Ford chief Jim Hackett on Wednesday ramped up his warnings about the tariffs imposed by President Donald Trump, saying his company was seeing profits slashed by $1 billion.

Hackett said the global automaker could face more damage if the trade confrontations were not resolved quickly.

“The metals tariffs took about $1 billion in profit from us,” Hackett said in an interview on Bloomberg Television. “If it goes on longer, there will be more damage.”

Trump in June imposed steep tariffs on steel and aluminum and has hit $250 billion in Chinese products with tariffs, prompting retaliation from US trading partners and raising costs for many industries.

The company earlier this year estimated materials costs would be $1.5 billion over 2017, which had already seen a jump. 

And in the July earnings report Ford said it lost $500 million in China in the latest quarter due in part to the tariffs.

General Motors likewise warned the current trade wars should cost it $1 billion this year, mainly due to rising input costs.

Ford recently announced it was scrapping plans to import the compact Focus model from Chinese plants into the US market due to the tariffs.

Joseph Hinrichs, Ford’s executive vice president for global operations, said this week the company was speeding up plans to build some models in China since it was becoming less attractive to export amid the trade tensions.

He also said he did not see any easy resolution to the trade dispute between the United States and China. 
…

Somalia’s finance minister says World Bank grants to the government are a sign the country has “trustable leadership” again after decades of chaos and corruption.

The World Bank said Tuesday it will provide $80 million in grants to Somalia’s federal government, the bank’s first direct grants to a Somali central authority in 27 years.

In an interview with VOA’s Somali service, Finance Minister Abdirahman Duale Beileh said the grants are “proof of Somalia’s merit.”

Beileh said $60 million will be used to increase the capacity of Somalia’s financial institutions, and $20 million will go toward education and energy projects to build the country’s resilience.

He said the grants show that international financial agencies have faith the government is capable of fighting against corruption.

“The work we have done and the trustworthiness we have earned brought us here,” he said. 

The World Bank cut ties with Somalia in 1991, following the collapse of the Mohamed Siad Barre government and the start of a long civil war.

Beileh said that in recent years, Somalia’s government has made tangible improvement in management of the economy and its institutions.

However, the latest global index of Transparency International put Somalia as the world’s most corrupt country.

Somali President Mohamed Abdullahi Mohammed, also known as Farmajo, took power last year in an election by parliament that observers said was characterized by bribes and vote-buying.

Beileh acknowledged the government’s fight against corruption is “far from over.”

“There is a perception that Somalia cannot be trusted because of its corruption history. Most of that is not perception,” he said.

He added: “We are proud that we made progress to at least a transparent level that both the World Bank and the IMF can notice.”
…

The Federal Reserve on Wednesday raised a key interest rate for the third time this year in response to a strong U.S. economy and signaled that it expected to maintain a pace of gradual rate hikes.

The Fed lifted its short-term rate — a benchmark for many consumer and business loans — by a quarter-point to a range of 2 percent to 2.25 percent. It was the eighth hike since late 2015.

The central bank stuck with its previous forecast for a fourth rate increase before year’s end and for three more hikes in 2019.

The Fed dropped phrasing it had used for years that characterized its rate policy as “accommodative” by favoring low rates. In dropping that language, the central bank may be signaling its resolve to keep raising rates.

Many analysts think the economy could weaken next year, in part from the effects of the trade conflicts President Donald Trump has pursued with China, Canada, Europe and other trading partners. The tariffs and countertariffs that have been imposed on imports and exports are having the effect of raising prices for some goods and supplies and potentially slowing growth.

Compounding the effects of the tariffs, other factors could slow growth next year. The benefits of tax cuts that took effect this year, along with increased government spending, for example, are widely expected to fade.

Still, some analysts hold to a more optimistic scenario. They think momentum already built up from the government’s economic stimulus will keep strengthening the job market and lowering unemployment — at 3.9 percent, already near a 50-year low. A tight employment market, in this scenario, will accelerate wages and inflation and prod the Fed to keep tightening credit to ensure that the economy doesn’t overheat.

Full-year growth

The U.S. economy, as measured by the gross domestic product, is expected to grow 3 percent for 2018 as a whole. That would mark the strongest full-year gain in 13 years. For the first nine years of the economic expansion, annual GDP growth averaged only around 2.2 percent.

The robust job market has helped make consumers, the main drivers of growth, more confident than they’ve been in nearly 18 years. Business investment is up. Americans are spending freely on cars, clothes and restaurant meals.

All the good news has helped fuel a stock market rally. Household wealth is up, too. It reached a record in the April-June quarter, although the gain is concentrated largely among the most affluent.

Many economists worry, though, that Trump’s combative trade policies could slow the economy. Trump insists that the tariffs he is imposing on Chinese imports, for which Beijing has retaliated, are needed to force China to halt unfair trading practices. But concern is growing that China won’t change its practices, the higher tariffs on U.S. and Chinese goods will become permanent, and both economies — the world’s two largest — will suffer.

Fed Chairman Jerome Powell has so far been circumspect in reflecting on Trump’s trade war. Powell has suggested that while higher tariffs are generally harmful, they could serve a healthy purpose if they eventually force Beijing to liberalize its trade practices.
…

The U.N. Conference on Trade and Development warns the world economy remains fragile, one decade after the collapse of the U.S. financial titan Lehman Brothers triggered a global economic crisis.

In its report Trade and Development Report 2018: Power, Platforms and the Free Trade Delusion, UNCTAD says the world economy once again is under stress. It views trade wars and escalating tariffs as symptoms of a growing economic malaise. It warns the world economy is walking a tightrope between debt-fueled growth and financial instability.

Lead author of the report Richard Kozul-Wright says many of the underlying problems that caused the 2008 financial crisis have not been addressed. He says footloose capital, precarious jobs, persistent inequality and rising debt remain problematic.

“We see growing asset bubbles and emerging crises everywhere,” he said. “Profits have been on an all-time high and real investment in the economy has not picked up. What we know from history is that debt-fueled booms always end badly. We do not know how. We do not know when, but if history is any guide the excessive reliance on debt in the current global economy will not end well for many economies.”

Kozul-Wright says trade wars, in many ways, are a reflection of lack of trust across the political system. He blames much of the tensions and problems seen in the global trading system on hyper globalization, which has not resulted in a win-win world.

The report finds global trade continues to be dominated by big firms. It says more than 50 percent of world trade is run through the top one percent of each country’s exporting firms.

 
…

After losing his job with a foreign food company in March, Alexander Costa surveyed Brazil’s anemic labor market and decided to start selling cheap lunches by the beach in Rio de Janeiro to try and provide for his young family.

“I could have stayed home, looking for work, sending out resumes, with few jobs and things very hard,” Costa said. “But I didn’t stand still. I decided to create something different … to reinvent myself.”

Many other Brazilians have also had to reinvent themselves in recent years, as Latin America’s largest economy struggles to overcome a jobs crisis more than a year after officially exiting recession.

Nearly 13 million people – or more than the entire population of Greece – are out of a job, with the unemployment rate hovering between 12 percent to 14 percent since 2016. As a result, unemployment is among voters’ top concerns ahead of next month’s election.

The desperate search for work amid a string of political graft scandals and rising violence has soured the mood, polarizing debate and distracting from the country’s underlying fiscal challenges.

But only by lowering the unemployment rate will Brazil achieve the rise in household spending it needs to maintain sustained growth, said Marcos Casarin, the head of Latin America macro research at Oxford Economics.

“The only way to have a prolonged recovery in economic activity is if unemployment starts to fall in a substantial way,” he said.

However, it could take several years to get the rate below 10 percent, he said, adding: “I’m not very optimistic.”

Divisive Figures

With no presidential candidate likely to win a majority in the first-round vote on Oct. 7, it looks increasingly likely voters will face a choice between two candidates in the Oct. 28 run-off: far-right Jair Bolsonaro and leftist Fernando Haddad of the Workers Party.

Both are divisive figures — rejected by nearly half the electorate — making it likely that either one will face an uphill battle to pass ambitious economic reforms that foreign investors have long called for.

Bolsonaro has vowed to erase Brazil’s primary budget deficit by 2020 through controversial privatizations and spending cuts.

Haddad has proposed broadening the central bank’s mandate to include unemployment, while boosting government-led investments, revoking a spending ceiling and scuttling privatizations.

Both Bolsonaro and Haddad are pitching their proposals as ways to tackle the unemployment crisis, which has pushed many into the informal sector, sapping tax income and leaving workers without paid holidays, salary raises and other benefits.

Outgoing President Michel Temer last year passed an overhaul of the country’s labor laws, which was intended to make the job market more flexible and which the government said would help create new jobs, an effect that as yet has failed to materialize.

Bolsonaro supports Temer’s labor reform and wants to further cut work regulations to boost jobs. Haddad has suggested putting the labor reform, which was opposed by unions, to a referendum, while also advocating a short-term stimulus program.

Costa, however, was unwilling to wait and see what Brazil’s next president comes up with.

His meals-on-wheels business started slowly, selling 13-reais ($3) lunches from the back of his car in Rio’s wealthy Barra da Tijuca neighborhood. But business took off when he joined forces with his friend, Stefan Weiss, whose white BMW provides a ritzier shop window from which they now sell roughly 200 hot meals each day.

“At the moment, Brazil faces a big problem in relation to the economy and the lack of jobs,” said Weiss, who works on an offshore oil platform but sells meals on days off to earn extra cash. “The people who lost their jobs are trying to find new ways to establish themselves in the market.”
…

When Kevin Systrom and Mike Krieger sold Instagram to Facebook in 2012, the photo-sharing startup’s fiercely loyal fans worried about what would happen to their beloved app under the social media giant’s wings. 

None of their worst fears materialized. But now that its founders have announced they are leaving in a swirl of well wishes and vague explanations, some of the same worries are bubbling up again — and then some. Will Instagram disappear? Get cluttered with ads and status updates? Suck up personal data for advertising the way its parent does? Lose its cool? 

Worst of all: Will it just become another Facebook?

“It”s probably a bigger challenge (for Facebook) than most people realize,” said Omar Akhtar, an analyst at the technology research firm Altimeter. “Instagram is the only platform that is growing. And a lot of people didn’t necessarily make the connection between Instagram and Facebook.”

Instagram had just 31 million users when Facebook snapped it up for $1 billion; now it has a billion. It had no ads back then; it now features both display and video ads, although they’re still restrained compared to Facebook. But that could quickly change. Facebook’s growth has started to slow, and Wall Street has been pushing the company to find new ways to increase revenue.

Instagram has been a primary focus of those efforts.

Facebook has been elevating Instagram’s profile in its financial discussions. In July, it unveiled a new metric for analysts, touting that 2.5 billion people use at least one of its apps — Facebook, Instagram, WhatsApp or Messenger — each month. While not particularly revealing, the measurement underscores the growing importance Facebook places on those secondary apps. 

Facebook doesn’t disclose how much money Instagram pulls in, though Wedbush analyst Michael Pachter estimates it’ll be around $6 billion this year, or just over 10 percent of Facebook’s expected overall revenue of about $55.7 billion. 

Facebook CEO Mark Zuckerberg has long seen Instagram’s promise. At the time, it was by far Facebook’s largest acquisition (although it was dwarfed by the $19 billion Zuckerberg paid for WhatsApp two years later). And it was the first startup allowed to operate mostly independently. 

That has paid off big time. Not only did Instagram reach 1 billion users faster than its parent company, it also succeeded in cloning a popular Snapchat feature, dealing a serious blow to that social network upstart and succeeding where Facebook’s own attempts had repeatedly failed. Instagram also pioneered a long-form video feature to challenge YouTube, another big Facebook rival.

Recently, Instagram has been on a roll. In June, Systrom traveled to New York to mark the opening of its new office there, complete with a gelato bar and plans to hire hundreds of engineers. Only a month earlier, Instagram had moved into sparkly new offices in San Francisco. In a July earnings call, Zuckerberg touted Instagram’s success as a function of its integration with Facebook, claiming that it used parent-company infrastructure to grow “more than twice as quickly as it would have on its own.”

But Instagram has also been a case study in how to run a subsidiary independently — especially when its parent is mired in user-privacy problems and concerns about election interference, fake news and misinformation. And especially when its parent has long stopped being cool, what with everyone and their grandma now on it.

Instagram’s simple design — just a collection of photos and videos of sunsets, faraway vacations, intimate breakfasts and baby close-ups — has allowed it to remain a favorite long after it became part of Facebook. If people go to Twitter to bicker over current events and to Facebook to see what old classmates are up to, Instagram is where they go to relax, scroll and feast their eyes.

So, will that change?

“I don’t think Zuckerberg is dumb,” Akhtar said. “He knows that a large part of Instagram’s popularity is that it’s separate from Facebook.”

As such, he thinks Facebook would be wise to reassure users that what they love about Instagram isn’t going to change — that they are not going to be forced to integrate with Facebook. “That’ll go a long way,” he said. 

Internally, the challenge is a bit more complicated. While Systrom and Krieger didn’t say why they’re leaving, their decision echoes the recent departure of WhatsApp’s co-founder and CEO Jan Koum, who resigned in April. Koum had signaled years earlier that he would take a stand if Facebook’s push to increase profits risked compromising core elements of the WhatsApp messaging service, such as its dedication to user privacy. When Facebook started pushing harder for more revenue and more integration with WhatsApp, Koum pulled the ripcord.

One sign that additional integration may be in Instagram’s future: Zuckerberg in May sent longtime Facebook executive Adam Mosseri to run Instagram’s product operation. Mosseri replaced longtime Instagrammer Kevin Weil, who was shuffled back to the Facebook mothership. 

That likely didn’t sit well with Instagram’s founders, Akhtar and other analysts said. Now that they’re gone as well, Mosseri is the most obvious candidate to head Instagram. 

“Kevin Systrom loyalists are probably going to leave,” Akhtar said. 

Which means Facebook may soon have a new challenge on its hands: Figuring out how to keep Instagram growing if it loses the coolness factor that has bolstered it for so long.
…

Automakers sought flexibility while environmental groups blasted the Trump administration’s proposal to roll back fuel economy standards at a public hearing on the plan in the industry’s backyard.

At the hearing Tuesday in Dearborn, Michigan, home to Ford Motor Co. and just miles from the General Motors and Fiat Chrysler home offices, industry officials repeated two themes: They’ll keep working to make cars and trucks more efficient, but they may not be able to meet existing standards because people are buying more trucks and SUVs.

Environmental groups, though, urged the government to scrap its plan to roll back the standards and instead keep in place the ones that were reaffirmed in the waning days of the Obama administration. They said the technology to meet the standards at low costs is available, and they accused President Donald Trump’s Department of Transportation of twisting numbers to justify the rollback.

Nearly 150 people were scheduled to testify at the hearing, the second on the preferred option of the National Highway Traffic Safety Administration and Environmental Protection Agency to freeze the standards at 2020 levels.

In 2016, for the first time since the latest standards started, the auto industry couldn’t meet them without using emissions credits earned in prior years, said Steve Bartoli, vice president of fuel economy compliance for Fiat Chrysler Automobiles. The reason is because with relatively low gas prices, people are buying more trucks and SUVs rather than fuel-efficient cars, he said.

Last year, cars made up only 36 percent of the U.S. new-vehicle fleet, something that wasn’t expected when the current requirements were put in place six years ago, he said. “The forecasts referenced by the agencies at that time showed cars increasing from 50 percent to 57 percent of annual vehicle sales by 2025,” Bartoli said.

The Obama EPA proposed raising the standard to 36 miles per gallon (15 kilometers per liter) by 2025, about 10 miles per gallon (4 kilometers per liter) higher than the current requirement. The goal was to reduce car emissions and save money at the pump.

Trump administration officials say waiving the tougher fuel efficiency requirements would make vehicles more affordable, which would get safer cars into consumers’ hands more quickly.

Industry response

Bartoli and other industry representatives said they’ll keep making vehicles more efficient, but need the more flexible standards because of the market shift. Industry officials said they don’t support a full freeze on the standards.

“FCA is willing to work with all parties on a data-driven final rule that results in market-facing fuel economy improvements that also support greater penetration of alternative powertrains” such as electric vehicles, Bartoli said.

Rhett Ricart, a Columbus, Ohio, car dealer who is regulatory chairman for the National Automobile Dealers Association, said trying to force people into efficient cars is like trying to make a 3-year-old eat vegetables. “If he doesn’t like vegetables, you can’t stuff his mouth full of them,” Ricart said.

Environmental response

But environmental groups said the Obama standards should remain in place, arguing that the technology is advancing so fast that automakers can meet the standards without adding huge costs for consumers. They said by the EPA’s own calculations, 60,000 jobs will be lost by 2030 developing and building fuel efficient technologies. They urged NHTSA and the EPA, which are holding the hearings, to scrap their preferred option of a freeze.

John German, senior fellow with the International Council on Clean Transportation, a group that pushes for stronger standards, said outside the hearing that the Trump administration’s cost estimates per car for the Obama standards are inflated to justify the freeze. Consumer savings at the pump are roughly three times the cost, which the ICCT calculates to be $551 per vehicle.

He also said the industry has developed lower-cost improvements to internal combustion powertrains faster than expected, so auto companies can meet standards without selling a lot of electric vehicles.

Environmental groups also said the Obama standards vary with vehicle size and give the industry flexibility to meet them. “The standards are working as designed,” German said.

California response

At Monday’s hearing in Fresno, California, state officials said the proposed rollback would damage people’s health and exacerbate climate change, and they demanded the Trump administration back off.

Looming over the administration’s proposal is the possibility that California, which has become a key leader on climate change as Trump has moved to dismantle Obama-era environmental rules, could set its own fuel standard that could roil the auto industry. That’s a change the federal government is trying to block.

“California will take whatever actions are needed to protect our people and follow the law,” Mary Nichols, chairwoman of the California Air Resources Board, testified at the hearing.

Automakers want one standard for the whole country, so they don’t have to design different vehicles for California and the states that follow its requirements.

Another hearing is planned Wednesday in Pittsburgh.
…

U.S. consumer confidence surged to an 18-year high in September as households grew more upbeat about the labor market, pointing to sustained strength in the economy despite an increasingly bitter trade dispute between the United States and China.

While other data on Tuesday showed a moderation in house price increases in July, the gains probably remain sufficient to boost household wealth and continue to support consumer spending, as well as making home purchasing a bit more affordable for first-time buyers.

“The consumer is always in the driver’s seat when it comes to stoking the fires that run the engines of economic growth, but the million dollar question is what is going to happen down the road when the trade tariffs start to bite?” said Chris Rupkey, chief economist at MUFG in New York.

The Conference Board said its consumer confidence index increased to a reading of 138.4 this month from an upwardly revised 134.7 in August. That was the best reading since September 2000 and the index is not too far from an all-time high of 144.7 reached that year.

Economists polled by Reuters had forecast the consumer index slipping to a reading of 132.0 this month from the previously reported 133.4 in August.

Consumers’ assessment of labor market conditions improved sharply even as the trade war between the United States and China escalated, which economists warned would lead to job losses and higher prices for consumers. Washington on Monday slapped tariffs on $200 billion worth of Chinese goods, with Beijing retaliating with duties on $60 billion worth of U.S. products. The United States and China had already imposed tariffs on $50 billion worth of each other’s goods.

For now, consumers appear to be shrugging off the trade tensions. Households were this month upbeat about business conditions over the next six months, with many planning purchases of household appliances, motor vehicles and houses.

Some economists believe a tightening labor market, which is starting to boost wage growth, and higher savings could provide a cushion for households against more expensive consumer goods imports from China.

“Moreover, consumers may choose to substitute purchases of goods affected by tariffs with other goods and firms may choose to absorb the higher costs,” saidRoiana Reid, an economist at Berenberg Capital Markets in New York.

Strong labor market

The Conference Board consumer survey’s so-called labor market differential, derived from data about respondents who think jobs are hard to get and those who think jobs are plentiful, rose to 32.5 in September, the highest level since January 2001, from 30.2 in August.

This measure, which closely correlates to the unemployment rate in the Labor Department’ employment report, is pointing to further declines in the jobless rate and labor market slack. The labor market is viewed as either at or near full employment, with the jobless rate at 3.9 percent.

The robust labor market, together with the strong economy and steadily rising inflation, have left economists confident that the Federal Reserve will raise interest rates on Wednesday for the third time this year.

The dollar was trading slightly weaker against a basket of currencies, while U.S. government bond yields rose. Stocks on Wall Street were little changed.

The consumer confidence report added to fairly upbeat data on consumer spending and manufacturing that have suggested solid economic growth in the third quarter. Gross domestic product increased at a 4.2 percent annualized rate in the second quarter. Growth estimates for the July-September quarter are above a 3.0 percent pace.

While the broader economy is powering ahead, the housing market is continuing to lag behind amid signs that higher mortgage rates and house prices are starting to hurt demand.

Separately, the S&P CoreLogic Case-Shiller composite home price index of 20 U.S. metropolitan areas rose 5.9 percent in July from a year ago after increasing 6.4 percent in June.

Prices in the 20 cities edged up 0.1 percent in July from June on a seasonally adjusted basis, the survey showed.

The moderation in house price inflation was also underscored by another report from the Federal Housing Finance Agency, which showed its home price index rising 0.2 percent in July after gaining 0.3 percent in June.

The FHFA’s index is calculated by using purchase prices of houses financed with mortgages sold to or guaranteed by mortgage finance companies Fannie Mae and Freddie Mac.

“Consumers are delirious but not bidding up prices of homes as much as they had been,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “Increasing prices and mortgage rates are reducing affordability and sales and that is translating into slower price gains.”
…

A luxury hotel in Panama City that used to bear the Trump name has formally been rebranded after a bitter dispute over control.

The 70-story, sail-shaped tower is now the JW Marriott. It’s operated by U.S. hotelier Marriott International, which took over management.

Owners and administrators unveiled the new name Tuesday on a granite wall at the entrance where the Trump name was removed in March.

After a hotly-contested legal fight, majority investor Orestes Fintiklis was able to evict managers from the U.S. president’s family company this year.

The company had appealed to Panamanian President Juan Carlos Varela to intervene, raising ethical concerns over possible mingling of Trump’s business and government interests.
…

American Airlines is expanding its inflight food options with the addition of a light and healthy Mediterranean menu.

The world’s largest carrier on Monday announced an agreement with the restaurant chain Zoe’s Kitchen.

American, which is based in Fort Worth, Texas, says the new Zoe’s Kitchen menu will be sold on most domestic flights longer than three hours beginning Dec. 1. Options will include hummus topped with olives, a turkey sandwich with specialty cheese and crunchy Mediterranean slaw, and a chicken wrap with roasted tomatoes, arugula and artichokes.

American currently serves cookies and mini pretzels for free during flights over 250 miles (400 kilometers). Sandwiches, wraps and snack boxes are also available for sale on most domestic flights.

 
…

U.S. President Donald Trump and South Korean President Moon Jae-in signed a revised free trade agreement between the two countries Monday afternoon in New York, following their bilateral meeting on the sidelines of the United Nations General Assembly (UNGA).

“I’m very excited about our new trade agreement,” Trump said during a joint press conference with Moon. “This is a brand new agreement. This is not an old one rewritten. … I’m very excited about that for the United States, and I really believe it’s good for both countries.” 

Trump called the signing “a historic milestone in trade” and “something that most people thought was not going to be happening.”

Speaking through an interpreter, Moon called the revision of the free trade agreement “significant, in the sense that it expands the ROK-U.S. alliance to the economic realm, as well.”

“With the swift conclusion of the negotiations for the revision, uncertainty surrounding our FTA (Free Trade Agreement) have been eliminated,” he said, adding that “as a result, companies from both countries will now be able to do business under more stable conditions.”

The new deal contains amendments to the 2012 U.S.-South Korea free trade deal known as KORUS, which Washington and Seoul agreed to revise in March. 

Trump had previously blamed KORUS, signed during the Obama administration, for increasing U.S. trade deficits with South Korea. 

The amendments include provisions to ease customs barriers for U.S. agricultural goods and pharmaceutical exports. It will increase the number of cars the U.S. can export to South Korea, from 25,000 to 50,000, without being subject to the country’s more stringent safety regulations.

Seoul also accepted a quota on its steel exports to the U.S. to avoid the tariffs Trump has imposed on other countries.

The new deal, however, does not include a currency agreement as members of the Trump administration had previously indicated.

NAFTA deal

Meanwhile, the U.S. and Canada are still trying to work out a deal on a new North American Free Trade Agreement (NAFTA). Canadian Prime Minister Justin Trudeau told reporters in Montreal on Sunday that negotiators are “very likely” to hold informal talks on the sidelines of the UNGA. 

Trump struck a side deal on the three-nation trade agreement with Mexico last month and has threatened to exclude Canada. His administration wants to reach an agreement by the end of September.

Canada says it does not feel bound by any deadlines. Trudeau reiterated his position that he would not sign a bad NAFTA deal.

In a blog for the conservative-leaning Heritage Foundation, economist Tori Whiting wrote that under the new KORUS agreement, Washington “failed to fully achieve the goal of eliminating tariff and non-tariff barriers.” She added that protectionist tariffs “should remain dormant under a new NAFTA.”

US-China tariffs

Also on Monday, a new round of U.S.-imposed duties on $200 billion worth of Chinese goods, and a retaliatory set of tariffs imposed by Beijing on $60 billion worth of U.S. goods took effect.

The new U.S. duties cover thousands of Chinese-made products, including electronics, food, tools and housewares. The new tariffs begin at 10 percent, and will rise to 25 percent on Jan. 1, 2019. 

In a policy statement, Beijing accused Washington of using tariffs as a means of intimidating other countries to submit to U.S. wishes on economic matters.

“We have now reached a stalemate,” Eswar Prasad, senior fellow at Brookings Institution, said in his podcast, “where neither side can be seen as caving in to each other’s demands, potentially signaling that we could be in for a long-standing trade war.”

Prasad added that it seems clear Trump “wants nothing less than total capitulation by the Chinese side on all American demands.”

This includes, he said, not just measures by China to reduce the trade deficit, but also other issues that the U.S. has long been concerned about, such as “better protection of intellectual property rights of American companies, better access to Chinese markets for American investors, as well as American manufacturers.” 

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

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

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.”
…