Day: September 27, 2017

President Donald Trump said on Wednesday a foreign leader told him at the United Nations last week that the country would soon announce plans to build or expand five automobile industry factories in the United States.

“I just left the United Nations last week and I was told by one of the most powerful leaders of the world that they are going to be announcing in the not too distant future five major factories in the United States, between increasing and new, five,” Trump said in a speech on tax reform in Indianapolis.

He added the factories were in the automotive industry.

He did not name the country. The White House did not immediately respond to a request for comment.

Automakers in Japan and Germany have both announced investments in the United States this year, with companies coming under pressure from Trump’s bid to curb imports and hire more workers to build cars and trucks in the country.

Investments to expand U.S. vehicle production capacity also reflect intensified competition for market share in the world’s most profitable vehicle market. In August, Toyota Motor Corp said it would build a $1.6 billion U.S. assembly plant with Mazda Motor Corp.

Toyota also said this week it was investing nearly $375 million in five U.S. manufacturing plants to support U.S. production of hybrid powertrains.

Last week, German automaker Daimler AG said it would spend $1 billion to expand its Mercedes Benz operations near Tuscaloosa, Alabama, to produce batteries and electric sport utility vehicles and create more than 600 jobs.

Rival German luxury automaker BMW AG said in June it would expand its U.S. factory in South Carolina, adding 1,000 jobs. And last month, Volkswagen AG’s brand president Herbert Diess said the company expected to bring electric SUV production to the United States and could add production at its Tennessee plant.
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The South American trade bloc Mercosur could seek trade deals with Canada, Australia and New Zealand this year, an Argentine official said Wednesday, as largest members Brazil and Argentina seek to open their economies.

Mercosur, which also includes Uruguay and Paraguay, is working with the European Union to finalize the political framework for a trade deal this year, at a time when the United States under President Donald Trump has been shying away from trade.

“There is a possibility that Mercosur starts negotiations with Canada, Australia and New Zealand this year,” Argentine Commerce Secretary Miguel Braun said at the Thomson Reuters Economic and Business forum in Buenos Aires.

“Integrating ourselves with these countries takes us in the direction we want to go,” he said, pointing to developed economies with high salaries. Argentina alone is seeking a trade agreement with Mexico, and Braun said it was also working on a trade agreement with Chile that would “deepen what we already have.”

Chilean President Michelle Bachelet said in New York last week that Santiago was finishing a trade liberalization agreement with Buenos Aires to boost trade and open opportunities for investors.
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Weather extremes and air pollution from burning fossil fuels cost the United States $240 billion a year in the past decade, according to a report Wednesday that urged President Donald Trump to do more to combat climate change.

This year is likely to be the most expensive on record, with an estimated $300 billion in losses from Hurricanes Harvey, Irma and Maria and a spate of wildfires in Western states in the past two months, it said.

“The evidence is undeniable: The more fossil fuels we burn, the faster the climate continues to change,” leading scientists wrote in the study published by the nonprofit Universal Ecological Fund.

Costs to human health from air pollution caused by fossil fuels averaged $188 billion a year over the past decade, it estimated, while losses from weather extremes such as droughts, heat waves and floods averaged $52 billion.

Trump could curb the $240 billion cost, equivalent to 1.2 percent of U.S. gross domestic product, by revising his plans to promote the U.S. coal industry and to pull out of the 195-nation Paris climate agreement, it said.

“We are not saying that all [weather extremes] are due to human activity, but these are the sorts of events that seem to be increasing in intensity,” co-author Robert Watson, a former head of the U.N. panel of climate scientists, told Reuters.

Higher ocean temperatures, for instance, mean more moisture in the air that can fuel hurricanes.

Events on the rise

And, in a sign of increasing risks, there were 92 extreme weather events that caused damage exceeding $1 billion in the United States in the decade ending in 2016, compared with 38 in the 1990s and 21 in the 1980s.

The combined cost of extreme weather and pollution from fossil fuels would climb to $360 billion a year in the next decade, the study said. Trump’s pro-coal policies could mean more air pollution, reversing recent improvements in air quality.

Last month, the U.S. Environmental Protection Agency accused scientists who linked record extreme rainfall from Tropical Storm Harvey to man-made climate change as trying to “politicize an ongoing tragedy.”

Wednesday’s study has been in the works for months, said co-author James McCarthy, professor of oceanography at Harvard University. He said there was widening evidence that a shift from fossil fuels made economic sense.

“Why is Iowa, why is Oklahoma, why is Kansas, why is Texas investing in wind energy? Not because they are interested in sea level rise or ocean temperatures but because it’s economically sensible,” he told Reuters.
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With Venezuela’s economic crisis leaving consumers struggling to buy basic staple foods, small Caracas brewery Social Club might seem out of place selling craft beer that costs per bottle what a worker earning the minimum wage makes in two days.

But business is booming.

Demand for Social Club’s beer regularly outstrips the 3,000 liters (793 gallons) it produces a month, according to its owners. Most of it is sold on weekends at a beer garden set up in the garage of its small production facility.

Brewers like Social Club are a reminder that despite the widespread social misery caused by the country’s economic crisis, an appetite remains among well-heeled Venezuelans for high-end niche products like craft beer.

At the same time, these small brewers are carving out a market in preparation for an eventual economic rebound.

“Venezuelans continue to be vain creatures who like to be in the vanguard, who like to keep up with what’s in fashion,” said Victor Querales, 32, one of Social Club’s owners, speaking on a Friday afternoon before clients began arriving. “There’s still a premium market that isn’t very sensitive to prices.”

The country now has around 30 craft brewers with commercial operations that supply high-end liquor stores and restaurants or deliver made-to-order brews for parties or weddings, according to the Craft Beer Association of Venezuela.

Craft brew still represents less than 1 percent of the market, which remains dominated by domestic brewing giant Polar and its smaller rival Regional.

But the last five years has seen the emergence of start-ups such as Norte del Sur and Pisse Des Gottes, both of which have won medals in international brewing contests.

The fortunes of Venezuelan craft brewers contrast with those of most major industries, which operate well below capacity as triple-digit inflation and byzantine currency controls make large-scale production of almost anything nearly impossible.

Social Club offers tours of its small brew facility and an adjacent bar that sells styles ranging from bitter coffee stouts to aromatic Belgian saisons.

Its production volume is tiny, reaching about 2 percent of the 1.8 million liters per year that the Colorado-based Brewers Association describes as the maximum for the denomination “microbrewer” in the United States.

Though Social Club’s fare is exorbitant by local standards, it is among the cheapest craft brews in the world at around $0.80 for a 12-ounce (354 milliliter) glass. U.S. brewpubs would likely charge at least five times that for a similar product.

Nation of beer drinkers

Costs are nonetheless a concern.

Malt and hops must be imported because they don’t grow in Venezuela’s tropical climate, leaving brewers at the mercy of the steadily depreciating bolivar currency.

And brewers often say their biggest challenge is winning over Venezuelans unaccustomed to beers with stronger flavors and higher alcohol content than commercial alternatives.

But they believe there is room to grow, in large part because Venezuelans have always been avid beer drinkers.

In 2010, at the height of an oil-fueled economic boom, the OPEC nation had the highest per capita beer consumption in Latin America and the ninth-highest in the world, according to figures compiled by Japan’s Kirin Holdings, which owns breweries in Brazil and Australia.

But per capita beer consumption fell to 25th in the world by 2015 as the drop in oil prices pushed the economy into free-fall.

Such slumping demand means microbreweries are far from a surefire route to success.

Some young would-be entrepreneurs take brewing classes with plans to start up businesses, only to end up selling off their equipment as they raise money to emigrate, according to interviews with brewers involved in such training.

But there are unlikely success stories too.

Architect Gustavo Izarra took up home-brew after visiting his daughter in Belgium in 2012. He set up Caleta brewery in 2015, just as the demand for architectural services was collapsing along with the economy.

He has since become the go-to design consultant for breweries including Social Club that are upgrading their facilities.

“People have limited spending power, so you end up with a product that for most people is out of reach,” said Izarra, 60.

“But nonetheless, people keep getting more and more interested in trying craft beer.”

 
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A blueprint of a Republican tax overhaul plan proposes tax cuts to wealthy Americans, businesses and the middle class while protecting deductions such as those for mortgage interest and charitable contributions.

The sweeping plan was unveiled Wednesday, the beginning of negotiations to revamp the U.S. tax code. It lacks critical details about the many tax breaks the White House and Republican congressional leaders want to eliminate to offset some of the trillions of dollars in revenue that would be lost through tax cuts.

“We’re going to introduce a tax plan that’s the largest tax cut, essentially in the history of our country,” President Donald Trump said Wednesday outside the White House.  “It’s going to be something special.  You already know some of the numbers, we’re going to give you some of the additional numbers.”

Some outside budget experts estimate the blueprint could slash government tax revenue by more than $5 trillion over 10 years. To offset some of the lost revenue, Republicans must agree on the benefits to eliminate.

In order to get the bill enacted, Republican congressional leaders will have to unite their party and possibly garner some Democratic support.

The plan calls for a cut in the corporate tax rate, from 35 percent to 20 percent. It’s a goal that has long had the support of House Republicans — although President Donald Trump has consistently pushed for a 15 percent corporate rate. The plan also proposes a one-time tax on the foreign earnings of U.S. companies.

Fewer income brackets

Individual income tax brackets would be streamlined from seven to three, and a larger number of people would qualify for the Child Tax Credit, which is aimed at helping low-income working families. The credit, currently $1,000 per child, would be expanded to higher-income families.

Other proposals, such as the elimination of the estate tax and the alternative minimum tax, would benefit upper-income earners.

The plan would maintain tax breaks for charitable giving and mortgage interest, and it also proposes amendments to the tax code that would benefit education and retirement.

Republicans control the White House and both houses of Congress, giving them a rare opportunity to revamp the tax code.

“This is our once-in-a-generation opportunity to fundamentally rethink our tax code. We can unleash the economy, promoting growth, attracting jobs and improving American competitiveness in the global market,” said Senate Majority Leader Mitch McConnell, a Kentucky Republican.

Many Democrats, however, have said they will oppose changes that will increase debt or benefit the wealthiest citizens.

The Republican plan “would result in a massive windfall for the wealthiest Americans and provide almost no relief to the middle-class taxpayers who need it most,” Senate Minority Leader Chuck Schumer, a New York Democrat, told colleagues on the Senate floor.
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Architect Kobi Karp has a vision for affordable housing in the Florida Keys: residences set at coconut-tree height to keep them dry, atop concrete columns holding them in place.

Key West clients sought out his designs before Hurricane Irma struck the island chain this month, and he thinks the two projects will continue despite Irma’s damage and debris. “It’s a more cost-efficient way of life,” the Miami-based architect said.

Such modern, planned development hasn’t always appealed to the independent spirits living in the Keys — but Irma may force the laid-back landscape to change.

Mobile homes and recreational vehicles didn’t survive the storm’s 130 mph winds and storm surge. The losses hit people crucial to Keys tourism: service industry and blue collar workers priced out of expensive Key West homes or newer structures meeting Florida’s stringent building codes.

Local officials are racing to find those workers housing to keep them in the Keys but still free up hotel rooms by Oct. 20, the opening day of the decadent Fantasy Fest and one of the biggest events on the Key West tourism calendar.

The housing crunch affects all sectors of the community: About 50 city employees may need to relocate, Key West city spokeswoman Alyson Crean said. Keys firefighters who lost everything have moved into fire stations or the homes of friends and relatives. On Duval Street, bar and tour company owners said some shell-shocked employees just quit because of the damage.

“When housing is eliminated, as it was in this storm, there’s literally no place for these people to move to. There’s no suburbs, there’s no driving for an hour and a half to find someplace to live. That’s just not possible here,” said Ed Swift, president of Key West-based Historic Tours of America, where at least a handful of employees have decided not to rebuild their lives here.

The Keys don’t function like other places: There’s only one narrow road in and out, and the isolation fosters a small-town, mom-and-pop atmosphere that has persevered amid booming numbers of tourists seeking Mardi Gras-style revelry and luxury accommodations.

As Key West rents rose over the last 20 years to $2,000 a month or more for two-bedroom units, Swift and other business owners started building housing, including dormitory-style accommodations, to keep local employees. Low-cost trailers and RVs helped fill housing gaps, but there’s already talk about replacing them altogether.

That worries people like U.S. Sen. Marco Rubio, R-Fla., who sounded wistful on the Senate floor last week about a paradise potentially lost.

“This storm threatens to fundamentally alter the character of Monroe County if we do not help the Florida Keys, because those trailer parks are on valuable land, and the owners of that land are going to be tempted to build on them — not mobile homes again, but build on them structures designed for visitors or people that can pay more money,” Rubio said. “That means you’re going to lose your housing stock, but it ultimately means you’re going to lose the character of the place.”

Irma destroyed or severely damaged up to 15,000 residential units, including vacation homes  amounting to more than a quarter of the 55,000 total homes in the Keys, according to Monroe County estimates.

That also includes nearly all the 7,500 mobile homes outside Key West, said Christine Hurley, assistant county administrator.

The county has asked the Federal Emergency Management Agency for 7,500 temporary mobile homes, as well as at least 1,700 travel trailers to park outside individual homes being repaired or rebuilt. It could be months before those units reach everyone who needs them, because of low inventory after Hurricane Harvey in Texas and other disasters, county and FEMA officials say.

About two dozen families have been approved so far for temporary trailers from vendors, FEMA Federal Coordinating Officer Willie Nunn said in a county statement released Monday.

Local officials also have asked FEMA to allow vacation homes typically listed on home-sharing websites to be used as temporary housing, Hurley said. Federal officials also are exploring ways to repair or improve existing multi-family homes for temporary housing.

The county also is asking mobile home park owners to allow FEMA to set up temporary housing on their properties, once cleared of debris and reconnected to power and water lines. Those mobiles homes would eventually need permanent replacements. It would be safer to build houses or apartment buildings, but that would change the lifestyle that appeals to many Keys residents, Hurley said.

Nine of Hurley’s employees were made homeless by Irma, but even those who faced significant financial challenges before the hurricane are making their way home, she said.

“I haven’t heard yet of people that don’t want to come back,” she said.

At Sunshine Key RV Resort and Marina on Big Pine Key, Richard Lessig said he wouldn’t mind new neighbors, even in government-issued trailers. He currently doesn’t have any, not since Irma flipped or crushed all the other trailers in the park.

Lessig’s own trailer home isn’t quite level, its air conditioning runs off a rumbling generator, and there was still no running water last week.

He’s gotten by in the Keys for nine months each year with his benefits and whatever money he makes in seasonal jobs as a boat captain and a magician for children’s birthday parties. He applied for disaster aid, wondering if he would have to spend more time living with his sister in New Jersey than in the Keys. He worried some friends won’t return for the potluck lunches and happy hours that made the park a vibrant community.

“Hopefully most of them will come back, but I’m sure there’s some that won’t,” Lessig said. “I figured, worst case, I’d have to borrow money and buy another trailer, because this is where I want to be.”

 
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The 220 percent tariff imposed by the United States on Bombardier Inc’s CSeries jet is an “attack” on Quebec and Canada, the province’s Premier Philippe Couillard said on Wednesday.

“Quebec has been attacked. And Quebec will resist. And Quebec will unite. All together, we will protect our workers. All together, we will be proud of our engineering,” he told reporters at a news conference.

The government of Quebec has taken a $1 billion stake in Bombardier’s CSeries jet. But Couillard said Wednesday the company had received “not a cent” in government subsidies.

The U.S. Commerce Department on Tuesday slapped preliminary anti-subsidy duties on Bombardier’s CSeries jets after rival Boeing Co accused Canada of unfairly subsidizing the aircraft, a move likely to strain trade relations between the neighbors.
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Orders for long-lasting manufactured goods rose a modest 1.7 percent in August, reflecting a rebound in the volatile aircraft sector. A gauge of business investment was up for a second month, providing hope that a revival in manufacturing is gaining strength.

Last month’s advance in orders for durable goods followed a 6.8 percent plunge in July, the Labor Department reported Wednesday. Both months were heavily influenced by swings in orders for commercial aircraft, which surged 44.8 percent in August after having plunged 71.1 percent in July.

A closely watched category that serves as a proxy for business investment posted a 0.9 percent gain in August after a 1.1 percent increase in July. Economists believe that U.S. factory output should continue rising in coming months, reflecting a rebound in the global economy.

Manufacturing has been improving since the middle of 2016, following a two-year slump caused by cutbacks in the energy industry and a strong dollar that made U.S. goods costlier overseas. Prospects are brighter now with the dollar weakening in value this year, which makes U.S. exports more competitive on overseas markets, and a rebound in energy drilling.

The overall economy, as measured by the gross domestic product, expanded at a solid 3 percent rate in the April-June quarter after a tepid 1.2 percent gain in the first three months of the year. Analysts believe activity in the current July-September quarter will likely slow a bit, in part because of the devastation caused by hurricanes Harvey and Irma.

For August, orders excluding transportation were up 0.2 percent after a stronger 0.8 percent rise in July.

Demand for machinery rose 0.3 percent while orders for computers and related products fell 2.3 percent. Orders for autos and auto parts rose 1.5 percent after a 2.1 percent drop in July.

 
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