from 25 countries pledged Tuesday to increase research into hydrogen technology and accelerate its everyday use to power factories, drive cars and heat homes.

The proposal, which was included in a non-binding agreement signed in Linz, Austria, includes the idea of using existing gas grids to distribute hydrogen produced with renewable energy.

The idea of a “hydrogen economy,” where fuels that release greenhouse gases are replaced with hydrogen, has been around for decades. Yet uptake on the concept has been slow so far, compared with some other technologies.

Advocates of hydrogen say it can solve the problem caused by fluctuating supplies of wind, solar, hydro and other renewable energies. By converting electricity generated from those sources into hydrogen, the energy can be stored in large tanks and released again when needed.

Electric vehicles can also use hydrogen to generate power on board, allowing manufacturers to overcome the range restrictions of existing batteries. Hydrogen vehicles can be refueled in a fraction of the time it takes to recharge a battery-powered vehicle.

On Monday the world’s first commuter train service using a prototype hydrogen-powered train began in northern Germany.

The European Union’s top climate and energy official said hydrogen could help the bloc meet its obligations to cut carbon emissions under the 2015 Paris accord. Miguel Arias Canete told reporters it could also contribute to the continent’s energy security by reducing imports of natural gas, much of which currently comes from Russia and countries outside of Europe.

Kirsten Westphal, an energy expert at the German Institute for International and Security Affairs, said encouraging the use of hydrogen as a means of storing and transporting energy makes sense, but added the overall goal for should be reducing fossil fuels rather than pushing a particular energy alternative.
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Africa has the globe’s fastest-growing youth population as well as 10 of the poorest countries, a volatile combination that warrants making it “the world’s most important priority for the foreseeable future.”

The Bill & Melinda Gates Foundation lays out that argument in its second annual report on progress toward sustainable development goals set by the United Nations for 2030. This Goalkeepers Data Report, released Tuesday, urges targeting Africa with the same kind of investment intensity that lifted once-poor China and India into the ranks of middle-income nations.

Sixty percent of Africans are younger than 24, numbers that Melinda Gates emphasized in a phone interview earlier this month with VOA’s English to Africa Service.

“If the world makes the right investments in health and nutrition and education,” she said, it could unleash the potential of “an amazing generation that has unbelievable ingenuity.”    

The report notes that while the youth population is booming in Africa, it’s shrinking elsewhere in the world. For example, the median age is 19 in Africa – and 35 in North America. Populations are expected to soar by 2050 in the 10 poorest countries: Benin, Burundi, Central African Republic, Democratic Republic of Congo, Madagascar, Malawi, Nigeria, Somalia, South Sudan and Zambia. 

Melinda Gates described the foundation as a “catalytic wedge,” whose investments can fuel beneficial projects and programs.

“We start getting things going” with many partners on the ground “working in culturally, contextually sensitive ways,” she said. “We take some risks, but ultimately it’s the governments who scale them up, and that work is done in deep partnership with many people around the globe.”

The Gates Foundation is the biggest of U.S. funders aiding Africa, such as the Ford, Rockefeller, Conrad N. Hilton, Carnegie and Open Society foundations, the website Inside Philanthropy reported in 2016. 

Earlier this year, it observed that charitable giving by Africans is growing, too.    

To date, the Gates Foundation has invested more than $15 billion “in projects relevant to Africa,” the report says, while promising to spend more. It has targeted three areas for investment: health, education and agriculture.

Health: The foundation subsidizes a range of health programs, from childhood vaccination and good nutrition, but it gives special attention to family planning and HIV interventions.

Among countries that have risen economically, “every one of them allowed voluntary access to contraceptives to women,” Gates told VOA. “We know if men and women can space the births of their children … there are more opportunities then for those children and their families. Girls can stay in school” and, when educated, are better able to provide for their families.

“Those people create amazing opportunities and new jobs in the economy,” Gates added.

The U.S. government is the biggest donor in global family planning and reproductive health, according to the Kaiser Family Foundation (KFF), a nonprofit focused on health issues. U.S. spending on that front was at $608 million in fiscal year 2018, though the Trump administration has proposed reductions for 2019. Funding levels can reflect domestic and international political debates, especially over abortion, KFF’s website notes. It adds that, since 1973, the government has banned “direct use of U.S. funding overseas for abortion as a method of family planning. …”

The report praised Rwanda for building “an effective health system” that has brought about “the steepest drop in child mortality ever recorded.” In 2005, the country recorded 103 deaths per 1,000 lives births; a decade later, the death rate dropped to 50.

As for HIV infections, the report acknowledged progress in Zimbabwe, where a fourth of all adults were infected in 1997, the peak year of the epidemic.

“Since 2010, new infections are down by 49 percent, and AIDS-related deaths are down by 45 percent,” it noted. But it warned that the youth boom could bring a reversal without continued support for treatment and prevention methods.

Education: While school enrollment and literacy rates have improved, as the United Nations reports, that’s not enough.

“We need to get the quality of education to come up, much like Vietnam has done,” Melinda Gates told VOA.

Students in that country, labeled as low income until 2010, ranked among the best in the world in science in the Paris-based Organization for Economic Cooperation and Development’s most recent assessment of 15-year-olds.

Agriculture: “… We need to make sure that we help countries move from subsistence farming to making real investments” supporting larger-scale operations so people can feed themselves, Gates said. 

Ghana provides a good example, she and the report noted.

With its current agricultural productivity and innovations such as new hybrid varieties of maize, the country’s “poverty rate is projected to fall from 20 percent in 2016 to 6 percent in 2030.”

But, the report observed, “There is ample room for Ghana’s agrifood system to keep developing.” For example, “cocoa, the country’s main export crop, is sold raw and processed outside the country. Meanwhile, almost half of all processed foods consumed in Ghana are imported.” Buying food processed in Ghana would keep more money in the country and generate jobs, it said.   

Since 2000, more than a billion people have risen from extreme poverty, a level that the World Bank sets at $1.90 a day. Melinda Gates attributed that rise to “investments the world made systematically in human capital: in health, in education, in agriculture. …

“A lot of the gains that we’ve seen can drop back, particularly with a growing population,” she said. “So our message to the world is keep your foot on the gas. Keep the accelerator going.”
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The Asian Development Bank said on Tuesday it is expanding its presence in the Pacific islands, at a time of competition for influence there, opening seven new country offices and expecting its loans and grants in the region to top $4 billion by 2020.

The pledge from the Japan-led bank comes amidst a vigorous new campaign by the United States and its allies to check China’s rising sway in the region, where it has sought deeper diplomatic ties and emerged as the second-largest donor.

The battle for influence in the sparsely populated Pacific matters because each of the tiny island states has a vote at international forums like the United Nations, and they also control vast swathes of resource-rich ocean.

The ADB said it will open offices in the Cook Islands, Micronesia, Kiribati, the Marshall Islands, Nauru, Palau, and Tuvalu, as well as expand missions in Samoa, the Solomon Islands, Tonga and Vanuatu.

“The new country offices will allow ADB to have more regular contact and substantive communication with government and development partners,” the bank said in a statement.

Its overall assistance to the Pacific, which stands at $2.9 billion, is expected to surpass $4 billion by 2020, it added, with the money destined for economic and social development projects and disaster resilience.

China has likewise pledged to keep lending to a region where it says its aid is supporting sustainable development.

However, it has spent $1.3 billion on concessionary loans and gifts since 2011, stoking concern in the West that several tiny nations could end up overburdened and in debt to Beijing.

Australia in particular, which has long viewed the Pacific as its backyard, has been critical of some Chinese aid projects, and a former foreign minister has warned that the lending could undermine the long-term sovereignty of recipients.
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Francisco Javier Jaramillo and Victor Chavez should be picking sweet potatoes at a North Carolina farm and sending much-needed money to their families in Mexico.

Instead, Hurricane Florence has forced the migrant workers to evacuate their farm and seek refuge at a school-turned-shelter near the tiny hamlet of Spivey’s Corner, where they sleep in school hallways, wait and worry.

“If the sweet potato fields are flooded, we cannot work. If we cannot work, we will be sent home. We will have nothing,” said Chavez, 39.

When Florence tore through the Carolinas last week, bringing wave after wave of wind and rain, the storm not only disrupted a harvest but also jeopardized its harvesters.

Known for its fields upon fields of sweet potatoes, tobacco and peanuts, North Carolina’s agricultural engine is powered by more than 83,000 migrant workers.

Many come from Mexico and other Latin American countries to toil on restrictive contracts working fields that double as floodplains when the weather sours.

The contracts guarantee a certain number of working hours but that can be nullified if a farmer declares an act of god if, for example, fields are so flooded or hurricane-battered their crop cannot be salvaged. That would mean these workers get sent home without the hours, or money, promised.

A spokeswoman for North Carolina’s agriculture department said there are no estimates yet of the extent of crop damage.

At peak harvest in 2016 there were more than 83,000 migrant workers on North Carolina farms, according to the Employment Security Commission.

Workers on an H2A visa for temporary agricultural workers are among the most vulnerable people hit by a hurricane, according to advocates, lawyers and outreach workers who talked with Reuters. They have the least means to cushion the blow and the most to lose.

“H2A workers are very isolated, very vulnerable,” said Lariza Garzon, with the Episcopal Farmworkers Ministry. “They may not know their rights.”

Lee Wicker, deputy director of the 700-farmer North Carolina Growers Association, said maybe decades ago that might have been true but now resources are in place to ensure workers have the supports they need.

About 20,000 of the workers come to North Carolina every year on H2A visas, which tether them to an employer on whom they rely for housing, transportation and, in many cases, information about the outside world, said Caitlin Ryland, a supervising attorney with Legal Aid of North Carolina’s farmworker unit.

They are frequently housed in areas close to farmland that can be prone to flooding, Ryland said.

Wicker said that sometimes happens, but said storms like Florence have outsize effects.

For workers like Jaramillo and Chavez, in a precarious labor position and with limited access to outside information, leaving camps for a few days to wait out a storm can be daunting.

Misinformation is rampant: many believe fleeing a storm can get them deported and barred from returning.

If their employer reports them as having abandoned their job, under the terms of the H2A visa it can start the clock ticking on having to leave the United States, Ryland said.

Fleeing for their lives in the face of a storm does not count as abandoning a job, she said, but many workers may not know that.

A spokeswoman for North Carolina’s Department of Labor wrote in an email that “the Agricultural Safety and Health Bureau has not received any complaints from migrant workers concerning unsafe housing conditions due to the storm.”

Five migrant workers Reuters spoke with at a supermarket outside Clinton, in Sampson County about 35 miles (56 km) east of Fayetteville, had elected to stay in their work camps despite the threats presented by the weather.

Explaining why he stayed, Miguel Hernandez motioned to the cement blocks used to build his barracks in an area under a flash-flood warning – surely they could withstand a storm, he said.

But Luis Alberto, a 25-year-old migrant worker from the Mexican state of Nayarit, was scared for his life when he and four friends decided to go to a shelter several miles away.

Luis Alberto, who asked not to use his last name, regularly sends money home to support his family. What worries him now is what happens next — if the crop is destroyed, if they cannot get the contracted hours of work they need.

“We want to know what is going to happen to us,” he said. “Can we keep working? Will we be sent back to Mexico?”
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Aid money urgently needs to be redirected to the poorest countries in order to reach the United Nations’ goal of ending extreme poverty by 2030, according to a report.

The London-based Overseas Development Institute (ODI) says middle-income countries receive more aid than the 30 poorest nations. It also warns that at least 400 million people will still be living on less than $1.90 a day, despite government pledges to eliminate all extreme poverty.

In northern Ethiopia, teams of workers dig irrigation channels through orchards and grain fields. Such projects have turned arid plains into fertile farmland, which has quadrupled agricultural production.

The report from the ODI credits Ethiopia’s “Productive Safety Net Program,” launched in 2005, with lifting 1.4 million people out of extreme poverty. It also enabled Ethiopia to avoid another famine during severe droughts in 2010 and 2015.

In contrast, neighboring Uganda has seen extreme poverty levels rise recently, after a rapid reduction in previous years.

“One of the reasons is because climate change is starting to have an impact in that country,” said Marcus Manuel, author of the ODI report. “Now in Ethiopia, they’ve managed, with a lot of support partly from the U.S., to have programs that support farmers when a sudden climate or weather event happens. In Uganda, they didn’t. So when they had a drought, that led to a real increase in poverty. So it’s a matter of having the right systems in place.”

Ethiopia’s program, the largest of any low-income country, pays beneficiaries to work on public works projects such as irrigation, roads, schools and health clinics, which helps to create long-term poverty relief.

Such programs are vital in ending extreme poverty, according to the ODI report. The report says there is an annual funding shortfall of $125 billion in the three core sectors of education, health and what it terms social protection transfers, or welfare.

“You need to do economic growth to do part of things, and you also need investment in the social sectors,” Manuel said. “You need to have both sides of the coin to make this work. Donors are investing both in growth and in social sectors, but they’re not investing it in the right countries to nearly the extent that’s needed. And, in particular, in this report we’ve identified 29 countries which can’t afford the investment needed in the social sectors and donors are not giving enough money to that group of countries.”

The statistics show middle-income countries receive more aid than poorer countries, whose share of global aid has fallen over the past six years from 30 percent to 24 percent.

In addition to better aid allocation, the report says more donor nations need to reach the U.N. goal of allocating at least 0.7 percent of gross domestic product to aid budgets. Without urgent action, the authors warn the goal of eliminating extreme poverty by 2030 will remain out of reach.
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U.S. media reports said Friday that President Donald Trump has instructed aides to proceed with tariffs on $200 billion more in Chinese products.

Citing sources familiar with the matter, Bloomberg and Reuters said the president wanted to move forward with the additional duties even though Treasury Secretary Steven Mnuchin is trying to restart trade talks with Beijing.

The reports sent stocks falling Friday and led to a drop in the Chinese yuan.

The White House did not immediately comment on the reports.

Bloomberg reported that Trump met Thursday with his top trade advisers to discuss the tariffs, including Mnuchin, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer. The meeting was not on Trump’s public schedule.

Before Thursday’s meeting, Trump said on Twitter that he felt “no pressure” to make a deal with Beijing, saying “they are under pressure to make a deal with us.” He also raised questions about whether new talks between the United States and China would happen, saying the U.S. “will soon be taking in Billions in Tariffs & making products at home. If we meet, we meet?”

A public comment period for the proposed new tariffs ended last week. The U.S. trade representative’s office received nearly 6,000 comments on the proposal.

Even more tariffs

Last week, Trump threatened even more tariffs on Chinese items — duties on another $267 worth of goods, which when combined with the others would cover virtually all the products that China sends to the United States.

“That changes the equation,” he told reporters.

The Untied States has already imposed tariffs on $50 billion worth of Chinese goods, leading China to retaliate on an equal amount of U.S. goods. 

The Trump administration has argued that tariffs on Chinese goods would force China to trade on more favorable terms with the United States.

It has demanded that China better protect American intellectual property, including ending cybertheft. The Trump administration has also called on China to allow U.S. companies greater access to Chinese markets and to cut its U.S. trade surplus.

China has threatened to retaliate against any potential new tariffs. However, China’s imports from the United States are worth $200 billion a year less than American imports from China, so it would run out of room to match U.S. sanctions.
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The Turkish central bank caught international markets by surprise Thursday as it aggressively hiked interest rates in an effort to strengthen consumer confidence, stem inflation and rein in the currency crisis. 

Interest rates were increased to 24 percent from 17.75 percent, which is more than double the median of investor predictions of a 3 percent hike. The Turkish lira surged above 5 percent in response, although the gains subsequently were pared back.

International investors broadly welcomed the move. “TCMB [Turkish Republic Central Bank] did show resolve in hiking the one-week repo rate substantially and going back to orthodoxy,” chief economist Inan Demir of Nomura International said.

The central bank had drawn sharp criticism for failing to substantially raise interest rates to rein in double-digit inflation and an ailing currency. The lira had fallen by more than 40 percent this year.

The rate hike is an apparent rebuke to Turkish President Recep Tayyip Erdogan, who has been opposed to such a move.

Only hours before the central bank decision, Erdogan again voiced his opposition to increasing interest rates. The Turkish president reiterated his stance of challenging orthodox economic thinking, arguing that inflation is caused by high rates, although that runs contrary to conventional economic theory. Erdogan also issued a presidential decree banning all businesses and leasing and rental agreements from using foreign currency denominations.

The central bank indicated further rate hikes could be in the offing. “Tight stance monetary policy will be maintained decisively until inflation outlook displays a significant improvement,” the central bank statement reads.

The strong commitment to challenge inflation was welcomed by investors. “Most importantly, the CBT seemed to be vocal about price stability risks,” wrote chief economist Muhammet Mercan of Ing bank.

‘Crazy’ spending

Fueled by August’s sharp fall in the lira, which drove up import costs, inflation is on a rapid upward trajectory. Some predictions warn inflation could approach 30 percent in the coming months.

While international markets are broadly welcoming the central bank’s interest rate hike, economist Demir warns more action is needed.

“This rate hike does not undo the damage inflicted on corporate balance sheet, and market concerns about geopolitics will remain in place. So this is not the hike to end all problems,” said Demir.

The World Bank and IMF repeatedly have called on Ankara to rein in spending, which they say is fueling inflation. Perhaps in response, Erdogan has announced a freeze on new state construction projects.

In the past few years, he has embarked on an unprecedented construction boom, including building one of the world’s largest airports and a multibillion-dollar canal project in Istanbul, which the president himself described as “crazy.”

Trade tariffs

Investors also remain concerned about ongoing diplomatic tensions between Ankara and Washington. The two NATO allies remain at loggerheads over the detention on terrorism charges of American pastor Andrew Brunson.

Brunson’s detention saw U.S. President Donald Trump impose trade tariffs on Turkey, which triggered August’s collapse in the lira. Trump has warned of further sanctions.

“If we somehow sort out our problems with the United States and adopt an orthodox austerity program, we may find a way out of this mess,” said political analyst Atilla Yesilada of Global Source Partners.  “Turkey is a country that has a net foreign debt of over $400 billion, and where 40 percent of [Turkish] deposits are in foreign currency, so the game could be over in a day.”

Turkey has a long tradition of carrying out business in foreign currencies to mitigate the threat of inflation and a falling lira. The growing danger of the so-called “dollarization” of the economy and the public abandonment of the lira are significant risks to the currency.

Turkish companies are paying the cost for the depreciation of the lira. Analysts estimate about $100 billion in foreign currency loans have to be repaid by the private sector in the coming year. Companies and individuals borrowing in local currency, however, will be facing higher repayments. And most analysts predict the Turkish economy is heading into a recession.

Economist Demir says, though, that the situation could have been far worse.

“In the absence of an [interest rate] hike, the rollover pressures on banks would get even worse, damage on corporate balance sheets would intensify, and local deposit holders’ confidence would have weakened further. So this hike, although it doesn’t eliminate other risks, eliminates some of the worst outcomes for the Turkish economy,” he said.

Thursday’s rate hike appears to have bought time for the Turkish economy and the nation’s besieged currency. Analysts say investors are watching to see if Turkey’s decision-makers use that time wisely.
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