Month: April 2018

After weeks of railing against online shopping giant Amazon, President Donald Trump signed an executive order Thursday creating a task force to study the United States Postal System. In the surprise move, Trump said that USPS is on “an unsustainable financial path” and “must be restructured to prevent a taxpayer-funded bailout.” The task force will be assigned to study factors including its pricing in the package delivery market and will have 120 days to submit a report with recommendations. The order does not specifically mention Amazon or it owner, Jeff Bezos. But Trump has been criticizing the company for months, accusing it of not paying its fair share of taxes, harming the postal service, and putting brick-and-mortar stores out of business. Trump has also gone after Bezos personally and accused The Washington Post, which he owns, of being Amazon’s “chief lobbyist.” The U.S. Postal Service has indeed lost money for years, but package delivery has actually been a bright spot for the service. Boosted by e-commerce, the Postal Service has enjoyed double-digit revenue increases from delivering packages. That just hasn’t been enough to offset pension and health care costs as well as declines in first-class letters and marketing mail, which together make up more than two-thirds of postal revenue. Still, Trump’s claim the service could be charging more may not be entirely far-fetched. A 2017 analysis by Citigroup concluded that the Postal Service, which does not use taxpayer money for its operations, was charging below market rates as a whole …

China’s exports growth unexpectedly fell in March, raising questions about the health of one of the economy’s key growth drivers even as trade tensions rapidly escalate with the United States. March import growth beat expectations, however, suggesting its domestic demand may still be solid enough to cushion the blow from any trade shocks. That left China with a rare trade deficit for the month, also the first drop since last February. The latest readings on the health of China’s trade sector follow weeks of tit-for-tat tariff threats by Washington and Beijing, sparked by U.S. frustration with China’s massive bilateral trade surplus and intellectual property policies, that have fueled fears of a global trade war. China’s March exports fell 2.7 percent from a year earlier, lagging analysts’ forecasts for a 10 percent increase, and down from a sharper-than-expected 44.5 percent jump in February, which economists believe was heavily distorted by seasonal factors. For the first quarter as a whole, exports still grew a hefty 14.1 percent. Stronger currency Some analysts had expected a pullback in March exports following an unusually strong start to the year, when firms stepped up shipments before the long Lunar New Year holiday in mid-February. That scenario did not alter their view that global demand remains robust. But a stronger currency could also be starting to erode Chinese exporters’ competitiveness. The yuan appreciated around 3.7 percent against the U.S. dollar in the first quarter this year, on top of a 6.6 percent gain last year. No hard …

U.S. President Donald Trump said Thursday that his administration might  allow the sale of gasoline containing 15 percent ethanol year-round, which could help farmers by firing up corn demand but faces opposition from oil companies. The proposal marked the latest move by the Trump administration to navigate the rival oil and corn constituencies as they clash over the nation’s biofuels policy. Oil refiners say the Renewable Fuel Standard requiring them to add biofuels into gasoline is costly and displaces petroleum, while the farm sector says the law provides critical support to growers. The Environmental Protection Agency currently bans the higher ethanol blend, called E15, during summer because of concerns it contributes to smog on hot days — a worry biofuels advocates say is unfounded. Gasoline typically contains just 10 percent ethanol. “We’re going to be going probably, probably to 15, and we’re going to be going to a 12-month period,” Trump told reporters during a White House meeting. “We’re going to work out something during the transition period, which is not easy, very complicated.” Earlier Thursday, EPA spokeswoman Liz Bowman said the agency had been “assessing the legal validity of granting an E15 waiver since last summer” and was awaiting an outcome from discussions with the White House, the Department of Agriculture and Congress before making any final decisions. Monte Shaw, executive director of the Iowa Renewable Fuels Association, said the proposed shift to year-round E15 sales would be “very exciting news.” “It would be a great morale boost for rural America, and more importantly a real demand boost if it can be moved forward quickly,” he said in an interview. Annual biofuels figure Under …

Japan has cautiously welcomed the news that U.S. President Donald Trump wants to rejoin the Trans-Pacific Partnership. “If this means that President Trump is correctly evaluating the significance and effects of the TPP, it’s something we want to welcome,” Toshimitsu Motegi, Japan’s trade minister, said Friday. He added that the trade pact is “as delicate as something made of glass,” making it difficult to renegotiate any part of the agreement. Trump ordered his top economic and trade advisers Thursday to look into rejoining the Pacific-rim trade pact that he abandoned last year three days after taking power. Late Thursday night the president tweeted about TPP: Farm-state lawmakers said after a White House meeting on agricultural trade that Trump told his economic adviser, Larry Kudlow, and U.S. Trade Representative Robert Lighthizer to weigh the benefits of re-entering the Trans-Pacific Partnership — a deal struck by the Obama administration. Nebraska Senator Ben Sasse, a Republican critic of Trump’s trade policies, said that at one point in the meeting, the president turned to Kudlow and said, “Larry, go get it done.” Sasse represents a Midwestern farm state. He called Trump’s change of mind on the Pacific trade deal “good news.” He said the president has consistently “reaffirmed the idea that TPP would be easier for us to join now.” Early Friday, Japanese Finance Minister Taro Aso said he would welcome a move by the United States to rejoin the TPP.  Aso, speaking to reporters after a cabinet meeting, also said that he expected Prime …

The World Trade Organization predicts continued trade growth this year, though it warns that tensions and “tit-for-tat” retaliatory measures, notably between the U.S. and China, could compromise those projections. WTO Director-General Roberto Azevedo laid out the trade body’s predictions at a news conference Thursday amid concerns about a trade war over U.S. President Donald Trump’s planned tariffs on Chinese and other goods and Beijing’s retaliation.   As it stands, the forecast is for 4.4 percent growth in merchandise trade volumes in 2018, easing to 4 percent next year. That’s down from 4.7 percent in 2017.   The WTO is pointing to “broadly positive signs” in world trade but says they face headwinds from “a rising tide of anti-trade sentiment and the increased willingness of governments to employ restrictive trade measures.” …

The European Union executive is seeking to protect farmers by imposing fines on retailers and supermarket chains using unfair trade practices.   EU Farm Commissioner Phil Hogan said Thursday the plan was “about giving voice to the voiceless” as small-scale farmers across the EU have struggled to eke out a living when faced with the negotiating power of major food conglomerates. He didn’t give details. In recent years milk farmers and others have complained about having to sell below production costs, threatening their livelihood. The EU Commission said farmers are also faced with late payments, last-minute cancellations and unilateral contract changes.   The Copa-Cogeca farm union said that of the value of farm products, farmers now only get 21 percent, with the rest going to processors and retailers.     …

The sweaty mechanic tossed aside the used jeans one by one, digging deep through the pile of secondhand clothes that are at the center of another, if little-noticed, Trump administration trade war.   The used clothes cast off by Americans and sold in bulk in African nations, a multimillion-dollar business, have been blamed in part for undermining local textile industries. Now Rwanda has taken action, raising tariffs on the clothing in defiance of U.S. pressure. In response, the U.S. says it will suspend duty-free status for clothing manufactured in Rwanda under the trade program known as the African Growth and Opportunity Act.   President Donald Trump’s decision has not gone down well in Rwanda, a small, largely impoverished East African nation still trying to heal the scars of genocide 24 years ago. Similar U.S. action against neighboring countries could follow; Uganda and Tanzania have pledged to raise tariffs and phase in a ban on used clothing imports by 2019.   The action against Rwanda comes just weeks after Trump met Rwandan President Paul Kagame at the World Economic Forum and proclaimed him a “friend,” as Trump sought to calm anger in Africa over his reported vulgar comments about the continent. Kagame currently chairs the African Union, where heads of state just days after the meeting drafted, but decided against issuing, a blistering statement on Trump.   The U.S. trade action is finding a mixed response in Africa, with some upset at Trump again, while others defend the secondhand clothing as …

Thousands of megawatts of wind and solar energy contracts in the Mekong region of Southeast Asia have been signed, seriously challenging the financial viability of major hydropower projects on the river, an energy expert told a water conference last week. Buoyed by a recent Thai government decision to delay a power purchase deal with a major mainstream Mekong dam, clean-energy proponents and economists told the third Mekong River Commission summit that the regional energy market was on the cusp of a technological revolution. Brian Eyler, director of the Southeast Asia Program at the Stimson Center, a nonprofit in Washington dedicated to enhancing global peace and security, said 6,000 megawatts’ worth of wind and solar contracts had been signed in Cambodia, Vietnam, Thailand and Laos in the last six months. He said that in January 2017, he and his colleagues had suggested that more solar and wind energy projects be incorporated into Cambodia’s power development plan, the prospect of which had been “basically off the table” at the time. “In a year’s time, Cambodia has entirely restructured its energy sector” to emphasize solar projects in the country, “and if Cambodia’s doing it, you can bet that the other countries are doing it as well.” Two gigawatts of wind and solar projects were announced in Vietnam in February and March alone according to a spreadsheet provided by the Stimson Center. Hyunjung Lee, senior energy economist at the Asian Development Bank’s Southeast Asia Energy Division, said technologies such as wind and solar power were …

The increasing trade tensions between the United States and China has rattled farmers in the American heartland, the place where many of the products on which China seeks to impose a tariff are produced.  As VOA’s Kane Farabaugh reports, those farmers, once supportive of President Trump, are increasingly wary about his stance on global trade, and ultimately, how it will impact their bottom line. …

The head of the International Monetary Fund is warning that the global trading system is in danger of being “torn apart.”   In a speech prepared for delivery in Hong Kong Wednesday, Christine Lagarde urged nations to “steer clear of protectionism.”  That may be a reference to Washington’s recent moves to slap large tariffs on imported steel and other products.  China responded by raising tariffs on U.S.-made products, beginning a cycle that some experts warn could escalate further into a trade war. Lagarde says the benefits of trade far outweigh the costs and has credited unfettered global trade for drastically reducing the number of people around the world living in extreme poverty.  Lagarde and other experts say everyone loses in trade wars, particularly the 800 million people around the world who, the World Bank says, remain mired in poverty. While Lagarde’s comments implied criticism of the Trump administration, she also urged nations, presumably including China, to do a better job of protecting intellectual property. President Trump and many foreign businesses operating in China have complained that they are pressured to turn over technology secrets to Chinese partner companies in exchange for access to the huge Chinese market.  She also urged economic reforms, including ending policies that unfairly favor state-owned enterprises. Lagarde says the global economy is experiencing a strong upswing, and says now is the time for nations to make economic reforms such as opening up the service sector in developing economies, and doing more to use digital technology to …