U.S. tariffs, China trade tensions overshadow G20 finance meeting

Argentina's Treasury Minister Nicolas Dujovne and Germany's Finance Minister Olaf Scholz leave a news conference during the 2018 G20 Conference in Buenos Aires
Argentina’s Treasury Minister Nicolas Dujovne and Germany’s Finance Minister Olaf Scholz leave a news conference during the 2018 G20 Conference entitled “The G20 Agenda Under the Argentine Presidency”, in Buenos Aires, Argentina, March 18, 2018. REUTERS/Agustin Marcarian

March 19, 2018

By David Lawder and Luc Cohen

BUENOS AIRES (Reuters) – Worries about the potential for a U.S.-China trade war and frustration over U.S. President Donald Trump’s steel and aluminum tariffs threatened to dominate a gathering of finance leaders this week amid strengthening growth.

U.S. Treasury Secretary Steven Mnuchin, who arrives on Sunday in Buenos Aires ahead of a two-day meeting of the Group of 20 finance ministers, will be in a position of defending Trump’s trade plans against widespread criticism from G20 partners.

At the same time, he is likely to hear pleas for exemptions from the steel and aluminum tariffs, said Edwin Truman, a former Treasury and Federal Reserve international policy official now with the Peterson Institute for International Economics in Washington.

“He’s going to get an earful from them,” Truman said.

“Mnuchin is going to be playing defense in his comments and he’ll put the best face on it that he can,” Truman added.

The U.S. import tariffs of 25 percent on steel and 10 percent on aluminum, set to become effective on March 23, have raised alarms among trading partners that Trump is following through on his threats to dismantle the decades-old trading system based around World Trade Organization rules in favor of unilateral U.S. actions.

Potentially broader anti-China tariffs and investment restrictions under consideration as part of a U.S. intellectual property probe have raised concerns that retaliation could seriously diminish global trade and choke off the strongest global growth since the G20 was formed during the 2008 financial crisis.

Reuters reported last week that the Trump administration was considering punitive tariffs on some $60 billion worth of Chinese information technology, telecoms and consumer products annually.


Several G20 officials, including the finance ministers from host country Argentina and Germany, said they will insist on maintaining G20 communique language emphasizing “the crucial role of the rules-based international trading system.”

An early draft of the G20 communique seen by Reuters contained that phrase and added: “We note the importance of bilateral, regional and plurilateral agreements being open, transparent, inclusive and WTO-consistent, and commit to working to ensure they complement the multilateral trade agreements.”

But it was unclear whether that language will stand. Mnuchin a year ago at his first G20 meeting in Germany pressed the group to drop a decades-old pledge “to resist all forms of protectionism.” This was replaced with a watered-down pledge to “strengthen the contribution of trade to our economies.”

Germany’s new finance minister Olaf Scholz warned on Sunday that protectionism could harm future economic prospects and said Germany would continue talks to dissuade the United States from imposing planned steel and aluminum tariffs.

The International Monetary Fund has forecast that global growth will reach 3.9 percent in 2018 and 2019, with all G20 members showing positive and accelerating growth due to strong trade and investment flows. But it listed rising protectionism as among the key risks to growth in a briefing note to G20 countries.

“The reemergence of unilateral trade restrictions may escalate tensions and fuel global protectionism, disrupting worldwide supply chains and affecting long-term productivity,” the IMF said.

Meanwhile, Mnuchin’s chief deputy at the G20 meeting, U.S. Treasury Undersecretary David Malpass, kept up his criticism of China’s economic policies on Sunday. Malpass told an Institute of International Finance forum in Buenos Aires that countries were increasingly concerned by Beijing’s move away from market liberalization, its reliance on state subsidies and its use of restrictive investment policies.

Increasing state control of China’s economy “has not been good for us and the world and will continue to cause difficulty,” Malpass said.

In Beijing on Monday, Chinese foreign ministry spokeswoman Hua Chunying told a news briefing that Malpass’ comments were “not very friendly and not objective”, and called on countries to cooperate instead of criticizing each other.

A European G20 official told Reuters the European Union was keen to avoid being seen as taking sides in any disputes between the United States and China and urged Trump to negotiate directly with Beijing to resolve such issues.

But German Chancellor Angela Merkel and Chinese president Xi Jinping also emphasized multilateralism in a telephone call on Sunday, pledging to work within the G20 to resolve global steel overcapacity problems.

Officially, Argentina seeks to use the finance track of its G20 presidency to discuss the “future of work” as technological advancements begin to cause unemployment across countries, and on finding ways to finance an estimated $5.5 trillion in infrastructure investments needed worldwide through 2035.

“We want to create a new asset class to close this gap,” Argentine Treasury Minister Nicolas Dujovne said in a speech on Sunday, saying there is enough liquidity to finance infrastructure projects but the way they are currently structured makes it difficult to lure investors.

(Additional reporting by Francesco Canepa, Leika Kihara and Gernot Heller in Buenos Aires, Andrea Shalal in Berlin, and Ben Blanchard in Beijing; Editing by Andrea Ricci)

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New German transport minister says he’s no buddy of auto bosses: Bild

March 16, 2018

BERLIN (Reuters) – Germany’s new transport minister said on Friday he was no “buddy” of car industry bosses, but a friend of production line workers and drivers who opposes bans for diesel vehicles and forcing manufacturers to refit cars.

Andreas Scheuer, sworn in as minister this week, also told Bild newspaper that he – like Chancellor Angela Merkel – opposed the introduction of a system of badges to identify more polluting diesels. He said they were the first step toward the driving bans he wanted to avoid.

“I don’t see myself as a buddy of automobile bosses but rather as the mate of those working on the production lines and as someone who represents the interests of diesel vehicle owners,” Scheuer said.

Some officials have proposed a system of “blue badges” that would allow cities with particularly bad air quality to selectively ban dirtier diesel cars from their streets.

But Scheuer said he, like his predecessor Alexander Dobrindt, who was often accused of being too closely tied to the country’s car industry, opposed any move in that direction.

“Whether it’s blue badges, light blue badges,” he said, “badges are the wrong method. I reject their introduction like my predecessor Alexander Dobrindt did. They are the first step toward driving bans.”

But he insisted he would be tough with carmakers, promising “new, very, very serious talks” with carmakers on diesel pollution. Asked whether car companies would be forced generally to retrofit diesel cars, he said he expected the companies to cooperate but added: “Forcing is not the way I do politics.”

Merkel last week said she opposed blanket nationwide schemes to restrict diesels, adding a badge scheme would let off the hook cities that should instead focus on finding locally appropriate ways of improving air quality, for instance by retrofitting public transport vehicles.

(Reporting by Michelle Martin and Thomas Escritt; Editing by Paul Carrel and Mark Potter)

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DowDuPont executive chairman Andrew Liveris to leave: WSJ | One America News Network

DowDuPont executive chairman Andrew Liveris to leave: WSJ

March 12, 2018

(Reuters) – U.S. chemicals producer DowDuPont Inc’s executive chairman Andrew Liveris will step down on April 1 and its co-lead director Jeff Fettig will assume Liveris’s role at the company, the Wall Street Journal reported on Monday.

Liveris will remain a director of the combined board until July 1, the WSJ said. http://on.wsj.com/2ImATmn

Jim Fitterling, currently the chief operating officer for DowDuPont’s material sciences unit, will take on the role of the Chief Executive of Dow after the breakup next year, the Journal said.

Last month, the company said it was pushing ahead with its plans to split into three separate units, starting with the Materials Science business by the end of the first quarter of 2019. Agriculture and Specialty Products are expected to follow by June 1, 2019.

Dow and DuPont completed the $130 billion merger in September.

The company could not be immediately reached for comment.

(Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by Vyas Mohan)


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Trump to visit Peru, Colombia in April

U.S. President Donald Trump signs a presidential proclamation placing tariffs on steel and aluminum imports while surrounded by workers from the steel and aluminum industries at the White House in Washington
U.S. President Donald Trump gives out pens he used to sign presidential proclamations placing tariffs on steel and aluminum imports to workers from the steel and aluminum industries at the White House in Washington, U.S. March 8, 2018. REUTERS/Leah Millis

March 10, 2018

WASHINGTON (Reuters) – President Donald Trump will travel to the Summit of the Americas in Peru and then visit Colombia in April, the White House announced on Saturday.

It will be Trump’s first visit to Latin America. He will meet with Peruvian President Pedro Pablo Kuczynski and Colombian President Juan Manuel Santos, the White House said.

(Reporting by Ginger Gibson; Editing by Dale Hudson)

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Stock futures fall as Cohn’s exit heightens trade war worries

Traders work on the floor at the New York Stock Exchange (NYSE) in Manhattan, New York
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., March 2, 2018. REUTERS/Andrew Kelly

March 7, 2018

By Sruthi Shankar

(Reuters) – U.S. stock index futures fell sharply on Wednesday after the resignation of top economic adviser Gary Cohn, a supporter of free trade in the White House, triggered worries that President Donald Trump may push ahead with plans to impose hefty metal tariffs and ignite a global trade war.

Dow e-minis <1YMc1> were down 257 points by 7:20 a.m. ET.

Manufacturing giants Boeing <BA.N> and Caterpillar <CAT.N> slipped 2 percent in premarket trading, while General Electric <GE.N> dipped 1.4 percent after Deutsche Bank analysts warned that rising metal input costs could weigh on a deal for its rail business.

S&P 500 e-minis <ESc1> were down 20.75 points and Nasdaq 100 e-minis <NQc1> fell 40.75 points.

The declines continued from Tuesday night after Cohn, the architect of the tax overhaul enacted in December, said he would resign, a move that came after he lost a fight over Trump’s plans for hefty steel and aluminum import tariffs.

Cohn, a former president and chief operating officer of investment bank Goldman Sachs, was seen by investors as a stabilizing force within the Trump administration.

Demand for safe-haven assets including U.S. government debt and Japanese yen rose, while Wall Street’s fear gauge, the CBOE Volatility index <.VIX>, was up 11 percent at 20.42.

The ADP’s National Employment Report, due at 8:15 a.m. ET, is expected to show private employers added 195,000 jobs in February, compared with 234,000 jobs in January.

A more comprehensive report that includes hiring in both public and private sectors is due on Friday.

The Federal Reserve will publish its Beige Book, a compendium of anecdotes on the health of the economy, in the afternoon. The Fed’s next policy meeting is scheduled for March 20-21.

Fed’s New York President William Dudley and Atlanta Fed chief Raphael Bostic are expected to speak on Wednesday.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)

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Trump has spoken with world leaders, no tariff exemptions: Ross to ABC

U.S. President Donald Trump listens to reporters as walks with first lady Melania Trump on South Lawn of the White House upon their return to Washington, U.S., from Palm Beach
U.S. President Donald Trump listens to reporters as walks with first lady Melania Trump on South Lawn of the White House upon their return to Washington, U.S., from Palm Beach, Florida, March 3, 2018. REUTERS/Yuri Gripas

March 4, 2018

WASHINGTON (Reuters) – U.S. President Donald Trump has spoken to world leaders about his planned tariff hike on steel and aluminum and is not considering any exemptions to the measure, Commerce Secretary Wilbur Ross said on Sunday.

“I know he’s had conversations with a number of the world leaders,” Ross said in an interview with ABC’s “This Week.”

“The decision obviously is his, but as of the moment as far as I know he’s talking about a fairly broad brush. I have not heard him describe particular exemptions just yet,” Ross said.

(Reporting by Doina Chiacu; Editing by Alexander Smith)

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U.N. says Russia’s eastern Ghouta aid plan not enough

Smoke rises from the besieged Eastern Ghouta in Damascus
Smoke rises from the besieged Eastern Ghouta in Damascus, Syria. REUTERS/ Bassam Khabieh

March 1, 2018

By Stephanie Nebehay and Tom Miles

GENEVA (Reuters) – A Russian plan for a five-hour pause in fighting in Syria’s eastern Ghouta needs to be expanded to allow aid deliveries to enter and civilians and medical cases to leave, United Nations officials said on Thursday.

Hundreds of people have died in 11 days of bombing of eastern Ghouta, a swathe of towns and farms outside Damascus that is the last major rebel-controlled area near the capital.

The onslaught has been one of the fiercest of Syria’s civil war, now entering its eighth year.

“You are failing to help us help civilians in Syria,” U.N. humanitarian adviser Jan Egeland told diplomats from 23 states attending a weekly meeting in Geneva.

“Eastern Ghouta is devoid of respect for international law.”

Some 400,000 people trapped in government-besieged eastern Ghouta need life-saving aid, and the only convoy allowed so far this year was a small one in mid-February with aid for just 7,200 people, Egeland said.

Russia, a strong ally of Syrian President Bashar al-Assad, has called for daily five-hour local ceasefires to establish what it calls a humanitarian corridor so aid can enter the enclave and civilians and wounded can leave.

But the first such truce on Tuesday quickly collapsed when bombing and shelling resumed after a short lull.


Egeland said a “two-way” humanitarian corridor was needed, with several convoys each week into eastern Ghouta, while 1,000 priority medical cases must be evacuated for treatment.

“I have to say I know no humanitarian actor… who thinks the five hours is enough for us to be able to deliver relief into eastern Ghouta and to organize orderly medical evacuations out,” he said of the Russian unilateral declaration.

During Thursday’s meeting of the humanitarian taskforce in Geneva, the United Nations received notice that it may get permission from Damascus to go to Douma in eastern Ghouta.

“We have 43 trucks standing by to go there and full warehouses to load into the trucks as soon as we get the permit,” Egeland said.

U.N. Syria envoy Staffan de Mistura told reporters the world body would not give up seeking a full 30-day ceasefire, as mandated by the U.N. Security Council last Saturday.

“We are determined because otherwise this becomes the copycat of Aleppo,” de Mistura said, referring to a battle for besieged rebel-held eastern Aleppo in late 2016.

Ghanem Tayara, chairman of the Union of Medical Care and Relief Organisations (UOSSM) working in Syria, said some 1,123 patients needed evacuation from eastern Ghouta, where two hospitals have been bombed since Saturday’s resolution.

“The U.N. resolution has been ignored completely,” he said.

(Reporting by Tom Miles and Stephanie Nebehay; Editing by Gareth Jones)

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Wall Street set to climb as focus shifts to Fed

Traders work on the floor of the NYSE in New York
FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., February 8, 2018. REUTERS/Brendan McDermid

February 26, 2018

By Sruthi Shankar

(Reuters) – U.S. stock index futures pointed to a strong start for Wall Street on Monday, with investors hoping that new Fed chair Jerome Powell will keep the U.S. central bank on a steady course of monetary tightening.

Powell faces questions from both houses of the U.S. Congress in a semi-annual testimony starting on Tuesday, his first major set piece since he took over from Janet Yellen earlier this month.

His testimony comes at a time when investors have been anxious about the pace of interest rate hikes, which have weighed on equity markets globally.

“There’s some talk of him (Powell) being a little more open to tolerating inflation running above the 2 percent target. The focus will be to see if he is indeed open to that and the rationale behind it,” said Aaron Clark, portfolio manager at GW&K Investment Management.

The Fed said on Friday it expected economic growth to remain steady and saw no serious risks on the horizon that might pause its planned pace of rate hikes.

The week is heavy on data, with a report on personal consumption expenditure, the Fed’s favorite gauge of inflation, expected on Thursday.

By 8:34 a.m. ET, Dow e-minis <1YMc1> had gained 143 points, S&P 500 e-minis <ESc1> added 10 points and Nasdaq 100 e-minis <NQc1> rose 27 points.

Among stocks, Qualcomm <QCOM.O> shares rose 2.8 percent in premarket trading after the chipmaker urged Broadcom <AVGO.O> to enter into price negotiations on its $117 billion offer for the company.

GE <GE.N> shares rose marginally after the industrial conglomerate nominated three new candidates to its board.

The U.S. 10-year Treasury yield eased to 2.8405 percent <US10YT=RR>, continuing a slip from the four-year high hit last week, while the CBOE Volatility index <.VIX>, known as Wall Street’s fear gauge, was last at 16.53.

A report on U.S. new home sales, due at 10:00 a.m. ET, is likely to show sales increased 3.2 percent to a seasonally adjusted rate of 645,000 units in January.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva)

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Brazil’s Temer says he will not run in October presidential election

Brazil's President Temer arrives to the Military Defense Council meeting in Brasilia
Brazil’s President Michel Temer arrives to the Military Defense Council meeting in Brasilia, Brazil February 22, 2018. REUTERS/Adriano Machado

February 23, 2018

BRASILIA (Reuters) – Brazil’s President Michel Temer said on Friday that he will not run in the October 7 election and denied that a federal security intervention in Rio de Janeiro state was designed to improve his low approval ratings.

“I am not a candidate and I won’t be a candidate,” Temer, a former vice president who took office when leftist Dilma Rousseff was impeached in 2016, said in an interview with Radio Bandeirantes.

(Reporting by Anthony BoadleEditing by Chizu Nomiyama)

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Britain urges EU to work jointly on Brexit deal, won’t undercut rivals

Britain's Secretary of State for Exiting the European Union Davis delivers a speech in Vienna
Britain’s Secretary of State for Exiting the European Union David Davis delivers a speech in Vienna, Austria, February 20, 2018. REUTERS/Heinz-Peter Bader

February 20, 2018

By Francois Murphy

VIENNA (Reuters) – Brexit minister David Davis said on Tuesday Britain and the European Union could reach a deal to access each others’ markets and dismissed fears Britain would use Brexit to cut regulation to attract global businesses, despite past threats to do so.

In the latest of several speeches by ministers to lay out Britain’s Brexit plans, Davis told business leaders in Austria that fears of Britain plunging into a “Mad Max-style world borrowed from dystopian fiction” after leaving the EU are unfounded.

Instead, he proposed a system of “mutual recognition” where both sides agree common regulatory outcomes, such as consumer protection or financial stability, but are able to pursue their own policies to reach those goals.

“This will be a crucial part of ensuring our future economic partnership is as open, and trade remains as frictionless, as possible,” Davis said.

“Britain’s plan, its blueprint for life outside of Europe, is a race to the top in global standards, not a regression from the high standards we have now.”

Davis is touring European capitals as Britain tries to persuade EU leaders to strike a new deal on trade. Britain wants to retain close economic ties with the EU after it leaves the trading bloc in March next year, while also being free to strike new trade deals around the world.

But EU leaders have warned Britain can’t have both freedom from the bloc’s regulations and frictionless trade.

Davis said Britain wants to work with the EU to create the highest standards of rules in the world, and cited workers’ rights and financial regulation as areas that could be improved.

His comments are designed to allay European politicians’ concerns that Britain could cut taxes and regulation to attract global businesses.

Since Britain voted to leave the EU in 2016, supporters of Brexit have argued that removing the costs imposed by EU rules would be one of the main benefits.


Davis said Britain and the EU could preserve regulatory standards by close cooperation between regulators and the use of an independent arbitration mechanism.  

“The agreement we strike will not be about how to build convergence but what to do when one of us wants to make changes to rules,” Davis said.

“Such mutual recognition will naturally require close, even-handed cooperation between these authorities and a common set of principles to guide them.”

He said the EU already has a number of mutual recognition agreements with countries such as Switzerland, Canada and South Korea covering products including toys, cars, electronics and medical devices.

Business leaders, anxious to preserve cross-border supply chains, generally support the plan.

The speech provides “assurances that the government wants to maintain and improve standards that deliver for consumers, whilst not inflicting any additional administrative burden on business,” said Helen Dickinson, chief executive of the British Retail Consortium.

Davis’s speech comes as the EU is formulating its approach to the next stage of the Brexit negotiations and ahead of a crucial cabinet meeting on Thursday to decide on Britain’s negotiating strategy.

(Writing by Andrew MacAskill; editing by Andrew Roche, William Maclean)

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