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.”

 
…

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.
…

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.

 
…

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.
…

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.

 
…

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.

 
…

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.

 
…

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.
…