Month: July 2018

European businesses are unsettled as they watch the U.S. and China collide over trade. And for good reason: the nascent global trade war could represent the biggest single threat to the economic upswing that has helped the region get past its financial crisis. In theory, some European companies could benefit, jumping into market niches if Chinese businesses are kept out of the U.S. market. But that would only be a few companies or sectors. When your entire economy is heavily dependent on trade, an overall slowdown in global commerce caused by tit-for-tat import taxes provokes fear and undermines confidence. And that’s just what’s happening in Europe. By one measure, business confidence has fallen in six of the past seven months in Germany, where exports are almost half of annual economic output. “It’s worth all our efforts to defuse this conflict, so it doesn’t become a war,” German Chancellor Angela Merkel said Wednesday. The U.S. is due to put tariffs on $34 billion worth of Chinese goods on Friday. The Chinese will respond with tariffs on an equivalent value of U.S. products such as soybeans, seafood and crude oil. Amid all this, Europe has its own trade dispute with the U.S. After the U.S. put tariffs on steel and aluminum from many allies, including the European Union, the 28-country bloc responded with import taxes on some $3.25 billion of U.S. goods. The Trump administration is also studying the option of putting tariffs on cars, which would significantly escalate the confrontation. The …

China is putting pressure on the European Union to issue a strong joint statement against President Donald Trump’s trade policies at a summit this month, but it’s facing resistance, European officials said. In meetings in Brussels, Berlin and Beijing, senior Chinese officials, including Vice Premier Liu He and the Chinese government’s top diplomat, State Councillor Wang Yi, have proposed an alliance between the two economic powers and offered to open more of the Chinese market in a gesture of goodwill. One proposal has been for China and the European Union to launch joint action against the United States at the World Trade Organization. But the European Union, the world’s largest trading bloc, has rejected the idea of allying with Beijing against Washington, five EU officials and diplomats told Reuters, ahead of the Sino-European summit in Beijing on July 16-17. Instead, the summit is expected to produce a modest communique that affirms the commitment of both sides to the multilateral trading system and promises to set up a working group on modernizing the WTO, EU officials said. Liu has said privately that China is ready to set out for the first time what sectors it can open to European investment at the annual summit, expected to be attended by President Xi Jinping, China’s Premier Li Keqiang and top EU officials. Chinese state media have promoted the message that the EU is on China’s side, officials said, putting the bloc in a delicate position. The past two summits, in 2016 and 2017, ended without a statement because of disagreements about the South China Sea and trade. “China wants the European Union to stand with …

President Donald Trump continues to turn up the heat on trade, a tactic that he insists will result in better deals for the American people. But the president’s rhetoric has economists concerned about a trade war. White House Correspondent Patsy Widakuswara has more. …

In the busy summer travel period in Cuba, a long line of people wait for hours in the sweltering heat outside the Havana office of state-owned airline Cubana, many of them eager to visit families in the provinces. But they are not waiting to book flights. Instead, they hope to get their money back on plane tickets or exchange them for bus tickets across the island. Cubana, which has a virtual monopoly on domestic flights, has suspended nearly all of them due to a lack of working aircraft, plunging travel on the Caribbean’s largest island into chaos and highlighting problems at what was once a vanguard of Latin American aviation. The flight suspensions were made a month after a Cubana flight crashed after takeoff from Havana airport in May, killing 112 people. They come at a time when Communist-run Cuba is trying to stimulate tourism, one of the few bright spots in its economy, by promoting beach resorts and colonial towns hundreds of kilometers (miles) from the capital. “Now I will have to take a 16-hour bus ride to Guantanamo, but what other options do I have?” said kindergarten teacher Marlene Mendoza, who was bathed in sweat and got a bus ticket to eastern Cuba after queuing for more than seven hours. Analysts say Cubana’s troubles stem largely from dual ills that afflict the whole state-run economy: the U.S. trade embargo and a problematic business model. Cubana did not reply to requests for comment for this story. Founded in 1929 …

The U.S. Commerce Department on Tuesday granted a temporary reprieve to ZTE that allows China’s No. 2 telecommunications equipment maker to conduct business needed to maintain existing networks and equipment in the United States as it works toward the lifting of a U.S. sales ban. The authorization from the department’s Bureau of Industry and Services, dated July 2 and seen by Reuters, runs until August 1. ZTE and spokespeople for the Commerce Department did not respond to requests for comment. ZTE, which makes smartphones and networking gear, was forced to cease major operations in April after the United States slapped it with a supplier ban saying it broke an agreement to discipline executives who conspired to evade U.S. sanctions on Iran and North Korea. The company had also agreed to pay a $1 billion penalty and put $400 million in an escrow account as part of the deal to resume business with U.S. suppliers — which provide almost a third of the components used in ZTE’s equipment. The escrow agreement is still pending, according to a source. Until it is executed, ZTE cannot deposit the $400 million in escrow necessary to get the ban lifted. While the denial order is still in place, the authorization grants a waiver to some companies that do business with ZTE to do so for one month, a source told Reuters. The waivers allow for a limited type of activity but do not authorize any new business. The uncertainty about the ban amid intensifying U.S.-China trade tensions has hammered ZTE shares, which have fallen 60 percent since trading resumed last month following a two-month hiatus, wiping out …

Eike Batista, the former mining and oil magnate who was once Brazil’s richest man, was convicted and sentenced to 30 years in prison for bribing Rio de Janeiro state’s disgraced ex-governor, according to a court document published Tuesday. Batista’s conviction and sentencing by federal judge Marcelo Bretas are the latest in a wave of graft investigations that have sent scores of powerful businessmen and politicians to jail. The eccentric former billionaire’s meteoric rise and fall mirrored the recent fortunes of Brazil, where the commodities boom faded as his energy, mineral and logistics empire fell apart earlier this decade. His swashbuckling attitude and confident forecasts of a prolonged golden era for Brazil evaporated just as Latin America’s largest economy suffered its worst recession on record. Batista, whose legal team said he would appeal, was found guilty of paying a $16.5 million bribe to former Rio governor Sergio Cabral, who also was found guilty in the case. Batista’s companies won state contracts in exchange for the bribe, including one awarding his consortium the rights to run Brazil’s temple of soccer, the Maracana in Rio, the stadium where the 2014 World Cup final was played and the 2016 Olympic Games’ opening and closing ceremonies were held. The bribes were also linked to the construction of the $3.7 billion Acu port facility, controlled since 2013 by Prumo Logistica, which is majority owned by U.S.-based EIG Energy Partners. Prosecutors said Batista paid a quarter of the bribes to Cabral in cash and the rest in …

Major U.S. trading partners including the European Union, China and Japan voiced deep concern at the World Trade Organization (WTO) on Tuesday about possible U.S. measures imposing additional duties on imported autos and parts. Japan, which along with Russia had initiated the discussion at the WTO Council on Trade in Goods, warned that such measures could trigger a spiral of countermeasures and result in the collapse of the rules-based multilateral trading system, an official who attended the meeting said. More than 40 WTO members — including the 28 countries of the European Union — warned that the U.S. action could seriously disrupt the world market and threaten the WTO system, given the importance of cars to world trade. The United States has imposed tariffs on European steel and aluminum imports and is conducting another national security study that could lead to tariffs on imports of cars and car parts. Both sets of tariffs would be based on concerns about U.S. national security. U.S. President Donald Trump said on June 29 that the probe would be completed in 3 to 4 weeks. But the European Union has warned the United States that imposing import tariffs on cars and car parts would harm its own automotive industry and likely lead to countermeasures by its trading partners on $294 billion of U.S. exports. A Russian official told the WTO meeting that the issue of U.S. investigations had been raised over the past year in different WTO meetings, only to see things change for …

Worried that Walmart’s $16 billion deal to takeover India’s biggest e-commerce company will force millions of mom and pop stores out of business, hundreds of shop owners in several cities have led protests against the U.S. retail giant.   India’s fast-growing retail trade is dominated by millions of small traders that have long opposed efforts by Walmart to establish its stores in the country. Now they are concerned its entry in the online market will drive down prices, making them uncompetitive, and are demanding the government block the deal. WATCH: Anjana Pasricha’s video report Raising slogans such as “Walmart Go Back” at a sit-in protest Monday in New Delhi, Praveen Khandelwal, the secretary general of the Confederation of All India Traders expressed fears that “Walmart will dump globally sourced material in India and ultimately the level playing field will be vitiated.” He says they fear practices like “deep discounting and predatory pricing” by large chains with deep pockets will “kill the competition.”   Although Walmart has eyed India’s retail market for more than a decade, its efforts to make inroads have been hampered by tough regulations for overseas retailers in opening brick and mortar stores. The regulations are meant to protect the livelihood of 15 million small store owners. Flipkart Deal   But Walmart’s deal with Indian e-commerce retailer Flipkart, which sells goods ranging from soaps to appliances, clothes and accessories, will allow it to access Indian consumers through the online route and establish a foothold in a fast growing …

Zimbabwe’s government is denying a report from Human Rights Watch that documented extensive child labor on the country’s tobacco farms. Some of the children are as young as 10 years old, and the report says many have experienced acute nicotine poisoning from handling tobacco plants. The 105-page report, titled “A Bitter Harvest,” documents how children working on tobacco farms in Zimbabwe are denied time in school and have to perform tasks that threaten their health and safety. According to Human Rights Watch, one of the most serious risks is “Green Tobacco Sickness,” which is caused by absorbing nicotine through the skin from tobacco plants. The rights group said the 14 child workers it interviewed, and most of the adults, said they had experienced at least one symptom consistent with acute nicotine poisoning, such as nausea, vomiting, headaches, or dizziness. In an interview with VOA, the secretary for the Ministry of Labor and Social Welfare, Ngoni Masoka, said the Human Rights Watch report is “not factual” and has not been independently confirmed. But he acknowledged that the youngsters face hazards working on Zimbabwean farms. “What we need to do, we need to do a survey to determine the nature and extent of the child labor problems in our farms; that’s what we want to do,” said Masoka. Masoka noted the problem is not limited to Zimbabwe. Millions of children around the world perform work on farms for little or no pay. Some are helping their families; others are working for low …

Halima Sheikh Ali is the proud owner of one of the few ATMs in Wajir town in northeast Kenya. But rather than doling out shilling notes, it dispenses something tastier: a fresh pint of camel milk. “For 100 Kenyan shillings ($1), you get one liter of the freshest milk in Wajir County,” she says, opening a vending machine advertising “fresh, hygienic and affordable camel milk” in order to check the liquid’s temperature. One of the world’s biggest camel producers, East Africa also produces much of the world’s camel milk, almost all of it consumed domestically. In the northeast Kenyan county of Wajir, demand is booming among local people, who say it is healthier and more nutritious than cow’s milk. “Camel milk is everything,” said Noor Abdullahi, a project officer for U.S.-based aid agency Mercy Corps. “It is good for diabetes, blood pressure and indigestion.” But temperatures averaging 40 degrees Celsius (104 degrees Fahrenheit) in the dry season, combined with the risk of dirty collection containers, mean the liquid can go sour in a matter of hours, he added, making it much harder to sell. To remedy this, an initiative is equipping about 50 women in Hadado, a village 80km from Wajir, with refrigerators to cool the milk that remote camel herders send them via tuk-tuk taxi, plus a van to transport it daily to Wajir. There a dozen women milk traders, including Sheikh Ali, sell it through four ATM-like vending machines, after receiving training on business skills such as accounting. …

A Portuguese tech firm is uncorking an Android smartphone whose case is made from cork, a natural and renewable material native to the Iberian country. The Ikimobile phone is one of the first to use materials other than plastic, metal and glass and represents a boost for the country’s technology sector, which has made strides in software development but less in hardware manufacturing. A Made in Portugal version of the phone is set to launch this year as Ikimobile completes a plant to transfer most of its production from China. “Ikimobile wants to put Portugal on the path to the future and technologies by emphasizing this Portuguese product,” chief executive Tito Cardoso told Reuters at Ikimobile’s plant in the cork-growing area of Coruche, 80 km (50 miles) west of Lisbon. “We believe the product offers something different, something that people can feel good about using,” he said. Cork is harvested only every nine years without hurting the oak trees and is fully recyclable. Portugal is the world’s largest cork producer and the phone also marks the latest effort to diversify its use beyond wine bottle stoppers. Portuguese cork exports have lately regained their peaks of 15 years ago as cork stoppers clawed back market share from plastic and metal. Portugal also exports other cork products such as flooring, clothing and wind turbine blades. A layer of cork covers the phone’s back providing thermal, acoustic and anti-shock insulation. The cork comes in colors ranging from black to light brown and has …

The U.S. Chamber of Commerce on Monday denounced President Donald Trump’s handling of global trade disputes, issuing a report that argued tariffs imposed by Washington and retaliation by its partners would boomerang badly on the American economy. The Chamber, the nation’s largest business lobbying group and a traditional ally of Trump’s Republican Party, said the White House is risking a global trade war with its push to protect U.S. industry and workers with tariffs. The group’s analysis of the harm each U.S. state could suffer from retaliation by U.S. trading partners painted a gloomy picture that could bring pressure on the White House from Republicans ahead of congressional elections in November. For example, nearly $4 billion worth of exports from Texas could be targeted by retaliatory tariffs, the Chamber said, including $321 million in meat the state sends to Mexico each year and $494 million in grain sorghum it exports to China. Trump has slapped tariffs on billions of dollars’ worth of steel and aluminum imports from China, the European Union, Canada and others, prompting retaliation against U.S. products. He is considering extending the levies to the auto sector. The Chamber, which says it represents the interests of three million companies, had praised Trump for slashing business taxes in December, but mounting trade tensions have opened a rift with the White House. “The administration is threatening to undermine the economic progress it worked so hard to achieve,” Chamber President Tom Donohue said in a statement. “We should seek free and …

Carlos Garcia was three years into his first job in technology at Merrill Lynch when he first learned what a 401K retirement savings account was. He was floored when he learned that a colleague had already saved $30,000 in three years, and the company had matched it.   The concept of making money off money was foreign to Garcia, an MIT graduate who was born in Texas to immigrants from Mexico. His story is not uncommon among U.S. Hispanics, who lag behind other demographic groups when it comes to saving for retirement. But for Garcia, the episode became the inspiration many years later for Finhabits, a bilingual digital platform designed to make savings and investment accessible for Latinos.   Finhabits launched last year into a crowded world of robo-advisers, savings apps, online lending platforms and other financial-technology companies.   But it is one of the few aimed at demystifying stocks and bonds for Hispanics, particularly young professionals who have the means to start investing but may have inherited a fuzzy understanding of the financial system from their immigrant parents. “Hispanics are very hard workers and we are able to generate quick income for our families. Sometimes we are good at savings but we put the money under the mattress,” said Garcia, who previously founded two other companies, including an internet analytics service for hedge funds.   Other financial-tech startups aimed at Latinos have focused on immediate financial needs: paying off debt, building credit and gaining access to loans. Few besides …