Month: May 2019

U.S. diplomats warned Saturday that commercial airliners flying over the wider Persian Gulf faced a risk of being “misidentified” amid heightened tensions between the U.S. and Iran. The warning relayed by U.S. diplomatic posts from the Federal Aviation Administration underlined the risks the current tensions pose to a region crucial to global air travel. It also came as Lloyd’s of London warned of increasing risks to maritime shipping in the region.   Concerns about a possible conflict have flared since the White House ordered warships and bombers to the region to counter an alleged, unexplained threat from Iran that has seen America order nonessential diplomatic staff out of Iraq. President Donald Trump since has sought to soften his tone.   Meanwhile, authorities allege that a sabotage operation targeted four oil tankers off the coast of the United Arab Emirates, and Iran-aligned rebels in Yemen claimed responsibility for a drone attack on a crucial Saudi oil pipeline. Saudi Arabia directly blamed Iran for the drone assault, and a local newspaper linked to the al-Saud royal family called on Thursday for America to launch “surgical strikes” on Tehran.   This all takes root in Trump’s decision last year to withdraw the U.S. from the 2015 nuclear accord between Iran and world powers and impose wide-reaching sanctions. Iran just announced it would begin backing away from terms of the deal, setting a 60-day deadline for Europe to come up with new terms or it would begin enriching uranium closer to weapons-grade levels. Tehran …

The U.S. Commerce Department said Friday it may soon scale back restrictions on Huawei Technologies after this week’s blacklisting would have made it nearly impossible for the Chinese company to service its existing customers. The Commerce Department, which had effectively halted Huawei’s ability to buy American-made parts and components, is considering issuing a temporary general license to “prevent the interruption of existing network operations and equipment,” a spokeswoman said. Potential beneficiaries of the license could, for example, include internet access and mobile phone service providers in thinly populated places such as Wyoming and eastern Oregon that purchased network equipment from Huawei in recent years. Temporary license In effect, the Commerce Department would allow Huawei to purchase U.S. goods so it can help existing customers maintain the reliability of networks and equipment, but the Chinese firm still would not be allowed to buy American parts and components to manufacture new products. The potential rule roll back suggests changes to Huawei’s supply chain may have immediate, far-reaching and unintended consequences. The blacklisting, officially known as placing Huawei on the Commerce Department’s entity list, was one or two efforts by the Trump administration this week allegedly made in an attempt to thwart national security risks. In an executive order, President Donald Trump also effectively barred the use of its equipment in U.S. telecom networks. The United States believes Huawei’s smartphones and network equipment could be used by China to spy on Americans, allegations the company has repeatedly denied. Aggressive trade talks tone The …

Bogged down in a sprawling trade dispute with U.S. rival China, President Donald Trump took steps Friday to ease tensions with America’s allies: lifting import taxes on Canadian and Mexican steel and aluminum and delaying auto tariffs that would have hurt Japan and Europe.    By removing the metals tariffs on Canada and Mexico, Trump cleared a key roadblock to a North American trade pact his team negotiated last year. As part of Friday’s arrangement, the Canadians and Mexicans agreed to scrap retaliatory tariffs they had imposed on U.S. goods, according to four sources in the U.S. and Canada who spoke on condition of anonymity ahead of an announcement.    In a joint statement, the U.S. and Canada said they would work to prevent cheap imports of steel and aluminum from entering North America. China has long been accused of flooding world markets with subsidized metal, driving down world prices and hurting U.S. producers.  Some in Washington were urging Trump to take advantage of the truce with U.S. allies to get even tougher with China. “China is our adversary,” said Sen. Ben Sasse, R-Neb. “Canada and Mexico are our friends. The president is right to increase pressure on China for their espionage, their theft of intellectual property and their hostility toward the rule of law. The president is also right to be deescalating tension with our North American allies.”   Earlier Friday, the White House said Trump was delaying for six months any decision to slap tariffs on foreign cars, a …

The United States must show sincerity if it is to hold meaningful trade talks, China said on Friday, after U.S. President Donald Trump dramatically raised the stakes with a potentially devastating blow to Chinese tech giant Huawei. China has yet to say whether or how it will retaliate against the latest escalation in trade tension, although state media has taken an increasingly strident tone, with the ruling Communist Party’s People’s Daily publishing a front-page commentary that evoked the patriotic spirit of past wars. China’s currency slid to its weakest in almost five months, although losses were capped after sources told Reuters that the central bank would ensure the yuan did not weaken past the key 7-per-dollar level in the immediate term. The world’s two largest economies are locked in an increasingly acrimonious trade dispute that has seen them level escalating tariffs on each other’s imports in the midst of negotiations, adding to fears about risks to global growth and knocking financial markets. Foreign ministry spokesman Lu Kang, asked about state media reports suggesting there would be no more U.S.-China trade talks, said China always encouraged resolving disputes between the two countries with dialog and consultations. “But because of certain things the U.S. side has done during the previous China-U.S. trade consultations, we believe if there is meaning for these talks, there must be a show of sincerity,” he told a daily news briefing. The United States should observe the principles of mutual respect, equality and mutual benefit, and they must …

A record number of 8.34 million university graduates are set to enter the Chinese job market this summer amid escalating trade tensions between Washington and Beijing. Observers say that as China’s export-dependent economy braces for more hits from tariff hikes, which U.S. President Donald Trump recently imposed, the country’s job markets will be tighter for everyone including fresh graduates. And the impact of a job mismatch among college graduates has long weighed on their actual employment rate at only 52% this year, according to a recent survey. That means more than 4 million graduates will soon join the ranks of those unemployed, although many of them may opt to pursue higher education, the survey found. Tightening job market “Graduate employment has always been problematic in China. Given the current situation with the trade war, I think we should expect it to be even more so this year,” said Geoffrey Crothall, spokesperson at China Labor Bulletin. “And there’s always been a mismatch between the expectations of graduates, the reality of the job markets and particularly the expectations of employers,” he added. Graduates will either take longer to find a job or settle with one that has lower pay or poor career prospects, Crothall said. Making matters worse, the number of job opportunities in China is on the wane as China tries to move away from labor-intensive industries, said Wang Zhangcheng, head of the Labor Economics Institute at the Zhongnan University of Economics and Law. “The transformation of industrial structure and the U.S.-China …

Juhyun Lee contributed to this report. SEOUL — As U.S. President Donald Trump intensifies his trade battle with China, one of the hardest-hit countries could be South Korea. Asia’s fourth-largest economy, South Korea is especially vulnerable to the tariff war because of its reliance on foreign trade — in particular, exports to its two biggest trading partners: China and the United States. After U.S.-China trade talks broke down, Trump last week raised tariffs on $200 billion worth of Chinese imports, and threatened to do so with $300 billion more. China retaliated with tariffs on $60 billion of U.S. goods. The trade war escalation, which rattled markets and threatened to hold back global growth, comes at an especially bad time for South Korea, whose economy unexpectedly contracted in the first quarter. “South Korea is particularly vulnerable,” says Xu Xiao Chun, an economist who monitors South Korea for Moody’s Analytics. “It’s not inconceivable that you could see a second consecutive quarter of contraction of GDP, which would make it a technical recession.” Trade war exacerbates tech woes As the world’s leading producer of memory chips that go into consumer electronics, such as cellphones and computers, South Korea benefited from years of rapid and consistent growth in the global smartphone market. But global demand for smartphones has plateaued. That, combined with a slowdown in China and sluggish global growth, has hurt South Korea’s export-driven economy. In April, South Korea’s exports declined for the fifth consecutive month, falling 2% compared to the same period …

The Afrobytes and Viva Tech conferences in Paris this week have provided an opportunity to look at the progress that high-tech startups have made in Africa, where fundraising is booming. According to Partech Africa, a venture capital firm, 146 startups in 19 African countries raised $1.16 billion for African digital entrepreneurs in 2018. Kenya, Nigeria and South Africa received 78% of the total funding, with Egypt close behind.  In French-speaking Africa, Senegal is the leading hub with $22 million raised in four deals. Compared with their Anglophone peers, Africa’s Francophone countries operate in smaller markets, and lack capital and mentors.   A key: Seeking advice   Marieme Diop, a venture capital investor at Orange Digital Ventures, said that “unfortunately in Francophone Africa, it is not in our DNA. People who succeed in business or in electing positions do not necessarily reach back to help their peers to show them how to be successful. In the Anglophone world, it is a must for anyone who wants to start something: seeking advice. So the gap is not only financial” between the regions.    Africa is seen by many as the next frontier for venture capital, with its booming population and mobile-first economy. That’s why Google, Facebook and PayPal participated in Paris in Afrobytes 2019.     “We do not want people globally to see African high-tech as an exotic stuff,” said Afrobytes CEO Ammin Youssouf. “We want to be heard and talk about AI, blockchain, what is happening in Silicon Valley, because it has an impact on us. We already have brilliant minds in Africa, especially …

President Donald Trump’s high-profile trade offensives have grabbed headlines and rattled financial markets around the world. He’s battling China over the industries of the future, strong-arming Canada and Mexico into reshaping North American trade and threatening to tax cars from Europe.    But his trade warriors are fighting dozens of more obscure battles — over laminated woven sacks from Vietnam, dried tart cherries from Turkey, rubber bands from Thailand and many others. Under the radar, the Trump administration has launched 162 investigations into allegations that U.S. trading partners dump products at cut-rate prices or unfairly subsidize their exporters — a 224% jump from the number of cases the Obama administration pursued in the same time in office.      If the U.S Commerce Department finds that U.S. companies have been hurt — and ultimately if the independent International Trade Commission goes along — the offending imports are slapped with duties that can price them out of the market. On Thursday, for instance, the department announced levies of up to 337% in combat over kitchen and bathroom countertops — or at least over the imported quartz slabs from China that many of them derive from.    These cases have nothing directly to do with the mother of all Trump’s trade wars: a cage match with China over Beijing’s aggressive push to transform Chinese companies into world leaders in cutting-edge industries like artificial intelligence and electric cars. In that one, the world’s two biggest economies have slapped tariffs on hundreds of billions of dollars’ worth …

Executives from major global retailers played down the threat to employment in stores from artificial intelligence and automation on Thursday and pledged more training to help staff adopt more high-value tasks as machines take over their work. Retail is one of the largest employers in many developed economies and experts have predicted automation puts millions of low-skilled jobs in the sector at risk, particularly as the introduction of self-checkouts makes cashiers redundant. “Technology can liberate people from repetitive tasks,” Barbara Martin Coppola, chief digital officer at Swedish furniture giant IKEA, told Reuters on the sidelines of the World Retail Congress, an annual industry gathering. “These jobs are not gone. We are believers in the talent we have in our house and we look to repurpose it into more fulfilling tasks.” Martin Coppola said IKEA needs far fewer people to select the goods displayed on the firm’s website, known as online merchandising, as algorithms get more sophisticated. But these people can be trained in digital marketing instead. “It is important to see technology as an enabler and not to let it be at the expense of human beings and the planet,” she said. Walmart, the world’s biggest private employer with 2.2 million staff, has been adding self check-outs and announced last month that it would be rolling out automated shelf scanners, to check product availability, and cleaning robots. “Cleaning the floor is not a thing that brings a person fulfillment,” said Tom Faitak, Walmart’s senior manager for AI, robotics and automation, …

U.S. homebuilding increased more than expected in April and activity in the prior month was stronger than initially thought, suggesting declining mortgage rates were starting to provide some support to the struggling housing market. Land and labor shortages, however, continue to constrain builders’ ability to construct more lower priced houses. This segment has experienced an acute shortage of inventory, holding back home sales. Investment homebuilding has contracted for five straight quarters. Housing starts rose 5.7% to a seasonally adjusted annual rate of 1.235 million units last month, driven by gains in the construction of both single- and multi-family housing units, the Commerce Department said on Thursday. Groundbreaking was also likely boosted by drier weather in the Midwest. Data for March was revised up to show homebuilding rising to a pace of 1.168 million units, instead of falling to a rate of 1.139 million units as previously reported. The government revised the seasonally adjusted data back to January 2014. The unadjusted series will be revised in July. Building permits rose 0.6% to a rate of 1.296 million units in April. Building permits had declined for three straight months. Permits for single-family housing, however, fell for a fifth straight month, likely reflecting the supply challenges. Economists polled by Reuters had forecast housing starts would increase to a pace of 1.205 million units in April. The 30-year fixed mortgage rate has dropped to 4.10% from a peak of about 4.94% in November, according to data from mortgage finance agency Freddie Mac. Decreasing mortgage …

Turkey needs to put a comprehensive and credible economic plan in place if it is to avoid another cut to sovereign credit rating, a senior Moody’s sovereign analyst said on Thursday. New analysis from the rating agency shows Turkey’s recession, the slump in the lira, upcoming refinancing pressures and dwindling reserves have pushed it to right near the top of its worldwide external vulnerability index. “Failure to put forward a credible broad-based plan to address the structural issues, and in the near-term dampen the market volatility pressure on the lira…that would be a pressure point from a rating perspective,” Moody’s Managing Director of Sovereign Risk, Yves Lemay, told Reuters. Moody’s downgraded Turkey to Ba3 – three rungs into junk territory – last August, but it also kept it on a ‘negative’ outlook which is a warning that another cut could happen in 12-18 months. It gives it some time and one of Turkey’s main plusses is that it has a low debt-to-GDP level of about 30 percent, but the likelihood is that an economic plan would be laid out after Istanbul’s mayoral elections have been re-run on June 23. “For us, the critical issue is whether this administration has the capacity to move aside the political issues and focus on the economic needs of the country,” Lemay said, adding that the repeat of the Istanbul vote had underscored concerns. “It is another manifestation of the domestic political risk in this instance, and the weakening of the institutions of the country.” …

As the U.S. and China escalate their trade standoff, consumers in both countries are starting to see the impact. VOA’s Mykhailo Komadovsky reports from Washington. …

The acting head of the Federal Aviation Administration defended the way his agency certifies airline safety after two deadly crashes of the now-grounded Boeing 737 Max jet. Daniel Elwell called the system in which FAA-approved employees at plane manufacturers inspect the aircraft they built themselves “a good system.” But skeptical Democrats on the House Transportation Committee questioned the agency’s credibility. They told Elwell that the closeness between Boeing and the FAA may be one of the reasons it took the agency a relatively long time to ground the Boeing jets. “The public perception is you were in bed with those you were supposed to be regulating,” Nevada’s Dina Titus said, while committee chairman Peter DeFazio wanted to know “How can we have a single point of failure on a modern aircraft?” A Boeing 737 Max crashed off the coast of Indonesia in October and another 737 Max crashed in Ethiopia in March, killing a total of 346 people. Both planes were equipped with a system designed to push the nose downward to prevent a midair stall. Faulty sensor readings kept pushing the planes down while the pilots struggled to regain control. The pilots did not know the planes were equipped with the anti-stall system and their manuals had no explicit information. Elwell defended the FAA’s approval of the system on the Boeing jets, but admitted the system should have been better explained in the pilots’ operational and flight manuals. He also faulted Boeing for failing to inform airlines and the …