Month: March 2018

U.S. Federal Reserve officials voted to raise the central bank’s benchmark interest rate by a quarter of a percent this week, signaling perhaps three or more rate hikes this year as economic conditions improve. But as Mil Arcega reports, rising rates mean higher borrowing costs for consumers, many who have yet to see a significant increase in wages. …

U.S. President Donald Trump is scheduled to sign a memorandum Thursday “targeting China’s economic aggression” in a move that could escalate into a full-scale trade war between the world’s two largest economies. The U.S. trade actions come partly in response to the theft and improper transfer of American technology to Chinese companies. The Chinese commerce ministry said ahead of the meeting that China opposes unilateral U.S. trade actions and hopes the two countries can find a mutually beneficial solution through dialogue. U.S. officials spoke to reporters Wednesday about their monthslong investigation under Section 301 of the Trade Act of 1974 of Beijing’s trade practices. China has long been considered by many in the international community to have contravened fundamental principles of global trade, despite joining the World Trade Organization in 2001.   There have been a “number of specific failings by China to live up to its WTO obligations,” said an official of the U.S. Trade Representative in a Wednesday background briefing for reporters.   The briefing and other comments not for attribution by officials are seen as clear signals the administration, in response to an Aug. 14 memo by Trump, intends to use the Section 301 trade tool. The last time it was wielded was by the Clinton administration against Japan to pry open that country’s automotive sector. ‘Ripping off’ China has been “ripping off” the United States, Trump has emphasized numerous times in public remarks during which he has harshly criticized his predecessors for not doing anything about …

Top officials of the U.S. central bank raised the key interest rate slightly Wednesday, amid strong job gains and moderate economic growth.  The rate is one-quarter of a percentage point higher, putting it in a range between 1.5 and 1.75 percent.  Federal Reserve officials said that is still “accommodative,” meaning it is still fairly low, compared to the average rate during the past few decades. Fed officials said they will probably raise interest rates a few more times this year if the economy continues along its current path. The Federal Reserve tries to manage the economy to maximize employment and keep prices stable.  The bank slashed interest rates nearly to zero during the financial crisis in 2008 to stimulate economic growth. However, economists say keeping rates too low for too long could push inflation up fast enough to damage the economy.  While inflation is below the 2 percent rate the Fed thinks is best for the economy, the bank said inflation seems likely to rise a bit.   …

Handshakes, smiles and jubilation accompanied the long-awaited launch of the African Continental Free Trade Area on Wednesday in Rwanda’s capital, Kigali.  The trade bloc has been in negotiation since 2012, when the African Union first decided on a continent-wide plan. It aims to create a single market for goods and services, allow free movement of business and investments, and establish a Customs Union to regulate tariffs. As part of a related action plan, the African Union aims to double intra-African trade by 2022.  “Africa is one continent that does not trade with itself like the rest of the world,” said Erastus Mwencha, former deputy chairperson of the African Union Commission and former secretary general of the Common Market for Eastern and Southern Africa (COMESA). “And, because of that, the huge demographic dividend of the continent is not of any advantage to the continent because Africa has not taken advantage of its market size, which is 1.3 billion people plus a GDP of over 2.3 trillion [U.S. dollars].”  But the Kigali launch — while significant — is largely symbolic, as many challenges remain before the trade deal can be implemented.  Gerrishon Ikiara, associate director of the Institute of Diplomacy and International Studies at the University of Nairobi, notes that Africa faces many political, social and economic barriers to integration.  “There is also often a bit of conflict between the French-speaking Africa, the English-speaking Africa, the Maghreb Arab part of Africa in North Africa. Then you have a few dominant economies like …

The United States will consider re-entry to the Trans-Pacific Partnership once Washington accomplishes its goals on other trading relationships, U.S. Treasury Secretary Steven Mnuchin said Wednesday while on an official visit to Chile. Trans-Pacific Partnership is aimed at cutting trade barriers in some of the fastest-growing economies of the Asia-Pacific region. The original 12-member deal was thrown into limbo early last year when President Donald Trump withdrew the United States from it, citing concerns about protecting U.S. jobs. “Our focus at the moment is, obviously, we’re working on renegotiation of NAFTA, we’re very focused on our trading relationship with China, which is way too much in one direction. Our markets are open to them, their markets are not open to us, on the same basis,” Mnuchin said at a news conference. He was in Chile following a two-day meeting of officials from the world’s 20 biggest economies in neighboring Argentina on Monday and Tuesday. “But as we accomplish our goals on these other trading relationships, this [TPP] is definitely something that we will consider and Chile will be a big partner of ours in that at the right time,” Mnuchin said. Chile Finance Minister Felipe Larrain said the South American nation would welcome U.S. participation in the partnership. “We would very much like to have the United States back in the TPP,” he said. Venezuelan sanctions Addressing U.S. sanctions against Venezuela, Mnuchin said they are directed not at the population but at individuals who are taking resources from the Venezuelan …

Top officials of the U.S. central bank are expected to raise the key interest rate slightly Wednesday at the end of two days of private meetings and debate. Economists surveyed by news organizations say the rate will probably go up one quarter of a percentage point, to a range between 1.5 and 1.75 percent.That is still fairly low compared to the average rate during the past few decades. The Federal Reserve tries to manage the economy to maximize employment and keep prices stable. The Fed slashed interest rates nearly to zero during the financial crisis to simulate economic growth.But economists say keeping rates too low for too long could over stimulate the economy and push inflation up fast enough to damage the economy. With the economy recovering from the economic crisis, unemployment at its lowest point in years, and inflation low, but rising, the Fed governors are nearly certain to raise the key interest rate Wednesday.Investors and economists are watching closely for word on how soon and how high future rate hikes will come. They will get some insight late Wednesday when the Fed publishes updated economic assessments of growth, employment, and inflation. The new chair of the Federal Reserve, Jerome Powell, will also meet with journalists to explain the Fed’s actions.This is Powell’s first such news conference. …

Insurance broker Paul Marshall can count on his phone ringing in the aftermath of a school shooting. Since the Feb. 14 shooting at a Florida high school, where 17 people were killed and more than a dozen injured, seven South Florida school districts have bought $3 million worth of “active shooter” coverage that Marshall’s Ohio-based employer, the McGowan Companies, began selling in 2016. “Every day we get a phone call from another school district,” Marshall said. The insurance, which is backed by XL Catlin, covers expenses tied to shootings in places such as office buildings and concert halls, and is increasingly gaining traction with schools. It pays up to $250,000 per shooting victim, for death and serious injuries, such as blindness or total disability, with additional medical coverage depending on how much insurance a district buys. There is no detailed survey of insurance coverage at U.S. schools, but insurers say it is only within about the past year that more schools have been seeking “active shooter” and “active assailant” policies. School districts often find that their general liability policies fall short on coverage for the cascade of bills that follow a violent incident like the mass shooting last month in Parkland, Florida, insurers and school administrators say. The costs can include victim lawsuits, building repairs, legal fees, medical expenses and trauma counseling, as well as media consultants, accountants to handle charitable contributions, and even reconstruction of buildings where bloodshed occurred. “This is a very sort of unique and specific issue …

When Commerce Secretary Wilbur Ross held up a can of Campbell’s soup in a CNBC interview to make the case that the Trump administration’s steel and aluminum tariffs were “no big deal,” the canning industry begged to disagree — and they were hardly alone. President Donald Trump’s strong-armed trade policies have set off an intense scramble among industry groups, companies and foreign countries seeking exemptions from tariffs of 25 percent on steel imports and 10 percent on imported aluminum. The push comes ahead of a round of new penalties expected to be slapped on China by week’s end. The Can Manufacturers Institute, which represents 22,000 workers at manufacturers across the nation, estimates the steel and aluminum tariffs will harm their industry and consumers alike. The institute says there are 119 billion cans made in the U.S., meaning a 1 cent tariff would lead to a $1.1 billion tax on consumers and businesses. “Secretary Ross has made cans a poster child to dispel concerns about the costs of tariffs,” said Robert Budway, the institute’s president. He said his organization was concerned Ross “is already predisposed to deny our petitions.” Trump’s one-two punch on trade has set in motion a deluge of requests to the Commerce Department for exclusions for certain steel and aluminum products. Foreign countries, meanwhile, complain the U.S. trade representative’s office has not provided specific guidance on gaining exemptions before the steel and aluminum tariffs are implemented on Friday. Countries in the dark “Typically, the countries are determined before tariffs …

The world’s financial leaders rejected protectionism Tuesday and urged “further dialogue” on trade, but failed to blunt the threat of a trade war days before U.S. metals tariffs take effect and Washington is to announce measures against China. Finance ministers and central bankers of the world’s 20 biggest economies, which represent 75 percent of world trade and 85 percent of global gross domestic product, discussed trade disruptions as a risk to growth at a two-day meeting. But after talks described by participants as “polite” and mainly consisting of read-out statements with no debate, the Group of 20 agreed only to stand by an ambiguous declaration on trade from 2017 and “recognize” the need for more “dialogue and actions.” “We reaffirm the conclusions of our leaders on trade at the Hamburg Summit and recognize the need for further dialogue and actions. We are working to strengthen contribution of trade to our economies,” the G-20 ministers’ final statement said. But the declaration did little to dispel concern about a global trade war as the U.S. tariffs of 25 percent on imported steel and 10 percent on aluminum take effect Friday. Tariffs on Chinese products Two officials briefed on the matter said U.S. President Donald Trump would also unveil tariffs on up to $60 billion in Chinese technology and telecoms products by Friday, a move stemming from Beijing’s intellectual property practices. The 2017 Hamburg declaration, which the financial leaders referred to on Tuesday, said G-20 countries would “continue to fight protectionism, including all unfair …

President Donald Trump will reap a huge budget increase for the military while Democrats cement wins on infrastructure and other domestic programs that they failed to get under President Barack Obama if lawmakers can agree on a $1.3 trillion governmentwide spending bill before a deadline this week.  Battles over budget priorities in the huge bill were essentially settled Tuesday, but a scaled-back plan for Trump’s border wall and a fight over a tunnel under the Hudson River still held up a final agreement.  Republican leaders were hopeful a deal could be announced as early as Tuesday evening, allowing for a House vote Thursday. If a bill doesn’t pass Congress by midnight Friday, the government will shut down for a third time this year.  The measure on the table would provide major funding increases for the Pentagon — $80 billion over current limits — bringing the military budget to $700 billion and giving GOP defense hawks a long-sought victory.  “We made a promise to the country that we would rebuild our military. Aging equipment, personnel shortages, training lapses, maintenance lapses — all of this has cost us,” said House Speaker Paul Ryan, a Wisconsin Republican. “With this week’s critical funding bill we will begin to reverse that damage.” Domestic accounts would get a generous 10 percent increase on average as well, awarding Democrats the sort of spending increases they sought but never secured during the Obama administration. Opioid problem Democrats touted billions to fight the nation’s opioid addiction epidemic. More than $2 …

Dozens of complaints of sexual harassment on the job are arriving nearly every day at the Time’s Up campaign, showing that decades of battling workplace misconduct have failed, its legal head said Tuesday. Reports of harassment have come from employees in more than 60 industries, from steel workers and prison guards to hotel maids, said Tina Tchen, head of the legal defense fund for the Time’s Up effort to fight workplace sexual harassment. Time’s Up was launched at the start of the year by hundreds of actresses, writers and others in the entertainment industry to battle sexual harassment in workplaces nationwide. It came on the heels of the #MeToo movement, an outpouring of women recounting sexual harassment and assault that followed accusations of sexual assault made public last fall against Hollywood producer Harvey Weinstein. Since January 1, Time’s Up has received about 1,900 requests for legal help, mostly from women, Tchen said at a women’s conference held by Catalyst, a nonprofit group. Time’s Up has raised $21 million in the same time period, she said. Many women faced with harassment are low-wage workers with no means to hire lawyers, she said. “There has been a whole segment of the workforce that hasn’t really had representation and, as a result, nobody has been holding people accountable,” Tchen told Reuters on the sidelines of the conference. “The response both on the fundraising side and the requests for assistance have surprised us and overwhelmed us,” she said. Tchen worked as an assistant to …

Mexican leftist presidential front-runner Andres Manuel Lopez Obrador said on Tuesday that if he wins office former World Trade Organization economist Jesus Seade would lead NAFTA negotiations with the United States and Canada. Mexico elects a new president on July 1 and Lopez Obrador is leading by double-digits in most polls. Despite being a longtime skeptic of the North American Free Trade Agreement, Lopez Obrador now says he wants to retain the pact, which is a lynchpin of Mexico’s export-led economy. Perfect man for the job In a short video posted online, Lopez Obrador said Seade, an Oxford University-educated academic, was the perfect man for the job, and reiterated he did not want a deal to be struck before the upcoming election. “Hopefully nothing is signed until the after the election … so there is no mistake in signing something that hurts us, that affects national producers, that doesn’t include the issue of migration, or the acceptance of ignominies like the construction of a wall,” Lopez Obrador said. Seade is currently a professor and the associate vice president for global affairs at the Chinese University of Hong Kong in Shenzhen, according to his LinkedIn page. In addition to his time at the WTO, he has also worked at the World Bank, the World Trade Organization and the International Monetary Fund, according to the university website and his LinkedIn profile. Tuesday’s announcement came just days after senior Lopez Obrador adviser Yeidckol Polevnsky, the president of his National Regeneration Movement political party, …