News Archive


U.S. Treasury’s Mnuchin says he sees at least 3 percent growth for next 4-5 years

WASHINGTON (Reuters) – U.S. Treasury Secretary Steven Mnuchin said on Sunday that he believes the quickening pace of growth in the nation’s economy in the second quarter will persist for the next few years.

“I don’t think this is a one- or two-year phenomenon. I think we definitely are in a period of four or five years of sustained 3 percent growth at least,” Mnuchin said in an interview with ‘Fox News Sunday.’

The U.S. economy grew at its fastest pace in nearly four years in the second quarter – at a 4.1 percent rate – as consumers boosted spending and farmers rushed shipments of soybeans to China to beat retaliatory trade tariffs before they took effect in early July.

Economists have cautioned against putting much weight on the surge, with the soybean boost seen likely to reverse in the coming quarters and the fiscal stimulus seen fading in 2019.

Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/tZFYiK55QOs/u-s-treasurys-mnuchin-says-he-sees-at-least-3-percent-growth-for-next-4-5-years-idUSKBN1KJ0H5

Exclusive: BMW to raise prices of two U.S.-made SUV models in China

BEIJING (Reuters) – German carmaker BMW (BMWG.DE) said it will raise the prices of two U.S.-made crossover sport-utility vehicles in China to cope with the additional cost of tariffs on U.S. car imports into the world’s biggest auto market.

In a move due to take effect on Monday, BMW said in a statement to Reuters over the weekend that it will increase maker-suggested retail prices of the popular, relatively high-margin X5 and X6 SUV models by 4 percent to 7 percent.

The rates of increase suggest that BMW is willing to absorb much of the higher costs stemming from bringing the SUVs to China from its factory in South Carolina, underscoring the fierce competition among luxury car brands in China.

BMW’s move comes after China imposed new tariffs earlier this month on about $34 billion of U.S. imports, from soybeans and cars to lobsters, as part of a widening trade row.

Beijing, which this year cut tariffs on all automobiles imported into China, slapped an additional 25 percent levy on U.S.-made cars as of July 6. As a result, China now levies a 40 percent import duty on all cars imported from the United States.

“BMW stands for free (trade) but can’t stand still without taking actions to respond to the market changes,” a BMW spokeswoman said in an email message to Reuters.

BMW imports X4, X5 and X6 crossover SUV models from the United States for sale in China where demand for SUVs has been booming. Last year, the German automaker shipped more than 100,000 vehicles from the United States to China.

The company made no reference to pricing of its X4 model.

BMW’s decision to absorb much of the impact of the higher tariffs echoes an earlier move by U.S. carmaker Ford Motor Co (F.N), which said it would not increase its prices for now in an effort to sustain its business momentum.

China-based car dealers told Reuters that German rival Mercedes Benz, operated by Daimler AG (DAIGn.DE), moderately raised the price in mid-July of its GLE, a sporty midsize SUV produced in the state of Alabama, in China.

A Daimler spokeswoman referred Reuters to comments made by the company last week.

Daimler’s chief executive Dieter Zetsche said last Thursday the car maker was looking at ways to mitigate the impact of the trade war. This would include a review of whether to shift some U.S. production to China.

Daimler also said last week its 2018 pre-tax profits would fall from last year because the new Chinese import tariffs would hurt sales of Mercedes-Benz SUVs.

Reporting By Norihiko Shirouzu; editing by Richard Pullin

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/x6LwtK4_ZE4/exclusive-bmw-to-raise-prices-of-two-u-s-made-suv-models-in-china-idUSKBN1KJ024

Global auto powers plotting response to Trump auto tariff threats

MEXICO CITY/OTTAWA (Reuters) – Canada, the European Union, Japan, Mexico and South Korea will meet in Geneva next week to discuss how to respond to threats by U.S. President Donald Trump to impose tariffs on U.S. imports of autos and car parts, officials familiar with the talks said.

The Trump administration has come under heavy criticism from automakers, foreign governments and others as it considers tariffs of up to 25 percent, a levy critics warn will hike vehicle costs, hurting auto sales and global industry jobs.

Several auto manufacturing powers have been talking to each other in recent days about their fears and a possible coordinated response to Trump’s “Section 232” investigation, which he ordered on May 23, into whether auto imports are a threat to U.S. security, sources say.

The probe could be completed within weeks, although similar ones ordered last year that led to tariffs of 25 percent on steel and 10 percent on aluminum took about 10 months. The Commerce Department has 270 days to offer recommendations to the president after such a probe starts. He then has 90 days to act upon them.

It was not immediately clear what kind of response the countries could be looking at, although Canada, the EU and Mexico retaliated with their own tariffs after Trump imposed levies on steel and aluminum imports in March. Another option is to fight the United States at the World Trade Organization (WTO).

Deputy ministers will gather in Geneva on July 31 to hear each other’s views, a Canadian official and a Mexican official told Reuters, asking to not be named because they were not authorized to talk to the media.

“The meeting is meant to bring together major auto producing nations so we can discuss our concerns over the U.S. Department of Commerce’s Section 232 investigation of automobiles and parts,” said the Canadian government official.

Mexico’s economy ministry confirmed Deputy Economy Minister Juan Carlos Baker will travel to Geneva for “work meetings about several subjects,” including meeting World Trade Organization (WTO) chief Roberto Azevedo. The Canadian foreign ministry declined to comment.

According to the WTO website, Azevedo will meet Baker on Monday, followed by Canada’s Deputy Trade Minister Timothy Sargent and Japan’s Senior Deputy Foreign Minister Kazuyuki Yamazaki on Tuesday. The Mexican official said the meetings were related to the auto tariff issue.

Eventual tariffs on autos could hit companies including Korea’s Hyundai Motor Co, Japan’s Toyota Motor Corp and Germany’s BMW, as well as global factories for U.S. brands General Motors Co, Ford Motor Co, and Fiat Chrysler Automobiles NV.

Trump’s agreement on Wednesday to refrain from imposing car tariffs on the EU in return for reduced trade barriers for U.S. products has helped cool fears of a trade war, but his final decision will not be known until the security investigation is concluded in coming months.

The U.S. automakers lowered their full-year profit forecasts on Wednesday due to the trade frictions, and their stocks fell as investors bet the disputes would hurt margins and sales.

Although hopes of a breakthrough in U.S.-EU trade talks boosted carmakers on Thursday, the planned meetings are a sign that auto-producing nations want to prepare for the worst.

MANAGED TRADE

Canadian Foreign Minister Chrystia Freeland raised the need for “cooperation by major interested nations” regarding the U.S. auto investigation during a meeting in Ottawa with South Korean Trade Minister Kim Hyun-chong last week, the South Korean ministry said in a statement after the meeting.

On a tour that also took in the United States, Kim broached the idea of working together to face tariffs at a meeting of the Pacific Alliance trade bloc in Mexico on Monday, said another Mexican official and a diplomat with knowledge of the matter, asking to remain anonymous because they were not authorized to speak about it.

Officials consulted by Reuters in Canada, Mexico and South Korea all said such discussions were preliminary, with another Canadian official characterizing them as comparing notes on the state of play of the tariff investigation, rather than discussing a coordinated reaction in detail.

“We have checked and listened to each other’s stance. However, as the auto tariff probe is still under way, it’s hard to know how things will turn out at this stage,” said a South Korean trade ministry official who declined to be named because he was not authorized to talk to the media.

“(Probe) results should come out first to work on a joint response,” the official said.

Canada is concerned South Korea may achieve an exemption that would give it a competitive advantage, the diplomat said, after the Asian country accepted quotas on its steel exports in return for an exemption from the metals tariffs that hit Canada, Mexico and other allies.

Ahn Dukgeun, a Seoul National University professor who advises the government on trade matters, said South Korea’s government was divided over what course to take.

“South Korea is at crossroads,” he said, on whether to “deepen managed trade” with the United States or to get tough, such as complaining to the WTO and using retaliatory tariffs.

Because of varying domestic rules on tariff retaliation, coordinating any action between several countries “quickly becomes fiendishly difficult,” the diplomat said.

“The idea is that we want to know that if we go to the WTO, if we use NAFTA (the North American Free Trade Agreement) in our case or if we retaliate,” our partners will be doing similar things, said the diplomat.

The conversations are more intense than before the steel and aluminum tariffs, the diplomat and the Canadian official said. One reason may be that countries now know Trump does not hesitate to pull the trigger on tariffs.

Another is the economic weight of the auto industry. The United States imported $173 billion of cars and $70 billion of auto parts in 2016, compared to $21 billion of steel.

Additional reporting by Frank Jack Daniel and Adriana Barrera in Mexico City, Hyunjoo Jin and Soyoung Kim in Seoul; Writing by Frank Jack Daniel; Editing by Richard Chang

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/6qrI6qJm5nw/global-auto-powers-plotting-response-to-trump-auto-tariff-threats-idUSKBN1KI0NI

UK’s Thomas Cook mulling airline sale: Sunday Times

LONDON (Reuters) – British travel company Thomas Cook (TCG.L) is considering splitting off its airline and selling a stake to an outside investor to reduce debt, the Sunday Times newspaper reported.

The newspaper, citing unnamed industry sources, said internal discussions were at an early stage and no change was likely imminently.

However, the sale of a stake in the airline – possibly to Chinese conglomerate Fosun (0656.HK), an existing 12 percent shareholder in the group – would make it easier for both the travel business and the airline to expand, the newspaper said.

A Thomas Cook spokesman told the newspaper that the company had previously said it was open to industry consolidation but that it had “no current plans” to sell its airline.

Thomas Cook said in May that it was on track to meet analysts’ expectations of a 7 percent rise in its post-operating profit to 352 million pounds ($461 million) for the 12 months to Sept. 30, on a constant currency basis.

Airline bookings rose 18 percent in the first half of its financial year, boosted by the collapse of German and British rivals Air Berlin and Monarch.

Reporting by David Milliken; Editing by Matthew Mpoke Bigg

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/4xoIDc5cFzE/uks-thomas-cook-mulling-airline-sale-sunday-times-idUSKBN1KI0MG

G20 agriculture ministers slam protectionism, pledge WTO reforms

BUENOS AIRES (Reuters) – Agriculture ministers from the G20 countries criticized protectionism in a joint statement on Saturday, and vowed to reform World Trade Organization (WTO) rules, but did not detail what steps they would take to improve the food trade system.

In the statement, they said they were “concerned about the increasing use of protectionist non-tariff trade measures, inconsistently with WTO rules.”

The ministers from countries including the United States and China, in Buenos Aires for the G20 meeting of agriculture ministers, said in the statement they had affirmed their commitment not to adopt “unnecessary obstacles” to trade, and affirmed their rights and obligations under WTO agreements.

The meeting came amid rising trade tensions that have rocked agricultural markets. China and other top U.S. trade partners have placed retaliatory tariffs on American farmers after the Trump administration put duties on Chinese goods as well as steel and aluminum from the European Union, Canada and Mexico.

U.S. growers are expected to take an estimated $11 billion hit due to China’s retaliatory tariffs. Last week, the Trump administration said it would pay up to $12 billion to help farmers weather the trade war.

U.S. Agriculture Secretary Sonny Perdue told Reuters in an interview on the sidelines of the meeting that Trump’s plan would include between $7 billion and $8 billion in direct cash relief that U.S. farmers could see as early as late September.

Despite the payments, the measures are “not going to make farmers whole,” Perdue said.

  • G20 agriculture ministers had ‘frank discussion’ about protectionism: Germany

Citing the Trump administration’s relief measures, German Agriculture Minister Julia Kloeckner said farmers “don’t need aid, (they) need trade.”

“We had a very frank discussion about the fact that we don’t want unilateral protectionist measures,” Kloeckner said in a news conference after the meeting.

The ministers, whose countries represent 60 percent of the world’s agricultural land and 80 percent of food and agricultural commodities trade, did not specify which measures they were referring to in the statement. Asked for details, Kloeckner said the ministers did not want to “criticize a single country.”

“We all know what happens if a single person or country doesn’t adhere to WTO rules, trying to get a benefit for themselves through protectionism,” she said. “This will usually lead to retaliatory tariffs.”

In the statement, the ministers said they agreed to continue reforming the WTO’s agricultural trade rules.

“Independent of all the news there was surrounding (the meeting), we managed to reach a unanimous consensus,” Argentine Agriculture Minister Luis Miguel Etchevehere said.

U.S. President Donald Trump and European Commission President Jean-Claude Juncker struck a surprise deal on Wednesday that ended the risk of further escalating trade tensions between the two powers.

After the meeting, Trump said the European Union would buy “a lot” of U.S. soybeans.

Earlier, Kloeckner told Reuters that the trade relationship between the United States and the European Union was improving, but that there was no guarantee the bloc would import the quantity of soybeans that Washington expects.

Reporting by Scott Squires and Luc Cohen; Editing by Diane Craft and Matthew Lewis

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Z7qDJV_E7y8/g20-agriculture-ministers-slam-protectionism-pledge-wto-reforms-idUSKBN1KI0IO

Bank Leumi, Azrieli agree to sell credit card unit to Warburg Pincus

JERUSALEM (Reuters) – Israel’s Bank Leumi (LUMI.TA) and Azrieli Group (AZRG.TA) have agreed to sell their credit card business Leumi Card to the U.S. private equity firm Warburg Pincus for 2.5 billion shekels ($685 million).

Leumi said in a statement on Saturday it would receive 2 billion shekels for its 80 percent stake, and that real estate developer Azrieli had agreed to sell its 20 percent stake.

Israel’s Harel Insurance Investments and Financial Services (HARL.TA) said it was lending Warburg Pincus 850 million shekels for the purchase.

The Bank of Israel said it would begin an examination into Warburg Pincus and its business plan before the deal could move forward, a process it estimated would take about four months.

In a bid to increase competition, regulators have instructed Israel’s top two banks sell off their credit card companies.

Leumi’s main rival, Bank Hapoalim (POLI.TA), last month submitted an initial prospectus with Israel’s securities regulator for a possible initial public offering of its Isracard credit card unit that also includes other sale options.

Leumi said that Warburg Pincus, which manages $45 billion in assets, will pay 1.05 billion shekels upon completion of the deal, a further 342 million shekels a year later, and the remaining amount after two years.

Reporting by Ari Rabinovitch; Editing by Kevin Liffey

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/e5JZ20Jbm6c/bank-leumi-azrieli-agree-to-sell-credit-card-unit-to-warburg-pincus-idUSKBN1KI0LN

G20 agriculture ministers express concern about ‘protectionist’ measures

BUENOS AIRES (Reuters) – Agriculture ministers from the G20 countries said on Saturday they were concerned about the increasing use of protectionist non-tariff trade measures inconsistent with World Trade Organization (WTO) rules.

The ministers from countries including the United States and China, in Buenos Aires for the G20 meeting of agriculture ministers, said in a joint statement they had affirmed their commitment not to adopt “unnecessary obstacles” to trade, and affirmed their rights and obligations under WTO agreements.

The meeting came amid rising trade tensions that have rocked agricultural markets. China and other top U.S. trade partners have placed retaliatory tariffs on American farmers after the Trump administration put duties on Chinese goods as well as steel and aluminum from the European Union, Canada and Mexico.

“We had a very frank discussion about the fact that we don’t want unilateral protectionist measures,” German Agriculture Minister Julia Klockner said in a press conference after the meeting.

Last week, the Trump administration said it would pay up to $12 billion to help U.S. farmers weather the trade war. President Donald Trump and the chief of the European Commission struck a surprise deal on Wednesday that ended the risk of further escalating trade tensions between the two powers.

  • G20 agriculture ministers had ‘frank discussion’ about protectionism: Germany

The ministers, whose countries represent 60 percent of the world’s agricultural land and 80 percent of food and agricultural commodities trade, did not specify which measures they were referring to in the statement. Asked for details, Klockner said the ministers did not want to “criticize a single country.”

“We all know what happens if a single person or country doesn’t adhere to WTO rules, trying to get a benefit for themselves through protectionism,” she said. “This will usually lead to retaliatory tariffs.”

In the statement, the ministers said they agreed to continue reforming the WTO’s agricultural trade rules.

“Independent of all the news there was surrounding [the meeting], we managed to reach a unanimous consensus,” Argentine Agriculture Minister Luis Miguel Etchevehere said.

After the meeting with European Commission President Jean-Claude Juncker last week, Trump said the European Union would buy “a lot” of U.S. soybeans.

Earlier, Klockner told Reuters that the trade relationship between the United States and the European Union was improving, but there was no guarantee the bloc would import the quantity of soybeans that Washington expects.

Reporting by Scott Squires and Luc Cohen; Editing by Matthew Lewis and Diane Craft

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/AD35bMKJMnc/g20-agriculture-ministers-express-concern-about-protectionist-measures-idUSKBN1KI0IO

G20 agriculture ministers had ‘frank discussion’ about protectionism: Germany

BUENOS AIRES (Reuters) – The G20 agriculture ministers gathered in Buenos Aires this weekend had a “frank discussion” about the fact that they do not want unilateral protectionist measures, German Agriculture Minister Julia Klockner told reporters on Saturday.

In a joint statement, the ministers agreed not to adopt “unnecessary obstacles” to trade as global trade tensions escalate.

Reporting by Luc Cohen; Editing by Sandra Maler

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/I65qFjATo-0/g20-agriculture-ministers-had-frank-discussion-about-protectionism-germany-idUSKBN1KI0JX

Germany says U.S.-Europe trade tensions ease, questions remain on soy

BUENOS AIRES (Reuters) – The trade relationship between the United States and Europe is improving, German Agriculture Minister Julia Kloeckner said on Saturday, but there is no guarantee the bloc will buy the quantity of soybeans that Washington expects.

U.S. President Donald Trump and Jean-Claude Juncker, president of the European Commission, the EU’s executive body, struck a surprise deal on Wednesday that ended the risk of an immediate trade war between the two powers.

After the talks, Trump highlighted benefits for U.S. farmers. “The European Union is going to start, almost immediately, to buy a lot of soybeans,” he told reporters.

Kloeckner, speaking to Reuters on the sidelines of a G20 meeting in Buenos Aires, said the amount of soy Europe will import is yet to be determined.

“Will we be able to do whatever President Trump wishes for? I don’t know. Let’s see whether this will be the case or not,” she said.

The EU was expected to import 15.3 million tonnes of soybeans in the 2018/19 crop year, according to data from the U.S. Department of Agriculture on July 12. The United States is the world’s No. 2 exporter of the oilseed after Brazil.

After Wednesday’s meeting at the White House, Trump agreed to refrain from imposing car tariffs while the European Union and the United States start talks on cutting other trade barriers.

Trump faced a backlash from some U.S. Midwestern farmers and lawmakers after announcing on Tuesday a $12 billion aid package intended as a temporary boost to growers hit by the escalating trade war between the United States and China.

China imposed tariffs of farm products including soybeans after Washington slapped duties on Chinese goods.

“A lot of U.S. farmers are currently under a lot of pressure caused primarily by the reactive tariffs and they are suffering a lot,” Kloeckner said.

“If you keep in mind that a lot of these farmers are supporters of President Trump, they have really felt the pressure. I think this has really helped Trump to understand that these tariffs can be potentially harmful and he has now reined in and we are moving towards a more positive situation,” she said.

Other European officials also expressed relief after Trump and Juncker agreed to tackle their transatlantic trade dispute.

“It’s a good thing for both the EU and the United States to have come together and agree to keep their conversation going, instead of seeing an exacerbation of the trade dispute,” Kloeckner added.

Reporting by Maximilian Heath in Buenos Aires; Writing by Hugh Bronstein; Editing by Matthew Lewis

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/xWkYKZhjfug/germany-says-u-s-europe-trade-tensions-ease-questions-remain-on-soy-idUSKBN1KI0GD