Month: May 2018

U.S. Commerce Secretary Wilbur Ross said Wednesday a U.S.-European Union trade deal could still be reached even if the United States imposes tariffs on EU steel and aluminum imports.

EU and U.S. officials are holding last-minute negotiations two days before U.S. President Donald Trump decides to apply tariffs on Europe.

The threat of tariffs has increased prospects of retaliation and a global trade war that could hinder the global economy.

“There can be negotiations with or without tariffs in place,” Ross said at the Organization for Economic Cooperation and Development in Paris. “There are plenty of tariffs the EU has on us. It’s not that we can’t talk just because there’s tariffs.”

The Trump administration is also exploring possible limits on foreign auto imports, citing national security. 

The EU wants exemptions on steel and aluminum tariffs, which Trump hopes will benefit the U.S., or impose tariffs on U.S. peanut butter, orange juice and other products.

In a speech at the OECD, French President Emmanuel Macron said Europe should stand its ground in the face of unilateral actions and warned against trade wars.

“Unilateral responses and threats over trade wars will solve nothing of the serious imbalances in world trade. Nothing,” he proclaimed.

In an apparent reference to Trump’s proposed tariffs, Macron said, “These solutions might bring symbolic satisfaction in the short term. …. One can think about making voters happy by saying, ‘I have a victory. I’ll change the rules. You’ll see.’” 

Macron also called on the EU, the U.S., China and Japan to draft a World Trade Organization reform plan for the G-20 summit in Argentina later this year.

“The new rules must meet the current challenges of world trade: massive state subsidies creating distortions of global markets, intellectual property, social rights and climate protection,” he said. 

But Macron’s multilateral approach has produced limited results to date, as Trump has withdrawn from the Paris Climate Accord and the Iran nuclear deal, and is threatening to disrupt trade relations between China, the EU and other economic powers.

 
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China vows it will fight back if the United States goes through with plans to impose huge tariffs on Chinese goods.

President Donald Trump’s administration said in a statement Tuesday it planned to impose 25 percent tariffs on $50 billion of Chinese goods that contain “industrially-significant technology.” It said the proposed tariffs are in response to China’s practices with respect to technology transfer, intellectual property, and innovation.  

Chinese Foreign Ministry Spokeswoman Hua Chunying blasted the Trump administration’s apparent reversal Wednesday in Beijing. Hua warned the administration risked squandering its credibility in international relations with every “flip flop” and contradiction of its previous stance.

Hua stressed Beijing is not afraid of engaging in a trade war, and will take “forceful” measures if the tariffs are imposed.

The White House said it will announce the final list of covered imports by June 15, 2018, and the tariffs will be imposed shortly thereafter.

Trump announced in April he planned to impose tariffs on $150 billion worth of Chinese goods, and Beijing responded by declaring it will retaliate by imposing similar amount of tariffs of imported American goods.

After two rounds of trade talks aimed at avoiding a full-blown trade war, U.S. Treasury Secretary Steven Mnuchin announced the two sides had reached a deal for Chinato buy more American goods to “substantially reduce” the huge trade deficit with the United States.

The Trump administration said in its statement trade talks with China will continue and it will request China remove all of its many trade barriers, including non-monetary trade barriers, and that tariffs and taxes between the two countries be “reciprocal in nature and value.” 

China in violation

The Trump administration’s decision to take action is a result of an investigation conducted by the U.S. Trade Representative under Section 301 of the Trade Act of 1974 to determine whether Beijing’s trade practices may be “unreasonable or discriminatory” and that may be “harming American intellectual property rights, innovation or technology development.”After a seven-month investigation, the USTR found the policies were in violation.

U.S. Commerce Secretary Wilbur Ross is set to go to Beijing this week to negotiate on how China might buy more American goods to reduce the huge U.S. trade deficit with Beijing, which last year totaled $375 billion.
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Taiwan will struggle to stop a shrinking pool of mostly poor diplomatic allies from shifting allegiance to its rival, China, because it lacks the amounts of money they want, experts and officials in Taipei say.

The number of countries that recognize Taiwan diplomatically fell to 18 last week after Burkina Faso severed 24 years of relations.

The West African country, one of the world’s poorest, established formal relations with China days later and became the fourth country to make the change since 2016.

Taiwan had extended medical and farming support to Burkina Faso, but Taiwanese media said China had offered $50 billion last year. China often sends investors to Africa to tap natural resources and build infrastructure.

Failure to match Chinese money could shift more allies from Taipei to Beijing, experts believe, minimizing Taiwan’s voice in the United Nations and hurting its struggle to be seen internationally as separate from China.

“Quantitatively, China can undoubtedly offer much more than Taiwan and can offer that over a spectrum that is much wider than the Taiwan side’s spectrum,” said Fabrizio Bozzato, a Taiwan Strategy Research Association fellow.

China sees Taiwan as part of its territory rather than a state entitled to diplomacy. Each side has ruled itself since the Chinese civil war of the 1940s.

Backed by more than 170 countries including the world’s most powerful, China insists the two sides eventually unify despite polls showing Taiwanese prefer autonomy.

Taiwan’s government says China pays Taiwanese allies to switch allegiance as a way to put pressure on President Tsai Ing-wen. Tsai took office in Taiwan two years ago and rejects Beijing’s idea that the two sides belong to a single China.

Funding limitations in Taiwan

Taiwan gives aid to its allies based on evaluations of what each one needs to develop socially or economically, foreign ministry spokesman Andrew Lee said. It may set a timeline of two to three years, Lee said. Common types of aid are scholarships, farming technology and medial programs.

Taiwan has a limited budget, Lee told a news conference Tuesday.

“Our government maintains a steady stance, and the most important thing now is what the president has indicated and foreign minister has emphasized, which is no diplomatic acts that are related to so-called money diplomacy,” he said.

“Presently, with our government financial problems and our foreign affairs budget being only so much, we must use the smallest budget to do the biggest deployment, so in this aspect we must positively use our creativity.”

On Tuesday Taiwan agreed to expand economic and infrastructure aid to Haiti with an eye toward luring more Taiwanese investors to the impoverished Caribbean country. They reached that deal as Haitian President Jovenel Moise visited Taipei.

Taiwan seldom specifies amounts of aid to particular countries, which are mostly in the Caribbean, Central America and the South Pacific.

More money, faster, from China

China as a Communist country need not vet aid money through parliament or test the opinion of citizens who may prefer the aid money be kept at home, analysts say. It has more money as well as farther-reaching programs to distribute it, they add.

One channel is the $1 trillion Belt-and-Road Initiative for building new infrastructure around Eurasia.

China also can encourage its tourists to visit impoverished countries as a source of hospitality income, Bozzato said. Chinese took 130.5 million trips overseas last year, more than in 2016.

Some money from China reaches its allies “under the table,” he said. China is “richer” than Taiwan and is seen as a “great power that keeps on rising,” he said.

South Pacific nations allied with the United States, he said, “can extract resources both from the traditional Western partners and the new Chinese partner.”

Exporters from nations allied with Beijing have access to the world’s biggest consumer market, as well.

When the Dominican Republic cut ties with Taiwan May 1, its presidential office website said domestic industries had “requested greater diplomatic, commercial and economic growth with the People’s Republic of China.”

Since the African nation of Sao Tome and Principe left Taiwan for China in 2016, Beijing has pledged $146 million for the modernization of its international airport and construction of a deep-sea container port to facilitate Chinese trade in Africa.

Taiwanese aid had focused on farming, energy and public health.

Countries that need peacekeeping can look to China for help because it’s a United Nations Security Council member, as well, said Huang Kwei-bo, international affairs college vice dean at National Chengchi University in Taipei. Taiwan has no U.N. seat.

“You could threaten Taiwan a bit and it would give you more money, but that’s still not as much as Beijing can offer,” Huang said.

 
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Greece’s largest labor unions are staging a general strike against plans to extend austerity measures, in a 24-hour protest that halted ferry services to the islands, and disrupted flights, public transport and other services.

Wednesday’s strike also closed schools and left public hospitals running on emergency staff.

Government budget austerity measures are due to continue for at least two more years after the international bailout ends in August, starting with another major round of pension cuts next January. Hundreds of protesters gathered in central Athens as several protest marches are planned in the capital and other cities Wednesday.

“The government is continuing disastrous policies for society and the economy, forcing unsustainable measures onto the backs of wage-earners and retired people,” the country’s largest union, the GSEE, said.

“The constant deterioration in the living standards is part of a downward trend that people [in government] chose not to see.”

Greece is currently negotiating the terms of its bailout exit with European creditors, including how its finances will be monitored and the conditions of a promised debt relief package. But the talks, due to be concluded in a few weeks, have been overshadowed by the political crisis in Italy and the resulting financial turmoil.

Eurozone member Greece has relied on money from three consecutive bailouts since losing market access in 2010. The rescue funds have been provided by a eurozone bailout fund and the International Monetary Fund, though the IMF has held off on a cash contribution toward Greece latest program.

A new round of administrative and market reforms demanded by creditors is due to be voted on in parliament on June 14.

 
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Starbucks closed 8,000 of its stores Tuesday to give 175,000 employees about four hours of anti-bias training.

The sessions were part of the company’s response to the April 12 arrests of two black men at a Starbucks in Philadelphia. 

Rashon Nelson and Donte Robinson had not purchased anything and told a store manager they were waiting for a friend to join them. They were asked to leave and an employee called the police, which led to their arrest. The scene was recorded on cellphones and quickly spread on social media, prompting sharp criticisms of Starbucks along with protests and calls to boycott the coffee chain.

Tuesday’s sessions involved asking employees to discuss with small groups of their colleagues aspects of race and bias and how they can make people feel like they belong.

There were exercises of personal reflection asking people to think about when they have thought about their own race, how it has affected their day-to-day lives and interactions with other people. 

Questions included evaluating how in the case of speaking to someone of the same race, or the case of speaking to someone of a different race, how easy or hard is it to talk about race, feel comfortable using their natural language and gestures, to be respected without having to prove their worth and express dissatisfaction with something without being told they seem angry.

“Without assigning good or bad, do you notice ways you treat people differently?” read one question.

Participants were also shown a series of videos including Starbucks executives discussing bias with experts, a company-funded documentary about the history of how African-Americans have been denied access in public places in the United States and employees describing instances in which they made assumptions about customers based on appearances.

Starbucks President and CEO Kevin Johnson acknowledged what he called the “disheartening situation that unfolded in Philadelphia” in one video and said the company’s mission is to be a “place where everyone feels welcome.” He said the focus of the training was not to be “color blind” by pretending race does not exist, but rather to be “color brave” and discuss race directly.

The training was developed with the NAACP Legal Defense and Education Fund, the Perception Institute and other social advocacy organizations, and included contributions by the rap music artist Common.

Similar unconscious bias training has been used by police departments, companies and other organizations to help address racism in the workplace and encourage workers to open up about implicit biases.

In one video, Common told employees that while people usually seek similarities with others, there are great advantages to learning to love what makes you different from other people.

“It’s a life skill to make someone else in your presence feel welcome. You do that by not only loving what makes them the same as you, but by appreciating what makes them different from you,” he said.

Starbucks has announced policy changes following the Philadelphia incident, mainly that it will no longer require people to buy anything in order to be welcome in the company’s stores. It also promised to give employees more training in the coming year, and to provide each store with a list of local resources for mental health and substance abuse services, housing shelters and protocols for calling authorities.

“Today was a starting point. We have much to do,” said Rosalind Brewer, chief operating officer and group president.

Nelson and Robinson reached an agreement with Starbucks for an undisclosed amount of money and offers of a free education. They also accepted from the city of Philadelphia a symbolic $1 each and a promise to launch a $200,000 program for young entrepreneurs.
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The U.S.-North Korea summit appears to be back on track, but Pyongyang is showing increased impatience at comments coming out of Washington that what leader Kim Jong Un really wants, even more than his nuclear security blanket, is American-style prosperity.

It’s a core issue for Kim and a message President Donald Trump shouldn’t ignore as they work to nail down their summit next month in Singapore.

Kim is as enthusiastic as Trump to see the summit happen as soon as possible, but the claim that his sudden switch to diplomacy over the past several months shows he is aching for U.S. economic aid and private-sector know-how presents a major problem for the North Korean leader, who can’t be seen as going into the summit with his hat in his hand.

The claim is also quite possibly off target. 

North Korea is far more interested in improving trade with China, its economic lifeline, and with South Korea, which it sees as a potential gold mine for tourism and large-scale joint projects. Getting the U.S. to back off sanctions so he can pursue those goals, along with the boost to his legitimacy and whatever security guarantees he can take home, is more likely foremost on Kim’s mind. 

Even so, the North’s perceived thirst for U.S. economic aid has consistently been the message coming from Trump and his senior officials. All Kim needs to do, they suggest, is commit to denuclearization and American entrepreneurs will be ready to unleash their miracles on the country’s sad-sack economy.

“I truly believe North Korea has brilliant potential and will be a great economic and financial nation one day,” Trump tweeted Sunday. “Kim Jong Un agrees with me on this.” 

Secretary of State Mike Pompeo has laid Washington’s road map out in more detail.

“We can create conditions for real economic prosperity for the North Korean people that will rival that of the South,” he said earlier this month in a televised interview. “It won’t be U.S. taxpayers. It will be American know-how, knowledge, entrepreneurs and risk-takers working alongside the North Korean people to create a robust economy for their people.” 

Pompeo suggested that Americans help build out the North’s energy grid, develop its infrastructure and deliver the finest agricultural equipment and technology “so they can eat meat and have healthy lives.”

Kim has emphatically not agreed to any of that. 

Under Trump’s “maximum pressure” policy, international sanctions on North Korea are stronger than ever. Sanctions relief would open the door for more trade with China, South Korea and possibly Russia – partners North Korea trusts more than it trusts Washington – and potentially unlock access to global financial institutions. 

The last thing Kim wants is to give up his nuclear weapons only to have his country overrun with American businessmen and entrepreneurs.

To Pyongyang’s ears, that scenario is less an offer than a threat. 

Despite its very real need for foreign investment, Kim’s regime has good reason to be wary of economic aid in general. Opening up to aid inevitably involves some degree of increased contact with potentially disruptive outsiders, calls for change, loosening of controls and restrictions – all of which could be seen as a threat to Kim’s near absolute authority.

North Korea’s message on that has been clear. 

Almost as soon as Pompeo started talking about his plan to rebuild North Korea’s economy, Kim Kye Gwan, the North’s first vice foreign minister, shot back that Pyongyang has no interest in that kind of help, saying, “We have never had any expectation of U.S. support in carrying out our economic construction and will not at all make such a deal in future, too.” 

State media unleashed another attack on the idea Sunday, calling Fox News, CBS and CNN “hack media on the payroll of power” for airing programs that featured U.S. officials talking about how large-scale, nongovernmental economic aid awaits North Korea if it moves toward verifiable and irreversible denuclearization.

The North’s media have been careful not to criticize Trump directly. 

But the issue is sensitive enough that the North has also stepped up its response in ideological terms, stressing the superiority of the socialist system and the value of independence, while warning against the underhanded scheming of the “imperialists,” which in North Korea speak is interchangeable with “Americans.”

“It is the calculation of the imperialists that they can attain their aims without firing a single shot if they make the people degenerate and disintegrate ideologically and foment social disorder,” said an editorial Sunday in the ruling party’s newspaper.

The commentary went on to call the capitalist way of life “ideological and cultural poisoning” and concluded, “Unless such poisoning is prevented, it would be impossible to defend independence and socialism and achieve the independent development of each country and nation.”
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Starbucks, mocked three years ago for suggesting employees discuss racial issues with customers, asked workers Tuesday to talk about race with each other.

It was part of the coffee chain’s anti-bias training, created after the arrest of two black men in a Philadelphia Starbucks six weeks ago. The chain apologized but also took the dramatic step of closing its stores early for the sessions. But still to be seen is whether the training, developed with the NAACP Legal Defense and Education Fund and other groups, will prevent another embarrassing incident. 

“This is not science, this is human behavior,” said Starbucks Chairman Howard Schultz. He called it the first step of many.

The training was personal, asking workers to break into small groups to talk about their experiences with race. According to training materials provided by the company, they were also asked to pair up with a co-worker and list the ways they “are different from each other.” A guidebook reminds people to “listen respectfully” and tells them to stop any conversations that get derailed. 

“I found out things about people that I’ve worked with a lot that I didn’t know,” said Carla Ruffin, a New York regional director at Starbucks, who took the training earlier Tuesday and was made available by the company to comment on it. 

Ruffin, who is black, said everyone in her group said they first experienced bias in middle school. “I just thought that was pretty impactful, that people from such diverse backgrounds, different ages, that it was all in middle school.”

She said the training and discussion was needed: “We’re never as human beings going to be perfect.”

Starbucks declined to specify how much the training cost the company, though Schultz said it was “quite expensive” and called it “an investment in our people and the long-term cultural values of Starbucks.”

The chain also lost sales from closing early, but the late-in-the-day training sessions meant no disruption to the busier morning hours.

At the company’s Pike Place Market location in Seattle, commonly referred to as the original Starbucks, the store stopped letting people in at 1 p.m.

Trina Mathis, who was visiting from Tampa, Florida, was frustrated that she couldn’t get in to take a photo but said the shutdown was necessary because what happened in Philadelphia was wrong.

“If they haven’t trained their employees to handle situations like that, they need to shut it down and try to do all they can to make sure their employees don’t make that same mistake again,” said Mathis, who is black.

Others visiting the store questioned whether the training would make a difference or suggested it was overkill.

Anna Teets, who lives in Washington state, said the problem has been fixed and the company has dealt with the situation. “It’s been addressed,” she said.

The training was not mandatory, but Starbucks said it expected almost all of the 175,000 employees at 8,000 stores to participate and said they would be paid for the full four hours. Executives took the same training last week in Seattle.

Training in unconscious, or implicit, bias is used by many corporations, police departments and other organizations. It is typically designed to get people to open up about prejudices and stereotypes — for example, the tendency among some white people to see black people as potential criminals.

Starbucks said it would make its training materials available to other companies. Many retailers, including Walmart and Target, said they already offer some racial bias training. Nordstrom has said it plans to enhance its training after three black teenagers in Missouri were falsely accused by employees of shoplifting. 

In the Philadelphia incident, Rashon Nelson and Donte Robinson were asked to leave after one was denied access to the restroom. They were arrested by police minutes after they sat down to await a business meeting.

Video of the arrests were posted on social media, triggering protests, boycott threats and debate over racial profiling, or what’s been dubbed “retail racism.” It proved a major embarrassment for Starbucks, which has long cast itself as a company with a social conscience. That included the earlier, widely ridiculed attempt to start a national conversation on race relations by asking its employees to write “Race Together” on coffee cups. 

Starbucks said the Philadelphia arrests never should have occurred. Some black coffee shop owners in the city suggested black customers instead make a habit of patronizing their businesses. Amalgam Comics and Coffeehouse owner Ariell Johnson said she has called the police just once in the two years she has been open. She said that should happen only when there is a provocation or danger.

Nelson and Robinson settled with Starbucks for an undisclosed sum and an offer of a free college education. They also reached a deal with the city of Philadelphia for a symbolic $1 each and a promise from officials to establish a $200,000 program for young entrepreneurs.

The two men visited the company’s Seattle headquarters on Friday, Schultz said, to “see what Starbucks does every day.” He added that Starbucks CEO Kevin Johnson has agreed to mentor them. “I suspect this won’t be the last time they come,” Schultz said. 

Calvin Lai, an assistant professor of psychological and brain sciences at Washington University in St. Louis, said diversity training can have mixed effects.  

“In some cases it can even backfire and lead people who are kind of already reactive to these issues to become even more polarized,” Lai said.

One afternoon wouldn’t really be “moving the needle on the biases,” he said, especially since Starbucks has so many employees and they may not stay very long.

Starbucks said the instruction will become part of how it trains all new workers. Stores will keep iPads given out for Tuesday’s meetings and new videos will be added every month for additional training. 

Starbucks said it also plans to hold training at its stores in other countries.
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