Wall Street surged on Wednesday as surging oil prices boosted energy stocks following U.S. President Donald Trump’s decision the previous day to quit a nuclear agreement with Iran.

Gains were broad and volume was high, with all but the utilities and telecom sectors advancing as investors who had moved to the sidelines in recent days ahead of Trump’s decision returned to the market.

“It’s classic ‘buy on the terrible news,’ ” said Ian Winer, director of trading at Wedbush Securities in Los Angeles, referring to the wider market’s rally. “People had gotten way too nervous about this.”

Trump’s decision for the United States pull out of the international agreement aimed at preventing Iran from obtaining a nuclear weapon was good news for investors betting on a rise in oil prices. Crude hit its highest level in 3½ years as investors bet the U.S. withdrawal would increase risks of conflict in the Middle East and curtail global oil supplies.

The S&P energy index jumped 2.03 percent, bringing its gain this quarter to 12.6 percent, more than any other sector.

“The rise in oil is helping energy sector, which is expected to be a pretty big growth sector. A lot of analysts are expecting strong earnings as oil rebounds, and that hasn’t really played out so much early this year,” said Shawn Cruz, senior trading specialist at TD Ameritrade in Chicago.

The Dow Jones industrial average rose 0.75 percent to end at 24,542.54 points, while the S&P 500 gained 0.97 percent to 2,697.79. The Nasdaq Composite added 1 percent to finish the session at 7,339.91.

Volatility Index down

The Cboe Volatility Index, the most widely followed barometer of expected near-term volatility for the S&P 500, closed down 1.29 points at 13.42, its lowest close since January  26.

Worries lingered that rising oil prices would perk up inflation. The U.S. 10-year Treasury yield rose to a two-week high and above the key 3 percent level on expectations of higher interest rates.

With March quarter reports mostly wrapped up, S&P 500 earnings per share appear to have surged by 25.9 percent, helped by deep corporate tax cuts introduced this year, according to Thomson Reuters I/B/E/S.

In stock trading, Google-owner Alphabet Inc. rose 2.87 percent, providing more lift than any other stock to the S&P 500. It was followed by Facebook Inc., which rose 2.09 percent.

Walmart Inc. fell 3.13 percent after the retailer took a majority stake in Indian e-commerce firm Flipkart for about $16 billion.

Walt Disney dipped 1.79 percent despite reporting a quarterly profit above Wall Street estimates.

Advancing issues outnumbered declining ones on the NYSE by a 1.71-to-1 ratio; on Nasdaq, a 1.65-to-1 ratio favored advancers.

The S&P 500 posted 40 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 168 new highs and 52 new lows.

Volume on U.S. exchanges was 7.1 billion shares, compared with the 6.6 billion-share average over the last 20 trading days.
…

Wall Street surged on Wednesday as surging oil prices boosted energy stocks following U.S. President Donald Trump’s decision the previous day to quit a nuclear agreement with Iran.

Gains were broad and volume was high, with all but the utilities and telecom sectors advancing as investors who had moved to the sidelines in recent days ahead of Trump’s decision returned to the market.

“It’s classic ‘buy on the terrible news,’ ” said Ian Winer, director of trading at Wedbush Securities in Los Angeles, referring to the wider market’s rally. “People had gotten way too nervous about this.”

Trump’s decision for the United States pull out of the international agreement aimed at preventing Iran from obtaining a nuclear weapon was good news for investors betting on a rise in oil prices. Crude hit its highest level in 3½ years as investors bet the U.S. withdrawal would increase risks of conflict in the Middle East and curtail global oil supplies.

The S&P energy index jumped 2.03 percent, bringing its gain this quarter to 12.6 percent, more than any other sector.

“The rise in oil is helping energy sector, which is expected to be a pretty big growth sector. A lot of analysts are expecting strong earnings as oil rebounds, and that hasn’t really played out so much early this year,” said Shawn Cruz, senior trading specialist at TD Ameritrade in Chicago.

The Dow Jones industrial average rose 0.75 percent to end at 24,542.54 points, while the S&P 500 gained 0.97 percent to 2,697.79. The Nasdaq Composite added 1 percent to finish the session at 7,339.91.

Volatility Index down

The Cboe Volatility Index, the most widely followed barometer of expected near-term volatility for the S&P 500, closed down 1.29 points at 13.42, its lowest close since January  26.

Worries lingered that rising oil prices would perk up inflation. The U.S. 10-year Treasury yield rose to a two-week high and above the key 3 percent level on expectations of higher interest rates.

With March quarter reports mostly wrapped up, S&P 500 earnings per share appear to have surged by 25.9 percent, helped by deep corporate tax cuts introduced this year, according to Thomson Reuters I/B/E/S.

In stock trading, Google-owner Alphabet Inc. rose 2.87 percent, providing more lift than any other stock to the S&P 500. It was followed by Facebook Inc., which rose 2.09 percent.

Walmart Inc. fell 3.13 percent after the retailer took a majority stake in Indian e-commerce firm Flipkart for about $16 billion.

Walt Disney dipped 1.79 percent despite reporting a quarterly profit above Wall Street estimates.

Advancing issues outnumbered declining ones on the NYSE by a 1.71-to-1 ratio; on Nasdaq, a 1.65-to-1 ratio favored advancers.

The S&P 500 posted 40 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 168 new highs and 52 new lows.

Volume on U.S. exchanges was 7.1 billion shares, compared with the 6.6 billion-share average over the last 20 trading days.
…

 A New York hedge fund founder was arrested Wednesday on charges that he exaggerated his company’s performance by over $200 million to impress and preserve investors.

Anilesh Ahuja, 49, of Manhattan, was charged with conspiracy, securities fraud and wire fraud.

Federal officials said that the founder, chief executive officer and chief investment officer of the investment firm Premium Point Investments LP had carried out a fraud from 2014 through 2016 that was designed to make investors believe that the firm’s hedge funds were doing much better than they were. Between 2008 and 2016, the firm managed billions of dollars in assets, exceeding $5 billion at one time at its peak, authorities said.

Amin Majidi, 52, of Armonk, New York, a former Premium Point portfolio manager, and Jeremy Shor, 46, of Manhattan, a former trader at the firm, also were charged. A lawyer for Ahuja did not immediately comment. A lawyer for Majidi declined comment. An attorney for Shor did not immediately return a message.

“By allegedly cooking the books, Ahuja and his co-defendants made the fund appear more attractive to would-be investors and dissuaded current investors from withdrawing their investments,” said Audrey Strauss, a federal prosecutor.

William F. Sweeney Jr., head of the New York FBI office, said in a release that the defendants’ “alleged practice of intentionally misleading investors and mismarking securities held in the funds they managed allowed them to charge higher fees and hold captive money that would have likely been withdrawn had their clients been aware of the hedge fund’s actual value.”

According to an indictment, Ahuja started his firm in 2008 and launched the company’s flagship mortgage credit fund a year later. After the firm began overstating the net asset value of its funds by more than $200 million at times, it was able to charge investors higher management and performance fees and could forestall redemptions, authorities said.

Prosecutors also announced Wednesday that the firm’s former chief risk officer and a former salesman at a broker-dealer have pleaded guilty to charges and are cooperating.

The Securities and Exchange Commission also filed civil charges against Ahuja, Majidi and Shor.

“Investors rely on their investment advisers to fairly and accurately value securities, and that is especially true when the securities trade in opaque markets,” said Daniel Michael, chief of the SEC’s Complex Financial Instruments Unit.  “As we allege, Premium Point masked its true performance, which denied investors the opportunity to make informed investment decisions.”
…

 A New York hedge fund founder was arrested Wednesday on charges that he exaggerated his company’s performance by over $200 million to impress and preserve investors.

Anilesh Ahuja, 49, of Manhattan, was charged with conspiracy, securities fraud and wire fraud.

Federal officials said that the founder, chief executive officer and chief investment officer of the investment firm Premium Point Investments LP had carried out a fraud from 2014 through 2016 that was designed to make investors believe that the firm’s hedge funds were doing much better than they were. Between 2008 and 2016, the firm managed billions of dollars in assets, exceeding $5 billion at one time at its peak, authorities said.

Amin Majidi, 52, of Armonk, New York, a former Premium Point portfolio manager, and Jeremy Shor, 46, of Manhattan, a former trader at the firm, also were charged. A lawyer for Ahuja did not immediately comment. A lawyer for Majidi declined comment. An attorney for Shor did not immediately return a message.

“By allegedly cooking the books, Ahuja and his co-defendants made the fund appear more attractive to would-be investors and dissuaded current investors from withdrawing their investments,” said Audrey Strauss, a federal prosecutor.

William F. Sweeney Jr., head of the New York FBI office, said in a release that the defendants’ “alleged practice of intentionally misleading investors and mismarking securities held in the funds they managed allowed them to charge higher fees and hold captive money that would have likely been withdrawn had their clients been aware of the hedge fund’s actual value.”

According to an indictment, Ahuja started his firm in 2008 and launched the company’s flagship mortgage credit fund a year later. After the firm began overstating the net asset value of its funds by more than $200 million at times, it was able to charge investors higher management and performance fees and could forestall redemptions, authorities said.

Prosecutors also announced Wednesday that the firm’s former chief risk officer and a former salesman at a broker-dealer have pleaded guilty to charges and are cooperating.

The Securities and Exchange Commission also filed civil charges against Ahuja, Majidi and Shor.

“Investors rely on their investment advisers to fairly and accurately value securities, and that is especially true when the securities trade in opaque markets,” said Daniel Michael, chief of the SEC’s Complex Financial Instruments Unit.  “As we allege, Premium Point masked its true performance, which denied investors the opportunity to make informed investment decisions.”
…

Saudi Arabia is monitoring the impact of the U.S. withdrawal from the Iran nuclear deal on oil supplies and is ready to offset any shortage but it will not act alone to fill the gap, an OPEC source familiar with the kingdom’s oil thinking said.

U.S. President Donald Trump on Tuesday abandoned a nuclear deal with Iran and announced the “highest level” of sanctions against the OPEC member. The original agreement had lifted sanctions in exchange for Tehran limiting its nuclear program.

Iran is the third-largest oil producer in the Organization of the Petroleum Exporting Countries after Saudi Arabia and Iraq.

During the last round of sanctions, Iran’s oil supplies fell by around 1 million barrels per day (bpd), but the country re-emerged as a major oil exporter, especially to refiners in Asia, after sanctions were lifted in January 2016.

“People shouldn’t take it for granted that Saudi Arabia will produce more oil single-handedly. We need to assess first the impact if there is any, in terms of disruption, in terms of a reduction of Iran’s production,” the OPEC source said Wednesday.

“We have managed to put together this new alliance between OPEC and non-OPEC. Saudi Arabia will not in any way act independently of its partners.”

Riyadh is working closely with the United Arab Emirates (UAE), which holds OPEC’s presidency in 2018 and non-OPEC producer Russia for “coordination and market consultations,” the OPEC source said.

He said any action would be taken in coordination with all OPEC and non-OPEC partners, if needed.

OPEC’s oil supply-cutting deal with non-OPEC producers such as Russia has helped to clear a global oil supply glut and boost prices. The agreement is due to expire at the end of 2018.

OPEC officials from Saudi Arabia, the UAE and Russia along with few other producers in the pact are due to meet in Saudi Arabia on May 22-23 as part of a monthly meeting for the Joint Technical Committee which monitors the oil market.

Saudi Arabia, the world’s largest oil exporter and top OPEC producer, is concerned about any negative impact from the potential oil supply shortage for oil-consuming countries, the OPEC source said.

But Saudi Arabia has enough oil production capacity — currently at 12 million barrels per day (bpd) — to maintain oil market stability, the OPEC source also said.

Iran produces about 3.8 million bpd. Since the Iran nuclear deal went into effect, its exports have risen to about 2.5 million bpd, from less than 1 million bpd. A majority goes to Asia, with Europe receiving about 600,000 bpd.

Analysts now expect Iran’s supplies to fall by between 200,000 bpd and 1 million bpd, depending on how many other countries fall in line with Washington.

Trump and oil prices

Expectations that new U.S. sanctions could hit Iranian crude exports and feed tensions in the Middle East had pushed oil prices higher in the past few weeks.

Brent crude was trading about $77 at a 3-1/2 year high on Wednesday, raising concerns that prices were going too high too fast.

Trump accused OPEC last month of “artificially” boosting oil prices in a message on Twitter, the first time he has mentioned OPEC on social media.

His tweet was seen by OPEC sources as the U.S. president’s way to appease a domestic audience unhappy about a rise in gasoline prices.

A key U.S. ally, Saudi Arabia welcomed Trump’s decision to withdraw from the nuclear agreement with Iran and to reimpose economic sanctions.

Riyadh also said it would work with OPEC and non-OPEC to lessen the impact of oil shortages in a clear indication that the country has been coordinating with Washington ahead of time, sources familiar with the matter said.

“You need to work with your partners in dealing with any potential effect on supply,” the OPEC source said.

“But it should be done in a collective coordinated way and that can only happen when you start to be able to assess what would be the impact.”

OPEC and non-OPEC meet next in June and they are widely expected to keep supply curbs in place until the end of 2018.

But a drop in Iranian exports due to U.S. sanctions, plus supply disruptions in other OPEC members, such as Venezuela, could reduce supply more than planned, leading to a potential price spike.

But the OPEC source said a rise in prices due to the market’s worries about supply should not be the parameter for OPEC to adjust output.

The OPEC source said any decision in June to raise output “should be driven by a potential physical shortage or reduction in production from any oil supply source not only Iran.”

“You only handle [output] when you have a semi-clear idea of what would be the potential impact. It is too early now to do that,” the source said.

He also said Saudi Arabia does not expect any physical impact on the oil market from the U.S. Iran sanctions until the third or fourth quarter of this year.

OPEC’s objective is still to reduce global oil inventories to an acceptable level, and any adjustment in production targets should be done in a coordinated way, the OPEC source said.

“This way you do not disrupt a mechanism that we have worked hard to put together and to sustain just to address a short-term issue,” the source said.
…

Saudi Arabia is monitoring the impact of the U.S. withdrawal from the Iran nuclear deal on oil supplies and is ready to offset any shortage but it will not act alone to fill the gap, an OPEC source familiar with the kingdom’s oil thinking said.

U.S. President Donald Trump on Tuesday abandoned a nuclear deal with Iran and announced the “highest level” of sanctions against the OPEC member. The original agreement had lifted sanctions in exchange for Tehran limiting its nuclear program.

Iran is the third-largest oil producer in the Organization of the Petroleum Exporting Countries after Saudi Arabia and Iraq.

During the last round of sanctions, Iran’s oil supplies fell by around 1 million barrels per day (bpd), but the country re-emerged as a major oil exporter, especially to refiners in Asia, after sanctions were lifted in January 2016.

“People shouldn’t take it for granted that Saudi Arabia will produce more oil single-handedly. We need to assess first the impact if there is any, in terms of disruption, in terms of a reduction of Iran’s production,” the OPEC source said Wednesday.

“We have managed to put together this new alliance between OPEC and non-OPEC. Saudi Arabia will not in any way act independently of its partners.”

Riyadh is working closely with the United Arab Emirates (UAE), which holds OPEC’s presidency in 2018 and non-OPEC producer Russia for “coordination and market consultations,” the OPEC source said.

He said any action would be taken in coordination with all OPEC and non-OPEC partners, if needed.

OPEC’s oil supply-cutting deal with non-OPEC producers such as Russia has helped to clear a global oil supply glut and boost prices. The agreement is due to expire at the end of 2018.

OPEC officials from Saudi Arabia, the UAE and Russia along with few other producers in the pact are due to meet in Saudi Arabia on May 22-23 as part of a monthly meeting for the Joint Technical Committee which monitors the oil market.

Saudi Arabia, the world’s largest oil exporter and top OPEC producer, is concerned about any negative impact from the potential oil supply shortage for oil-consuming countries, the OPEC source said.

But Saudi Arabia has enough oil production capacity — currently at 12 million barrels per day (bpd) — to maintain oil market stability, the OPEC source also said.

Iran produces about 3.8 million bpd. Since the Iran nuclear deal went into effect, its exports have risen to about 2.5 million bpd, from less than 1 million bpd. A majority goes to Asia, with Europe receiving about 600,000 bpd.

Analysts now expect Iran’s supplies to fall by between 200,000 bpd and 1 million bpd, depending on how many other countries fall in line with Washington.

Trump and oil prices

Expectations that new U.S. sanctions could hit Iranian crude exports and feed tensions in the Middle East had pushed oil prices higher in the past few weeks.

Brent crude was trading about $77 at a 3-1/2 year high on Wednesday, raising concerns that prices were going too high too fast.

Trump accused OPEC last month of “artificially” boosting oil prices in a message on Twitter, the first time he has mentioned OPEC on social media.

His tweet was seen by OPEC sources as the U.S. president’s way to appease a domestic audience unhappy about a rise in gasoline prices.

A key U.S. ally, Saudi Arabia welcomed Trump’s decision to withdraw from the nuclear agreement with Iran and to reimpose economic sanctions.

Riyadh also said it would work with OPEC and non-OPEC to lessen the impact of oil shortages in a clear indication that the country has been coordinating with Washington ahead of time, sources familiar with the matter said.

“You need to work with your partners in dealing with any potential effect on supply,” the OPEC source said.

“But it should be done in a collective coordinated way and that can only happen when you start to be able to assess what would be the impact.”

OPEC and non-OPEC meet next in June and they are widely expected to keep supply curbs in place until the end of 2018.

But a drop in Iranian exports due to U.S. sanctions, plus supply disruptions in other OPEC members, such as Venezuela, could reduce supply more than planned, leading to a potential price spike.

But the OPEC source said a rise in prices due to the market’s worries about supply should not be the parameter for OPEC to adjust output.

The OPEC source said any decision in June to raise output “should be driven by a potential physical shortage or reduction in production from any oil supply source not only Iran.”

“You only handle [output] when you have a semi-clear idea of what would be the potential impact. It is too early now to do that,” the source said.

He also said Saudi Arabia does not expect any physical impact on the oil market from the U.S. Iran sanctions until the third or fourth quarter of this year.

OPEC’s objective is still to reduce global oil inventories to an acceptable level, and any adjustment in production targets should be done in a coordinated way, the OPEC source said.

“This way you do not disrupt a mechanism that we have worked hard to put together and to sustain just to address a short-term issue,” the source said.
…

A United Nations agency said on Tuesday an “unjust” U.S. financial and trade embargo on Cuba had cost the country’s economy $130 billion over nearly six decades, coming up with the same estimate as the island’s communist government.

Although many U.S. allies join Washington in criticizing Cuba’s one-party system and repression of political opponents, the United States has lost nearly all international support for the embargo since the collapse of the Soviet Union.

The U.N. has adopted a non-binding resolution calling for an end to the embargo with overwhelming support every year since 1992. In a report ahead of the vote last year, Cuba estimated total damage from the embargo at $130 billion.

“This country which welcomes us today .. is testing its own ways to face the brutal human costs that it has sustained during an unjust blockade,” the head of the U.N.’s regional economic body for Latin America, ECLAC, Alicia Barcena told its biennial meeting in Havana on Tuesday.

“We evaluate it every year as an economic commission and we know that this blockade costs the Cuban people more than $130 billion at current prices and has left an indelible mark on its economic structure,” she said, without detailing how the organization came to that estimate.

After agreeing to a historic U.S.-Cuban detente in 2014, former U.S. President Barack Obama eased the embargo, which was fully put into place in 1962. But U.S. President Donald Trump last year tightened travel and trade restrictions again. Only the U.S. Congress can lift it in full.

“Despite the difficulties the Cuban economy is faced with, particularly due to the intensification of the blockade imposed on Cuba… we will continue to focus on the development goals set,” Cuban President Miguel Diaz-Canel said in his opening remarks at the meeting, attended also by U.N. Secretary-General Antonio Guterres.

Cuba’s Soviet-style, centralized economy has grown just 2.4 percent on average per year over the past decade, official statistics show, much less than the 7 percent annual expansion the government has estimated it needs in order to develop.

Cuba hoped market reforms introduced in the last decade would boost growth, but they have so far borne mixed results.

The ruling Communist Party earlier this year admitted implementation had been harder than expected.

ECLAC will support Cuba’s reform program, Barcena said.
…

A United Nations agency said on Tuesday an “unjust” U.S. financial and trade embargo on Cuba had cost the country’s economy $130 billion over nearly six decades, coming up with the same estimate as the island’s communist government.

Although many U.S. allies join Washington in criticizing Cuba’s one-party system and repression of political opponents, the United States has lost nearly all international support for the embargo since the collapse of the Soviet Union.

The U.N. has adopted a non-binding resolution calling for an end to the embargo with overwhelming support every year since 1992. In a report ahead of the vote last year, Cuba estimated total damage from the embargo at $130 billion.

“This country which welcomes us today .. is testing its own ways to face the brutal human costs that it has sustained during an unjust blockade,” the head of the U.N.’s regional economic body for Latin America, ECLAC, Alicia Barcena told its biennial meeting in Havana on Tuesday.

“We evaluate it every year as an economic commission and we know that this blockade costs the Cuban people more than $130 billion at current prices and has left an indelible mark on its economic structure,” she said, without detailing how the organization came to that estimate.

After agreeing to a historic U.S.-Cuban detente in 2014, former U.S. President Barack Obama eased the embargo, which was fully put into place in 1962. But U.S. President Donald Trump last year tightened travel and trade restrictions again. Only the U.S. Congress can lift it in full.

“Despite the difficulties the Cuban economy is faced with, particularly due to the intensification of the blockade imposed on Cuba… we will continue to focus on the development goals set,” Cuban President Miguel Diaz-Canel said in his opening remarks at the meeting, attended also by U.N. Secretary-General Antonio Guterres.

Cuba’s Soviet-style, centralized economy has grown just 2.4 percent on average per year over the past decade, official statistics show, much less than the 7 percent annual expansion the government has estimated it needs in order to develop.

Cuba hoped market reforms introduced in the last decade would boost growth, but they have so far borne mixed results.

The ruling Communist Party earlier this year admitted implementation had been harder than expected.

ECLAC will support Cuba’s reform program, Barcena said.
…

President Donald Trump will allow year-round sales of renewable fuel with blends of 15 percent ethanol as part of an emerging deal to make changes to the federal ethanol mandate.

Republican senators and the White House announced the deal Tuesday after a closed-door meeting, the latest in a series of White House sessions on ethanol.

The Environmental Protection Agency currently bans the 15-percent blend, called E15, during the summer because of concerns that it contributes to smog on hot days. Gasoline typically contains 10 percent ethanol. Farm-state lawmakers have pushed for greater sales of the higher ethanol blend to boost demand for the corn-based fuel.

Iowa Sen. Chuck Grassley called the agreement good news for farmers and drivers alike, saying it would increase ethanol production and consumer choice at the pump.

Texas Sen. Ted Cruz said the deal will save the jobs of thousands of blue-collar workers at refineries in Texas, Pennsylvania and other states.

“Terrific final decision from @POTUS meeting,” Cruz tweeted. “This is a WIN-WIN for everyone.”

The decision allowing E15 to be sold year-round will provide “relief to refiners” and “protect our hardworking farmers and refinery workers,” White House spokeswoman Lindsay Walters said. “The president is satisfied with the attention and care that all parties devoted to this issue.”

Trump met Tuesday with Grassley, Cruz, Iowa Sen. Joni Ernst and Pennsylvania Sen. Pat Toomey, as well as EPA Administrator Scott Pruitt and Agriculture Secretary Sonny Perdue.

The EPA oversees the decade-old Renewable Fuel Standard, commonly known as the ethanol mandate, which sets out how much corn-based ethanol and other renewable fuels refiners must blend into gasoline. The program’s intent was to address global warming, reduce dependence on foreign oil and bolster the rural economy by requiring a steady increase in renewable fuels over time.

The mandate has not worked as intended, and production levels of renewable fuels, mostly ethanol, routinely fail to reach minimum thresholds set in law.

Environmental groups criticized the deal, saying it would worsen air pollution during summer months.

“Waiving clean-air standards at the behest of one favored industry would not only set a precedent for bad policy, it could cost lives,” a coalition of environmental groups said in a statement.

Ernst said allowing year-round sale of E15 “will drive up domestic ethanol production and consumption” while helping to “maintain already low prices” for fuel credits that oil refiners must buy if they can’t blend ethanol into their fuels.

She and Grassley also said they were encouraged that the Trump administration will take a closer look at “hardship” waivers that have been granted to small refineries, a practice they say has hurt biofuels and undermined the RFS.

The EPA has reportedly granted a waiver to a refinery owned by billionaire Carl Icahn, a former Trump adviser, as well as other small refineries. The agency has not disclosed which refineries received the waivers, saying it did not want to reveal private business information.

Cruz said the president also agreed to consider his proposal to include fuel credits for ethanol that is produced domestically and exported. The proposal is meant to make it easier for the industry to meet annual sales volumes required under the renewable-fuel mandate.

“This is good for farmers, refiners and America,” Cruz said in a statement.

But the Renewable Fuels Association, an industry group, said allowing exports to qualify for RFS compliance could dramatically reduce domestic demand and result in retaliatory trade barriers from countries that import U.S. ethanol.

The group’s president, Bob Dinneen, called the export idea a “disgrace” and said ethanol producers and farmers would bear the brunt of any retaliatory tariffs.
…

President Donald Trump will allow year-round sales of renewable fuel with blends of 15 percent ethanol as part of an emerging deal to make changes to the federal ethanol mandate.

Republican senators and the White House announced the deal Tuesday after a closed-door meeting, the latest in a series of White House sessions on ethanol.

The Environmental Protection Agency currently bans the 15-percent blend, called E15, during the summer because of concerns that it contributes to smog on hot days. Gasoline typically contains 10 percent ethanol. Farm-state lawmakers have pushed for greater sales of the higher ethanol blend to boost demand for the corn-based fuel.

Iowa Sen. Chuck Grassley called the agreement good news for farmers and drivers alike, saying it would increase ethanol production and consumer choice at the pump.

Texas Sen. Ted Cruz said the deal will save the jobs of thousands of blue-collar workers at refineries in Texas, Pennsylvania and other states.

“Terrific final decision from @POTUS meeting,” Cruz tweeted. “This is a WIN-WIN for everyone.”

The decision allowing E15 to be sold year-round will provide “relief to refiners” and “protect our hardworking farmers and refinery workers,” White House spokeswoman Lindsay Walters said. “The president is satisfied with the attention and care that all parties devoted to this issue.”

Trump met Tuesday with Grassley, Cruz, Iowa Sen. Joni Ernst and Pennsylvania Sen. Pat Toomey, as well as EPA Administrator Scott Pruitt and Agriculture Secretary Sonny Perdue.

The EPA oversees the decade-old Renewable Fuel Standard, commonly known as the ethanol mandate, which sets out how much corn-based ethanol and other renewable fuels refiners must blend into gasoline. The program’s intent was to address global warming, reduce dependence on foreign oil and bolster the rural economy by requiring a steady increase in renewable fuels over time.

The mandate has not worked as intended, and production levels of renewable fuels, mostly ethanol, routinely fail to reach minimum thresholds set in law.

Environmental groups criticized the deal, saying it would worsen air pollution during summer months.

“Waiving clean-air standards at the behest of one favored industry would not only set a precedent for bad policy, it could cost lives,” a coalition of environmental groups said in a statement.

Ernst said allowing year-round sale of E15 “will drive up domestic ethanol production and consumption” while helping to “maintain already low prices” for fuel credits that oil refiners must buy if they can’t blend ethanol into their fuels.

She and Grassley also said they were encouraged that the Trump administration will take a closer look at “hardship” waivers that have been granted to small refineries, a practice they say has hurt biofuels and undermined the RFS.

The EPA has reportedly granted a waiver to a refinery owned by billionaire Carl Icahn, a former Trump adviser, as well as other small refineries. The agency has not disclosed which refineries received the waivers, saying it did not want to reveal private business information.

Cruz said the president also agreed to consider his proposal to include fuel credits for ethanol that is produced domestically and exported. The proposal is meant to make it easier for the industry to meet annual sales volumes required under the renewable-fuel mandate.

“This is good for farmers, refiners and America,” Cruz said in a statement.

But the Renewable Fuels Association, an industry group, said allowing exports to qualify for RFS compliance could dramatically reduce domestic demand and result in retaliatory trade barriers from countries that import U.S. ethanol.

The group’s president, Bob Dinneen, called the export idea a “disgrace” and said ethanol producers and farmers would bear the brunt of any retaliatory tariffs.
…

With the threat of tariffs and counter-tariffs between Washington and Beijing looming, Chinese buyers are canceling orders for U.S. soybeans, a trend that could deal a blow to American farmers if it continues.

At the same time, farmers in China are being encouraged to plant more soy, apparently to help make up for any shortfall from the United States.

Beijing has included soybeans on a list of $50 billion of U.S. exports on which it has said it would impose 25 percent tariffs if the United States follows through on its threats to impose the same level of tariffs on the same value of Chinese goods. The U.S. tariffs could kick in later this month; China would likely retaliate soon after.

It can take a month or longer for soybean shipments to travel from the U.S. to China. Any soybeans en route to China now could be hit by the tariff by the time they arrive.

“The Chinese aren’t willing to buy US soybeans with a 25 percent tax hanging over their head,” said Dan Basse, president of AgResource, an agricultural research and advisory firm. “You just don’t want the risk.”

China typically buys most of its soybeans from South American nations such as Brazil and Argentina during spring and early summer. It shifts to U.S. soybeans in the fall. As a result, for now, the cutbacks from the United States are relatively small.

But should they persist, it could cause real pain to U.S. farmers. Roughly 60 percent of U.S. soybeans are shipped to China.

There might also be a political impact: Three of the top five soybean-exporting states — Iowa, Indiana and Nebraska — voted for President Donald Trump in 2016.

Illinois, the top soybean exporter, and Minnesota, the third-largest, backed Hillary Clinton.

Basse said that it has been roughly three weeks since China has made any major soybean purchases, an unusually long delay.

Some Chinese buyers might be showing support for their government in the trade dispute by turning away U.S. soybeans, Basse said. The dispute may also make it seem too risky to buy from the United States over the long run.

“The United States could lose the reliable supplier label that we’ve had these many years,” Basse said.

Data from the U.S. government data show that sales of soybeans have fallen from about 255,000 metric tons in the first week of April, when the trade dispute began, to just 7,900 in the week that ended April 26.

Cancellations have also jumped, to more than 140,000 metric tons in the week ending April 26. In the same week last year, there were no canceled sales at all.

Some analysts argue that the shifts aren’t yet particularly significant. China buys most of its soybeans from the United States in the late summer and fall, and then switches to South American sources, mainly Brazil and Argentina, in the spring. So the current market activity doesn’t necessarily reflect the pattern that would occur during the main buying season.

“These numbers we’re talking about are pretty minor,” said John Baize, an economist for the U.S. Soybean Export Council.

The U.S. ships about 35 million metric tons of soybeans to China a year, Baize said. China usually imports about 100 million tons a year and can’t import enough from other countries, he said, to abandon the United States as a source.

“Where’s China going to buy its beans?” Baize asked.

That may be true in the short run. But Basse suggests that Brazil has enough land that could be used for soybean cultivation that it could soon mostly replace the United States as a supplier to China.

And if the Chinese market were to be closed to U.S. farmers, they might be able to sell some portion of their soybeans to other markets. Baize said that huge multinational companies, such as Cargill and ADM, might, for example, sell more U.S. soybeans to Europe, where they wouldn’t face any tariffs, though this likely wouldn’t make up for the loss of the Chinese market.

At the same time, China is looking more to its own farmers. Since China announced its potential tariffs on U.S. soy in April, the government has encouraged farmers to cultivate more soybeans. Beginning this month, Chinese farmers say, Beijing reduced corn subsidies and raised annual soybean subsidies from 2550 yuan ($400) per hectare to 3000 yuan ($470) or more per hectare in major soybean-producing provinces in northeast China.

An adjustment had already been planned to help draw down China’s substantial corn stockpiles, so the change wasn’t necessarily aimed at U.S. soy growers, analysts say.

But the subsidy adjustment did come with political undertones. Officials in major soybean-producing provinces were describing the promotion of local soybeans as “the most important political task in agricultural production at present.” Heilongjiang in northeast China announced a pilot project to plant soybeans on over 100,000 new hectares, with an extra 2,250 yuan ($353) subsidy per hectare.

The moves are prompting farmers like Liu Cong to focus more on growing soy. Liu says he used most of his land to grow corn last year but this year is planting more soybeans.

“This is encouraging for farmers,” he said in a phone interview. “We’re more motivated.”

Zhang Xiaoping, China director for the U.S. Soybean Export Council, says that Chinese buyers have been canceling soybean purchases of last year’s U.S. soybean harvest because of the threat of tariffs.

“The buyers literally stopped buying from the U.S.,” Zhang said. “Exporters cannot find any buyers in China.”
…

With the threat of tariffs and counter-tariffs between Washington and Beijing looming, Chinese buyers are canceling orders for U.S. soybeans, a trend that could deal a blow to American farmers if it continues.

At the same time, farmers in China are being encouraged to plant more soy, apparently to help make up for any shortfall from the United States.

Beijing has included soybeans on a list of $50 billion of U.S. exports on which it has said it would impose 25 percent tariffs if the United States follows through on its threats to impose the same level of tariffs on the same value of Chinese goods. The U.S. tariffs could kick in later this month; China would likely retaliate soon after.

It can take a month or longer for soybean shipments to travel from the U.S. to China. Any soybeans en route to China now could be hit by the tariff by the time they arrive.

“The Chinese aren’t willing to buy US soybeans with a 25 percent tax hanging over their head,” said Dan Basse, president of AgResource, an agricultural research and advisory firm. “You just don’t want the risk.”

China typically buys most of its soybeans from South American nations such as Brazil and Argentina during spring and early summer. It shifts to U.S. soybeans in the fall. As a result, for now, the cutbacks from the United States are relatively small.

But should they persist, it could cause real pain to U.S. farmers. Roughly 60 percent of U.S. soybeans are shipped to China.

There might also be a political impact: Three of the top five soybean-exporting states — Iowa, Indiana and Nebraska — voted for President Donald Trump in 2016.

Illinois, the top soybean exporter, and Minnesota, the third-largest, backed Hillary Clinton.

Basse said that it has been roughly three weeks since China has made any major soybean purchases, an unusually long delay.

Some Chinese buyers might be showing support for their government in the trade dispute by turning away U.S. soybeans, Basse said. The dispute may also make it seem too risky to buy from the United States over the long run.

“The United States could lose the reliable supplier label that we’ve had these many years,” Basse said.

Data from the U.S. government data show that sales of soybeans have fallen from about 255,000 metric tons in the first week of April, when the trade dispute began, to just 7,900 in the week that ended April 26.

Cancellations have also jumped, to more than 140,000 metric tons in the week ending April 26. In the same week last year, there were no canceled sales at all.

Some analysts argue that the shifts aren’t yet particularly significant. China buys most of its soybeans from the United States in the late summer and fall, and then switches to South American sources, mainly Brazil and Argentina, in the spring. So the current market activity doesn’t necessarily reflect the pattern that would occur during the main buying season.

“These numbers we’re talking about are pretty minor,” said John Baize, an economist for the U.S. Soybean Export Council.

The U.S. ships about 35 million metric tons of soybeans to China a year, Baize said. China usually imports about 100 million tons a year and can’t import enough from other countries, he said, to abandon the United States as a source.

“Where’s China going to buy its beans?” Baize asked.

That may be true in the short run. But Basse suggests that Brazil has enough land that could be used for soybean cultivation that it could soon mostly replace the United States as a supplier to China.

And if the Chinese market were to be closed to U.S. farmers, they might be able to sell some portion of their soybeans to other markets. Baize said that huge multinational companies, such as Cargill and ADM, might, for example, sell more U.S. soybeans to Europe, where they wouldn’t face any tariffs, though this likely wouldn’t make up for the loss of the Chinese market.

At the same time, China is looking more to its own farmers. Since China announced its potential tariffs on U.S. soy in April, the government has encouraged farmers to cultivate more soybeans. Beginning this month, Chinese farmers say, Beijing reduced corn subsidies and raised annual soybean subsidies from 2550 yuan ($400) per hectare to 3000 yuan ($470) or more per hectare in major soybean-producing provinces in northeast China.

An adjustment had already been planned to help draw down China’s substantial corn stockpiles, so the change wasn’t necessarily aimed at U.S. soy growers, analysts say.

But the subsidy adjustment did come with political undertones. Officials in major soybean-producing provinces were describing the promotion of local soybeans as “the most important political task in agricultural production at present.” Heilongjiang in northeast China announced a pilot project to plant soybeans on over 100,000 new hectares, with an extra 2,250 yuan ($353) subsidy per hectare.

The moves are prompting farmers like Liu Cong to focus more on growing soy. Liu says he used most of his land to grow corn last year but this year is planting more soybeans.

“This is encouraging for farmers,” he said in a phone interview. “We’re more motivated.”

Zhang Xiaoping, China director for the U.S. Soybean Export Council, says that Chinese buyers have been canceling soybean purchases of last year’s U.S. soybean harvest because of the threat of tariffs.

“The buyers literally stopped buying from the U.S.,” Zhang said. “Exporters cannot find any buyers in China.”
…

Former President Robert Mugabe will not appear before Zimbabwe’s parliament as scheduled on Wednesday to answer questions on diamond mining operations, a legislator said.

Temba Mliswa, who leads the parliamentary committee on mines, said the clerk of parliament hadn’t written to Mugabe to invite him to appear.

“It has been delayed but that resolution still stands,” Mliswa said. “He will have to appear before the committee whether he likes it or not.”

The committee had ordered the 94-year-old Mugabe to face legislators over his previous pronouncements that the state had been deprived of at least $15 billion in diamond revenue by mining companies.

Mugabe said in March 2016 the country was robbed of the revenue by diamond companies, including joint ventures between Chinese companies and the army, police and intelligence services, whose operations were shielded from public scrutiny.

Specifically, he said Zimbabwe lost $15 billion from the Marange gem fields, more than 400 kilometers (250 miles) east of the capital. He later expelled the companies and replaced them with a state-owned diamond company.

Mliswa said a new date for Mugabe to testify would be set.

The questioning on Wednesday would have been Mugabe’s first public appearance since the army deposed him last November in a de facto coup.
…

Former President Robert Mugabe will not appear before Zimbabwe’s parliament as scheduled on Wednesday to answer questions on diamond mining operations, a legislator said.

Temba Mliswa, who leads the parliamentary committee on mines, said the clerk of parliament hadn’t written to Mugabe to invite him to appear.

“It has been delayed but that resolution still stands,” Mliswa said. “He will have to appear before the committee whether he likes it or not.”

The committee had ordered the 94-year-old Mugabe to face legislators over his previous pronouncements that the state had been deprived of at least $15 billion in diamond revenue by mining companies.

Mugabe said in March 2016 the country was robbed of the revenue by diamond companies, including joint ventures between Chinese companies and the army, police and intelligence services, whose operations were shielded from public scrutiny.

Specifically, he said Zimbabwe lost $15 billion from the Marange gem fields, more than 400 kilometers (250 miles) east of the capital. He later expelled the companies and replaced them with a state-owned diamond company.

Mliswa said a new date for Mugabe to testify would be set.

The questioning on Wednesday would have been Mugabe’s first public appearance since the army deposed him last November in a de facto coup.
…

Trade negotiations between China and the United States continue early next week in Washington D.C., but analysts say after the first round, the differences between the two sides are huge. Some believe the differences are so fundamental and big that an escalation of tariffs is unavoidable.

According to a widely circulated copy of Washington’s demands, President Donald Trump’s delegation not only asked Beijing to cut its trade deficit with the United States by $200 billion by 2020, but to also sharply lower tariffs and government subsidies of advanced technologies.

Beijing wants the United States to no longer oppose granting China market economy status at the World Trade Organization, amend an export ban against Chinese tech company ZTE Corp and open American government procurement to Chinese technology and services among other demands.

View to escalation

Scott Kennedy, a China scholar at the Washington-based Center for Strategic and International Studies, said the first round made it clear just how far apart the U.S. and China are in their views of what’s fair, what they want and expect the other side to do.

“I think we’re still headed toward escalation with both sides adopting tariffs in the next few weeks, but at least now we know what the fight is about,” Kennedy said. “It’s about whether or not China should be a market economy, or what you know whether it should be able to maintain its state capitalist system without any constraints.”

China joined the WTO in December of 2001 as a non-market economy and after 15 years it was expected the granting of the status as a market economy would naturally follow — along with its opening up.

But that is not what has happened, and the United States and European Union have refused to grant China market economy status.

Beijing insists it should be regarded as a market economy regardless of whether other countries believe it fits the definition. Under Xi Jinping, the Communist Party has moved to assert greater control over business and the economy.

Competition vs. compensation

It has also become increasingly clear that China’s definition of reform and that of the West are strikingly different.

In an interview with VOA earlier this year, William Zarit, chairman of the American Chamber of Commerce, said that while many used to assume China would continue to carry out Western style economic reforms initiated in the early 2000s, that is no longer the case.

“In the last four or five years, we’ve seen that reform has taken a different direction, that the Chinese economy is on a different trajectory and that is more support for state-owned enterprises,” Zarit said. “And when I hear reforms now, it is more about making state-owned enterprises more efficient and not necessarily competitive in a fully market-based economy.”

But Song Hong, an economist with the Chinese Academy of Social Sciences, argues that China has fulfilled its WTO obligations and it is the United States and European Union that have broken their promises to grant the country market economy status.

He said Washington’s demands to slash the trade deficit by $100 billion a year does not make economic sense. He also said the demand for China to lower tariffs and put the two countries on equal footing is impossible.

“The market in China is of course not as open as the U.S. market because China remains a developing country, which is no match to the U.S.,” Song Hong said. “The per capita income level in China around $10,000 vs. the U.S.’s some $50,000. How can both countries be equal?”

Talks as clock ticks

Some Chinese state media reports have tried to sound upbeat about the meetings focusing on the two sides agreed to keep talking, despite their differences.

On Monday, the White House announced a Chinese delegation led by Liu He, China’s vice premier and a top aide to Chinese leader Xi Jinping, will visit the United States early next week.

At the same time, however, the clock is ticking on U.S. threats to implement up to $150 billion in tariffs on Chinese goods. A day after Liu arrives in Washington, there will be a public hearing to discuss tariffs and the Trump administration’s investigation into China’s trade policies and practices.

If no agreement is reached by May 23, Washington would be well within its right to go ahead with the tariffs, analysts note. To which, China has promised to promptly reply.

Kennedy said that while the United States has used unilateral penalties in the past, this time around the chances of escalation are a lot higher.

“Not only are the disagreements deeply fundamental, China is much more powerful and ambitious than it used to be. And so it’s not likely to cave easily,” he said.

Brian Kopczynski contributed to this report.

 
…

Trade negotiations between China and the United States continue early next week in Washington D.C., but analysts say after the first round, the differences between the two sides are huge. Some believe the differences are so fundamental and big that an escalation of tariffs is unavoidable.

According to a widely circulated copy of Washington’s demands, President Donald Trump’s delegation not only asked Beijing to cut its trade deficit with the United States by $200 billion by 2020, but to also sharply lower tariffs and government subsidies of advanced technologies.

Beijing wants the United States to no longer oppose granting China market economy status at the World Trade Organization, amend an export ban against Chinese tech company ZTE Corp and open American government procurement to Chinese technology and services among other demands.

View to escalation

Scott Kennedy, a China scholar at the Washington-based Center for Strategic and International Studies, said the first round made it clear just how far apart the U.S. and China are in their views of what’s fair, what they want and expect the other side to do.

“I think we’re still headed toward escalation with both sides adopting tariffs in the next few weeks, but at least now we know what the fight is about,” Kennedy said. “It’s about whether or not China should be a market economy, or what you know whether it should be able to maintain its state capitalist system without any constraints.”

China joined the WTO in December of 2001 as a non-market economy and after 15 years it was expected the granting of the status as a market economy would naturally follow — along with its opening up.

But that is not what has happened, and the United States and European Union have refused to grant China market economy status.

Beijing insists it should be regarded as a market economy regardless of whether other countries believe it fits the definition. Under Xi Jinping, the Communist Party has moved to assert greater control over business and the economy.

Competition vs. compensation

It has also become increasingly clear that China’s definition of reform and that of the West are strikingly different.

In an interview with VOA earlier this year, William Zarit, chairman of the American Chamber of Commerce, said that while many used to assume China would continue to carry out Western style economic reforms initiated in the early 2000s, that is no longer the case.

“In the last four or five years, we’ve seen that reform has taken a different direction, that the Chinese economy is on a different trajectory and that is more support for state-owned enterprises,” Zarit said. “And when I hear reforms now, it is more about making state-owned enterprises more efficient and not necessarily competitive in a fully market-based economy.”

But Song Hong, an economist with the Chinese Academy of Social Sciences, argues that China has fulfilled its WTO obligations and it is the United States and European Union that have broken their promises to grant the country market economy status.

He said Washington’s demands to slash the trade deficit by $100 billion a year does not make economic sense. He also said the demand for China to lower tariffs and put the two countries on equal footing is impossible.

“The market in China is of course not as open as the U.S. market because China remains a developing country, which is no match to the U.S.,” Song Hong said. “The per capita income level in China around $10,000 vs. the U.S.’s some $50,000. How can both countries be equal?”

Talks as clock ticks

Some Chinese state media reports have tried to sound upbeat about the meetings focusing on the two sides agreed to keep talking, despite their differences.

On Monday, the White House announced a Chinese delegation led by Liu He, China’s vice premier and a top aide to Chinese leader Xi Jinping, will visit the United States early next week.

At the same time, however, the clock is ticking on U.S. threats to implement up to $150 billion in tariffs on Chinese goods. A day after Liu arrives in Washington, there will be a public hearing to discuss tariffs and the Trump administration’s investigation into China’s trade policies and practices.

If no agreement is reached by May 23, Washington would be well within its right to go ahead with the tariffs, analysts note. To which, China has promised to promptly reply.

Kennedy said that while the United States has used unilateral penalties in the past, this time around the chances of escalation are a lot higher.

“Not only are the disagreements deeply fundamental, China is much more powerful and ambitious than it used to be. And so it’s not likely to cave easily,” he said.

Brian Kopczynski contributed to this report.

 
…

The Trump administration is unveiling a multibillion-dollar roster of proposed spending cuts but is leaving this year’s $1.3 trillion catchall spending bill alone.

The cuts wouldn’t have much impact, however, since they come from leftover funding from previous years that wouldn’t be spent anyway.

The White House said it is sending the so-called rescissions package to lawmakers Tuesday. Administration officials, who required anonymity because they weren’t authorized to speak publicly on the matter, said the package proposes killing $15 billion in unused funds. A senior official said about $7 billion would come from the Children’s Health Insurance Program, or CHIP, which provides health care to kids from low-income families, though that official stressed the cuts won’t have a practical impact on the popular program.

The administration is trying to use its authority to prod Congress to “rescind” spending approved years ago, but even if the package is approved it would only have a tiny impact on the government’s budget deficit, which is on track to total more than $800 billion this year. Some of the cuts wouldn’t affect the deficit at all since budget scorekeepers don’t give credit for rescinded money that they don’t think would have ever been spent.

For instance, more than $4 billion in cuts to a loan program designed to boost fuel-efficient, advanced-technology vehicles wouldn’t result in fewer loans since the loans are no longer being made. And $107 million worth of watershed restoration money from the 2013 Superstorm Sandy aid bill is going unused because local governments aren’t stepping up with matching funds. Another $252 million is left over from the 2015 fight against Ebola, which has been declared over.

Still, the cuts, if enacted by Congress, would take spending authority off the table so it couldn’t be tapped by lawmakers for other uses in the future. The catchall spending bill, for instance, contained $7 billion in cuts to CHIP that were used elsewhere to boost other programs.

“This is money that was never going to be spent,” a senior administration official said on a press call ahead of Tuesday’s submission. “The only thing it would be used for is offsets down the line.”

Democrats have supported such cuts in the past, eager to grab easy budget savings to finance new spending. But some Democrats howled over the White House proposal anyway.

“Let’s be honest about what this is: President Trump and Republicans in Congress are looking to tear apart the bipartisan Children’s Health Insurance Program (CHIP), hurting middle-class families and low-income children,” said Senate Minority Leader Chuck Schumer, D-N.Y.

Pressure from party conservatives to increase cuts in a tentative $11 billion proposal contributed to a delay from Monday’s original release date.

The White House and tea party lawmakers upset by the budget-busting “omnibus” bill have rallied around the plan, aiming to show that Republicans are taking on out-of-control spending. The administration says it will propose cuts to the omnibus measure later in the year.

The spending cuts are also a priority for House Majority Leader Kevin McCarthy, R-Calif., who likens them to “giving the bloated federal budget a much-needed spring cleaning.” But while the package may pass the House it faces a more difficult path — and potential procedural roadblocks — in the Senate.

McCarthy wants to succeed soon-to-retire House Speaker Paul Ryan, R-Wis., and some of his allies view the project as a way to improve his standing with fractious GOP conservatives who blocked his path to the speakership in 2015.

The proposal has already had a tortured path even before its unveiling. More pragmatic Republicans, including the senior ranks of the powerful House and Senate Appropriations committees, rebelled against the measure. They argued that it would be breaking a bipartisan budget pact just weeks after it was negotiated. In response, White House budget director Mick Mulvaney cleansed the measure of cuts to the huge omnibus bill.

Last month, Mulvaney told lawmakers the plan could have totaled $25 billion or so. Now he says he’s planning to submit several different packages of spending cuts — and it’s likely they’ll get more conservative with each new proposal.

Either way, the idea faces a challenging path in Congress — particularly the Senate, where a 51-49 GOP majority leaves little room for error even though budget rules permit rescissions measures to advance free of the threat of Democratic filibusters. But the cuts to the popular children’s health insurance program probably could still be filibustered because they are so-called mandatory programs rather than annual appropriations.
…

The Trump administration is unveiling a multibillion-dollar roster of proposed spending cuts but is leaving this year’s $1.3 trillion catchall spending bill alone.

The cuts wouldn’t have much impact, however, since they come from leftover funding from previous years that wouldn’t be spent anyway.

The White House said it is sending the so-called rescissions package to lawmakers Tuesday. Administration officials, who required anonymity because they weren’t authorized to speak publicly on the matter, said the package proposes killing $15 billion in unused funds. A senior official said about $7 billion would come from the Children’s Health Insurance Program, or CHIP, which provides health care to kids from low-income families, though that official stressed the cuts won’t have a practical impact on the popular program.

The administration is trying to use its authority to prod Congress to “rescind” spending approved years ago, but even if the package is approved it would only have a tiny impact on the government’s budget deficit, which is on track to total more than $800 billion this year. Some of the cuts wouldn’t affect the deficit at all since budget scorekeepers don’t give credit for rescinded money that they don’t think would have ever been spent.

For instance, more than $4 billion in cuts to a loan program designed to boost fuel-efficient, advanced-technology vehicles wouldn’t result in fewer loans since the loans are no longer being made. And $107 million worth of watershed restoration money from the 2013 Superstorm Sandy aid bill is going unused because local governments aren’t stepping up with matching funds. Another $252 million is left over from the 2015 fight against Ebola, which has been declared over.

Still, the cuts, if enacted by Congress, would take spending authority off the table so it couldn’t be tapped by lawmakers for other uses in the future. The catchall spending bill, for instance, contained $7 billion in cuts to CHIP that were used elsewhere to boost other programs.

“This is money that was never going to be spent,” a senior administration official said on a press call ahead of Tuesday’s submission. “The only thing it would be used for is offsets down the line.”

Democrats have supported such cuts in the past, eager to grab easy budget savings to finance new spending. But some Democrats howled over the White House proposal anyway.

“Let’s be honest about what this is: President Trump and Republicans in Congress are looking to tear apart the bipartisan Children’s Health Insurance Program (CHIP), hurting middle-class families and low-income children,” said Senate Minority Leader Chuck Schumer, D-N.Y.

Pressure from party conservatives to increase cuts in a tentative $11 billion proposal contributed to a delay from Monday’s original release date.

The White House and tea party lawmakers upset by the budget-busting “omnibus” bill have rallied around the plan, aiming to show that Republicans are taking on out-of-control spending. The administration says it will propose cuts to the omnibus measure later in the year.

The spending cuts are also a priority for House Majority Leader Kevin McCarthy, R-Calif., who likens them to “giving the bloated federal budget a much-needed spring cleaning.” But while the package may pass the House it faces a more difficult path — and potential procedural roadblocks — in the Senate.

McCarthy wants to succeed soon-to-retire House Speaker Paul Ryan, R-Wis., and some of his allies view the project as a way to improve his standing with fractious GOP conservatives who blocked his path to the speakership in 2015.

The proposal has already had a tortured path even before its unveiling. More pragmatic Republicans, including the senior ranks of the powerful House and Senate Appropriations committees, rebelled against the measure. They argued that it would be breaking a bipartisan budget pact just weeks after it was negotiated. In response, White House budget director Mick Mulvaney cleansed the measure of cuts to the huge omnibus bill.

Last month, Mulvaney told lawmakers the plan could have totaled $25 billion or so. Now he says he’s planning to submit several different packages of spending cuts — and it’s likely they’ll get more conservative with each new proposal.

Either way, the idea faces a challenging path in Congress — particularly the Senate, where a 51-49 GOP majority leaves little room for error even though budget rules permit rescissions measures to advance free of the threat of Democratic filibusters. But the cuts to the popular children’s health insurance program probably could still be filibustered because they are so-called mandatory programs rather than annual appropriations.
…

Nestle is paying more than $7 billion to handle global retail sales of Starbucks’s coffee and tea outside of its coffee shops.

The deal comes with a huge price tag for Nestle, but it could pay off big for the Swiss company. Its Nescafe and Nespresso don’t carry anywhere near the heft in America that Starbucks brand does, with its $2 billion in annual sales.

The deal gives Nestle the rights to market, sell and distribute Starbucks, Seattle’s Best Coffee, Starbucks Reserve, Teavana, Starbucks VIA and Torrefazione Italia packaged coffee and tea. It will also be able to put the Starbucks brand on Nestle single-serve capsules. The agreement excludes bottled drinks like ice coffees and Frappuccinos that are sold in and outside of Starbucks stores.

Nestle had hinted last year that it was looking at focusing on higher-growth areas like pet care, coffee and infant nutrition. In January it announced it was selling its U.S. candy business to Italy’s Ferrero for approximately $2.8 billion.

With the strength of the Starbucks brand, (equals) Nestle will be able to better compete against JAB Holdings, an investment holding company that has gobbled up businesses and brands associated with Peet’s Coffee & Tea, Caribou Coffee Co., Stumptown Coffee and Krispy Kreme Doughnuts.

Nestle announced Monday that Starbucks Corp. will receive $7.15 billion in an up-front cash payment. Approximately 500 Starbucks employees will join Nestle, and operations will continue to be located in Seattle.

The deal is subject to regulatory approval and is expected to close by the end of the year.

 
…

Nestle is paying more than $7 billion to handle global retail sales of Starbucks’s coffee and tea outside of its coffee shops.

The deal comes with a huge price tag for Nestle, but it could pay off big for the Swiss company. Its Nescafe and Nespresso don’t carry anywhere near the heft in America that Starbucks brand does, with its $2 billion in annual sales.

The deal gives Nestle the rights to market, sell and distribute Starbucks, Seattle’s Best Coffee, Starbucks Reserve, Teavana, Starbucks VIA and Torrefazione Italia packaged coffee and tea. It will also be able to put the Starbucks brand on Nestle single-serve capsules. The agreement excludes bottled drinks like ice coffees and Frappuccinos that are sold in and outside of Starbucks stores.

Nestle had hinted last year that it was looking at focusing on higher-growth areas like pet care, coffee and infant nutrition. In January it announced it was selling its U.S. candy business to Italy’s Ferrero for approximately $2.8 billion.

With the strength of the Starbucks brand, (equals) Nestle will be able to better compete against JAB Holdings, an investment holding company that has gobbled up businesses and brands associated with Peet’s Coffee & Tea, Caribou Coffee Co., Stumptown Coffee and Krispy Kreme Doughnuts.

Nestle announced Monday that Starbucks Corp. will receive $7.15 billion in an up-front cash payment. Approximately 500 Starbucks employees will join Nestle, and operations will continue to be located in Seattle.

The deal is subject to regulatory approval and is expected to close by the end of the year.

 
…

A small band of Belgian monks are planning to start producing their own beer again, more than 200 years after invading French troops stopped all brewing at the abbey.

The men from Grimbergen Abbey started making beer in 1128, but stopped in 1797 when the French took over the site and sold off the equipment.

After that, some of the world’s biggest drink brands filled the gap – Heineken unit Alken-Maes makes brown and blond lagers with the Grimbergen brand in Belgium. Carlsberg sells them abroad, paying royalties to the abbey.

Now the monks have drawn up plans for their own micro-brewery to produce their own beers to sell alongside the other Grimbergen drinks on the market.

“We want to build a micro-brewery, on a small scale and linked with tradition, on the site where the brewery stood before the French Revolution,” said Sub-prior Karel Stautemas.

“What exactly the beer will be, we don’t yet know, but the tastes of before and now have changed. This will be a beer of the 21st century.”

The operation will be much smaller than the ones run by Belgium’s trappist abbeys, such as Chimay or Westmalle, he added. Other abbeys such as Leffe have also allowed their names to be used in products made by large brewers.

The abbey, which is home to about 20 monks, still needs to complete a feasibility study and secure approvals and licenses, but hopes the new Grimbergen will be flowing by 2020, Stautemas said.

Alken-Maes and Carlsberg supported the project, he added.
…

Afghanistan’s poverty rate has worsened sharply over the past five years as the economy has stalled and the Taliban insurgency has spread, with more than half the population living on less than a dollar a day, a survey published on Monday showed.

The Afghanistan Living Conditions Survey (ALCS), a joint study by the European Union and Afghanistan’s Central Statistics Organization, showed the national poverty rate rising to 55 percent in 2016-17 from 38 percent in 2011-12.

“The high poverty rates represent the combined effect of stagnating economic growth, increasing demographic pressures, and a deteriorating security situation,” Shubham Chaudhuri, World Bank director for Afghanistan, said in a commentary about the survey.

The report underlines the problems facing the Western-backed government in Kabul which needs economic growth to help replace foreign aid and to provide jobs for its fast-growing population.

As international forces have withdrawn and the billions of dollars in foreign aid that once poured in have dried up, Afghanistan’s battered agricultural economy has struggled.

More than a decade and a half after a U.S.-led campaign toppled the Taliban in 2001, the poverty line was defined as an income of 70 afghanis, or about one U.S. dollar, per person a day.

The ALCS report comes at a time when 20 of Afghanistan’s 34 provinces are suffering from serious drought and international aid agencies are seeking millions of dollars to help them.

Food insecurity has risen from 30.1 percent to 44.6 percent in five years, meaning many more people are forced to sell their land, take their children out of school to work or depend on food aid, the survey found.

Chaudhuri said the survey was the first estimate of the economic situation since Afghan forces took over security responsibilities in 2014 from international troops.

“In recent years, as population growth outstripped economic growth, an increase in poverty was inevitable,” he said on the World Bank blog site.

The survey found that 50 percent of the population is younger than 15.

This month, President Ashraf Ghani’s government said it had listed job creation among its priorities and aimed at creating 2.1 million jobs within three years.

However, according to the IMF, the economy is set to grow at 2.5-3 percent in 2017-18, too slowly to stop unemployment from rising.

The needs to produce some 400,000 new jobs a year to keep pace with population growth and tens of thousands of qualified people struggle to find work in cities, and farmers were unable to earn a sustainable livelihood due to the drought.

Officials at the European Union said the ALCS report was based on data collected from 21,000 households over 12 months.
…

An innovative consumer awareness campaign will be launched this summer in several cities in the United States. The campaign is aimed at preventing the waste of food that costs the world billions of dollars and has severe consequences on global food security and the environment. Verónica Balderas Iglesias spoke with experts.
…

The U.S. and China ended the second day of high level talks Friday aimed at avoiding a possible trade war.

The U.S. delegation, headed by Treasury Secretary Steven Mnuchin, will brief President Donald Trump Saturday and “seek his decision on next steps,” the White House said in a statement, adding that the administration had “consensus” for “immediate attention” to change the U.S.-China trade and investment relationship.

“We will be meeting tomorrow to determine the results, but it is hard for China in that they have become very spoiled with U.S. trade wins!” Trump said in a Twitter post late Friday.

“Both sides recognize there are still big differences on some issues and that they need to continue to step up their work to make progress,” China said in a statement released by Xinhua state news agency.

An editorial Saturday by China’s ruling Communist Party newspaper, the People’s Daily, however, said that “in the face of the U.S.’s fierce offensive of protectionism, China resolutely defends its national interest,” adding that Beijing “will never trade away its core interests and rejects the U.S.’s demand for an exorbitant price.”

The announcement followed comments by Mnuchin earlier in the day that the two sides were having “very good conversations.”

Trump has threatened to levy new tariffs on $150 billion of Chinese imports while Beijing shot back with a list of $50 billion in targeted U.S. goods.
…