News Archive


China sets 2019 deadline for automakers to meet green-car sales targets

BEIJING/SHANGHAI (Reuters) – China has set a deadline of 2019 to impose tough new sales targets for electric plug-in and hybrids vehicles, slightly relaxing an earlier plan to launch the rules from next year that had left global automakers worried about being able to comply.

Car makers will need to amass credits for so-called new-energy vehicles (NEVs) equivalent to 10 percent of annual sales by 2019, China’s industry ministry said in a statement on Thursday. That level would rise to 12 percent for 2020.

A single vehicle can generate multiple credits meaning the proportion by NEVs by volume would likely be lower.

The targets, announced by the Ministry of Industry and Information Technology (MIIT), closely mirror previously announced plans, but remove an explicit 8 percent quota for 2018, in effect giving carmakers an extra year grace period.

The quotas are a key part of a drive by China, the world’s largest auto market, to develop its own NEV market, with a long-term aim to ban the production and sale of cars that use traditional fuels announced earlier this month.

Global automotive manufacturers, however, had urged a softening of the proposals for all-electric battery vehicles and electric plug-in hybrids.

Under the rules, car makers will receive credits for new-energy vehicles including plug-in hybrids and fully electric cars that can be transferred or traded. Firms with annual sales volumes above 30,000 units will need to comply with the targets.

These credits – which will vary depending on the range and performance of the vehicle – will be used to calculate if firms have met their quota, a system which would likely mean the actual proportion NEVs made up of total sales was lower.

“The rules could result in the production of more than one million EVs annually in China by 2020, or about 4 percent of sales,” Simon Mui, a transport and energy exert at the U.S.-based Natural Resources Defense Council wrote in note.

GREEN CAR ROLL-OUT

Carmakers were in general positive about the move.

“We welcome the Chinese auto industry’s shift towards greater adoption of NEVs and will comply with relevant regulations presented by authorities,” Ford Motor Co (F.N) said in a statement responding to the announcement.

General Motors Co (GM.N) said it would “strive to comply with the NEV mandatory requirements”, though it added “continued joint efforts by the government and companies are essential to build broad-based consumer acceptance for NEVs”.

“GM has sufficient capacity to manufacture NEVs in China,” it said in a statement.

Japan’s Honda Motor Co Ltd (7267.T) said it planned to launch an electric battery car in China next year and would “try to expand our lineup of new energy vehicles” to meet the quotas.

China is keen to combat air pollution and close a competitive gap between its newer domestic automakers and global rivals. It wants to set goals for electric and plug-in hybrid cars to make up at least a fifth of Chinese auto sales by 2025.

Reuters reported in August that China would delay the implementation of the NEV quotas until 2019, giving global automakers more time to prepare.

Reporting by Adam Jourdan in SHANGHAI, Norihiko Shirouzu in BEIJING; Additional reporting by Joe White in DETROIT, Peter Henderson in SAN FRANSISCO and Beijing Monitoring Desk; Editing by Stephen Coates

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/U61iZYOxAMg/china-sets-2019-deadline-for-automakers-to-meet-green-car-sales-targets-idUSKCN1C30ZL

White House battles critics over tax plan as lawmakers prepare to act

WASHINGTON (Reuters) – The White House struggled on Thursday to defend its new tax plan against criticism that it would help the rich at the expense of lower classes, as Republicans in Congress prepared to move ahead with actual legislation.

A day after President Donald Trump unveiled the plan and called it “a miracle for the middle class,” White House economic adviser Gary Cohn said he could not guarantee that all middle-class Americans would see their tax bills decline.

“I cannot guarantee that. You could find me someone in the country that their taxes may not go down,” Cohn told reporters at a White House briefing.

Cohn said that taxes may not decline for some, “maybe one person,” but insisted that the middle class would benefit.

“Our tax plan is aimed at making sure that we give middle class Americans a tax cut,” Cohn told reporters. “That is what we are spending all of our time on doing, and we’ve got lots of tools at our disposal to make sure we do that and that’s what we’re going to do.”

The Trump plan’s tax cuts for businesses and individuals would reduce federal revenues by more than $5 trillion over a decade, according to independent analysts.

The United States is already $20 trillion in debt and the Republican plan, while very specific on tax cuts, provided few details on how to offset the federal revenues that would be lost if the U.S. Congress were to approve Trump’s proposals.

Some critics said the plan may need to be pared back if Congress cannot agree on $4 trillion in offsets.

It calls for slashing the corporate tax rate to 20 percent from 35 percent, the small business rate to 25 percent from 39.6 percent and the top individual rate to 35 percent from 39.6 percent. The Trump administration did not assign income levels to their proposed tax brackets.

Every year, the Internal Revenue Service adjusts tax provisions for inflation to avoid people and businesses suddenly finding themselves in a different tax bracket.

The plan also has raised concerns among some critics about how it would effect the U.S. income gap between rich and poor.

Democrats blasted the plan as a giveaway to the wealthy and businesses, despite Trump’s assurances that the rich would not benefit. Critics have zeroed in on Republican plans to raise the lowest individual tax bracket to 12 percent from 10 percent.

Representative Kevin Brady, Republican chairman of the tax-writing House of Representative Ways and Means Committee, dismissed the criticism as false.

“The 10 percent bracket today goes to zero,” Brady told a audience at the Heritage Foundation think tank. “Those of modest income, the poor and middle class, are better off.”

But before they can unveil actual tax reform legislation, the House and Senate will have to adopt a fiscal year 2018 budget resolution containing a procedural tool called “reconciliation,” which is vital if Republicans intend to move a tax bill through the Senate without support.

Until this week, the budget resolution drive was embroiled in House Republican infighting. But House Budget Committee Chairman Diane Black told Reuters on Friday that she expected the measure to be approved in an Oct. 5 vote.

“We’re going to absolutely have the votes,” said Black, a Republican. “People are excited about tax reform.”

Lawmakers will face a fight to eliminate $4 trillion in tax deductions, loopholes and other “base broadeners”, including tax breaks that will be defended by interest groups and lobbyists.

“This is going to make healthcare look like a simple thing to do,” Senator Bob Corker, a fiscal hawk, said a day after the latest Senate push to replace Obamacare collapsed. Corker said the plan’s goals may not be achievable if lawmakers cannot agree on enough base broadeners.

Republicans are aiming to have tax reform signed into law before January. Independent analysts believe they could enact legislation sometime in the first half of 2018.

Reporting by David Morgan; Additional reporting by Susan Heavey and Lindsay Dunsmuir; Editing by Kevin Drawbaugh and Grant McCool

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/aQc_WIDWQJo/white-house-battles-critics-over-tax-plan-as-lawmakers-prepare-to-act-idUSKCN1C33AN

White House battles critics over tax plan as lawmakers prepare to act

WASHINGTON (Reuters) – The White House struggled on Thursday to defend its new tax plan against criticism that it would help the rich at the expense of lower classes, as Republicans in Congress prepared to move ahead with actual legislation.

A day after President Donald Trump unveiled the plan and called it “a miracle for the middle class,” White House economic adviser Gary Cohn said he could not guarantee that all middle-class Americans would see their tax bills decline.

“I cannot guarantee that. You could find me someone in the country that their taxes may not go down,” Cohn told reporters at a White House briefing.

Cohn said that taxes may not decline for some, “maybe one person,” but insisted that the middle class would benefit.

“Our tax plan is aimed at making sure that we give middle class Americans a tax cut,” Cohn told reporters. “That is what we are spending all of our time on doing, and we’ve got lots of tools at our disposal to make sure we do that and that’s what we’re going to do.”

The Trump plan’s tax cuts for businesses and individuals would reduce federal revenues by more than $5 trillion over a decade, according to independent analysts.

The United States is already $20 trillion in debt and the Republican plan, while very specific on tax cuts, provided few details on how to offset the federal revenues that would be lost if the U.S. Congress were to approve Trump’s proposals.

Some critics said the plan may need to be pared back if Congress cannot agree on $4 trillion in offsets.

It calls for slashing the corporate tax rate to 20 percent from 35 percent, the small business rate to 25 percent from 39.6 percent and the top individual rate to 35 percent from 39.6 percent. The Trump administration did not assign income levels to their proposed tax brackets.

Every year, the Internal Revenue Service adjusts tax provisions for inflation to avoid people and businesses suddenly finding themselves in a different tax bracket.

The plan also has raised concerns among some critics about how it would effect the U.S. income gap between rich and poor.

Democrats blasted the plan as a giveaway to the wealthy and businesses, despite Trump’s assurances that the rich would not benefit. Critics have zeroed in on Republican plans to raise the lowest individual tax bracket to 12 percent from 10 percent.

Representative Kevin Brady, Republican chairman of the tax-writing House of Representative Ways and Means Committee, dismissed the criticism as false.

“The 10 percent bracket today goes to zero,” Brady told a audience at the Heritage Foundation think tank. “Those of modest income, the poor and middle class, are better off.”

But before they can unveil actual tax reform legislation, the House and Senate will have to adopt a fiscal year 2018 budget resolution containing a procedural tool called “reconciliation,” which is vital if Republicans intend to move a tax bill through the Senate without support.

Until this week, the budget resolution drive was embroiled in House Republican infighting. But House Budget Committee Chairman Diane Black told Reuters on Friday that she expected the measure to be approved in an Oct. 5 vote.

“We’re going to absolutely have the votes,” said Black, a Republican. “People are excited about tax reform.”

Lawmakers will face a fight to eliminate $4 trillion in tax deductions, loopholes and other “base broadeners”, including tax breaks that will be defended by interest groups and lobbyists.

“This is going to make healthcare look like a simple thing to do,” Senator Bob Corker, a fiscal hawk, said a day after the latest Senate push to replace Obamacare collapsed. Corker said the plan’s goals may not be achievable if lawmakers cannot agree on enough base broadeners.

Republicans are aiming to have tax reform signed into law before January. Independent analysts believe they could enact legislation sometime in the first half of 2018.

Reporting by David Morgan; Additional reporting by Susan Heavey and Lindsay Dunsmuir; Editing by Kevin Drawbaugh and Grant McCool

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/aQc_WIDWQJo/white-house-battles-critics-over-tax-plan-as-lawmakers-prepare-to-act-idUSKCN1C33AN

White House battles critics over tax plan as lawmakers prepare to act

WASHINGTON (Reuters) – The White House struggled on Thursday to defend its new tax plan against criticism that it would help the rich at the expense of lower classes, as Republicans in Congress prepared to move ahead with actual legislation.

A day after President Donald Trump unveiled the plan and called it “a miracle for the middle class,” White House economic adviser Gary Cohn said he could not guarantee that all middle-class Americans would see their tax bills decline.

“I cannot guarantee that. You could find me someone in the country that their taxes may not go down,” Cohn told reporters at a White House briefing.

Cohn said that taxes may not decline for some, “maybe one person,” but insisted that the middle class would benefit.

“Our tax plan is aimed at making sure that we give middle class Americans a tax cut,” Cohn told reporters. “That is what we are spending all of our time on doing, and we’ve got lots of tools at our disposal to make sure we do that and that’s what we’re going to do.”

The Trump plan’s tax cuts for businesses and individuals would reduce federal revenues by more than $5 trillion over a decade, according to independent analysts.

The United States is already $20 trillion in debt and the Republican plan, while very specific on tax cuts, provided few details on how to offset the federal revenues that would be lost if the U.S. Congress were to approve Trump’s proposals.

Some critics said the plan may need to be pared back if Congress cannot agree on $4 trillion in offsets.

It calls for slashing the corporate tax rate to 20 percent from 35 percent, the small business rate to 25 percent from 39.6 percent and the top individual rate to 35 percent from 39.6 percent. The Trump administration did not assign income levels to their proposed tax brackets.

Every year, the Internal Revenue Service adjusts tax provisions for inflation to avoid people and businesses suddenly finding themselves in a different tax bracket.

The plan also has raised concerns among some critics about how it would effect the U.S. income gap between rich and poor.

Democrats blasted the plan as a giveaway to the wealthy and businesses, despite Trump’s assurances that the rich would not benefit. Critics have zeroed in on Republican plans to raise the lowest individual tax bracket to 12 percent from 10 percent.

Representative Kevin Brady, Republican chairman of the tax-writing House of Representative Ways and Means Committee, dismissed the criticism as false.

“The 10 percent bracket today goes to zero,” Brady told a audience at the Heritage Foundation think tank. “Those of modest income, the poor and middle class, are better off.”

But before they can unveil actual tax reform legislation, the House and Senate will have to adopt a fiscal year 2018 budget resolution containing a procedural tool called “reconciliation,” which is vital if Republicans intend to move a tax bill through the Senate without support.

Until this week, the budget resolution drive was embroiled in House Republican infighting. But House Budget Committee Chairman Diane Black told Reuters on Friday that she expected the measure to be approved in an Oct. 5 vote.

“We’re going to absolutely have the votes,” said Black, a Republican. “People are excited about tax reform.”

Lawmakers will face a fight to eliminate $4 trillion in tax deductions, loopholes and other “base broadeners”, including tax breaks that will be defended by interest groups and lobbyists.

“This is going to make healthcare look like a simple thing to do,” Senator Bob Corker, a fiscal hawk, said a day after the latest Senate push to replace Obamacare collapsed. Corker said the plan’s goals may not be achievable if lawmakers cannot agree on enough base broadeners.

Republicans are aiming to have tax reform signed into law before January. Independent analysts believe they could enact legislation sometime in the first half of 2018.

Reporting by David Morgan; Additional reporting by Susan Heavey and Lindsay Dunsmuir; Editing by Kevin Drawbaugh and Grant McCool

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/aQc_WIDWQJo/white-house-battles-critics-over-tax-plan-as-lawmakers-prepare-to-act-idUSKCN1C33AN

Roku connects with investors in debut, shares soar over 67 percent

(Reuters) – Shares of video streaming firm Roku Inc (ROKU.O) rose more than 67 percent in their market debut on Thursday, giving the U.S. IPO market a much-needed shot in the arm.

Roku ended trading on the Nasdaq with a share price of $23.50, giving it a market capitalization of about $2.23 billion.

The IPO market is struggling to finish on a high note even though it has already notched more money so far this year than in 2016.

A pioneer in helping consumers cut the proverbial cord from traditional cable television, Roku made one of the first devices to offer streaming content such as Netflix over TVs.

But the market has since become more competitive, with Apple Inc (AAPL.O), Alphabet Inc’s (GOOGL.O) Google, Amazon.com Inc (AMZN.O) and others offering their own devices.

To compete better, Roku has opened its platform to more TV apps than its peers, including Amazon Prime Video, Hulu and Google Play, allowing it to offer over 3,000 channels internationally.

The Los Gatos, California-based company has also shifted its business model from sales of its Roku box. It licenses its software to companies such as Sharp and Hitachi and gets a cut of the advertising revenue from media companies and new signups for apps on its platform.

Roku Chief Executive Anthony Wood said in an interview that the company will keep riding the wave of television content moving online and away from the cable bundle.

“When we sign up a customer to a subscription service or Hulu or Netflix, we get a revenue share as well,” Wood said.

In six months ended June 30, Roku had around 15.1 million active accounts, with around 6.74 billion hours of content streamed, the company said in a filing with the U.S. Securities and Exchange Commission.

Those numbers, however, have not translated into profitability as the company pumps cash into marketing and RD.

In the quarter ended June 30, the company posted a net loss of $15.5 million, deeper than its $14.1 million loss in the year-ago quarter.

“I don’t like that they are losing cash, but if you wait for a cash flow positive tech company, you may have to wait for a full solar eclipse to come around again,” said Brian Hamilton, founder of data firm Sageworks.

Roku’s shareholders include Menlo Ventures, Fidelity and Rupert Murdoch’s Twenty-First Century Fox (FOXA.O).

The 15.67 million Class A share offering was priced at $14 per share, the upper end of Roku’s proposed $12 to $14 range, raising about $219.35 million in proceeds.

Reporting by Aparajita Saxena in Bengaluru and Liana B. Baker in San Francisco; editing by Patrick Graham, Sriraj Kalluvila and G Crosse

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/kCTLyyTwHi0/roku-connects-with-investors-in-debut-shares-soar-over-67-percent-idUSKCN1C31HO

Roku connects with investors in debut, shares soar over 67 percent

(Reuters) – Shares of video streaming firm Roku Inc (ROKU.O) rose more than 67 percent in their market debut on Thursday, giving the U.S. IPO market a much-needed shot in the arm.

Roku ended trading on the Nasdaq with a share price of $23.50, giving it a market capitalization of about $2.23 billion.

The IPO market is struggling to finish on a high note even though it has already notched more money so far this year than in 2016.

A pioneer in helping consumers cut the proverbial cord from traditional cable television, Roku made one of the first devices to offer streaming content such as Netflix over TVs.

But the market has since become more competitive, with Apple Inc (AAPL.O), Alphabet Inc’s (GOOGL.O) Google, Amazon.com Inc (AMZN.O) and others offering their own devices.

To compete better, Roku has opened its platform to more TV apps than its peers, including Amazon Prime Video, Hulu and Google Play, allowing it to offer over 3,000 channels internationally.

The Los Gatos, California-based company has also shifted its business model from sales of its Roku box. It licenses its software to companies such as Sharp and Hitachi and gets a cut of the advertising revenue from media companies and new signups for apps on its platform.

Roku Chief Executive Anthony Wood said in an interview that the company will keep riding the wave of television content moving online and away from the cable bundle.

“When we sign up a customer to a subscription service or Hulu or Netflix, we get a revenue share as well,” Wood said.

In six months ended June 30, Roku had around 15.1 million active accounts, with around 6.74 billion hours of content streamed, the company said in a filing with the U.S. Securities and Exchange Commission.

Those numbers, however, have not translated into profitability as the company pumps cash into marketing and RD.

In the quarter ended June 30, the company posted a net loss of $15.5 million, deeper than its $14.1 million loss in the year-ago quarter.

“I don’t like that they are losing cash, but if you wait for a cash flow positive tech company, you may have to wait for a full solar eclipse to come around again,” said Brian Hamilton, founder of data firm Sageworks.

Roku’s shareholders include Menlo Ventures, Fidelity and Rupert Murdoch’s Twenty-First Century Fox (FOXA.O).

The 15.67 million Class A share offering was priced at $14 per share, the upper end of Roku’s proposed $12 to $14 range, raising about $219.35 million in proceeds.

Reporting by Aparajita Saxena in Bengaluru and Liana B. Baker in San Francisco; editing by Patrick Graham, Sriraj Kalluvila and G Crosse

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/kCTLyyTwHi0/roku-connects-with-investors-in-debut-shares-soar-over-67-percent-idUSKCN1C31HO

Roku connects with investors in debut, shares soar over 67 percent

(Reuters) – Shares of video streaming firm Roku Inc (ROKU.O) rose more than 67 percent in their market debut on Thursday, giving the U.S. IPO market a much-needed shot in the arm.

Roku ended trading on the Nasdaq with a share price of $23.50, giving it a market capitalization of about $2.23 billion.

The IPO market is struggling to finish on a high note even though it has already notched more money so far this year than in 2016.

A pioneer in helping consumers cut the proverbial cord from traditional cable television, Roku made one of the first devices to offer streaming content such as Netflix over TVs.

But the market has since become more competitive, with Apple Inc (AAPL.O), Alphabet Inc’s (GOOGL.O) Google, Amazon.com Inc (AMZN.O) and others offering their own devices.

To compete better, Roku has opened its platform to more TV apps than its peers, including Amazon Prime Video, Hulu and Google Play, allowing it to offer over 3,000 channels internationally.

The Los Gatos, California-based company has also shifted its business model from sales of its Roku box. It licenses its software to companies such as Sharp and Hitachi and gets a cut of the advertising revenue from media companies and new signups for apps on its platform.

Roku Chief Executive Anthony Wood said in an interview that the company will keep riding the wave of television content moving online and away from the cable bundle.

“When we sign up a customer to a subscription service or Hulu or Netflix, we get a revenue share as well,” Wood said.

In six months ended June 30, Roku had around 15.1 million active accounts, with around 6.74 billion hours of content streamed, the company said in a filing with the U.S. Securities and Exchange Commission.

Those numbers, however, have not translated into profitability as the company pumps cash into marketing and RD.

In the quarter ended June 30, the company posted a net loss of $15.5 million, deeper than its $14.1 million loss in the year-ago quarter.

“I don’t like that they are losing cash, but if you wait for a cash flow positive tech company, you may have to wait for a full solar eclipse to come around again,” said Brian Hamilton, founder of data firm Sageworks.

Roku’s shareholders include Menlo Ventures, Fidelity and Rupert Murdoch’s Twenty-First Century Fox (FOXA.O).

The 15.67 million Class A share offering was priced at $14 per share, the upper end of Roku’s proposed $12 to $14 range, raising about $219.35 million in proceeds.

Reporting by Aparajita Saxena in Bengaluru and Liana B. Baker in San Francisco; editing by Patrick Graham, Sriraj Kalluvila and G Crosse

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/kCTLyyTwHi0/roku-connects-with-investors-in-debut-shares-soar-over-67-percent-idUSKCN1C31HO

Wealthy financiers could gain from Trump’s proposed tax cut for small businesses

WASHINGTON (Reuters) – High-income Wall Street financiers could be unintended winners from a section of U.S. President Donald Trump’s tax-cut plan that is meant to help mostly small, “mom-and-pop” businesses.

Trump called on Wednesday for a new “pass-through” tax rate of 25 percent that could mean big savings for owners of sole proprietorships and partnerships who now pay 39.6 percent.

But it could also mean a windfall for partners in private-equity, venture-capital and hedge funds, unless Congress can figure out a way to block them from taking advantage of the new rate.

Ron Wyden, top Democrat on the tax-writing Senate Finance Committee, said Democrats supported a pass-through rate for small businesses, such as “a cleaner, a garage, a restaurant.”

He said Trump’s plan, however, would create “a whole new set of wealthy individuals being able to dodge their taxes through this new provision.”

At issue is the taxation of the roughly 95 percent of American businesses that are not public corporations.

Non-public pass-through businesses, such as sole proprietorships, limited liability companies and partnerships, pay no income tax themselves. Instead their profits “pass through” directly to their owners, who pay tax on them at the individual tax rates.

  • Typical U.S. family earning $100,000 to get $1,000 tax cut under Trump plan: aide
  • Treasury’s Mnuchin: Trump’s proposed corporate tax rate ‘not negotiable’
  • White House’s Cohn says now sees more than 3 percent growth to pay for tax plan

A small fraction of those business owners pay the top individual tax rate of 39.6 percent, higher than the current top corporate income tax rate of 35 percent.

Those business owners have long complained that the disparity is unfair, especially in view of the fact that many multinationals pay much less than the 35 percent statutory corporate tax rate by exploiting abundant loopholes and tax breaks available to large, global corporations.

Republicans have been eager to address the issue. Trump’s plan proposes a new tax rate of 25 percent for the pass-through income of “small and family-owned businesses.”

The problem, according to the plan’s critics, is that financial entities such as private-equity, venture-capital and hedge funds are all partnerships whose wealthy partners would see substantial tax savings on large portions of their income unless congressional tax writers find a way to exclude them.

‘GOOD’ VERSUS ‘BAD’ PASS-THROUGH INCOME

The White House document that spelled out Trump’s plan signaled that the administration was aware of the potential problem but would leave addressing it up to Congress.

The document said: “The framework contemplates that the (congressional tax) committees will adopt measures to prevent the recharacterization of personal income into business income to prevent wealthy individuals from avoiding the top personal tax rate.”

Trump’s plan also proposes cutting the top corporate tax rate to 20 percent from 35 percent and cutting the top individual tax rate to 35 percent from 39.6 percent.

Treasury Secretary Steven Mnuchin said two weeks ago that the administration would ensure partners at services firms such as accounting, law and financial firms would not benefit from a new, lower pass-through rate.

A Treasury Department spokesman did not respond to a request for comment on the pass-through rate or plans to exempt certain categories of firms.

Frank Clemente, executive director of Americans for Tax Fairness, a liberal advocacy group, said the idea that a new pass-through rate would help small business was “simply a hoax.”

Tax experts said it would be difficult for congressional tax writers to exempt partners at services firms from using the new pass-through rate.

“There has always been talk of how to carve out ‘good’ pass-through income from ‘bad’ pass-through income. The problem is it’s exceedingly hard to do and there is no way to draw clear lines that won’t be manipulated,” said Seth Hanlon with the Center for American Progress, a liberal group.

Victor Fleischer, a law professor at the University of San Diego, agreed it would be “challenging.”

“Still, I think it can probably be done,” Fleischer said.

Reporting by Amanda Becker; Editing by Kevin Drawbaugh and Peter Cooney

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/OTvaCEbrxag/wealthy-financiers-could-gain-from-trumps-proposed-tax-cut-for-small-businesses-idUSKCN1C3175

Britain’s May fires warning to Boeing over Bombardier trade dispute

LONDON (Reuters) – Prime Minister Theresa May told U.S. planemaker Boeing (BA.N) on Thursday that its behaviour in a trade dispute with Canada’s Bombardier (BBDb.TO) was undermining its commercial relationship with Britain.

May intervened in the trade row between Canada and the United States after a complaint by Boeing led to the U.S. Department of Commerce imposing a preliminary 220-percent duty on Bombardier’s CSeries jets.

The U.S. ruling puts as many as 4,200 jobs at risk at a plant in the British province of Northern Ireland, where the jets’ carbon wings are made.

“We have a long-term partnership with Boeing in various aspects of government and this is not the sort of behaviour we expect from a long-term partner and it undermines that partnership,” May said in response to a question at a Bank of England event.

Boeing, the world’s biggest plane maker, has said it is committed to the United Kingdom.

May’s criticism of Boeing indicates the importance of the plant to the small Northern Irish political party on which her government has relied since she lost her parliamentary majority in June following a botched election campaign.

Britain would nevertheless find it difficult to unpick its relationship with one of its most important defence equipment suppliers.

  • Refer Boeing-Bombardier case to World Trade Organization, say UK opposition Labour

May also needs U.S. President Donald Trump’s support as Britain prepares to sever ties with the European Union. She has pitched a new trade deal with the United States to cushion the impact of leaving the EU’s tariff-free single market.

But May could find it difficult to convince Trump, who has made “America First” a theme of his administration, to get a titan of U.S. industry to back off from defending what it views as its trade rights.

May, who had raised the issue with Trump, said she would try to work with Canada to stress the importance of Bombardier to Northern Ireland.

CONTRACTS

Canada’s Liberal government is refusing to go ahead with a planned purchase of 18 Boeing Super Hornet fighter jets until the U.S. company drops its challenge.

“We can’t do business with companies that treat us in this manner … we are actively looking at other options,” Canadian Defence Minister Harjit Sajjan told reporters on Thursday.

On Wednesday, Boeing said it had listened to Britain’s concerns but gave no indication that it might change tack.

Boeing said that since 2011 it had tripled its spending in the United Kingdom to 2.1 billion pounds ($2.8 billion) in 2016, while the firm and its suppliers accounted for more than 18,700 UK jobs.

British defence minister Michael Fallon has also criticised Boeing. He ruled out cancelling existing orders with Boeing for nine P-8 spy planes and 50 Apache helicopters, but added the U.S. firm was seeking other UK contracts.

Boeing has risen since 2000 from a relatively minor defence supplier to become one of Britain’s top five following the purchase of C-17 transporters and Apache attack helicopters, according to defence analyst Francis Tusa.

Possibilities for reprisals are relatively limited in the short term but further ahead, potentially valuable requirements include the replacement of the Boeing-built Chinook helicopter.

Britain could also consider moving lucrative maintenance and support work for the C-17 transport plane from the United States to Britain, he added.

“What is going to be fascinating is that the Bombardier case will open the eyes of senior service chiefs to the fact that Britain is less important to the United States,” Tusa said.

May’s comments came in a question and answer session after she had delivered a robust defence of capitalism and free markets in a speech designed to halt the rising popularity of a more radical interventionist economic model espoused by her political opponents, the Labour Party.

Labour said the trade dispute should be referred to the World Trade Organization, and criticised May for “threatening to victimise Boeing.”

Additional reporting by David Ljunggren in Ottawa; Writing by William James and Tim Hepher; editing by Catherine Evans and Adrian Croft

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/PJZyagh49eM/britains-may-fires-warning-to-boeing-over-bombardier-trade-dispute-idUSKCN1C313X