Day: March 15, 2018

White House trade adviser Peter Navarro said Thursday that President Donald Trump would soon consider new punitive measures against China for its alleged “theft” of intellectual property.

U.S. officials, according to news accounts, are considering imposing as much as $60 billion in annual tariffs against Chinese information technology, telecommunications and consumer exports to the U.S. in an effort to trim its chronic annual trade deficit with Beijing by $100 billion. Last year, the U.S. says it imported Chinese goods worth $375 billion more than it exported to China.

“In the coming weeks, President Trump is going to have on his desk some recommendations,” Navarro told CNBC. “This will be one of the many steps the president is going to courageously take in order to address unfair trade practices.

“I don’t think there’s a single person … on Wall Street that will oppose cracking down on China’s theft of our intellectual property or their forced transfer,” Navarro said.

The new tariffs and other measures would be in addition to the 25 percent tariff on steel imports to the U.S. and 10 percent levy on aluminum that Trump announced last week, some of which affect China.

​At a political fundraiser Wednesday, Trump attacked several trading partners for the billions of dollars in trade surpluses they have built up against the U.S. He contended that China had become an economic power — the world’s second biggest economy — because of its trade surplus with the United States.

China warned it would likely retaliate against any new tariffs the U.S. imposes.

Foreign minister spokesman Lu Kang said, “History has proven that a trade war is in no one’s interest.”

He said that “if an undesirable situation arises, China has the intention of safeguarding its legitimate rights.”

Trump’s new tariffs on metal imports have led in recent days to volatility on U.S. stock exchanges, with wide day-to-day swings of hundreds of points in stock indexes. 

But Navarro said the U.S. can impose the tariffs in a way that can be good for the American people and good for the global trading system. We can do this in a way that is peaceful and will improve and strengthen the trading system. … Everybody on Wall Street needs to understand: Just relax.”
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HSBC will reveal a gender pay gap of 59 percent at its main U.K. banking operation, the biggest yet disclosed by a British bank, according to a copy of the lender’s report on the subject seen by Reuters on Thursday ahead of its publication.

The bank will also disclose a mean gender bonus gap of 86 percent at HSBC Bank Plc, which is the biggest of the lender’s seven entities in Britain and employs 23,507 people.

A spokeswoman for the bank confirmed the contents of the report.

The gender pay gap is the biggest yet reported by a British financial firm, according to government data, with some firms yet to provide figures ahead of an April deadline set by Prime Minister Theresa May last year.

Almost 50 years since the passage of Britain’s equal pay act, the continued gulf in earnings between men and women has attracted significant public attention over the past year or so.

In common with other banks, HSBC said its pay gap was largely accounted for by the bank having fewer women in senior roles.

The gender pay gap measures the difference between the average salary of men and women, calculated on an hourly basis.

HSBC said women held only 23 percent of senior leadership positions in its workforce in Britain, despite accounting for more than half of total staff.

The bank said it was taking a number of steps to reduce the pay gap, including committing to an aspirational target of women holding 30 percent of senior roles by 2020.

Last month, Asia-focused Standard Chartered reported a gap of 30 percent in Britain, while Virgin Money — the only major UK lender run by a woman — said its female staff earned on average 32.5 percent less per hour than its male workforce.

Lloyds Banking Group and Royal Bank of Scotland reported gender pay gaps of 32.8 percent and 37 percent respectively.

Barclays said last month it paid women in its international division, which houses its investment bank, on average 48 percent of what men earned in fixed pay.

The pay gaps have drawn criticism from lawmakers and are likely to spur questions from investors in the upcoming season for shareholder meetings, with stock prices and future earnings potential strongly linked to banks’ efforts to revive their reputations in the wake of the global financial crisis.
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Germany said on Thursday that any escalation of U.S. President Donald Trump’s tariffs on metal imports into a full-blown trade war could cause tangible damage to the global recovery, although the tariffs themselves should have only a limited effect.

Trump last week ordered the imposition of duties on incoming steel and aluminum and threatened to levy a tax on European cars if the European Union did not remove “horrific” tariffs and trade barriers on a range of goods.

“The German economic upswing is continuing at the beginning of 2018. The global economic environment is still favorable,” the Economy Ministry said in its monthly report. But it said U.S. trade policies were creating a sense of uncertainty.

The tariffs on steel and aluminum will affect trade flows in some regions, but their overall implications for the global economy are likely to be manageable, it said.

“But a possible escalation into a trade war and rising uncertainty among market participants could cause tangible damage,” it added.

European Council President Donald Tusk on Wednesday urged the United States to revive trade talks rather than escalate a dispute over tariffs on metals and cars.

And Swiss National Bank Chairman Thomas Jordan said on Thursday that U.S. protectionism could be a threat to the export-dependent Swiss economy and trigger safe-haven flows that would drive up the value of the Swiss currency.

‘At a crossroads’

Germany’s new economy minister, Peter Altmaier, said Trump was challenging the multilateral trade system as defined by the rules of the World Trade Organization (WTO).

“We are at a very important crossroads,” Altmaier said, warning of a scenario in which countries could start a spiral of tit-for-tat trade restrictions.

“This is a really huge challenge with implications for all of us,” Altmaier added. He said consumers in all countries would end up footing the bill because tariffs would push up prices for many kinds of products.

The threat of a full-blown trade war will also be on the agenda of the G-20 meeting in Argentina, where finance ministers and central bank governors from the world’s 20 biggest economies meet from March 17 to 20.

Germany’s new finance minister, Olaf Scholz, will meet his U.S. counterpart Steven Mnuchin on Sunday or Monday on the sidelines of the meeting to discuss trade, banking regulation and other issues, senior German officials said on Thursday.

“The minister will have bilateral meetings with all G-7 counterparts,” one of the officials said, on condition of anonymity, adding that multilateral trade would “certainly be a big topic” at the G-20 meeting.

The taxation of profits from digital business and regulation of crypto currencies will also be in focus, the official added.

 
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Major U.S. airlines are hiring pilots at a rate not seen since before 9/11, and that is encouraging more young people to consider a career in the cockpit.

Hiring is likely to remain brisk for years. Smaller airlines in the U.S. are struggling with a shortage that will continue as they lose pilots to the bigger carriers, which in turn will need to replace thousands of retiring pilots over the next few years.

Aircraft maker Boeing predicts that the U.S. will need 117,000 new pilots by 2036. Just a decade ago thousands of pilots were furloughed and some abandoned the profession.

The shortage has been felt most keenly at regional carriers where many pilots start their airline careers.

Last summer, Alaska Airlines subsidiary Horizon Air canceled more than 300 flights over two months for lack of pilots. Republic Airways filed for bankruptcy protection in 2016, citing a pilot shortage that forced it to ground flights.

Many regional carriers fly smaller planes for American Eagle, Delta Connection and United Express. Signing bonuses and higher pay have helped them hire more than 17,000 pilots in the past four years, but that only replaced those who moved up to the major carriers, according to the Regional Airline Association.

Demand at the major airlines is expected to grow as thousands of pilots at American, Delta, United and Southwest hit the U.S. mandatory pilot-retirement age of 65 in the next several years.

American Airlines CEO Doug Parker believes the industry will cope.

“Economics is going to take care of this, and I think that’s what is happening now,” Parker says. “The [flight] schools are starting to fill up with people who realize, ‘If I can get myself to 1,500 hours [the minimum flight hours needed to get an airline-pilot license], I can be assured of a career as a pilot.’ That’s not something people could convince themselves of from 9/11 on until now.”

Pilot hiring nosedived after the Sept. 11, 2001 terror attacks that led to a decline in travel, and again during the global financial crisis in 2008-2009. Major U.S. airlines hired only 30 pilots in 2009, according to Future & Active Pilot Advisors, a career-counseling business for pilots.

The job market didn’t pick up significantly until around 2014. Last year 10 of the largest U.S. passenger and cargo airlines hired 4,988 pilots, the most since 2000 when they hired 5,105.

“It’s the best sellers’ market I have seen in the last 45 years of monitoring airline pilot hiring,” says Louis Smith, a retired airline pilot who runs the pilot-counseling outfit.

Smith says forums for aspiring pilots that once drew a couple dozen people now sometimes attract more than 150. Some hope to make a mid-career change, which was rare just a few years ago.

Aaron Ludomirski is one of those career-changers. The 31-year-old from Asbury Park, New Jersey, says he always wanted to be a pilot but studied business instead because the bleak job opportunities for pilots in the years after 9/11 didn’t justify the cost of school and flight training. After college he started an online marketing business.

“Year after year I found myself less and less satisfied with my work,” he says. “I started thinking about what kind of career would really lead me to feeling fulfilled and accomplished, and I kept coming back to aviation.”

Ludomirski did some fresh research and learned that pilots were back in demand — and more would be retiring in the next few years. He quit his job and went to flight school. Now he is working as a flight instructor to gain the required flying time for an airline pilot.

“I can interview for and even accept a conditional letter of employment and know I have my dream job lined up for me when I’m ready,” he says.

Applications for commercial aviation majors at the University of North Dakota, a big aeronautical school, have more than doubled in the last three years, says Elizabeth Bjerke, an aviation professor and one of the authors of the university’s widely watched forecast on pilot supply.

Some students graduate early to take advantage of the job market and the chance to move up the seniority list quickly because so many older pilots are retiring.

“Our graduates will fly at the regionals for a very short period,” Bjerke said. “They are getting picked up by the major carriers in their mid-20s, which would have been just crazy to think of 15 or 20 years ago.”

Michael Wiggins, chairman of the aeronautical science department at Embry-Riddle Aeronautical University, says his school’s graduates are getting multiple job offers from regional airlines.

Pilots who become captains on jumbo jets that fly international routes can earn more than $300,000 a year. But for anyone starting out in the profession, the training is expensive — upward of $100,000.

A few years ago, those who made it faced starting pay for first officers or co-pilots at regional airlines in the low-$20,000s. With bonuses and higher hourly rates, some regionals now claim to offer starting pay of $80,000 or more, but even that might not be enough to meet future demand.

The Regional Airline Association is pushing to change a 2013 federal rule that requires 1,500 hours of flying time — usually in small, single-engine planes — by replacing some of it with supervised classroom instruction. The group’s president, Faye Malarkey Black, says supervised training would produce aviators with skills more relevant to piloting an airliner.

But a similar proposal appears stalled in Congress, partly due to opposition from families of the 50 people who died in the last deadly crash of a U.S. airliner, a Colgan Air plane in 2009. Black believes the Trump administration has the authority to change the minimum flight hours without waiting for Congress to act, but she admits that will be difficult “as long as those changes are successfully cast as rolling back safety.”

JetBlue Airways is beginning a small-scale program of training people with no flying experience — an approach used by Lufthansa and other international airlines. The JetBlue program costs about $125,000, however, the airline says it is looking into providing financial assistance.

Even with assistance, however, life for newcomers can be taxing. In addition to flying smaller planes for lower wages, they work on holidays and spend lots of time away from home.

Starting pilots need “a passion for flying that drives the thrill of going to work,” says Smith, the career adviser. “It’s certainly not for everyone.”

 
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Cooking is Chris Spear’s passion. He’s been professionally cooking since he was 16. Over the years, he worked for big restaurants and reached a point where he had almost 100 employees reporting to him. That’s when he missed flexibility and wanted to be more creative. So, he quit working for restaurants and founded his own catering company, Perfect Little Bites in Frederick, Maryland.

“Not that having your business is easy, but I want to have the flexibility to say, ‘It’s Valentine’s Day, and it’s more important to me to stay home with my wife,’ or to be home cooking for someone. I really wanted something that I felt was mine,” Spear explained.

Spending long hours in the kitchen doesn’t tire Spear, but he had often been concerned that becoming an independent chef would make him feel lonely. That inspired him to found Chefs Without Restaurants, an online resource for chefs. 

“I’ve been thinking about the Chefs Without Restaurants for about five years now, even before I took Perfect Little Bites full time, because I kept thinking about, ‘Well, when I do this full time, who are going to be my colleagues? Who are going to be the people who I can bounce ideas off? Who am I going to be able to [get to] do things like cater an event that’s maybe outside my range of 30 people? Like, do I have a resource where I can pull in one or two other people?’ ” he said. ” … And what I started to see was other independent chefs were referring customers to me, [and] I started to do that back to them. I kind of thought, ‘There’s got to be an easier way to do this.’ ”

Dozens have joined

Since the group started last January around 100 chefs have joined it.

“We’re caterers,” he said. “We’re personal chefs. We run food trucks. We have awesome food specialty shops.” Spear said he wanted to find an arrangement that would be beneficial to all such groups but didn’t cost them any money. 

So now he has a Facebook group where he can post information about, for instance, a potential customer who wants to arrange a dinner in a given location and within a certain price range, and he can offer interested chefs more information.

Customers can also benefit from this network. Spear said he’s building a website where customers will be able to check out profiles of the Chefs Without Restaurants members, learn about their specialties and see what kinds of events they can cater, large or small.

Lana and Bobby Browner are a wife-and-husband team who own their own catering company, Bent and Bent Events, in Frederick.

“We’ve been doing this for five years, since he graduated from a culinary school,” Lana Browner said.

“We specialize in Creole cuisine, Caribbean cuisine. So we blend flavors and bring a nice flavor, a different flavor in the field of food in Frederick County,” Bobby Browner said.

When the Browners heard about Spear’s group, they decided to become members. 

“I think the biggest hurdle for a lot of chefs is that they don’t really form an alliance because they’re all kind of competing with each other, but you don’t have that in this group,” Lana Browner said. “What we’ve experienced so far is a lot of learning about different chefs in the area. It’s even been interesting to get feedback from chefs that are not in this immediate area.”

Her husband added, “It’s a really competitive field,” but there’s “a lot of camaraderie, a lot of openness and a lot of sharing” within the group.

Shared kitchen

The group is also bringing more business to local facilities, like a shared kitchen called Maryland Bakes where members often meet and work. Terri Rowe, a food entrepreneur and owner of Maryland Bakes, said the group brings more energy to the small food businesses in the area.

“They bring connections,” she said. “They bring a variety of talents and gifts. They bring creative ideas and just the whole network of independent people joining together. So it’s a big community.”

The whole local food community seems to embrace Chefs Without Restaurants.

Oil & Vinegar Frederick is one of the local shops Spear likes. The place often hosts events to introduce cooking ideas and chefs to their customers.

Store owner Sharon Streb said small businesses should help one another succeed. 

When other chefs and businesses come to her store, “they get in front of our customers and hopefully we get in front of their customers. That’s a win-win for both of us,” she said. “It’s tough out there for a small business, and not a lot of small businesses succeed. It’s important that we can work together and be successful, both of us.”

That’s the goal for Spear, who wants to carve out a space for independent chefs on the food map in the area.
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President Donald Trump freestyled with the facts when talking trade with Canadian Prime Minister Justin Trudeau.

The Republican described the discussion during a fundraising speech in St. Louis on Wednesday.

According to audio obtained by The Washington Post, Trump insisted that the United States runs a trade deficit with Canada.

Trump said Trudeau told him there was no trade deficit. Trump said he replied, “‘Wrong, Justin, you do.’ I didn’t even know. … I had no idea. I just said, ‘You’re wrong.'”

Trump claimed the figures don’t include timber and energy.

However, the Office of the United States Trade Representative says the United States has a trade surplus with Canada.
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President Donald Trump’s recently proposed tariffs on steel and aluminum have spurred a hot debate in the U.S. that doesn’t adhere to traditional party lines. Is the administration’s move a boon to American workers or the beginning of a trade war? VOA’s Plugged In with Greta Van Susteren examines the pros, cons, impact and history of tariffs on goods imported to the United States. VOA’s Joan DeLuca reports:
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Amazon.com Inc.’s top television shows drew more than 5 million people worldwide to its Prime shopping club by early 2017, according to company documents, revealing for the first time how the retailer’s bet on original video is paying off.

The documents also show that Amazon’s U.S. audience for all video programming on Prime, including films and TV shows it licenses from other companies, was about 26 million customers.

Amazon has never released figures for its total audience.

The internal documents compare metrics that have never been reported for 19 shows exclusive to Amazon: their cost, their viewership and the number of people they helped lure to Prime.

Known as Prime Originals, the shows account for as much as a quarter of what analysts estimate to be total Prime sign-ups from late 2014 to early 2017, the period covered by the documents.

Viewers to shoppers

Core to Amazon’s strategy is the use of video to convert viewers into shoppers. Fans access Amazon’s lineup by joining Prime, a club that includes two-day package delivery and other perks, for an annual fee.

The company declined to comment on the documents seen by Reuters. But Chief Executive Jeff Bezos has been upfront about the company’s use of entertainment to drive merchandise sales.

The world’s biggest online retailer launched Amazon Studios in 2010 to develop original programs that have since grabbed awards and Hollywood buzz.

“When we win a Golden Globe, it helps us sell more shoes,” Bezos said at a 2016 technology conference near Los Angeles. He said film and TV customers renew their subscriptions “at higher rates, and they convert from free trials at higher rates” than members who do not stream videos on Prime.

​$5 billion in video

Video has grown to be one of Amazon’s biggest expenditures at $5 billion per year for original and licensed content, two people familiar with the matter said. The company has never disclosed how many subscribers it won as a result, making it hard for investors to evaluate its programming decisions.

The internal documents show what Amazon considers to be the financial logic of its strategy, and why the company is now making more commercial projects in addition to shows aimed at winning awards, the people said.

For example, the first season of the popular drama The Man in the High Castle, an alternate history depicting Germany as the victor of World War II, had 8 million U.S. viewers as of early 2017, according to the documents. The program cost $72 million in production and marketing and attracted 1.15 million new subscribers worldwide based on Amazon’s accounting, the documents showed.

Amazon calculated that the show drew new Prime members at an average cost of $63 per subscriber.

That is far less than the $99 that subscribers pay in the United States for Prime; the company charges similar fees abroad. Prime members also buy more goods from Amazon than non-members, Bezos has said, further boosting profit.

Amazon’s secret math

Precisely how Amazon determines a customer’s motivation for joining its Prime club is not clear from the documents viewed by Reuters.

But a person familiar with its strategy said the company credits a specific show for luring someone to start or extend a Prime subscription if that program is the first one a customer streams after signing up. That metric, referenced throughout the documents, is known as a “first stream.”

The company then calculates how expensive the viewer was to acquire by dividing the show’s costs by the number of first streams it had. The lower that figure, the better.

The internal documents do not show how long subscribers stayed with Prime, nor do they indicate how much shopping they do on Amazon. The company reviews other metrics for its programs as well. Consequently, the documents do not provide enough information to determine the overall profitability of Amazon’s Hollywood endeavor.

Still, the numbers indicate that broad-interest shows can lure Prime members cheaply by Amazon’s calculations. One big winner was the motoring series The Grand Tour, which stars the former presenters of BBC’s Top Gear. The show had more than 1.5 million first streams from Prime members worldwide, at a cost of $49 per subscriber in its first season.

The documents seen by Reuters reflect Prime subscribers in the United States, United Kingdom, Germany, Austria and Japan, where Amazon’s programs were available before Prime Video rolled out globally in December 2016.

Analysts estimate that 75 million or more customers have Prime subscriptions worldwide, including about half of all households in the United States.

Bigger bets

About 26 million U.S. Prime members watched television and movies on Amazon as of early 2017. Reuters calculated this number from the documents, which showed how many viewers a TV series had as a percentage of total Prime Video customers.

Rival Netflix Inc had twice that many U.S. subscribers in the first quarter of last year. It does not disclose how many were active viewers.

For years, Amazon Studios aimed to win credibility in Hollywood with sophisticated shows beloved by critics. Its marquee series Transparent, about a transgender father and his family, won eight Primetime Emmy Awards and created the buzz Amazon wanted to attract top producers and actors.

Yet Transparent lagged Amazon’s top shows in viewership.

Its first season drew a U.S. audience half as large as that of The Man in the High Castle, and it fell to 1.3 million viewers for its third season, according to the documents.

Similarly, Good Girls Revolt, a critically acclaimed show about gender inequality in a New York newsroom, had total U.S. viewership of 1.6 million but cost $81 million, with only 52,000 first streams worldwide by Prime members.

The program’s cost per new customer was about $1,560, according to the documents. Amazon canceled it after one season.

Amazon is now working on more commercial dramas and spin-offs with appeal outside the United States, where Prime membership has far more room to grow, people familiar with the matter said.

The effort to broaden Amazon’s lineup, long in the works, will be in the hands of Jennifer Salke, NBC Entertainment’s president whom Amazon hired last month as its studio chief.

Amazon’s Bezos has wanted a drama to rival HBO’s global hit Game of Thrones, according to the people.

In November, Amazon announced it will make a prequel to the fantasy hit The Lord of the Rings. The company had offered $250 million for the rights alone; production and marketing could raise costs to $500 million or more for two seasons, one of the people said.

At half a billion dollars, the prequel would cost triple what Amazon paid for The Man in the High Castle seasons one and two, the documents show. That means it would need to draw three times the number of Prime members as The Man in the High Castle for an equal payoff.
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The U.S. Senate voted 67 to 31 Wednesday to ease bank rules, bringing Congress a step closer to passing the first rewrite of the Dodd-Frank reform law enacted after the 2007-2009 global financial crisis.

The draft legislation now heads to the U.S. House of Representatives where Republicans in the majority say they want to add more provisions to ease financial regulations. Those changes have some of the bill’s backers worried that late alterations could upend the deal struck in the Senate between Republicans and Democrats.

The bill would ease tight restrictions on small banks and community lenders, and includes provisions beneficial to all but the largest U.S. banks.

The measure marks the first significant rewrite of financial rules since the passage of the 2010 Dodd-Frank financial reform law. The White House said in a statement that President Donald Trump would sign the bill into law if approved by the House.

GOP: Dodd-Frank too much

Republican critics say Dodd-Frank went too far and curbs banks ability to lend, while many Democrats say it provides critical protections for consumers and taxpayers.

The bill would raise the threshold at which banks are considered systemically risky and subject to stricter oversight from $50 billion to $250 billion. It also exempts banks with less than $10 billion in assets from rules banning proprietary trading, as well as exempts smaller banks from several other post-crisis rules.

The bill would allow custody banks such as BNY Mellon and State Street Corp to exempt the customer deposits they place with central banks from a stringent capital calculation requirement.

In House, 30 bills

In the House, conservative Republicans say they want to expand the bill to include additional regulatory relief, identifying roughly 30 bills they have passed for inclusion. But that insistence has some of the bill’s supporters concerned it could disrupt the bipartisan support it needs to become law.

“To expect that the House would have a desire to have some fingerprints on this final product is more than reasonable,” said Representative Bill Huizenga, a Michigan Republican, who wants additions to the bill.

Any changes made in the House would again have to pass the Senate, and Republican additions could drive away Senate Democrats whose support is needed for passage.

“There’s no guarantee that a modified bill would be able to pass the Senate,” said Paul Merski, executive vice president with the Independent Community Bankers of America, which supports the Senate bill. “That’s a real danger.”
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