Pope Francis has told the world’s oil executives that a transition to less-polluting energy sources “is a challenge of epochal proportions.”

On the last day of a two-day conference Saturday, the Roman Catholic leader urged the executives to provide electricity to the one billion people who are without it, but said that process must be done in a way that avoids “creating environmental imbalances resulting in deterioration and pollution gravely harmful to our human family, both now and in the future.”

Reuters reports the unprecedented conference was held behind closed doors at the Pontifical Academy of Sciences.

The news agency says the oil executives, investors and Vatican experts who attended the summit, believe, like the pope does, that science supports the notion that climate change is caused by human activity and that global warming must be curbed.

Pope Francis told the conference, “Our desire to ensure energy for all must not lead to the undesired effect of a spiral of extreme climate changes due to a catastrophic rise in global temperatures, harsher environments and increased levels of poverty.”

 
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The Cambodian rosewood had stood for hundreds of years, but its value finally proved too hard to resist and the giant tree came crashing down — inside a protected forest.

It’s unclear exactly who was behind the felling — nobody has been charged — but it set off a series of events, which culminated in hundreds of villagers rejecting their community forest in favor of cutting more trees.

The incident underscores the challenge of protecting the country’s forests, which researchers say have been rapidly disappearing due to logging and agricultural land concessions granted to companies.

Cambodia has among the highest deforestation rates in the world, according to a study published in the journal Science Advances in 2017.

The Southeast Asian nation lost 1.6 million hectares between 2001 and 2014, including 38 percent of its “intact forest landscape”, which the study defined as “a seamless mosaic of forest and naturally treeless ecosystems.”

Conservationists have fought for years to convince the government and people in remote areas to check deforestation, and the community forest model has been a key strategy.

Local residents agree to preserve a community forest, although they are allowed to continue to farm areas already under cultivation, as well as harvest timber needed for construction — if they receive permission.

That model is broken, according to Ben Davis, who has worked in conservation in Cambodia since 1992 and set up the community forest near Ta Bos village in the province of Preah Vihear.

Davis has helped non-governmental organizations (NGOs) establish other community forests, which he said had ended up being logged as soon as no one was around to enforce protection.

“Unless there’s an NGO that is living there in the forest,” he said, trailing off. “The minute they’re gone…” Davis, an American, and his Australian wife, Sharyn, live with their two children in the community forest where they have set up an ecotourism lodge, and he often accompanies Ministry of Environment forest rangers on patrol.

A year ago, rangers startled some men who had just cut down the ancient rosewood, which Davis said was the biggest in the forest.

Authorities decided to confiscate the tree, but the rainy season delayed them and it lay in the jungle until this past April, said Davis and Pov Samuth, the local commune chief.

After the rangers hauled the rosewood to the village common area, residents protested, demanding that it be turned over to them, Davis and Pov Samuth said.

Davis said villagers recently sold one section of the tree — 1.7 meters long and more than a meter in diameter — for $10,000.

“It’s no wonder this thing set off a firestorm,” he said. “You can see why the villagers are hell bent on taking the forest over.”

About 400 residents demonstrated outside Davis’ house in April, and hundreds have applied their thumbprints to a petition demanding his eviction.

“We are not satisfied, because they said the area should be protected for the next generation, but villagers can’t go into the forest to do our work,” said Rorn Chhang, who added her thumbprint to the petition.

Her sister, Sorum Chhang, said she owned 20 hectares in the forest, which she began clearing in 2001.

“A few years ago, they came and said it belongs to the protected area, so they don’t allow me to do anything on my land,” said Sorum Chhang, who has no ownership documents.

Time to Talk

As the controversy continued, government officials in the capital, Phnom Penh, decided to meet with the villagers to explain the regulations around community forests.

About 300 people crowded into a wooden pagoda in the center of the village to speak to Lay Piden, deputy chief of law enforcement and governance at the Ministry of Agriculture.

“Nowadays, there are restrictions even to walk into the forest,” one man said to nods and murmurs of agreement.

After a heated discussion, Lay Piden said the villagers seemed most interested in figuring out how to keep felling trees, as they had before the community forest was established.

“Now, the officials from the Ministry of Environment prohibit them,” he told the Thomson Reuters Foundation. “That’s why they come here and get mad.”

Meas Nhem, director of the Phnom Tnout Wildlife Sanctuary, where the community forest lies, denied that residents are prevented from entering the protected area.

“We are not strict with the villagers,” he said by phone. “We allow them to take yields from the forest, but what we ban is deforesting for farming land and selling to dealers.”

Debt and Deforestation

Davis said almost the every family in the village has taken out loans, putting up their land as collateral, and they struggle to service the debt.

Pov Samuth, the commune chief, concurred.

“Nearly all villagers take money from the banks,” he said. “Some need to cut the trees to construct houses, and some also sell for paying the bank.”

Debt-driven deforestation in the Phnom Tnout Wildlife Sanctuary has raised fears among conservation groups.

In April, eight organizations, including the World Wildlife Fund, released a statement warning of “the rapid rate of destruction” and urged authorities to “enforce the rule of law.”

Already this month, three villagers have been arrested for cutting down a massive padauk tree, an endangered, luxury hardwood that is carved into furniture and musical instruments.

Davis said the rosewood incident had emboldened residents, as some had gained from the illegal felling.

“They hope to get away with it again,” he said.
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Once reliant on seasonal farming jobs to make ends meet, Aguti Rukia is now a successful entrepreneur in Arubela, eastern Uganda.

With the help of a $150 “micro-grant” last year, Rukia and two women from her village started a business buying petrol from fuel stations and selling it in smaller quantities to motorcycle taxis in the area.

“We buy three jerrycans of petrol per week and we make a profit of up to 15,000 Ugandan shillings ($4) from each,” explained Rukia, adding that each business partner had personally invested 30,000 shillings ($8) to top up the grant.

Uganda is one of the 30 poorest countries in the world, with 2017 government figures showing over one quarter of the population lives in poverty.

Eastern Uganda is particularly affected, with only 6 percent of households with access to electricity, according to the World Bank.

To boost people’s income, a project is helping rural Ugandans set up their own businesses by providing seed funding, training and mentoring.

The initiative, led by U.S. charity Village Enterprise, selects groups of three would-be entrepreneurs based on an assessment of their poverty level, and requires them to raise part of their business capital themselves.

“By giving people ownership of their enterprise we thought they would have a better chance of success,” said Winnie Auma, the charity’s director in Uganda.

Each venture is limited to three people as it reduces the risk of failure — compared to only two partners — while still being a number small enough to manage, she told the Thomson Reuters Foundation.

Weather and Poverty

Poverty in the East African country is exacerbated by increasingly erratic weather linked to climate change, experts say.

Absalom Ragira from the Tree is Life Trust, a Kenyan charity working to protect the environment, said rising temperatures help pests to breed, destroying farmers’ crops and their main source of income.

“At the same time, flash floods can sweep away harvests and livestock,” he said.

Before Rukia set up her business with partners Mary Atim and Mary Alinga, the women’s income largely fluctuated with the weather.

“We used to rush to people’s farms whenever they needed someone to till their land,” recalled Rukia.

But those jobs are becoming increasingly scarce, she added.

Seasonal farming jobs are harder to come by in times of drought or floods, local people say, as there are fewer crops left to harvest.

Money – and Respect

After starting off reselling fuel, Rukia, Atim and Alinga have expanded their business by buying and selling groundnut oil for cooking.

Rukia now earns about 75,000 shillings ($20) per week selling petrol, cooking oil and beans — over five times more than when she took up seasonal jobs. The income comes on top of the 60,000 shillings ($16) her husband makes selling brooms.

She said the help starting her business has not only boosted her family’s income — allowing them to buy a solar pay-as-you-go kit — but has also earned her her husband’s respect.

Atim agrees. “They (men) look at us differently because we can even lend them money or pay our children’s school fees,” said the mother of four.

Their venture is one of 4,000 businesses created each year in Uganda and Kenya through the grants, said Auma, estimating they have benefited over 200,000 people since 2012.

Grants, Not Loans

Hannah McCandless, a program associate at Village Enterprise, said the micro-grant model works because budding entrepreneurs only receive the cash once they have been through nine months of training on business and financial skills — and they must spend it on their venture.

Each team also joins a savings group, which can act as a safety net for the women and allow them to take out loans as needed, she added.

“As a result only about 5 percent of businesses fail six months after having started,” she said.

Hassan Mbaziira, a manager at the Ugandan Ministry of Gender, Labor and Social Development, said micro-grants or cash transfers like the Village Enterprise model are an effective way of tackling poverty.

“Cash transfers allow people to spend money according to their needs, and help them regain a sense of control,” he said.

While the government runs its own entrepreneurship and social protection programs, “it is unlikely that they will wipe out poverty on their own”, he added, calling for more support from NGOs and civil society.
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Ukraine’s parliament has voted to establish an anti-corruption court in an effort to meet the criteria to receive $17.5 billion from the International Monetary Fund.

Before the IMF releases the funds needed to shore up Ukraine’s struggling economy, it will have make sure the court’s laws are IMF compliant. The West has repeatedly called on Ukraine to reform it political system and establish an independent body to fight corruption.

“What we’ll be looking to see is that it ensures the establishment of an independent and trustworthy anti-corruption court that meets the expectation of the Ukrainian people,” IMF spokesman Gerry Rice said at a briefing Thursday.

President Petrol Poroshenko said the court was in line with Western recommendations and Ukrainian law.  

Last year Poroshenko rejected the need for an anti-corruption court, saying such institutions are needed in “Kenya, Uganda, Malaysia and Croatia” but not in Western Europe or the United States.

While the approval of the court was seen as a positive, Ukraine also likely dismayed the West by firing Finance Minister Oleksandr Danylyuk, a respected reform advocate.

Danylyuk’s ouster came after he took on Prime Minister Volodymyr Groysman, accusing him of stalling reforms of the state tax service that are needed to combat corruption.

Before the parliament voted on his ouster, Danylyuk addressed the lawmakers, telling them he had been accused of “defending the interests of international organizations.”

But, “I am defending the interests of Ukrainians,” he said.
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The Trump administration said Thursday it would spend $4 million on construction projects in the Arctic National Wildlife Refuge in preparation for oil drilling in the nation’s biggest wildlife park.

In an announcement that touted planned improvements to U.S. Fish and Wildlife Service visitor facilities, the Department of the Interior said it has approved spending on projects for “Oil Exploration Readiness” in the coastal plain of the Arctic refuge.

The Trump administration is pushing for an oil lease sale in the refuge as early as next year. The tax-overhaul bill passed by the U.S. Congress last December includes a provision mandating two oil lease sales, each offering at least 400,000 acres (161,874.26 hectares), within seven years.

True wilderness refuge

The 19-million-acre (7.7 million-hectare) Arctic refuge, the largest in the U.S. national wildlife refuge system, contains some of the wildest territory in North America. There are no roads, established trails or buildings within the refuge border, and no cell phone service, according to the Fish and Wildlife Service.

“This is a true wilderness refuge,” the Arctic refuge website advises.

Political and business leaders in oil-dependent Alaska have tried for decades to pry open the refuge’s coastal plain, which is believed to hold potential for billions of barrels of oil.

But the plain, between the mountains of the Brooks Range and the Arctic Ocean, is prized for its importance to caribou, polar bears and other wildlife. Oil development there had been banned until Alaska Senator Lisa Murkowski led a move to insert a pro-drilling provision into the 2017 tax bill signed by President Donald Trump.

Some Alaskans opposed

In Alaska, the development plan is largely embraced, but not universally so. Drilling opponents gathered outside of last week’s Anchorage and Fairbanks hearings about the proposed lease sales to protest the plan.

Interior spokeswoman Heather Swift, in an email, said the $4 million “will be used to support six projects designed to improve and construct existing outbuildings, facilities and research operations.”

That work will include improvements to facilities outside the refuge, in the Inupiat village of Kaktovik and at Galbraith Lake along the Trans-Alaska Pipeline corridor, she said in the email.

Large appropriation

The $4 million appropriation for Arctic refuge projects is one of the largest single items in a total of $50 million in planned DOI construction spending.

“The president is a builder, he loves to build and he loves our public lands, so it is a natural fit that the Trump administration is dedicating so much attention to rebuilding our aging Fish and Wildlife Service infrastructure,” Secretary Ryan Zinke said in a statement Thursday.

A partnership of three companies is seeking to do seismic surveys in the refuge starting this winter. That plan, from SAExploration and two Alaska Native corporations, was panned by the U.S. Fish and Wildlife Service, the Washington Post reported last month.

There has been no decision on that application, Swift said Thursday. “It was a draft application. The department does not make decisions based upon early drafts,” she said by email.
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Argentina and the International Monetary Fund said Thursday that they had reached an agreement for a three-year, $50 billion standby lending

arrangement, which the government said it sought to provide a

safety net and avoid the frequent crises of the country’s past.

Argentina requested IMF assistance on May 8 after its peso currency weakened sharply in an investor exodus from emerging markets. As part of the deal, which is subject to IMF board approval, the government pledged to speed up plans to reduce the fiscal deficit even as authorities now foresee lower growth and higher inflation in the coming years.

The deal marks a turning point for Argentina, which for years shunned the IMF after a devastating 2001-02 economic crisis that many Argentines blamed on IMF-imposed austerity measures. President Mauricio Macri’s turn to the lender has led to protests in the country.

“There is no magic. The IMF can help but Argentines need to resolve our own problems,” Treasury Minister Nicolas Dujovne said at a news conference.

Dujovne said he expected the IMF’s board to approve the deal during a June 20 meeting. After that, he said, he expects an immediate disbursement of 30 percent of the funding, or about $15 billion.

Argentina will seek to reduce its fiscal deficit to 1.3 percent of gross domestic product in 2019, down from 2.2 percent previously, Dujovne said. The deal calls for fiscal balance in 2020 and a fiscal surplus of 0.5 percent of GDP in 2020.

“This measure will ultimately lessen the government financing needs, put public debt on a downward trajectory and, as President Macri has stated, relieve a burden from Argentina’s back,” IMF Managing Director Christine Lagarde said in a statement.

Higher inflation, for now

Speaking alongside central bank governor Federico Sturzenegger, Dujovne noted that the agreement was well above Argentina’s IMF quota. A minimum $20 billion had been expected based on Argentina’s quota.

The interest rate will be from 1.96 to 4.96 percent, depending on how much Argentina uses. The South American country must pay back each disbursement in eight quarterly installments, with a three-year grace period.

As widely expected, the government will also send a proposal to Congress to reform the central bank’s charter and strengthen its autonomy. The central bank will also stop transferring money to the treasury, a practice known locally as the “little machine” that is seen as a major driver of incessant

inflation.

“The little machine has been turned off. It has been unplugged,” Sturzenegger said.

The IMF’s backing was expected to boost Argentine assets, which have sagged in recent months amid a global selloff in emerging markets.

Neighboring Brazil, Latin America’s largest economy, has also seen its currency weaken in recent days to its lowest level in more than two years on fears about the county’s fiscal outlook and political future.

“It is convincing and greatly exceeds expectations. Markets should react very positively tomorrow,” Miguel Kiguel, a former Argentine finance secretary who runs local consultancy Econviews, said in a Twitter post. “It is clear the country has capacity to pay.”

But the short-term economic picture for Argentina remains more complicated than it appeared several months ago. Dujovne said economic growth was expected at 1.4 percent for 2018 and between 1.5 percent and 2.5 percent for 2019, down from prior expectations above 3 percent in both years.

The central bank will also abandon its 2018 inflation target of 15 percent and will not target any particular level this year, Sturzenegger said. Argentina agreed to new, looser inflation targets of 17 percent for 2019, 13 percent for 2020 and 9 percent for 2021, down from 25 percent currently.

“They are mortgaging the future for our children and grandchildren,” Martin Sabbatella, a politician aligned with former populist President Cristina Fernandez, wrote on Twitter.

Both Argentina and the IMF said the deal would protect the most vulnerable.

In a separate statement, the president’s office said it had clinched agreements for an additional $5.65 billion from the Inter-American Development Bank, the World Bank and the CAF development bank over the next 12 months.
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India’s central bank raised its benchmark lending rate Wednesday to tamp down rising inflation following an increase in oil prices.

The increase of one-quarter percentage point to 6.25 percent is the first since January 2014 and comes at a time when consumer inflation is at a four-year high.

The Reserve Bank of India said it expects inflation of 4.8 to 4.9 percent in the first half of the 2018-19 financial year, which started April 1.

More rate hikes are likely in coming months, said Shilan Shah of Capital Economics in a report.

The bank said crude oil prices have been volatile, causing uncertainty to the inflation outlook. There was a 12 percent increase in the price of Indian crude basket, which was sharper than expected.

The bank forecast GDP growth for the 2018-19 financial year at 7.4 percent, up from the previous year’s 6.7 percent.

That increase has been underpinned by improved rural demand on the back of a bumper harvest and the government’s emphasis on rural housing and infrastructure.

The bank said the forecast of a normal June-September monsoon is a good sign for agricultural.
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 Britain, France and Germany have joined forces to urge the United States to exempt European companies from any sanctions the U.S. will slap on Iran after pulling out of an international nuclear agreement.

In a letter made public Wednesday, ministers from the three European countries told U.S. officials they “strongly regret” President Donald Trump’s decision to withdraw from the 2015 Iran deal to which their nations also were signatories.

The agreement was meant to stop Iran from developing nuclear weapons in exchange for the lifting of economic sanctions. Trump argued that it was insufficiently tough and has said sanctions will be imposed on any company doing business with Tehran.

The ministers — British Foreign Minister Boris Johnson, French Finance Minister Bruno Le Maire and German Finance Minister Olaf Scholz — said they want the U.S. to “grant exemptions” for European Union companies that have been doing business with Iran since the nuclear deal took effect in 2016.  

“As close allies, we expect that the extraterritorial effects of U.S. secondary sanctions will not be enforced on EU entities and individuals, and the United States will thus respect our political decision and the good faith of economic operators within EU legal territory,” they said in their letter to In a letter dated Monday to U.S. Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo dated Monday.

They also said that Iran should not be cut out of the SWIFT system for international money transfers.

Many companies from Europe and the U.S. have been steadily building up their investments in Iran in the wake of the nuclear deal, particularly in the fields of pharmaceuticals, banking and oil. Any sanctions could be damaging, especially if they affect business interests in the United States.

The ministers reiterated their view that the deal with Iran remains the “best means” to prevent the country from becoming a nuclear power.

They also warned that any Iranian withdrawal from the deal would “further unsettle a region where additional conflicts would be disastrous.”

The letter was published during a trip to Europe by Israeli Prime Minister Benjamin Netanyahu, who has backed Trump in declaring the nuclear deal too soft on Iran.

Earlier this week, Netanyahu met with French President Emmanuel Macron and German Chancellor Angela Merkel, who both reiterated their support for the accord.

He met British Prime Minister Theresa May on Wednesday. May said that Britain, like France and Germany, believes the nuclear deal “is the best route to preventing Iran from getting a nuclear weapon.”

“We will remain committed to it as long as Iran meets its obligations,” she said.

The publication of the letter came a day after Iran said it was preparing for the resumption of uranium enrichment within the limits set by the 2015 agreement. The modest steps appeared mainly aimed at signaling that Iran could resume its drive toward industrial-scale enrichment if the nuclear accord unravels.

French Foreign Minister Jean-Yves Le Drian sought to downplay the implications of the move and said it did not violate the terms of the deal.

“It shows a sort of irritation, and it is always dangerous to flirt with the red lines,” Le Drian said on Europe-1 radio.

“We must keep a sense of proportion and stick to the agreement,” he said. “And today, the agreement is not broken and Iran respects totally its commitments.”
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Arms control experts estimate that the dismantlement of North Korea’s nuclear program could take a decade to complete, and cost $20 billion, if a nuclear agreement is reached between U.S. President Donald Trump and North Korean leader Kim Jong Un when they meet in Singapore on June 12.

“The hard work has not yet begun, and it is gong to take sustained energy on the part of the United States, South Korea, Japan, China and North Korea. It’s going to be a multiyear long process,” said Daryl Kimball, the executive director of the Arms Control Association in Washington.

President Trump has said he expects a “very positive result” from the North Korea nuclear summit, but he also said it will likely be the beginning of a process to resolve differences over the extent of the North’s denuclearization, and the specifics regarding what sanctions relief, economic aid and security guarantees would be offered in return.

U.S. Defense Secretary Jim Mattis said on Sunday that North Korea would only receive sanctions relief after it takes “verifiable and irreversible steps to denuclearization.”

This position aligns closer to the Kim government’s stance that denuclearization measures and concessions be matched action for action. And it backs away from demands made by some in the president’s national security team that Pyongyang quickly and unilaterally dismantle all its weapons of mass destruction before any concessions would be offered.

Nuclear costs

North Korea is estimated to have 20 to 80 nuclear warheads, both known and covert nuclear research and processing sites, and thousands of ballistic missiles that can be launched from mobile vehicles, and submarine based launchers have been tested in recent years.

With such an extensive nuclear arsenal it could cost $20 billion to achieve the U.S. goal of complete, irreversible, and verifiable nuclear dismantlement (CVID), according to a recent study conducted by Kwon Hyuk-chul, a Kookmin University professor of security strategy.

Kwon based his assessment in part on past nuclear deals with North Korea and Ukraine’s experience in dismantling its nuclear arsenal after the fall of the Soviet Union in the 1990s. 

“In the process of the nuclear dismantlement of Ukraine, all of the strategic nuclear warheads that Ukraine possessed were transferred to Russia and were dismantled there. In doing so, the United States provided large-scale containers and technical support to assist with safe dismantling,” said Kwon.

The Kookmin University study estimates it would costs $5 billion to dismantle the North’s nuclear arsenal and supporting facilities. Another $5 billion, Kwon said, would be needed to fulfill a U.S. pledge, made as part of a 1994 nuclear agreement with North Korea, to build two light water reactors to generate electrical power.

Another $10 billion in economic aid would be needed both as incentives to convince the leadership to give up its nuclear deterrent and to help transition the over 3,000 to 10,000 nuclear workers into peacetime professions.

President Trump recently said he does not expect the U.S. to provide any government aid but could offer American private investment if North Korea gives up its nuclear weapons. Instead he said the Kim government should look to South Korea and China for any direct economic assistance.

Denuclearization roadmap

A recent Stanford University report estimates it would take over 10 years to permanently dismantle the North’s nuclear program.

Stanford nuclear scientist Siegfried Hecker, who visited North Korea in the past to assess the country’s plutonium program, Robert Carlin, a former CIA Korea analyst, and researcher Elliot Serbin, conducted the detailed study of the North’s nuclear program.

The researchers listed specific categories that must be verified by outside inspectors including; nuclear fissile material of plutonium, tritium for fusion Hydrogen bombs, enriched uranium, nuclear reactors, centrifuge facilities, long and medium and short range missiles, test engines, and space launch vehicles.

The authors proposed a three-phase denuclearization process that would halt or limit further activity in the first year, roll back or dismantle over five years, and permanently eliminate North Korea’s nuclear capabilities in 10 years.

Lee Yoon-jee in Seoul contributed to this report.
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Mexico put tariffs on American products ranging from steel to pork and bourbon on Tuesday, retaliating against import duties on metals imposed by

President Donald Trump and taking aim at Republican strongholds ahead of U.S. congressional elections in November.

Mexico’s response further raises trade tensions between the two countries and adds a new complication to efforts to renegotiate the NAFTA trade deal between Canada, the United States and Mexico.

American pork producers, for whom Mexico is the largest export market, were dismayed by the move.

Trump last week rattled some of the closest U.S. allies by removing an exemption to tariffs on imported steel and aluminum that his administration had granted to Mexico, Canada and the European Union.

Meanwhile, Trump economic advisor Larry Kudlow revived the possibility on Tuesday that the president will seek to replace the trillion dollar North American Trade Agreement (NAFTA) with bilateral deals with Canada and Mexico, something both countries say they oppose.

Following news of the new Mexican tariffs, which take effect immediately, the peso tumbled to its weakest level since February 2017, making it one of the worst performers among major currencies.

Mexico’s retaliatory list, published in the government’s official gazette, included a 20 percent tariff on U.S. pork legs and shoulders, apples and potatoes and 20 to 25 percent duties on types of cheeses and bourbon.

A net importer of U.S. steel, Mexico is also putting 25 percent duties on a range of U.S. steel products.

Mexico’s trade negotiators designed the list, in part, to include products exported by top Republican leaders’ states, including Indiana where Vice President Mike Pence was formerly governor, according to a trade source familiar with the matter.

Bourbon-producing Kentucky is the home state of Senate Majority Leader Mitch McConnell, a Republican.

The new tariffs could also have political implications in some hotly contested races as the Republicans seek to maintain control of both chambers in Congress in November’s election, illustrating the potential perils of Trump’s aggressive efforts to set right what he sees as unfair trade balances with allies and rivals.

Midwestern worries

Iowa, where one incumbent Republican representative, Rod Blum, is seen as vulnerable, is an example of a place where Trump’s party could be hurt. The state is the top pork producing state in the United States and Mexico is its main export market by volume.

“We need trade and one of the things we’re concerned about is long-term implications that these trade issues will have on our partnerships with Mexico and Canada and other markets,” said Iowa Secretary of Agriculture Mike Naig, a Republican.

“Our customers around the world start going to other parts of the world for their supplies, that is a serious problem,” he said.

Chicago Mercantile Exchange hog futures at one point fell more than 2 percent following the Mexico pork tariff announcement.

“It certainly casts a negative pall over the market,” said CME livestock futures trader Dan Norcini.

The president of the U.S. National Pork Producers Council, Jim Heimerl, said Mexico accounted for nearly 25 percent of all pork shipments last year, adding that “a 20 percent tariff eliminates our ability to compete effectively in Mexico.”

“This is devastating to my family and pork producing families across the United States,” said Heimerl, a pork producer from Johnstown, Ohio.

In Minnesota, about 14 percent of the state’s $7.1 billion of annual agricultural exports goes to Mexico, one of the state’s top export markets, said Matthew Wohlman, Minnesota Department of Agriculture deputy commissioner.

The Mexican tariffs will hit its pork, dairy and potato exports, Minnesota state officials said.

U.S. Senator Mark Warner, a Democrat from Virginia, called the new tariffs a “gut punch” to farmers in his state, who he said exported more than $68 million in pork to Mexico last year.

“The President’s trade war is going to cost Virginia ag jobs,” he wrote in a tweet.

America first

Mexico announced its response to Trump’s move last week but it did not provide details of tariff levels or a full list of products at the time.

The United States and Mexico do $600 billion in annual trade and about 16 percent of U.S. goods exports go to its southern neighbor. However, the Mexican economy relies more on trade than does the U.S. economy, with about 80 percent of its exports sold to America.

The trade fights with Mexico and Canada are part of the Trump administration’s “America First” economic agenda, which has also put Washington on a collision course with China over trade.

Washington and Beijing have threatened tit-for-tat tariffs on goods worth up to $150 billion each, as Trump has pushed Beijing to open its economy further and address the United States’ large trade deficit with China.

The United States imposed tariffs of 25 percent on imported steel and 10 percent on aluminum in March, citing national security grounds. Last week Washington said it was ending a two-month exemption it had granted to imports from Canada, Mexico and the European Union.

The dispute with Mexico over tariffs makes it more difficult to conclude talks on renegotiating NAFTA between the three countries, discussions that began last year because Trump said the deal needed to be reworked to better serve the United States. Canada has also strongly objected to the metals tariffs.

The U.S. side has linked lifting its tariffs to a successful outcome of the NAFTA negotiations.

Separately, Mexico took steps on Tuesday to make it more attractive for other countries to send it pork by opening a tariff-free quota for some pork imports. Economy Minister Ildefonso Guajardo said his country would now “surely” look to Europe for pork products, used in many traditional dishes in Mexico.
…

U.S. President Donald Trump is “seriously contemplating” trying to reach separate trade deals with Canada and Mexico instead of reshaping the more than two-decade-old North American Free Trade Agreement with both neighbors, a White House economic adviser said Tuesday.

Trump economic adviser Larry Kudlow told Fox News, “He prefers bilateral negotiations, and he is looking at two much different countries.”

The U.S., Canada and Mexico have for months engaged in talks to revise NAFTA, which has been in force since 1994. But Kudlow said separate deals “might be able to happen more rapidly.”

However, Kudlow said Trump does not plan to withdraw from the three-nation agreement.

“He is seriously contemplating a shift in the NAFTA negotiations … [and] he asked me to convey this,” Kudlow said. The adviser said Trump “believed bilateral is always better. He hates large treaties.”

Trump has long assailed multinational trade deals and within days of assuming power last year, withdrew the U.S. from the Trans-Pacific Partnership with 11 other Pacific rim nations.

On Monday, he said on Twitter, “The U.S. has made such bad trade deals over so many years that we can only WIN!”

He declared, “China already charges a tax of 16% on soybeans. Canada has all sorts of trade barriers on our Agricultural products. Not acceptable!”

Trump contended, “Farmers have not been doing well for 15 years. Mexico, Canada, China and others have treated them unfairly. By the time I finish trade talks, that will change. Big trade barriers against U.S. farmers, and other businesses, will finally be broken. Massive trade deficits no longer!”

The NAFTA talks have stalled on U.S. demands to increase American components in duty-free NAFTA autos, as well as its argument that any new agreement end after five years.

Kudlow said he told top Canadian officials Monday about Trump’s hope for bilateral trade talks and is awaiting for reaction from Ottawa.

“The important thought is he may be moving quickly towards these bilateral discussions instead of as a whole,” Kudlow said.

Trump’s trade talks with China, Mexico, Canada and the European Union have proved contentious. The U.S. leader last week drew the ire of Canada, Mexico and the EU by imposing tariffs on their aluminum and steel exports.

Canadian Prime Minister Justin Trudeau called the tariffs “insulting and unacceptable.” In a weekend television interview, Kudlow called the U.S.-Canada trade dispute a “family quarrel.”

 
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Starbucks Corp, the world’s biggest coffee chain, said on Monday Executive Chairman Howard Schultz is stepping down, effective June 26.

Schultz, who has been with Starbucks for nearly four decades, is credited with turning the company into a popular household name and growing it from 11 stores to more than 28,000 in 77 countries.

Last year, Schultz stepped down as chief executive officer to become executive chairman, handing the top job to Kevin Johnson.

Most recently, he was involved in steering the company through an anti-bias training program that was kickstarted after a Philadelphia cafe manager’s call to police resulted in the arrests of two black men who were waiting for a friend.

Starbucks’ board named Myron Ullman, who was previously chairman and CEO of struggling retailer J.C. Penney Co, as its new chair and Mellody Hobson vice chair effective upon Schultz’s retirement.

Schultz will also resign from Starbucks’ board and will be named chairman emeritus, the company said in a statement.
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German chemicals and pharmaceuticals giant Bayer will discard the name Monsanto when it takes over the controversial US seeds and pesticides producer this week, it said Monday.

But Bayer executives insisted Monsanto practices rejected by many environmentalists, including genetic modification of seeds and deployment of “crop protection” technologies like pesticides, were vital to help feed a growing world population.

“The company name is and will remain Bayer. Monsanto will no longer be a company name,” chief executive Werner Baumann told journalists during a telephone conference.

Bayer’s $63 billion (54 billion euro) buyout of Monsanto — one of the largest in German corporate history — is set to close Thursday, birthing a global giant with 115,000 employees and revenues of some 45 billion euros.

Bosses plan to name the merged agrichemical division Bayer Crop Science once the merger is complete, German business newspaper Handelsblatt reported, citing “industry sources”.

The Monsanto brand “was an issue for some time for Monsanto management,” noted Liam Condon, president of Bayer’s crop science division, adding that the US firm’s employees were “not fixated on the Monsanto brand” but “proud of what they’ve achieved.”

Weedkiller arms race

Producing high-tech genetically modified seeds, many designed to grow crops resistant to its proprietary pesticides, Monsanto has been a target for environmentalist protests and lawsuits over harm to health and the environment for decades.

“It’s understandable that Bayer wants to avoid having bought Monsanto’s negative image with the billions it has spent on the firm,” said Greenpeace campaigner Dirk Zimmermann.

“More important than giving up the Monsanto name would be a fundamental transformation in the new mega-company’s policies,” he added, accusing Bayer of having “no interest in developing future-proof, sustainable solutions for agriculture.”

Activists fear the firm’s addition to Bayer will further reduce competition in the hotly-contested agrichemical sector, limiting farmers’ and consumers’ choices if they want to avoid GM and chemically treated crops.

What’s more, in recent years weeds have begun to emerge that are resistant to products like Monsanto staple glyphosate, marketed as Roundup alongside “Roundup-ready” seeds beginning in the 1990s.

As agrichemical firms scramble to respond with new pesticides and resistant seeds, there are fears of an arms race with ever-more-potent weedkillers.

Some scientists already suspect glyphosate could cause cancer, with a 2015 World Health Organization study determining it was “probably carcinogenic” — although Bayer and other defenders of the chemical have contested the research.

In 2017, attempts to block the European Union’s five-year renewal of its approval for the weedkiller were unsuccessful.

But activists are lobbying governments and France has vowed to outlaw the substance within three years.

When launching the Monsanto takeover bid, Bayer also promised it would not introduce genetically modified crops in Europe.

“We will listen to our critics and work together where we find common ground,” Baumann said, but added that “agriculture is too important to allow ideological differences to bring progress to a standstill”.

With the world population set to reach almost 10 billion people by 2050, Bayer argues its products and methods are needed to meet demand for food.

‘Number one in seeds’

Bayer has put massive resources behind the deal, raising $57 billion in financing including a new share issue worth six billion euros announced Sunday.

It will also sell large parts of its existing agrichemical and crop seeds business to BASF in concessions to competition authorities on both sides of the Atlantic.

Once the buyout and the sales to BASF are completed, Leverkusen-based Bayer’s crop science business plus Monsanto will account for around half its turnover, with the remainder coming from pharmaceuticals and over-the-counter health products.

At around 19.7 billion euros in 2017, Monsanto and Bayer’s combined agriculture sales outweighed those of competitors ChemChina, DowDuPont and BASF, according to figures provided by Bayer.

“We estimate that Bayer will become number one in seeds and number two in crop protection globally” following the merger, analysts at Standard and Poor’s wrote Monday.

Nevertheless, the ratings agency downgraded its score for Bayer’s debt from “A-” to “BBB,” while upgrading the outlook to “stable”.

“Bayer’s stronger business position in agriculture products… does not fully offset the increased debt in its capital structure,” the analysts wrote.

 
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Institutional investors with $26 trillion in assets under management called on Group of Seven leaders on Monday to phase out the use of coal in power generation to help limit climate change, despite strong opposition from Washington.

Government plans to cut greenhouse gas emissions were too weak to limit warming as agreed by world leaders at a Paris summit in 2015, they wrote. U.S. President Donald Trump announced a year ago that he was pulling out of the pact.

“The global shift to clean energy is under way, but much more needs to be done by governments,” the group of 288 investors wrote in a statement before the G7 summit in Canada on June 8-9.

Signatories included Allianz Global Investors, Aviva Investors, DWS, HSBC Global Asset Management, Nomura Asset Management, Australian Super, HESTA and some major U.S. pension funds including CalPERS, it said.

As part of action to slow climate change, the investors called on governments to “phase out thermal coal power worldwide by set deadlines,” to phase out fossil fuel subsidies and to “put a meaningful price on carbon.”

The investors also urged governments to strengthen national plans for cutting greenhouse gas emissions by 2020 and to ensure that companies improve climate-related financial reporting.

Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change (IIGC), said it was the first time that such a broad group of investors had called for a phase-out of thermal coal, used in power generation.

“There is a lot more momentum in the investor community” to put pressure on governments, she told Reuters. The IIGC was among backers of the statement, delivered to G7 governments and to the United Nations.

G7 nations Canada, Britain, France and Italy are members of a “Powering Past Coal” alliance of almost 30 nations set up last year and which seeks to halt use of coal power by 2030. Japan, Germany and the United States are not members.

The investors wrote that countries and companies that implement the Paris climate agreement “will see significant economic benefits and attract increased investment.” U.S. gross domestic product was $18.6 trillion in 2016, World Bank data show.

Trump doubts scientific findings that heatwaves, downpours and rising sea levels are linked to man-made greenhouse gas emissions and wants to bolster the U.S. fossil fuel industry.

Worldwide, coal is now used to generate almost 40 percent of electricity.
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British civil servants have warned of shortages of food, fuel and medicines within weeks if the U.K. leaves the European Union without a trade deal, a newspaper reported Sunday.

The Sunday Times said government officials have modeled three potential scenarios for a “no deal” Brexit: mild, severe and “Armageddon.”

It said under the “severe” scenario, the English Channel ferry port of Dover would “collapse on day one” and supermarkets and hospitals would soon run short of supplies.

Britain wants to strike a deal on future trade relations with the EU before it officially leaves the bloc on March 29, 2019, but officials are also drawing up plans for negotiations ending without an agreement.

The U.K.’s Department for Exiting the European Union rejected the downbeat scenario, saying it was drawing up no-deal plans but was confident “none of this would come to pass.”

Britain and the EU are aiming to strike an overall Brexit agreement by October, so parliaments in other EU nations have time to ratify it before Britain leaves the bloc.

But British Prime Minister Theresa May’s Conservative government is split between ministers who favor a clean-break “hard Brexit,” that would leave Britain freer to strike new trade deals around the world, and those who want to keep the country closely aligned to the EU, Britain’s biggest trading partner.

 EU leaders are frustrated with what they see as a lack of firm proposals from the U.K. over how to resolve major issues around customs arrangements and the status of the border between Northern Ireland and the Republic of Ireland. That will be the U.K.’s only land border with the EU after Britain leaves the bloc.

Irish Deputy Prime Minister Simon Coveney said Saturday that the U.K. must produce “written proposals” for the border within two weeks, ahead of a June 28-29 EU summit.

 British Home Secretary Sajid Javid said Sunday that the British government would have “a good set of proposals” to submit to the bloc at its June meeting.

 
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China is warning the United States any trade and business agreements between the two countries will be void if President Donald Trump carries out his threats to impose tariff hikes and other trade measures.

The warning came after U.S. Commerce Secretary Wilbur Ross and Chinese Deputy Prime Minister Liu He ended a new round of talks Sunday in Beijing aimed at settling a simmering trade dispute, in which Beijing pledged to buy more American products to narrow its trade surplus with the United States.  The Chinese trade surplus reached $375 billion last year.

No joint statement was issued and neither side released details.

“Our meetings so far have been friendly and frank,” Ross said at the start of the talks, “and covered some useful topics about specific export items” China might buy.

Chinese envoys had promised after the last high-level meeting in Washington in mid-May to buy more American farm goods and energy products.

Ross was accompanied by agricultural, treasury and trade officials.

Liu’s delegation included China’s central bank governor and commerce minister.

There was no indication whether the talks also took up American complaints that Beijing steals from or pressures foreign companies.

Trump is threatening to hike duties on up to $150 billion of Chinese imports, with Beijing vowing to retaliate in kind.

The White House renewed a threat last week to hike duties on $50 billion of Chinese technology-related goods in that dispute.

The state-run Chinese newspaper Global Times contended in an editorial that, “Tariffs and expanding exports – the United States can’t have both.  China-U.S. trade negotiations have to dig up the two sides’ greatest number of common interests, and cannot be tilted toward unilateral U.S. interests.”

While the U.S.-China trade and tariff disputes remain unresolved, Trump last week imposed new tariffs on steel and aluminum imports from the European Union, Canada and Mexico, angering three key U.S. allies who vowed to retaliate by imposing new duties on American goods.

 
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Britain will not sign a trade agreement with the United States that is not in the country’s best interests, Trade Minister Liam Fox said Saturday after European Union officials filed a complaint with the World Trade Organization over stiff U.S. tariffs on steel and aluminum imports.

“If we can’t come to an agreement that we believe is in the interests of the United Kingdom, then we wouldn’t be signing any trade agreement,” Fox said Saturday in an interview with BBC radio.

Fox’s comments came one day after European Union officials submitted a formal complaint to the WTO, the first in a series of retaliatory actions, including possible tariffs, against the U.S. Fox said the tariffs are “illegal” and that British Prime Minister Theresa May would raise the issue at the Group of Seven meeting next week in Canada.

Trans-Atlantic and North American trade tensions escalated when the U.S. imposed on Friday a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from the European Union, Canada and Mexico. The U.S. also negotiated quotas or volume limits on other countries, such as South Korea, Argentina, Australia and Brazil, instead of tariffs.

In a separate dispute, China is prepared to target billions of dollars in U.S. products, many of which come from America’s agricultural heartland, where Trump enjoys strong voter support.

Commerce Secretary Wilbur Ross arrived in Beijing Saturday in an attempt to avert an all-out trade war between the world’s two largest economies. On China’s target list are U.S. soybean farmers, who export about 60-percent of their soybeans to China.

A dairy farmer who also grows soybeans in the midwestern state of Nebraska, Ben Steffen, is angry about the U.S. tariffs “because it hits me in my pocketbook from multiple angles.”

California farmer Jeff Colombini, who grows walnuts, cherries and apples, is concerned about the financial damage a trade war could bring.

“With these tariffs, its going to make the product[s] too expensive for the consumers in Mexico and in Canada and in the EU,” he said. “I have 200 employees, and they depend on the success of this operation for their jobs and to feed and clothe their families.”

The imposition of the tariffs is also not popular with some members of Congress, including those from Trump’s own party, whose states are dependent on exports.

“Imposing steel and aluminum tariffs on our most important trading partners is the wrong approach and represents an abuse of authority intended only for national security purposes,” said Bob Corker of Tennessee, who is the chairman of the Senate Foreign Relations Committee.

“You don’t treat allies the same way you treat opponents,” Republican Senator Ben Sasse of Nebraska said on Twitter. “Blanket protectionism is a big part of why we had a Great Depression. ‘Make America Great Again’ shouldn’t mean ‘Make America 1929 Again.’”

Tennessee has three major auto assembly plants. Nebraska is a significant exporter of cattle, corn, soybeans and hogs.

Mexico said, in response, it will penalize U.S. imports, including pork bellies, apples, grapes, cheeses and flat steel.

“There’s a reason why” the countries are carefully selecting which American products to target in response, said William Reinsch, senior adviser at the Center for Strategic and International Studies.

“Most of bourbon is made in Kentucky, which is the state of the Senate majority leader. Harley Davidsons are made in Wisconsin, which is the state of the speaker of the House,” Reinsch told VOA News. “Usually when other countries retaliate, and the Chinese have done something similar, is they’re good at maximizing political pain by picking out products that are made in places where people are politically important.”

“Tariffs on steel and aluminum imports are a tax hike on Americans and will have damaging consequences for consumers, manufacturers and workers,” said Republican Orrin Hatch, who chairs the Senate’s finance committee and is a longtime advocate of breaking down trade barriers.

Expected higher prices for U.S. consumers on some products is only one side of the equation, said Ross, who noted that steel and aluminum makers in the U.S. are adding employment and opening facilities as a result of the U.S. government action.

“You can create a few jobs, however, you’re going to lose more in the process,” as consuming industries will be placed at a disadvantage of paying more for raw materials compared to their foreign competitors, Simon Lester, trade policy analyst at the libertarian Cato Institute, told VOA News.

 
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An anonymous bidder offered more than $3.3 million Friday for a private lunch with Warren Buffett, an amount just short of the record paid in 2016 and 2012 for the chance to pick the brain of the renowned investor and philanthropist.

An online auction that raises money for the Glide Foundation’s work to help the homeless in San Francisco ended Friday night on eBay with a winning bid of $3,300,100. The winner wished to remain anonymous.

Third highest price paid

The price was the third highest in the 18 years Buffett has offered the lunch. Winners paid $3,456,789 in 2012 and 2016, which remain the most expensive charity items ever sold on eBay.

Buffett has raised more than $26 million for the Glide Foundation through the annual auctions. Bidders continue to pay high prices for the chance to talk with Buffett, who leads Nebraska-based Berkshire Hathaway, and the event raises a significant part of Glide’s $20 million annual budget.

Buffett supports Glide because of the work the charity does to help people. His first wife, Susie, introduced him to Glide after she volunteered there.

“Glide really takes people who have hit rock bottom and helps bring them back. They’ve been doing it for decades,” Buffett said.

Glide provides meals, health care, job training, rehabilitation and housing support to the poor and homeless.

One topic off limits

Buffett has said he gets asked about a variety of topics during the lunch. The only subject that’s off limits is what Buffett might invest in next.

The winners of the lunch auction typically dine with Buffett at Smith and Wollensky steak house in New York City, which donates at least $10,000 to Glide each year to host the lunch.

Buffett’s company owns more than 90 companies including insurance, furniture, railroad, jewelry, utility and candy businesses. Berkshire Hathaway also has major investments in companies including Coca-Cola Co., Apple, American Express and Wells Fargo & Co.
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The U.S. economy added 223,000 jobs in May, sending the unemployment rate to an 18-year low of 3.8 percent. The Labor Department says hourly wages also grew, bumping average worker pay up 2.7 percent from this time last year. And yet, despite the improving job picture, economists say there may be dark clouds forming on the horizon. Mil Arcega reports.
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U.S. Commerce Secretary Wilbur Ross arrived in Beijing on Saturday for talks on China’s promise to buy more American goods after Washington revived tensions by renewing its threat of tariff hikes on Chinese high-tech exports.

The talks focus on adding details to China’s May 19 promise to narrow its politically volatile surplus in trade in goods with the United States, which reached a record $375.2 billion last year.

President Donald Trump threw the status of the talks into doubt this week by renewing a threat to hike tariffs on $50 billion of Chinese goods over complaints Beijing steals or pressures foreign companies to hand over technology.

Compromise on surplus

Private sector analysts say that while Beijing is willing to compromise on its trade surplus, it will resist changes that might threaten plans to transform China into a global technology competitor.

China has promised to “significantly increase” purchases of farm goods, energy and other products and services. Still, Beijing resisted pressure to commit to a specific target of narrowing its annual surplus with the United States by $200 billion.

Following Beijing’s announcement, U.S. Treasury Secretary Steven Mnuchin said the dispute was “on hold.” But the truce appeared to end with this week’s announcement that Washington was going ahead with tariff hikes on technology goods and also would impose curbs on Chinese investment and purchases of U.S. high-tech exports.

Technology competitor

The move reflects growing American concern about China’s status as a potential tech competitor and complaints Beijing improperly subsidizes its fledgling industries and shields them from competition.

Foreign governments and businesses cite strategic plans such as “Made in China 2025,” which calls for state-led efforts to create Chinese industry leaders in areas from robots to electric cars to computer chips.

“The U.S. focus on so-called industrially significant technologies heightens the risk of escalation between the two countries,” BMI Research said in a report. “Indeed, while China has shown itself willing to compromise in the area of trade deficit reduction, it will not take any actions which threaten its strategically important ‘Made in China 2025’ program.”

Trump also has threatened to raise tariffs on an additional $100 billion of Chinese goods, but gave no indication this week whether that would go ahead.

Earlier, China responded with a threat to retaliate with higher duties on a $50 billion list of American goods including soybeans, small aircraft, whiskey, electric vehicles and orange juice. It criticized Trump’s move this week and said it reserved the right to retaliate but avoided repeating its earlier threat.

Tariffs on Canada, Europe Mexico

Trade analysts warned Ross’s hand might be weakened by the Trump administration’s decision Thursday to go ahead with tariffs on steel and aluminum imports from Canada, Europe and Mexico.

That might alienate allies who share complaints about Chinese technology policy and a flood of low-priced steel, aluminum and other exports they say are the result of improper subsidies and hurt foreign competitors.
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Turkish Foreign Minister Mevlut Cavusoglu is scheduled to meet with U.S. Secretary of State Mike Pompeo in Washington on Monday amid souring relations between the NATO allies and trading partners over economic and other issues.

The talks come as Turkish sectors, such as the major steel industry, reel from the higher tariffs imposed by the U.S. administration on Turkey and other nations.

“Huge, huge effect, steel producers are desperate, the psychology is terrible among producers,” said Tayfun Senturk, a Turkey-based international steel trader. “For the last three months, there have been no new U.S. orders, and the U.S. is a major market for Turkish producers, especially in piping. If it continues for a few years, there will be closures.”

In March, President Donald Trump introduced 25 percent tariffs on steel from several primary producers. Turkey didn’t enjoy an exemption given to the European Union, Canada and Mexico that ended Friday.

“This is mainly a dispute with China and secondly the European Union. Why was Turkey targeted? I don’t understand,” Senturk said.

Turkey is the eighth-largest steel producer in the world and second only to Germany in Europe. Last year, Turkey was the sixth-largest exporter to the United States.

There are growing suspicions among Turkish steel producers that politics rather than economics is behind the steel tariffs.

“There have been steps by the steel industry to try to build an understanding with the USA. As far as I know, it is not progressing, because of political reasons,” steel trader Senturk said. “They [steel producers] are saying this would not have happened if the situation [between the U.S. and Turkey] was all right like it was 10 years ago.”

In addition to the manufacturing industry, Turkey’s financial sector could be next to feel the repercussions from strained U.S. relations. U.S. regulatory authorities are considering a significant fine against Turkish state-owned Halkbank after one of its senior officials was convicted in a New York court in January of violating U.S. sanctions against Iran.

“Everybody is expecting a huge fine against Halkbank, but this is a political decision,” political scientist Cengiz Aktar said. Analysts predict the fine could exceed the $9 billion imposed on France-based BNP Paribas bank for breaking U.S. sanctions on Iran.

The fallout of such a fine could be considerable given international investors’ concerns about the Turkish economy.

“If we see major sanctions on Turkey, politically driven ones, the pressure on the currency could be substantial,” said economist Inan Demir of Nomura International, a Japan-based financial holding company.

This year the Turkish lira has already fallen more than 20 percent.

Worse could still be in store for Turkey, analysts say. Washington’s withdrawal from the international-brokered nuclear deal with Tehran could put Ankara and Turkish business in a tight spot. Trump has announced the introduction of trade sanctions against Iran. The U.S. has also warned that companies in violation of the measures could become targets themselves.

Ankara appears unfazed by Washington’s warnings.

“It is an opportunity for Turkey,” said Turkish Economy Minister Nihat Zeybekci. “We will continue to have trade with Iran while complying with the U.N. resolutions on nuclear activities. We believe in this: The stronger Iran gets in this region, the stronger Turkey becomes as well.”

Analysts suggest Zeybekci’s combative stance could be just political rhetoric, given Turkey is in the midst of campaigning for general and presidential elections set for June 24. Taking a tough stand against Washington is seen to play well with the ruling AKP nationalist voting base.

Complying with U.S. sanctions on Iran, however, could come at a substantial cost for Ankara.

“Turkey is in a difficult position. We have to remember Iran is one of the main actors, along with Russia, providing oil and gas to Turkey,” said former senior Turkish diplomat Aydin Selcen, who served in Iraq and Washington.

“It will be difficult for Turkish banks and Turkish companies to do business in Iran, but it will be difficult to find an alternative for natural gas and oil from Iran. So Turkey will have to tread carefully,” he added.

The prosecution in Turkey of U.S. pastor Andrew Brunson on terrorism charges threatens further measures by Washington against Ankara.

“It’s a show trial taking place, and it has already hurt the bilateral relationship,” U.S. Ambassador-at-Large Sam Brownback said Wednesday in a press briefing. “I think there will be more items to follow … from the United States towards Turkey if they continue to hold him.”

Ankara says Brunson’s trial is a matter for the courts, but, analysts warn, as U.S.-Turkish relations continue souring, the economic price Ankara will pay is likely to rise.
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Some U.S. trading partners are vowing to retaliate against U.S interests over President Donald Trump’s decision to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from the European Union, Canada and Mexico beginning on Friday.
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Some U.S. trading partners are vowing to retaliate against U.S interests over President Donald Trump’s decision to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from the European Union, Canada and Mexico beginning on Friday.
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The United States is escalating trans-Atlantic and North American trade tensions, imposing a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from the European Union, Canada and Mexico that will go into effect on Friday.

The move is prompting immediate retaliatory tariffs from the Europeans – expected to target such iconic American products as Harley Davidson motorcycles and Levi’s jeans, as well as Kentucky bourbon and Tennessee whiskey.

“We look forward to continued negotiations, both with Canada and Mexico on the one hand, and with the European Commission on the other hand, because there are other issues that we also need to get resolved,” U.S. Commerce Secretary Wilbur Ross told reporters in a telephone briefing on Thursday.

“This is a bad day for world trade,” responded European Commission President Jean-Claude Juncker, who announced there is “no choice” but to proceed with a World Trade Organization dispute settlement case and additional duties on numerous U.S. imports.

“We will defend the EU’s interests, in full compliance with international trade law,” Juncker added.

U.S. President Donald Trump has said the tariffs are needed for national security, claiming current trade deals harm U.S. companies and cost America jobs.

The U.S. also negotiated voluntary export limits from South Korea, Argentina, Australia and Brazil, said the commerce secretary.

The U.S. also negotiated quotas or volume limits on other countries such as South Korea, Argentina, Australia and Brazil instead of tariffs, Ross told reporters.

Ross, in Paris, interviewed after the announcement on CNBC, brushed off retaliatory moves by Europe on $3 billion worth of American goods, saying “it’s a tiny, tiny fraction of one percent” of trade.

Ross, a banker known for restructuring failed companies prior to joining Trump’s Cabinet, also predicted America’s trading partners “will get over this in due course.”

“The United States is taking on the whole world in trade and it’s not going to go well,” predicted Simon Lester, trade policy analyst at the libertarian Cato Institute.

‘Not very cataclysmic’

The U.S. trade action has spooked investors, sending key U.S. stock indexes down in Thursday morning trading.

The drop is “not very cataclysmic in any event,” responded Ross in the CNBC interview.

Reacting to that comment, Lester told VOA News that while “we’re not talking about the end of the world, that’s true, but it’s still bad for the economy.”

Expected higher prices for U.S. consumers on some products is only one side of the equation, according to Ross, who noted that steel and aluminum makers in the United States are adding employment and opening facilities as a result of the U.S. government action.

“You can create a few jobs, however, you’re going to lose more in the process” as consuming industries will be placed at a disadvantage of paying more for raw materials compared to their foreign competitors, according to Lester.

“We are deeply disappointed that the U.S. has decided to apply tariffs to steel and aluminum imports from the EU on national security grounds,” according to a statement from the British government. “The UK and other European Union countries are close allies of the U.S. and should be permanently and fully exempted from the American measures on steel and aluminum.”

The Confederation of British Industry, representing 190,000 businesses in the United Kingdom, immediately appealed to the EU to “avoid any disproportionate escalation” by taking retaliatory actions.

‘No winners’

“There are no winners in a trade war, which will damage prosperity on both sides of the Atlantic,” said CBI International Director Ben Digby in a statement. “These tariffs could lead to a protectionist domino effect, damaging firms, employees and consumers in the USA, UK and many other trading partners.”

Prior to Ross’ announcement, Germany’s foreign minister, Heiko Maas, declared “protectionism and isolation against free trade mustn’t regain the upper hand.”  

Maas spoke at a news conference on Thursday alongside his Chinese counterpart Wang Yi, saying neither Berlin nor Beijing had an interest in “turning back the clocks when it comes to trade policy.”

Wang stressed the importance of the two countries’ common interests when it comes to finance and security policies and said China would continue to open its markets for its trade partners.

German’s Chancellor Angela Merkel, during a visit to Lisbon, Portugal, on Thursday said the 28-nation European Union has made plain to the United States that such tariffs are incompatible with World Trade Organization rules.

Trump, in March, announced the United States would impose such tariffs but he granted an exemptions that expire Friday to the EU and other U.S. allies.

France’s finance minister, Bruno Le Maire, who met Ross earlier on Thursday, says the U.S. shouldn’t see global trade like the Wild West or the “gunfight at the OK Corral.”

 
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