Month: June 2017

When Wal-Mart Stores Inc. bought online retailer Jet.com for $3 billion last year, it marked a crucial moment — the world’s largest brick-and-mortar retailer, after years of ceding e-commerce leadership to arch rival Amazon, intended to compete. On Friday, Amazon.com Inc. countered. With its $14 billion purchase of grocery chain Whole Foods Market Inc., the largest e-commerce company announced its intention to take on Wal-Mart in the brick-and-mortar world. The two deals make it clear that the lines that divided traditional retail from e-commerce are disappearing and sector dominance will no longer be bound by e-commerce or brick-and-mortar,  but by who is better at both. Amazon’s purchase of Whole Foods also brings disruption to the $700 billion U.S. grocery sector, a traditional area of retailing that stands on the precipice of a ferocious price war. German discounters Aldi and Lidl are battling Wal-Mart, which controls 22 percent of the U.S. grocery market, with each vowing to undercut whatever price the others offer. The stakes are highest for Wal-Mart. Amazon’s move aims at the heart of the Bentonville, Arkansas-based retail giant’s business — groceries, which account for 56 percent of Wal-Mart’s $486 billion in revenue for the year ending Jan. 31. With the deal, Whole Foods’ more than 460 stores become a test bed with which Amazon can learn how to compete with Wal-Mart’s 4,700 stores with a large grocery offering that are also within 10 miles (16 km) of 90 percent of the U.S. population. Amazon is expected to lower Whole Foods’ …

A key part of House Republicans’ plan to overhaul the way corporations pay taxes is on life support, leaving lawmakers scrambling to save one of President Donald Trump’s biggest priorities and increasing the chances the GOP will simply pass a tax cut instead of overhauling the tax code. A proposed tax on imports is central to the GOP plan to lower the overall corporate tax rate. It would generate about $1 trillion over the next decade to finance the lower rates without adding to the deficit. It would also provide strong incentives for U.S.-based companies to keep their operations in the United States and perhaps persuade companies to move overseas operations to the U.S. But the tax faces strong opposition from retailers, automakers and the oil industry, and a growing number of congressional Republicans have come out against it. They worry that it will increase the cost of imports, raising consumer prices. Import tax Majority Leader Mitch McConnell, R-Ky., says there probably aren’t enough votes to pass the import tax in the Senate — not a single Republican senator has publicly endorsed it. And a powerful group of House conservatives says it’s time to dump the idea. “The sooner we acknowledge that and get on with a plan that actually works and actually can build consensus, the better off we will be,” said Rep. Mark Meadows, R-N.C., chairman of the conservative Freedom Caucus. Even one of the biggest backers of the new tax says he is open to other ideas. …

U.S. farm groups criticized President Donald Trump’s decision to retreat from his predecessor’s opening toward Cuba, saying it could derail huge increases in farm exports that totaled $221 million last year. A trade delegation from Minnesota, one of the largest U.S. agriculture states, vowed to carry on with its planned visit to Cuba next week.  “We’re going to continue to beat the drum and let them (the Trump administration) know that trade is good for agriculture,” said Kevin Paap, a farmer in the delegation. Trump signed a presidential directive Friday rolling back parts of former President Barack Obama’s opening to the Communist-ruled country after a 2014 diplomatic breakthrough between the two former Cold War foes. Farm groups saw the move as a step backward in what had been an improving trade relationship between the two countries, which are 90 miles (145 kms) apart, even though agriculture is not directly targeted. U.S. law exempts food from a decades-old embargo on U.S. trade with Cuba, but cumbersome rules on how transactions were executed have made deals difficult and costly. Since Obama’s detente, substantial headway has been made with shipments of U.S. corn and soybeans to Cuba soaring 420 percent in 2016 from a year earlier to 268,360 tons, U.S. Department of Agriculture data shows. Through the first four months of 2017, total shipments of U.S. grain and soy were 142,860 ton, up from 49,090 tons during the same period of 2016. While the quantities are dwarfed by total U.S. exports — nearly …

The key to success for ride-hailing providers like Uber is keeping drivers happy so they run their app, ensuring that enough cars respond to passenger demand. Estonia upstart Taxify is hoping to win over drivers and take on Uber Technologies Inc., the industry leader, by offering a larger share of the profit. Upstarts across the world, such as Lyft Inc. and Ola, are trying to catch Uber in the on-demand car-ride market by securing brand loyalty. But Uber has gathered critical mass and reached a valuation of more than $60 billion in eight years, despite a lack of profits. It has kept rivals at bay, partly by offering incentives to drivers to stay online. Taxify hopes to lure drivers Taxify, a minnow compared with Uber, cannot afford these perks but believes that by taking a smaller share of fares, 15-20 percent compared with Uber’s 20-25 percent, it can steal market share from its San Francisco-based rival. It also hopes that allowing drivers to take cash as well as credit card fares will also help it attract more passengers. “Taxify’s biggest advantage is the focus on good service by treating the drivers and riders better than other platforms. This means having higher pay for drivers, thanks to lower fees,” Chief Executive Markus Villig told Reuters at Taxify’s headquarters in Estonia. An Uber spokeswoman declined to comment but the company has said it had fare revenue of around $20 billion last year. Villig said Taxify generated fares worth “tens of millions of euros” …

Colombia on Friday reached a deal with public school teachers to end a 37-day strike that has kept millions of children out of classes, amid criticism the government has failed to keep its promise to improve public education after a peace deal with Marxist rebels. Union members participating in the nationwide walkout held near-daily marches, often blocking busy roads in the capital Bogota to demand more funding for school maintenance, supplies, student meals and salaries. President Juan Manuel Santos says he is focused on combating inequality and improving education now that a peace deal with the Revolutionary Armed Forces of Colombia (FARC), an end of more than 52 years of war, is under way. But educators said improvements are nowhere to be seen and their salaries, some as low as 1.8 million pesos per month (about $610), are not adequate compensation for work that requires extensive and expensive higher education.   “The government’s priority was always to reach an agreement that recognizes the work of teachers and the indispensable role of education in the development of the country and, at the same time, be responsible with public finances,” Education Minister Yaneth Ghia told reporters. The deal, among other things, will improve salaries through progressive bonus payments and allow bigger union involvement in how money is spent on education, she said. The powerful Colombian Federation of Education Workers (Fecode) union, which represents more than 350,000 teachers, agreed to the deal after meeting with Finance Minister Mauricio Cardenas. “The president said the …

McDonald’s Corp ended its 41-year-old sponsorship of the Olympic Games three years early, the International Olympic Committee said Friday, reflecting the U.S. fast-food giant’s focus on its core business as well as rising Olympics sponsorship costs and declining TV ratings. McDonald’s deal would have run through the Tokyo Olympics in 2020, and bowing out will likely to save it hundreds of million of dollars if it had continued into the next four-year Olympics cycle and beyond. McDonald’s has been trying to hold down costs as it invests in improving food quality, restaurant service and online ordering to woo back U.S. diners. Intense competition has gnawed away at sales. “We are reconsidering all aspects of our business and have made this decision in cooperation with the IOC to focus on different priorities,” said McDonald’s Global Chief Marketing Officer Silvia Lagnado. Sponsor since 1976 The company, first involved with the games in 1968 and a sponsor since 1976, was the Olympics’ food retail sponsor. Despite pulling out with immediate effect, McDonald’s will continue at next year’s Pyeongchang winter Olympics as a domestic sponsor. The company’s move may also reflect a rising view among consumer brands that exclusive Olympics sponsorship deals do not offer the marketing impact they once did. Some companies find it is much cheaper to work directly with athletes or specific countries than the IOC. Moreover, in a trend that began after the Beijing games in 2008, shrinking television audiences for the games could be diminishing the value of sponsors’ …

President Donald Trump’s Washington hotel saw almost $20 million in revenue during its first few months of operation, a period that coincided with his election and inauguration as the 45th president. His Mar-a-Lago resort in Florida, which he’s visited seven times as president, pulled in millions of dollars more than it had previously.   The new details were included in a financial disclosure that Trump voluntarily submitted Friday to the Office of Government Ethics, the first snapshot of the Trump Organization’s finances since its longtime leader became president.   Liabilities listed The disclosure forms also listed his personal liabilities of at least $315.6 million to German, U.S. and other lenders as of mid-2017, according to a federal financial disclosure form released late Friday by the U.S. Office of Government Ethics. Trump reported income of at least $594 million for 2016 and early 2017 and assets worth at least $1.4 billion. The 98-page disclosure document posted on the ethics office’s website showed liabilities for Trump of at least $130 million to Deutsche Bank Trust Company Americas, a unit of German-based Deutsche Bank AG. For example, Trump disclosed a liability to Deutsche exceeding $50 million for the Old Post Office, a landmark historic property in downtown Washington that he recently redeveloped into a hotel near the White House. Trump reported liabilities of at least $110 million to Ladder Capital, a commercial real estate lender with offices in New York, Los Angeles and Boca Raton, Florida. The largest component of Trump’s income was …

Nationwide strikes left commuters and tourists stranded across Italy on Friday, as transport unions called for better job conditions for workers and protested against privatization. Underground and overground trains, airplanes and buses were cancelled in a series of strikes over a 24-hour period starting on Thursday evening. Transport Minister Graziano Delrio said he had tried to negotiate with union leaders, but “sadly, it will be a black Friday.” People seeking shade from the summer sun at bus stops around Rome’s Termini train station, the city’s main transport hub, said it was unfair that the country’s powerful labour unions still resorted to striking. “I’ve waited for buses from three different lines for two hours and not even one has passed,” said Rome resident Franco Marini. “I find this way of protesting uncivil, in the 21st century there should be other ways to resolve labor issues.” Italy is due to spin off parts of the state railway company under a delayed privatization plan to cut its huge public debt. It is also looking for a buyer for struggling airline Alitalia, which was put under state management in May after making losses for years. “The doctrine of privatization has gradually, dangerously spread through this sector, creating economic instability, unemployment, fewer services, and worrying reductions in safety, and sending salaries and workers’ rights and protections into free fall,” the SGB union said in a statement. One of the special commissioners brought in to help salvage Alitalia said the strikes were “irresponsible” and “a gift …

Greek stocks rallied to two-year highs Friday after the government struck a deal with European creditors that means the country won’t face another brush with bankruptcy anytime soon. However, for austerity-weary Greeks, the deal does little to lift the pall from years of belt-tightening. After months of haggling that raised fears of another escalation in Greece’s nearly eight-year debt crisis, the 19-country eurozone agreed late Thursday to release a further 8.5 billion euros ($9.5 billion) from its current, third bailout after the Greek government delivered on an array of reforms. Getting the money was becoming increasingly urgent because Greece has a big debt repayment hump next month. Extending repayments With an eye to the longer term, the eurozone creditors also made clear they are ready to ease the burden of Greece’s debt repayments when its bailout program ends next year, possibly by extending repayments by up to 15 years. The International Monetary Fund may also get involved financially, with up to $2 billion, but only if and when it sees the specifics of the debt relief and agrees it can make Greece’s debt bearable. “I think that’s really the best agreement we’ve had for quite a while,” said Pierre Moscovici, the top economy official for the European Union, the 28-country bloc that includes the 19 states using the euro. Even though some details remain sketchy, investors breathed a sigh of relief if just on the mere fact that a deal wasn’t postponed, as has occurred so many times previously. The …

From the president of Mozambique to the US Secretary of Commerce, greater US economic engagement in Africa is the dominant theme at this year’s business summit organized by the Corporate Council on Africa. VOA Correspondent Mariama Diallo was there and reports. …

U.S. authorities moved on Thursday to seize a Picasso painting given to American movie star Leonardo DiCaprio and the rights to two Hollywood comedies, as they filed complaints to recover about $540 million they say was stolen from the 1Malaysia Development Berhad sovereign wealth fund. The U.S. Justice Department filing was the latest legal action tied to alleged money laundering at the fund set up by Malaysian Prime Minister Najib Razak in 2009 to promote economic development. In the complaints, the department alleges more than $4.5 billion was taken from 1MDB by high-level fund officials and their associates. “This money financed the lavish lifestyles of the alleged co-conspirators at the expense and detriment of the Malaysian people,” Kenneth Blanco, acting assistant attorney general, said in a statement. 1MDB could not be immediately reached for comment. Najib has denied taking money from 1MDB or any other entity for personal gain, after it was reported that investigators traced nearly $700 million to bank accounts that were allegedly in his name. The assets U.S. authorities are seeking to seize include the rights to Dumb and Dumber To, a 2014 comedy starring Jim Carrey, they allege was financed with tens of millions of dollars stolen from 1MDB, and the 2015 film Daddy’s Home, starring Will Ferrell. Last year, U.S. authorities moved to seize rights to the 2013 film The Wolf of Wall Street, which starred DiCaprio. The three films were produced by Red Granite, a company founded by Najib’s stepson Riza Aziz. Red Granite …

The White House lacks a unified plan to increase the government’s borrowing cap as a likely September deadline is drawing near, said Mick Mulvaney, director of the Office of Management and Budget. A failure by Congress to raise the debt ceiling could send dangerous shock waves through the global economy. The federal government could be at risk of defaulting on obligations such as interest payments on bonds as well as temporarily halting benefit programs. The White House budget director suggested in an interview Thursday with reporters that neither the Trump administration nor Capitol Hill lawmakers had set their terms for an agreement. “It’s fair to say we haven’t settled on a final way to address the debt ceiling any more than the Hill has,” Mulvaney said. The former South Carolina congressman added that none of this was necessarily “unusual.” Possible extension Under the current borrowing restrictions, the government has already been taking extraordinary measures and will likely be unable to pay its bills at some point in September. But Congress still has a recess scheduled in August that could create time pressures. Private analysts say the debt ceiling deadline could be extended into October. Mulvaney said he would like to see the debt ceiling raised in July. But Trump administration officials still have yet to resolve internal differences on the best strategy to increase the legal cap on government debt, which already exceeds $19.8 trillion. Mulvaney suggested he would like to have any increase in the borrowing authority be attached …

American tourists strolling the ample squares and narrow streets of colonial Havana may not know it, but from novelist Ernest Hemingway’s famed Floridita bar to Sloppy Joe’s eatery, they are probably patronizing businesses owned by Cuba’s military. It is that lucrative line of business that President Donald Trump will target when he rolls out his new Cuba policy Friday in Miami, the heart of the country’s hard-line exile community, according to U.S. officials who have seen a draft presidential memorandum. Trump will significantly restrict U.S. companies from doing business with some military-linked enterprises, the officials said. “Any ban on using military-owned tourism facilities would make it very difficult to bring groups larger than seven people, because for logistical reasons you need to work with the government,” said Collin Laverty, president of Cuba Educational Travel. The number of Americans traveling to Cuba, mostly in large groups because of U.S. regulations, has nearly tripled in recent years and was expected to reach around 400,000 in 2017, according to U.S. travel agencies. Trump’s expected limits on U.S. business deals will target the Armed Forces Business Enterprises Group (GAESA), a conglomerate involved in all sectors of the economy that is led by General Luis Alberto Rodriguez, reportedly President Raul Castro’s son-in-law. That is bad news for the pro-engagement U.S. politicians and hundreds of businesses that flocked to Cuba in the last few years in search of new opportunities. Lone hotel deal The only hotel deal struck to date may prove the last for now, …

Foreign fishing in Indonesian waters has long been a concern for the government, for which it has recently taken a literally explosive approach: blowing up illicit fishing boats. But the country’s wildly popular Minister of Marine Affairs lobbied the United Nations last week to declare illegal, unreported and unregulated fishing (IUUF) an organized crime, signaling growing frustration and a new approach from Jakarta. That said, even if the U.N. takes this step, Indonesia faces an uphill battle in protecting its fisheries. As the world’s largest archipelagic nation, it has somewhere between 15,000 and 17,000 islands and many kilometers of unsecured coastline. President Joko “Jokowi” Widodo created a task force to address illegal fishing in October 2015, which reports directly to him and gives the Navy, the National Police and the Maritime Security Agency wide jurisdiction to deter illegal fishing by any means necessary. But the fleet and law enforcement personnel are still small given the scale of the problem, which costs Indonesia, by one estimate, $3 billion a year. Surprisingly empowered task force Task forces, or “Satgas” (satuan tugas in Bahasa Indonesia) are almost a punchline in Indonesian governance because they are created for a wide variety of issues and often with unclear mandates. But the fishing task force feels different, according to Mas Achmad Santosa, head of the IUUF Fisheries Task Force. “This is the first time for Indonesians that the president has set up a task force and it actually works well,” Santosa told VOA. “Every element needed …