Day: June 26, 2018

President Donald Trump on Tuesday endorsed U.S. Treasury Secretary Steven Mnuchin’s measured approach to restricting Chinese investments in U.S. technology companies, saying a strengthened merger security review committee could protect sensitive American technologies.

Trump, in remarks to reporters at the White House, said the approach would target all countries, not just China, echoing comments from Mnuchin on Monday amid a fierce internal debate over the scope of investment restrictions due to be unveiled Friday.

“It’s not just Chinese” investment, Trump told reporters when asked about the administration’s plans.

Mnuchin and White House trade adviser Peter Navarro sent mixed signals on Monday about the Chinese investment restrictions, ordered by Trump on May 29. Mnuchin said they would apply to “all countries that are trying to steal our technology,” while Navarro said they would be focused specifically on China.

The restrictions are being developed to help put pressure on China to address the administration’s complaints that it has misappropriated U.S. intellectual property through joint-venture requirements, unfair licensing policies and state-backed acquisitions of U.S. technology firms.

Enhanced reviews

Mnuchin would prefer to use new tools associated with pending legislation to enhance security reviews of transactions by the Committee on Foreign Investments in the United States (CFIUS), some administration officials have said.

A government official told Reuters on Sunday that Treasury had been working on a proposal to ban acquisitions of U.S. firms with “industrially significant technology” by companies with at least 25 percent Chinese ownership.

Asked about the pending restrictions at a White House meeting with Republican lawmakers on Tuesday, Trump said: “We have the greatest technology in the world. People copy it. And they steal it, but we have the great scientists, we have the great brains and we have to protect that and we’re going to protect it and that’s what we’re doing.

“And that can be done through CFIUS. We have a lot of things we can do it through and we’re working that out,” he said.

Prior to the meeting, Mnuchin was seen by reporters in the West Wing of the White House. A Treasury spokesman did not respond to a Reuters request for comment.

The U.S. House of Representatives passed legislation on Tuesday to strengthen the authority of CFIUS by a 400-2 vote, with many similarities to a Senate-passed bill. Both versions would expand CFIUS reviews to minority stakes in U.S. companies and investments that may reveal information on critical infrastructure to foreign governments.

​Signs of Fed shift

Trump’s intensifying list of trade disputes with China, the European Union, Canada and Mexico showed signs of influencing Federal Reserve policy on Tuesday. Atlanta Fed President Raphael Bostic said in Birmingham, Alabama, that increased tensions could cause him to oppose a fourth rate increase this year.

Trump said earlier on Twitter that his administration was “finishing up” its study of tariffs on U.S. car imports, suggesting that he would take action soon.

The Alliance of Automobile Manufacturers, a trade group, said it would file written comments in the study warning that a 25 percent tariff on imported passenger vehicles would cost American consumers $45 billion annually, or $5,800 per vehicle.

Tariffs of 25 percent on an initial $34 billion worth of Chinese imports are due to take effect on July 6, with a further $16 billion undergoing a vetting process for activation later this summer.

Should China follow through on its vow to retaliate in equal measure with tariffs on U.S. soybeans, cars and other goods, Trump has threatened to impose 10 percent tariffs on a further $400 billion worth of Chinese goods.

A Reuters analysis of the tariff lists found that most of the Chinese products targeted thus far are classified as intermediate or capital goods — avoiding a direct tax on voters — but many consumer goods have been caught up in the net, and will be targeted in future rounds.

Trump on Tuesday also threatened Harley-Davidson with higher taxes if it proceeded with a plan to move some production out of the United States to avoid the EU’s retaliatory tariffs on American motorcycles.
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Daniel Baud is a veteran of Route 66, who fondly recalls riding the iconic highway spanning a large swath of the United States saddled on his motorcycle. Sporting a snowy goatee and a leather jacket speckled with American memorabilia, he speaks reverently about his vehicle of choice. 

“I’ve dreamt of having a Harley-Davidson ever since I was a kid,” Baud said. “For me, it’s about liberty.”

Baud might fit comfortably into an upscale Hells Angels club. But the aging biker is not from Paris, Texas, but rather the French capital.

On a recent morning, he gathered with other Paris-area enthusiasts to plot out their next trip — to Prague. The lure of the open road has been transplanted from America’s heartland to Eastern Europe.

Now, as a transatlantic trade dispute deepens, Harleys, as the motorcycles are called, are a symbol of both what divides and what unites Europe and the United States.

“The French in general seem to have an overwhelming passion and enthusiasm for American culture,” said Richard Clairefond, co-director of the Harley-Davidson Bastille dealership in Paris, where Baud’s club meets most weekends. “And the Harley just kind of rolls up into that experience.”

In the crosshairs

At the moment, however, the motorcycle is better known for being in the crosshairs of a growing divide between Brussels and Washington. After the Trump administration introduced tariffs on European steel and aluminum imports, the European Union riposted, slapping taxes on a long list of U.S. products, including peanut butter, orange juice — and Harley-Davidsons.

WATCH: Caught in Trade Spat, Harley-Davidson Bridges Transatlantic Divides

Now, the Wisconsin-based motorcycle manufacturer is also feeling the heat at home. President Donald Trump vowed Tuesday that it would be “taxed like never before” after the company announced it would move part of its operations overseas — it hasn’t said where — to avoid the European tariff hike.

French Economy Minister Bruno Le Maire had a different take.

“Anything that creates jobs in Europe goes in the right direction,” Le Maire told members of the Anglo-American Press Association of Paris in an interview. “We don’t want a trade war, but we will defend ourselves. We aren’t the aggressors, but the aggressed.” 

Even as he described “excellent” personal relations with Trump administration counterparts, Le Maire also defended Brussels’ apparent efforts to tax products from mostly Republican states ahead of U.S. congressional elections in November.

“It’s legitimate to use the means we have to make Mr. Trump understand we don’t accept his decision” to tax European metals exports, he said. “And if the sanctions hit Republican states and it makes Republicans understand that their decision is unacceptable, so much the better.”

For the Bastille Harley club, however, the sharpening dispute is being met with a somewhat Gallic shrug.

“It’s politics, that’s all. It’s a mistake on both sides,” said the club’s vice president, Patrick Sarfati, who believes European Harley fans will continue to buy the bike even at a higher price.

Baud is similarly philosophical.

“It’s too bad, but we can’t do anything about it,” he said. “But it won’t stop us from buying our Harleys.” 

Dilemma mirrored in Europe

In some ways, Harley-Davidson’s dilemma is matched by the one faced by some European companies. They’ve been threatened with separate U.S. sanctions for doing business with Iran following Trump’s decision to withdraw from the nuclear agreement. A growing number are pulling out of Iran, and Economy Minister Le Maire acknowledged that for the moment, European governments had little means of reversing the trend. 

“For the moment, our requests remain unanswered,” he said of discussions with Washington.

France, in particular, is no stranger to rocky transatlantic relations — and the euros lost as a result. In 2003, French opposition to the U.S.-led war in Iraq led to a “freedom fries” retaliation by an irate U.S. Congress, and an American boycott of iconic products like brie and camembert.

Jean-Pierre Raffarin, who was French prime minister at the time, is happy that Europe today is fighting for its principles.

“Maybe it’s Europe’s luck to have Mr. Trump,” he said in an interview. “Because it finds new unity in this adversity, and maybe this will allow it to react strongly.”

Experts say the U.S., for now, is in a position of strength, particularly given its booming economy, although it is confronted by multiple trade disputes. The EU, by contrast, is economically weaker, and splintered by political divisions over issues such as migration and closer economic unity.

Still, the former head of the World Trade Organization, Pascal Lamy, is confident, for the moment, that free trade will win in the long term.

“My own sense is that we’ve reached a stage of globalization that will make de-globalization extremely unlikely” unless protectionist and populist parties strengthen further, Lamy said in recent remarks to Anglophone reporters.

Harley-Davidson’s eventual reprieve from EU sanctions, following its production shift, will help maintain business, said Clairefond of the Bastille motorcycle store — especially when it comes to newer riders with less loyalty and financial means than those in the bikers club.

But he is less upbeat about the broader standoff.

“I think anytime you have a trade war, there’s bound to be winners and losers,” Clairefond said. “But more losers in the end.” 
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U.S. President Donald Trump accused motorcycle maker Harley-Davidson Inc on Tuesday of using trade tensions over tariffs as an excuse to move production for European customers overseas.

“Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand. That was long before Tariffs were announced. Hence, they were just using Tariffs/Trade War as an excuse,” Trump said on Twitter.

“When I had Harley-Davidson officials over to the White House, I chided them about tariffs in other countries, like India, being too high. Companies are now coming back to America.

“Harley must know that they won’t be able to sell back into U.S. without paying a big tax!”

Harley-Davidson representatives did not immediately return a request for comment.

The company decided to build the Thailand plant last year after Trump pulled out from the Trans-Pacific Partnership, which would have lowered import tariffs on its bikes in some of the fastest-growing motorcycle markets in Asia.

Harley-Davidson said on Monday it would move production of motorcycles shipped to the EU from the United States to its international facilities and forecast the trading bloc’s tariffs would cost the company $90 million to $100 million a year.

The Trump administration imposed tariffs on imports of European steel and aluminum earlier this month, and in response, the European Union began charging import duties of 25 percent on a range of U.S. products including big motorcycles like Harley’s on June 22.

Trump responded angrily to the Harley-Davidson’s announcement on Monday, saying he has fought hard for the 115-year-old Milwaukee-based company and was surprised by its plans, which he described as waving the “White Flag.”

“I fought hard for them and ultimately they will not pay tariffs selling into the E.U., which has hurt us badly on trade, down $151 Billion. Taxes just a Harley excuse – be patient!” Trump said in a post on Twitter on Monday night.

Harley-Davidson, the dominant player in the heavyweight U.S. motorcycle market, said it would not pass on any retail or wholesale price increases in the EU and instead focus on shifting some U.S. production.

 
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As Washington and Beijing teeter on the brink of a possible trade war, the European Union and China have agreed to launch a working group to promote reform at the World Trade Organization. The move is part of an effort to upgrade the global trade system’s toolbox and ward off growing threats to the multilateral trade system and body.

According to a top EU official, the reform group would look at ways to modernize regulations and address the problem of state subsidies and other unfair trade practices.

How willing a participant Beijing will be in that effort is unclear as most of the EU’s proposed upgrades are connected to unfair trade measures, practices and policies that exist in China. The same concerns are driving the administration of President Donald Trump to press forward with the possible threat of heavy tariffs on some $34 billion in Chinese goods.

The Trump administration announced Monday that it is also mulling restrictions on foreign investments in technology. 

European Union Vice President Jyrki Katainen admits that the effort to try and promote reform of WTO rules will not be easy. He said it would take time and that China would have different views on priorities. 

But, Katainen added that if nothing is done, “the environment for multilateral trade will vanish.”

State media in China has portrayed Monday’s meetings with EU officials, a high-level dialogue ahead of next month’s EU-China summit, as the two teaming up to combat “unilateralism and protectionism” and promote globalization and protecting the global economy.

The European Union wants the reform effort to address issues such as industrial subsidies and unfair trade practices such as the forced transfer of technology in exchange for market access. 

“The two issues together are some of the reasons why, not the only reasons but some of the reasons why the president of the United States is taking unilateral action,” Katainen said, adding that the issue instead has to be solved in an orderly manner.

The basic idea is to update the WTO so that it is better suited to the current realities of the modern world, he said.

“The EU is not siding with any party or any country, the only thing we are siding with is rules-based trade,” Katainen said.

Chinese state media have portrayed the effort as a sign that Washington’s trade actions are creating a united front between the EU and China. A report in the Beijing-based newspaper Global Times called the joint effort to combat “unilateralism” and “protectionism” a “clear rebuttal of punitive U.S. tariffs on European and Chinese goods” and defense of the “multilateral trade system.” 

A report in the China Daily highlighted how trade frictions were bolstering closer trade ties between the EU and China. 

At the release of a survey on the business climate in China last week, the head of a top European businesses lobby noted that some companies, perhaps one or two, have already seen benefits from the ongoing trade dispute. 

Mats Harborn, president of the European Chamber of Commerce, said that it was not possible to tell if that is a trend but added that trade tensions are not good for business. 

“We don’t want companies to benefit from this trade war, we would like to see that we are all competing on a level playing field in China,” Harborn said.

In remarks following meetings with Katainen on Monday, Vice Premier Liu He did not mention the reform working group proposal for the WTO specifically. He did say that both countries agreed to pay attention to market access issues facing businesses on both sides and that they agreed to “reform the multi-lateral trade system and keep it advancing with the times.”

At a so-called “press conference” with Katainen, where journalists were not allowed to ask questions, Liu said “unilateralism and trade protectionism” was on the rise and that the European Union and China agreed to prevent such practices from impacting the world economy or dragging it into recession. 

Monday’s high-level dialogue was held in preparation for the EU-China Summit, which will be held next month on July 16-17th. During that meeting the two are looking to move forward a Comprehensive Agreement on Investment and to exchange market access offers. 
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The American fashion industry has something for nearly everyone: from high-fashion mavens, sports enthusiasts, to the most discriminating pet owners. Among the pet boutiques that aim to please the fussiest of pets and their owners, a popular designer stands out. Her name is Yana Syrkin, a Ukrainian immigrant who has been designing apparel for Hollywood pets for two decades. Iurii Mamon has more on Syrkin’s luxury pet store called Fifi & Romeo.
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Historic levels of violent crime in Mexico have sparked a record increase in the country’s car-armoring business, with an industry group predicting a double-digit jump in the number of vehicles bulletproofed this year.

There were more than 25,000 murders across Mexico last year, the highest annual tally since modern records began, government data shows, with 2018 on track to be even worse.

That insecurity will help drive a 10 percent rise in car-armoring services this year to 3,284 cars, above the previous all-time high in 2012, according to the Mexican Automotive Armor Association (AMBA).

That figure is small relative to the 15,145 cars armored in 2017 in Brazil, which expects to see a 25 percent jump this year.

Demand in Mexico has grown so strong that more global automakers have started bulletproofing cars on their own Mexican production lines as opposed to the usual practice of after-market armoring.

Audi began making an armored version of its Q5 light sport utility vehicle exclusively in the central state of Puebla in mid-2017 for local sale and export to Brazil and Argentina. The company declined to give recent sales figures.

Audi’s Mexico arm said its factory-made armored Q5, which cost $87,000 locally, was cheaper for consumers than using an after-market firm, which one industry expert estimated would boost the car’s cost to more than $95,000 and void the factory guarantee.

BMW, Jeep and Mercedes-Benz have made armored cars in Mexico for several years.

After being assaulted and robbed multiple times in recent years, Arturo Avila, who owns a security company, now only travels in armored cars to traverse the streets of Mexico City.

“One of the crimes that hurts us most is kidnapping, that’s what we’re afraid of,” he said, adding he changed his car every two years.

About 1.5 million cars were sold in Mexico in 2017, but just a tiny portion were armored, since the cars remain a luxury for the affluent and for companies that require executives to travel in bulletproof vehicles with bodyguards, said Avila.

Those companies include Mexico’s largest banks and multinationals like Unilever and Procter & Gamble. Both companies did not immediately respond to a request for comment.

Mexican security companies have also expanded rental and leasing offerings, services that are increasingly popular.

About 80 percent of armored car providers’ business is in the private sector, which seeks to protect executives and their families, with the rest from government.
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To treat snake bites, bathe in a tea brewed from yellow button-shaped flowers, advises Melissa Espinoza Paez as she describes the medicinal properties of Costa Rica’s jungle plants, pointing out towering vines used to combat kidney problems.

In the lush mountains close to the Panama border that make up the Bribri indigenous territory, Espinoza hopes the country’s first certified indigenous tour agency can deliver a bigger slice of income from ecotourism directly to local women.

“When other agencies brought tourists to our territory, sometimes they’d give a small amount to the people here, but it wasn’t really the value of their work,” said Espinoza, 38, indicating a green dart frog trying to hide in the undergrowth.

“We’re giving a tourism experience that is truly cultural… We are trying to live a more dignified life,” she said at the Siwakabata farm near Bribri town, some 220 km (140 miles) southeast of the capital San Jose.

Based in Talamanca canton, one of the poorest in Costa Rica, the recently licensed Talamanca Indigenous Bribri Tour Guides Association (AGITUBRIT) wants to ensure the financial benefits start to trickle down to local families, said Espinoza.

Alongside medicinal plant and gastronomy tours, hiking, jungle and river trips are run through a network of indigenous guides who stamp their cultural identity on the expeditions.

Costa Rican tourists, who often have little knowledge of indigenous culture, as well as Europeans, have so far made up the visitors who come to find out more about the relatively isolated Bribri people.

Tourists often stay with local families in thatched wooden houses to absorb Bribri traditions and learn the language, while some make appointments with traditional doctors who prescribe plant-based medicines.

Home to dense jungles and cloud forests teeming with wildlife, Costa Rica has become one of the world’s best-known ecotourism destinations. A quarter of its territory is now national parks or protected reserves.

But while ecotourism offers an incentive to protect the biodiversity that pulls in visitors, there has been less success in channeling benefits to those who provide services and protect the local environment, say some in the industry.

“The tourism sector in general is still learning how to deal with the social factors,” said Saul Blanco Sosa, a sustainable tourism specialist with the Rainforest Alliance conservation group. “Dealing with people is more complicated than dealing with natural reserves.”

Tour companies need to think about ways to become more socially responsible and inclusive, and avoid disrupting communities with their activities, he added.

Culture Crash Course

Ecotourism ranks as one of the fastest-growing sectors of the global travel market, and is worth around $100 billion a year, according to a 2017 report by the U.N. World Tourism Organization and United Nations Development Program.

The World Travel & Tourism Council says about 13 percent of Costa Rica’s gross domestic product comes from tourism, which is expected to employ 265,000 people directly and indirectly in 2018 to deal with its 3 million annual visitors.

Tourists have long come inland from Costa Rica’s Caribbean coast to explore the mountains, swim in waterfalls or float in long wooden canoes along the rivers lacing the Bribri territory.

But by the time middlemen have taken a hefty slice of their money, little is left for local people offering trips or cultural demonstrations, said Espinoza, who is learning English to help bring in more international tourists.

Guides from outside the area explaining the Bribri’s spirituality and strong connection with nature usually just learn their spiel from a book or the internet, she added.

“We live it, we feel it – but for the others, it’s just about money,” said Nora Paez Mayorga, who helps runs the 15-hectare (37-acre) Siwakabata agro-ecology project with her daughter Melissa.

No Jobs

For many women living in Costa Rica’s remote southeast corner with few formal qualifications, jobs other than raising chickens or growing crops such as plantain are hard to come by.

Younger people often have little choice but to head to San Jose to find work, said Paez, as she served up fried pastries and mugs of bitter chocolate drink.

Alongside its eight guides, the tour organization works with about 40 women from local indigenous communities. Some are employed at Siwakabata to cook for visitors, while others come to sell handicrafts, clothes, fruit and chocolate.

Demonstrating how to remove cacao seeds from their padded pods, dry and toast them on an open stove before grinding them to a paste, Basilia Jackson Jackson said she was looking to attract tourists to her home village of Coruma two hours away.

Growing bananas and cacao, her family’s fortunes depend on the prices set by buyers, she explained, turning the wheel of a metal grinder.

“We’ve never dealt with tourists, we’re just getting involved with it… we could have a little bit more income – it wouldn’t be much, but it would help the family,” said Jackson, who traveled to Siwakabata with her daughter Flor. “In this area, we don’t have much work. Between women, we’ve got to get organized to see how we can help each other.”

Espinoza, who left to work in a factory in San Jose before returning to study and finally helping set up AGITUBRIT, is optimistic the agency will prove invaluable in strengthening the position of local women while protecting their culture.

“As indigenous women from here, we know what we need. We can help each other to develop this project – valuing, maintaining and respecting our world view and our culture,” said Espinoza.
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