Year: 2018

Nearly all of the currency removed from circulation in a surprise 2016 attempt to root out illegal hoards of cash came back into the financial system, India’s reserve bank has announced, indicating the move did little to slow the underground economy. Prime Minister Narendra Modi’s currency decree, which was designed to destroy the value of billions of dollars in untaxed cash stockpiles, caused an economic slowdown and months of financial chaos for tens of millions of people. Modi announced in a November 2016 TV address that all 500-rupee and 1,000-rupee notes, then worth about $7.50 and $15, would be withdrawn immediately from circulation. The banned notes could be deposited into bank accounts but the government also said it would investigate deposits over 250,000 rupees, or about $3,700. The government eventually released new currency notes worth 500 and 2,000 rupees. In theory, the decree meant corrupt politicians and businesspeople would suddenly find themselves sitting on billions of dollars in worthless currency, known here as “black money.” “A few people are spreading corruption for their own benefit,” Modi said in the surprise nighttime speech announcement of the order. “There is a time when you realize that you have to bring some change in society, and this is our time.” But even as the decree caused turmoil for those in India who have always depended on cash — the poor and middle class, and millions of small traders — the rich found ways around the currency switch. In the months after the decree, …

U.S. President Donald Trump has signed proclamations permitting targeted relief from steel and aluminum quotas from some countries, the U.S. Commerce Department said on Wednesday. Trump, who put in place tariffs on steel and aluminum imports in March, signed proclamations allowing relief from the quotas on steel from South Korea, Brazil and Argentina and on aluminum from Argentina, the department said in a statement. “Companies can apply for product exclusions based on insufficient quantity or quality available from U.S. steel or aluminum producers,” the statement said. “In such cases, an exclusion from the quota may be granted and no tariff would be owed.” Trump, citing national security concerns, placed tariffs of 25 percent on steel imports and 10 percent on aluminum imports. The tariffs on steel and aluminum imports from the European Union, Canada and Mexico took effect June 1, and Commerce Secretary Wilbur Ross said May 31 that arrangements had been made with some countries to have non-tariff limits on their exports of the two metals to the United States. Ross said the arrangement with South Korea was for a quota of 70 percent of average steel exports to the United States in the years 2015 to 2017. The Brazilian government said at the time the U.S. quotas and tariffs on Brazil’s steel and aluminum exports were unjustified but that it remained open to negotiate a solution. Brazilian semi-finished steel exports to the United States are subject to quotas based on the average for the three years from 2015-2017, …

The leaders of the United States and Canada expressed optimism on Wednesday that they could reach new NAFTA deal by a Friday deadline as negotiators prepared to talk through the night, although Canada warned that a number of tricky issues remained. Under pressure, Canada rejoined the talks to modernize the 24-year-old North American Free Trade Agreement after Mexico and the United States announced a bilateral deal on Monday. Canadian Foreign Minister Chrystia Freeland said late on Wednesday that talks were at “a very intense moment” but said there was “a lot of good will” between Canadian and U.S. negotiators. “Our officials are meeting now and will be meeting until very late tonight. Possibly they’ll be meeting all night long,” Freeland said. She and U.S. Trade Representative Robert Lighthizer had agreed to review progress early on Thursday. U.S. President Donald Trump has set a Friday deadline for the three countries to reach an in-principle agreement, which would allow Mexican President Enrique Pena Nieto to sign it before he leaves office at the end of November. Under U.S. law, Trump must wait 90 days before signing the pact. Trump has warned he could try to proceed with a deal with Mexico alone and levy tariffs on Canadian-made cars if Ottawa does not come on board, although U.S. lawmakers have said ratifying a bilateral deal would not be easy. “They (Canada) want to be part of the deal, and we gave until Friday and I think we’re probably on track. We’ll see what …

The U.S. economy expanded at a 4.2 percent annual rate in April, May and June, the Commerce Department said Wednesday. The second-quarter growth figure for gross domestic product was one-tenth of a percentage point higher than initial estimates. “The economy is in good shape,” said PNC Bank Chief Economist Gus Faucher. He wrote that this was the best “year-over-year increase in three years.” But Faucher also said growth above 4 percent was “unsustainable” and that the economy was “set to slow somewhat in the second half of 2018,” hitting 3.4 percent growth for the whole year. He predicted U.S. economic growth would slow further in 2019 and 2020 as the “stimulus from tax cuts and spending increases fades.” U.S. President Donald Trump cheered the news: But Senate Minority Leader Chuck Schumer, a New York Democrat, had a different take on the report. “No amount of President Trump tweets can change the fact that real wages are declining,” he said in a statement, adding that the cost of living — particularly gas and health care costs, “thanks in large part to Republicans and the Trump administration” — is “continuing to climb.” Wednesday’s report from the Commerce Department was a routine revision; such changes are made as more complete data become available. Growth figures were boosted by a decline in imports, particularly petroleum, and by some temporary factors. One of those factors was a surge in soybean exports, which were rushed at a faster-than-usual pace to beat tariffs imposed by China in retaliation for new tariffs …

British officials have been turning to Japan for tips on how to dodge American sanctions on Iran, according to local media. Britain is already seeking from Washington exemptions from some U.S. sanctions, which are being re-imposed by President Donald Trump because of the U.S. withdrawal earlier this year from a controversial 2015 nuclear deal with Tehran. The British are especially keen to maintain banking links with Iran and to import Iranian oil. According to local media, U.K. officials have been asking their Japanese counterparts how they managed in the past to sidestep some aspects of the pre-2015 sanctions regime, which allowed Tokyo to sign oil deals with Iran as well as insurance contracts without incurring U.S. penalties. Re-imposed U.S. sanctions penalize any foreign companies that deal with Iran by barring them from doing business in America. That threat has already persuaded more than 50 Western firms to shutter their operations in Iran, including French automakers Renault and Peugeot and the French oil giant Total as well as Germany’s Deutsche Bahn railway company and Deutsche Telekom. Seeking waivers British ministers have publicly announced that they are hoping to secure waivers from sanctions for oil imports, tanker insurance and banking. There is particular concern, say British officials, about the position of a gas field 240 miles from Aberdeen which is jointly owned by BP and a subsidiary of Iran’s state-controlled oil company. According to The Times newspaper, British diplomats and Treasury officials have discussed with their Japanese counterparts what options they may …

Negotiators from Canada and the United States are holding detailed trade negotiations in Washington as they seek to work out a replacement for the North American Free Trade Agreement. The talks come after the United States and Mexico agreed to a bilateral trade deal this week while leaving the door open for Canada to join and preserve what has been a trilateral trade relationship for more than 20 years. Canadian Foreign Minister Chrystia Freeland met with U.S. Trade Representative Robert Lighthizer on Tuesday for what she said were “very constructive” initial talks before more specific negotiations between the two sides on Wednesday. Freeland said some of the details of the U.S.-Mexico agreement, particularly what she called “significant concessions” by Mexico on rules regarding automotive labor and parts origin, have given Canada optimism about the talks in Washington. “The fact that Mexico was able to do something that I think must have been quite difficult for Mexico and make those concessions does really set the stage for some productive conversations for us here this week.” It is unclear if the United States and Canada will resolve their long-standing disputes over duties on automobiles and dairy products that have persisted through months of NAFTA negotiations. Freeland was also due to meet with Mexican trade officials who were still in Washington. Final details of the U.S.-Mexico deal have yet to be worked out, but Lighthizer said he believes the tentative agreement is a win for both countries that creates more jobs for farmers …

Canadian Prime Minister Justin Trudeau says his country will negotiate new trade terms with the United States, but will only accept a deal that serves Canada’s interests. Speaking after the United States reached a tentative deal with Mexico to replace the North American Free Trade Agreement (NAFTA), Trudeau said negotiators have made some progress. U.S. President Donald Trump has threatened to increase U.S. tariffs on Canada’s auto imports if a deal is not reached. VOA’s Zlatica Hoke has more. …

Faced with plunging U.S. orders, surgical glove maker Ren Jiding is hunting for new markets amid Chinese government calls to reduce reliance on the United States. But no other market can absorb the 60 percent of his sales that went to American customers last year. “Other countries import much less than the United States,” said Ren, a co-owner of Hongyeshangqin Medical Science and Technology Co. Ltd. in the eastern city of Zibo. From medical products to smartphone chips to soybeans, Beijing is responding to President Donald Trump’s tariff hikes by pushing companies to trade more with other countries. But there are few substitutes for the United States as an export market and source of technology for industries including telecom equipment makers that Chinese leaders are eager to develop. Beijing has announced tariff cuts and other changes while rejecting U.S. demands to scale back plans such as “Made in China 2025,” which calls for state-led creation of Chinese champions in robotics, biotech and other fields. American leaders say those violate Beijing’s market-opening promises and might erode U.S. industrial leadership. The response highlights the cost the ruling Communist Party is willing to pay in lost sales and jobs to stick to plans that are fueling conflict with Washington, Europe and other trading partners. ​’Fundamental’ to growth “China sees its technology and industrial policies as fundamental to its growth,” Tianjie He of Oxford Economics said in an email. “It is thus hard to see China’s leadership committing to significant changes.” Trump has raised duties on …

More than a week after the floodwater began subsiding, animal carcasses are  still floating in Kerala’s backwaters, and in places a nauseating stench rises like a wall when the wake from a passing boat breaks the surface. These inland lagoons running parallel to the coast are one of the biggest tourist draws in India’s most southwesterly state, but the stain of death and devastation wrought by Kerala’s worst flood in a century will take longer than a season to wash away. The quaint towns and villages scattered between the lush forests and paddy fields bordering the backwaters are now communities in despair. Houses in low-lying areas are still submerged, roads are waterlogged and the sewage from drains have washed into channels that are too slow-moving to effectively flush out the effluent. Sudarsanan T.K., a houseboat owner in the town of Alappuzha,  had been looking forward to the peak tourist season, but as his home disappeared under 2.5 meters (8 feet) of water his family now have to live aboard the boat he would otherwise be renting to tourists from Europe, China, Malaysia and India. “I’ve nothing left, but this houseboat. I don’t know how I can repay my bank loan in this condition. The bank may take back my boat. I will have nothing at all then,”  Sudarsanan, a 64-year-old father of two, told Reuters. ​Some 1,500 houseboats are tied up at Alappuzha, going nowhere, with many of the owners still paying off loans taken to buy the boats. Sudarsanan …

President Donald Trump’s trade deal with Mexico could struggle to win approval from Congress unless Canada comes on board, lawmakers from both parties said on Tuesday, saying support from Democrats would be needed to pass a purely bilateral deal. Trump unveiled the Mexico deal on Monday and threatened to slap tariffs on Canadian-made cars if Canada did not join the revamp of the trilateral North American Free Trade Agreement (NAFTA), which Trump has long criticized. If Trump, a Republican, tries to get the Senate to vote in favor of a bilateral deal as a replacement for NAFTA, he will face an uphill struggle to win passage, lawmakers said. Some lawmakers said only a trilateral pact would be eligible for fast-track, 51-vote Senate approval. A bilateral deal, on the other hand, would need 60 votes and that would require some support from Democrats, who likely would be reluctant to help Trump, they said. There are now 50 Republican-held seats in the 100-member Senate. To get fast-track Senate ratification, “the administration must also reach an agreement with Canada,” said Republican Senator Pat Toomey in a statement. “NAFTA was a tri-party agreement only made operative with legislation enacted by Congress,” said Toomey, a member of the committee that oversees trade policy. “Any change, such as NAFTA’s termination, would require additional legislation from Congress. Conversion into a bilateral agreement would not qualify for … ‘fast track’ procedures and would therefore require 60 votes in the Senate.” The White House did not immediately respond to …

Iraq will send a delegation to the United States seeking an agreement on financial transactions with Iran following Washington’s reimposition of sanctions on Tehran, Prime Minister Haider al-Abadi said Tuesday. His statement was the first by an Iraqi official since Reuters reported last week that Baghdad was going to ask Washington for exemptions from some of the sanctions because Iraq’s economy is closely linked with neighboring Iran. “We have requests for the American side, we have presented them and a delegation will go to negotiate within that framework,” Abadi told a weekly news conference. “We have presented a clear vision of what Iraq really needs. This includes Iranian [natural] gas, which is very important, as well as other trade and the electricity sector.” U.S. President Donald Trump withdrew the United States in May from world powers’ 2015 nuclear deal with Iran, calling it flawed, and reimposed trade sanctions on the Islamic Republic. The Trump administration has warned of consequences for countries including European allies that co-signed the nuclear accord, that do not respect the new sanctions. Baghdad is in a difficult position — its two biggest allies are the United States and Iran, themselves arch-adversaries. “We have had good promises initially, but as you know the American situation is complicated; you do not deal with one person, there are several institutions,” Abadi said. He called the sanctions “unilateral” and “oppressive,” adding that Iraq would not be “part of a blockade” due to its own painful experience with international sanctions during …

Alphabet’s Google said Tuesday that it was partnering with a handful of Indian banks to bring quick loans to the masses, as it aims to woo tens of millions of new internet users in the country to its digital payments services. At an annual Google event in New Delhi, Caesar Sengupta, vice president of Google’s Next Billion Users initiative, said the move would make banking services accessible to tens of millions of Indians. Google launched payments app Tez, meaning fast in Hindi, in India last year, integrating it with the state-backed unified payments interface (UPI), as it sought to gain a foothold in the South Asian nation’s digital payments space — which, according to Credit Suisse, will grow fivefold to $1 trillion by 2023. On Tuesday, Google rebranded the app as Google Pay and said it was partnering with four Indian banks — Federal Bank, HDFC Bank, ICICI Bank and Kotak Mahindra Bank — to provide instant loans to the app’s users. “We’re talking to a lot of banks. We’re completely open with whom we work with in terms of banking partners,” Sengupta said in an interview on the sidelines of the event. “Banks bring their financial capabilities, their understanding of the user, their customers. We bring our user experience, our ability to make complex processes extremely simple and very fast,” he added. Challenge to Paytm Google’s ambitions could pose a challenge for homegrown Paytm, backed by Japan’s SoftBank and China’s Alibaba and U.S. conglomerate Berkshire Hathaway. Paytm’s founder, Vijay Shekhar Sharma, and its parent, One97 Communications, run a payments bank, and the payments firm also plans to expand to selling financial …