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Tehran: Trump Wrong to Expect Saudis to Cover Loss of Iran Oil Supply

Iran said on Tuesday U.S. President Donald Trump was mistaken to expect Saudi Arabia and other oil producers to compensate for supply losses caused by U.S. sanctions on Iran, after OPEC production rose only modestly in July.

The comments, from Iran’s OPEC governor, came a day after a Reuters survey showed OPEC production rose by 70,000 barrels per day in July. Saudi production increased but was offset by a decline in Iranian supply due to the restart of U.S. sanctions, the survey found.

“It seems President Trump has been taken hostage by Saudi Arabia and a few producers when they claimed they can replace 2.5 million barrels per day of Iranian exports, encouraging him to take action against Iran,” Hossein Kazempour Ardebili told Reuters. “Now they and Russia sell more oil and more expensively. Not even from their incremental production but their stocks.”

He said oil prices, which Trump has been pressuring the Organization of the Petroleum Exporting Countries to bring down by raising output, will rise unless the United States grants waivers to buyers of Iranian crude.

“They are also calling for the use of the U.S. SPR [Strategic Petroleum Reserve]. This will also mean higher prices. U.S. waivers to our clients if they come is due to the failure of bluffers [Saudi and the other producers] and, if not given, will again push the prices higher,” he said.

“So they hanged him [Trump] on the wall. Now they want to have a mega OPEC, congratulations to President Trump, Russia and Saudi Arabia.”

OPEC governors represent their respective country on the organization’s board of governors and are typically the second most senior person in a country’s OPEC delegation after the oil minister.

“The longer-term solution, Mr President, is to support and facilitate capacity building in all countries, proportionate to their reserves of oil and gas. And we will remain the biggest opportunity,” Kazempour said.

 

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50 Years on, McDonald’s and Fast-Food Evolve Around Big Mac

McDonald’s is fighting to hold onto customers as the Big Mac turns 50, but it isn’t changing the makings of its most famous burger.

The company is celebrating the 1968 national launch of the double-decker sandwich whose ingredients of “two all-beef patties, special sauce, lettuce, cheese, pickles, onions and a sesame seed bun” were seared into American memories by a TV jingle. But the milestone comes as the company reduces its number of U.S. stores. McDonald’s said Thursday that customers are visiting less often. Other trendy burger options are reaching into the heartland.

The “Golden Arches” still have a massive global reach, and the McDonald’s brand of cheeseburgers, chicken nuggets and french fries remains recognizable around the world. But on its critical home turf, the company is toiling to stay relevant. Kale now appears in salads, fresh has replaced frozen beef patties in Quarter Pounders, and some stores now offer ordering kiosks, food delivery and barista-style cafes.

The milestone for the Big Mac shows how much McDonald’s and the rest of fast-food have evolved around it.

“Clearly, we’ve gotten a little more sophisticated in our menu development,” McDonald’s CEO Steve Easterbrook said in a phone interview.

As with many of its popular and long-lasting menu items, the idea for the Big Mac came from a franchisee.

In 1967, Michael James “Jim” Delligatti lobbied the company to let him test the burger at his Pittsburgh restaurants. Later, he acknowledged the Big Mac’s similarity to a popular sandwich sold by the Big Boy chain.

“This wasn’t like discovering the light bulb. The bulb was already there. All I did was screw it in the socket,” Delligatti said, according to “Behind the Arches.”

McDonald’s agreed to let Delligatti sell the sandwich at a single location, on the condition that he use the company’s standard bun. It didn’t work. Delligatti tried a bigger sesame seed bun, and the burger soon lifted sales by more than 12 percent.

After similar results at more stores, the Big Mac was added to the national menu in 1968. Other ideas from franchisees that hit the big time include the Filet-O-Fish, Egg McMuffin, Apple Pie (once deep-fried but now baked), and the Shamrock Shake.

“The company has benefited from the ingenuity of its small business men,” wrote Ray Kroc, who transformed the McDonald’s into a global franchise, in his book, “Grinding It Out.”

Franchisees still play an important role, driving the recent switch to fresh from frozen for the beef in Quarter Pounders, Easterbrook says. They also participate in menu development, which in the U.S. has included a series of cooking tweaks intended to improve taste.

Messing with a signature menu item can be taboo, but keeping the Big Mac unchanged comes with its own risks. Newer chains such as Shake Shack and Five Guys offer burgers that can make the Big Mac seem outdated. Even White Castle is modernizing, recently adding plant-based “Impossible Burger” sliders at some locations.

A McDonald’s franchisee fretted in 2016 that only one out of five millennials has tried the Big Mac. The Big Mac had “gotten less relevant,” the franchisee wrote in a memo, according to the Wall Street Journal.

McDonald’s then ran promotions designed to introduce the Big Mac to more people. Those kind of periodic campaigns should help keep the Big Mac relevant for years to come, says Mike Delligatti, the son of the Big Mac inventor, who died in 2016.

“What iconic sandwich do you know that can beat the Big Mac as far as longevity?” said Delligatti, himself a McDonald’s franchisee.

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Accusations Fly as US Firms Seek to Avoid Trump’s Steel Tariff

U.S. companies seeking to be exempted from President Donald Trump’s tariff on imported steel are accusing American steel manufacturers of spreading inaccurate and misleading information, and they fear it may torpedo their requests.

Robert Miller, president and CEO of NLMK USA, said objections raised by U.S. Steel and Nucor to his bid for a waiver are “literal untruths.” He said his company, which imports huge slabs of steel from Russia, has already paid $80 million in duties and will be forced out of business if it isn’t excused from the 25 percent tariff. U.S. Steel and Nucor are two of the country’s largest steel producers.

“They ought to be ashamed of themselves,” said Miller, who employs more than 1,100 people at mills in Pennsylvania and Indiana.

Miller’s resentment, echoed by several other executives, is evidence of the backlash over how the Commerce Department is evaluating their requests to avoid the duty on steel imports. They fear the agency will be swayed by opposition from U.S. Steel, Nucor and other domestic steel suppliers that say they’ve been unfairly hurt by a glut of imports and back Trump’s tariff.

U.S. Steel said its objections are based on detailed information about the dimensions and chemistry of the steel included in the requests. “We read what is publicly posted and respond,” said spokeswoman Meghan Cox. Nucor did not reply to requests for comment.

The 20,000-plus waiver applications that the Commerce Department has received illustrate the chaos and uncertainty ignited by Trump’s trade war against America’s allies and adversaries. It’s a battle that critics of his trade policy, including a number of Republican lawmakers, have warned is misguided and will end up harming U.S. businesses.

Trump and European leaders agreed this past Wednesday not to escalate their dispute over trade, but the tariff on steel and a separate duty on aluminum imports remains in place as the U.S. and Europe aim for a broader trade agreement. The metal taxes would continue to hit U.S. trading partners such as Canada, Mexico and Japan even if the U.S. and the EU forge a deal.

Miller bristled over insistence by Nucor and U.S. Steel that steel slab is readily available in the United States. “That’s just not true,” he said.

His company isn’t the only one looking overseas for a product described as being consistently in short supply. California Steel Industries, a mill east of Los Angeles in Fontana, described the slab shortage as “acute” on the West Coast and declared that its waiver request is critical to its survival.

Aiming to rebuild the U.S. steel industry, Trump relied on a rarely used 1962 law that empowers him to impose tariffs on particular imports if the Commerce Department determines those goods threaten national security. He added a twist: Companies could be excused from the tariff if they could show, for example, that U.S. manufacturers don’t make the metal they need in sufficient quantities.

But there are hurdles to clear on the path to securing an exemption. A single company may have to file dozens of separate requests to account for even slight variations in the metal it’s buying. That means a mountain of paperwork to be filled out precisely. If not, the request is at risk of being rejected as incomplete. All this can be time-consuming and expensive, especially for smaller businesses.

The requests are open to objections. The Commerce Department posts the exemption requests online to allow third parties to offer comments — even from competitors who have an interest in seeing a rival’s request denied. But objections are frequently being submitted just as the comment period closes, undercutting the requester’s ability to fire back.

Willie Chiang, executive vice president of Plains All American Pipeline, told the House Ways and Means subcommittee on trade last week that his company had no opportunity to respond to objections that contained “incorrect information” before the Commerce Department denied its exclusion request. Chiang didn’t say who submitted the inaccurate information.

“The intent here is to restrict imports on a broad scale,” said Richard Chriss, executive director of the American Institute for International Steel, a free trade group opposed to tariffs. “It wouldn’t make sense from the administration’s perspective to design a process that readily granted exclusions.”

The Commerce Department declined to comment for this story.

Department officials have so far made public only a small number of their rulings.

An analysis of the numbers by the office of Rep. Jackie Walorski, an Indiana Republican and one of the most vocal opponents of the steel tariff on Capitol Hill, shows that 760 requests have been approved while 552 have been denied. The department hasn’t yet approved a waiver request that triggered objections, according to Walorski’s review.

The congresswoman’s office also examined the more than 5,600 publicly available comments and found they were submitted on average about four days before the end of the 30-day comment period. More than 50 percent of the comments weren’t delivered until 48 hours or less before the comment window closed. It took department an average of nine days to post comments online after receiving them, according to the analysis. The most prolific commenters were Nucor and U.S. Steel with 1,064 and 1,009, respectively.

A waiver request Seneca Foods Corporation submitted for tinplated steel it had already agreed to purchase from China was among the denials. U.S. Steel had objected, calling the tinplate a “standard product” that’s readily available in the United States. In fact, U.S. Steel said it currently supplies the material to Seneca Foods, the nation’s largest vegetable canner.

The New York-based Seneca Foods declined to comment. But in its waiver application, the company said domestically made tinplate “is of inferior quality to imported material.” Seneca Foods also said it’s unclear, at best, if U.S. suppliers have the ability or willingness to expand their production in the long term to meet the company’s annual demand for the material.

Philadelphia-based Crown Cork & Seal, a manufacturer of metal packaging for food and beverages, submitted a sharply worded attachment to its waiver application that anticipated pushback from domestic manufacturers. American steel mills, the document said, cannot meet aggregate demand for tinplate and have no plans to increase their capacity.

“We anticipate the U.S. mills will attempt to rebut this statement when they object to this exclusion request, but we encourage the Department of Commerce to see through their manipulative attempt to exploit the rules of the exclusion request process,” the application said.

Daniel Shackell, Crown Cork & Seal’s vice president for steel sourcing, said he’s not optimistic about the company’s chances of getting all 70 of its waiver requests approved. Eight have been granted so far primarily because the metal specified in those requests is not made in the United States. Twelve others have been denied, leaving 50 still to be decided.

“It’s hard not to interpret that the Commerce Department wants domestic suppliers to have an edge,” Shackell said.

Jay Zidell, president of Tube Forgings of America, a small company in Portland, Oregon, said he’s filed 54 exclusion requests and U.S. Steel has objected to 38 of them. U.S. Steel declared it is “willing and ready to satisfy” Tube Forgings’ demands for carbon steel tubing. But Zidell said the comments ignored past problems with metal quality and workmanship that led his company to sever a prior relationship with U.S. Steel.

Still, he’s worried the Commerce Department won’t approve all of the requests. Tube Forgings already has spent $600,000 on tariffs, he said, and may be on the hook for much more than that.

“The entire system is just screwed up,” Zidell said.

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Lopez Obrador Looks to Tree Planting to Create Mexico Jobs

Mexican President-elect Andres Manuel Lopez Obrador says he wants to create 400,000 jobs by planting 1 million hectares (2.47 million acres) with timber and fruit trees.

 

Lopez Obrador said in a video posted Sunday that he wants to plant half the total amount in 2019, focusing on timber species like cedar and mahogany. The other half would be planted in 2020.

 

Referring to the Usumacinta river basin near the border with Guatemala, Lopez Obrador said 50,000 to 100,000 hectares could be planted there. He said the upper canopy of timber species could provide cover for cacao plantings beneath. Cacao is the source of chocolate.

 

Lopez Obrador sees the planting program as a way to offer rural Mexicans work in their home communities, so they do not have to emigrate.

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Impact of Trade Tariffs on European Companies

Some European companies are rethinking their strategies to cushion the impact of trade tensions between the world’s two biggest economies, the United States and China.

The focus will switch back to China after a truce on tariffs emerged from U.S. President Donald Trump’s meeting with European Commission President Jean-Claude Juncker on July 25.

Trump and Juncker agreed to suspend any new tariffs on the European Union, including a proposed 25 percent levy on auto imports, and hold talks over duties on imports of European steel and aluminum. However, Trump retained the power to impose tariffs if no progress is made.

In the case of China, Trump threatened that he was ready to impose tariffs on an additional $500 billion of imports.

The United States has already imposed tariffs on $34 billion of Chinese imports. In return, China has levied taxes on the same value of U.S. products.

Below are recent comments from European companies on trade tensions:

Russian steelmaker MMK has delayed the launch of a project in Turkey, which was expected to add $90-$100 million to its core earnings, due to uncertainty created by global trade wars, the company said.
Siemens Healthineers plans to cushion the impact of U.S.-China trade tensions by changing its supply routes to ship goods from its European factories. The firm expects tariffs to have a low single digit million euro impact on Healthineers’ results this year, which could rise to a double-digit million euro effect next year.
German automaker BMW said it would increase suggested retail prices of the relatively high-margin X5 and X6 SUV models by 4 percent to 7 percent. The company has said that it would be unable to “completely absorb” a 25 percent Chinese tariff on imported U.S.-made models.
China-based car dealers said Mercedes maker Daimler moderately raised prices in the country of its GLE midsize SUV which is produced in Alabama. Daimler is looking at ways to mitigate the impact of the trade tensions, including reviewing whether to shift some U.S. production to Asia. The company blamed tariffs for a 30 percent drop in second-quarter profit.
Wind turbine maker Siemens Gamesa warned that trade tensions would drive up U.S. costs by 2 to 4 percent, depending on the product and whether further tariffs are imposed. The company is working to reduce the impact on margins by optimizing its supply chains.
French electrical equipment company Schneider Electric foresees growth slowing in the second half of the year and expects the first extra costs linked to higher U.S. tariffs, which could reach 20 million euros.
“If the trade war escalates we are more concerned about the consequences that it can have on global macro environment,” STMicro said, adding that the direct impact of trade war risks were currently negligible.
Fiat Chrysler cut its 2018 outlook, hurt by a weaker performance in China. Its operating profit for the second-quarter was negatively impacted by China import duty changes.
French mining group Eramet warned that current favorable markets could be hurt by trade rows.
Philips confirmed its sales growth target for this year but added that trade worries and the consequences of Brexit continued to cause uncertainty.
Finnish steel maker Outokumpu sees a double impact from the U.S. tariffs, with surging imports to Europe resulting in heavy price pressure, whilst in the Americas base prices have risen, benefiting local manufacturers itself.
Fellow Finnish company Valmet said tariff increases could derail the recovery and depress its medium-term growth prospects.
Chinese-owned Volvo Cars said it was shifting production of its top-selling SUV production for the U.S. market to Europe from China to avoid Washington’s new duties on Chinese imports.
The Alliance of Automobile Manufacturers, whose members include General Motors, Volkswagen AG and Toyota, also warned on the impact of the tariffs. A study released by a U.S. auto dealer group warned that the tariffs could cut U.S. auto sales by 2 million vehicles.
Sweden’s Electrolux said U.S. tariffs announced in July would have an impact of $10 million plus this year. In the third quarter. It expects raw material costs to rise by 0.5 billion Swedish crowns.
Belgian steel wire maker Bekaert reported it sees underlying operating profit 20 percent below analysts’ estimates in the first half, blaming wire rod costs partly driven up by tariffs.
Swedish lock maker Assa Abloy sees a further increase in steel prices in the second part of the year in the U.S., partly due to new import tariffs.
Austrian steelmaker Voestalpine said about a third of its U.S. sales would be impacted by import tariffs, adding it was talking to its customers about who would bear the cost.
Norway’s REC Silicon booked an impairment charge of $340 million “due to the market disruption from the curtailment of solar incentives in China, as well as continued trade barriers that prevent access to primary markets inside China.”

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Taxi Strike Targeting Uber Brings Chaos to Spanish Cities

Spanish taxi drivers blocked major city streets including Barcelona’s Gran Via and Madrid’s Castellana on Monday in a protest to pressure the government to curb licenses to online ride-hailing services such as Uber.

Union representatives were due to meet officials of Prime Minister Pedro Sanchez’s government later in the day to try to resolve the dispute, in which taxi drivers have choked main roads and snarled airports, bus and train stations since Saturday.

Along with counterparts in many other European countries, Spain’s taxi drivers say that ride-hailing apps have made it impossible to compete.

“Uber and Cabify are putting the viability of the taxi sector and 130,000 jobs at risk … The union considers this unfair competition intolerable,” the UGT union said in a statement.

Union representatives say the current law of one ride-hailing license for every 30 taxi licenses is not being respected and want an end to the practice of transferring ride-hailing permits between drivers.

With backers including Goldman Sachs and BlackRock and valued at more than $70 billion, Uber has faced protests, bans and restrictions around the world as it challenges traditional taxi operators, angering some unions.

London cab drivers are examining the possibility of bringing a class action suit against Uber after the mobile app was granted a temporary license renewal to operate in the British capital.

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White House Economic Adviser Sees Sustainable US Growth

White House economic adviser Larry Kudlow said Sunday he believes the 4.1 percent growth the U.S. recorded in the last three months is sustainable in the coming months despite skepticism expressed by independent economists.

“There’s just a lot of good things going on,” Kudlow told CNN.  He said President Donald Trump “deserves a victory lap,” with “low tax rates, rolling back regulations, opening up energy, for example. Trade reform I think is already paying off. The fundamentals of the economy look really good.”

He said “business investment spending is really booming. That’s a productivity creator. That’s a job creator. That’s a wage creator for ordinary mainstream folks, terribly important.”

Kudlow said the five calendar quarters occurring fully during Trump’s 18-month presidency have now been recorded with average economic growth of 2.9 percent for the world’s largest economy.

“I don’t see why we can’t run this for several quarters,” Kudlow said.

As the 4.1 percent growth rate for the April-to-June period was announced Friday, Trump boasted that the U.S. was on track to hit its highest annual growth rate in its gross domestic product in 13 years and predicted that as the country reaches new trade deals with other countries, the U.S. would exceed its second quarter advance.

“These numbers are very, very sustainable,” he said. “This isn’t a one-time shot.”

On Sunday, Trump said on Twitter, “The biggest and best results coming out of the good GDP report was that the quarterly Trade Deficit has been reduced by $52 Billion and, of course, the historically low unemployment numbers, especially for African Americans, Hispanics, Asians and Women.”

Skeptics less upbeat

Some independent economists, however, voiced skepticism that the $18.6 trillion annual U.S. economy would continue to advance at the same pace as the last three months.

Some forecasters said the gains in recent months were mostly, although not totally, the result of temporary factors, such as the initial boost from tax cuts Trump supported that took effect earlier this year. Most analysts say that for all of 2018 the U.S. could reach 3 percent growth, which would be the best since a 3.5 percent gain in 2005, but not again hit the annual 4.1 percent growth rate recorded last quarter.

“We believe quarter two will represent a growth peak as the boost from tax cuts fades, global growth moderates, inflation rises, the Fed tightens monetary policy and trade protectionism looms over the economy,” said Gregory Daco, chief U.S. economist at Oxford Economics.

Mark Zandi, chief economist at Moody’s Analytics, said, “The second quarter was a strong quarter, but it was juiced up by the tax cuts and higher government spending.”

In the U.S., consumer spending accounts for about 70 percent of the economy, with Ian Shepherdson, the chief economist of Pantheon Macroeconomics, saying that such spending accounted for the robust second quarter.

“Consumers were really on a tear,” he said. “So to grow at 4 [percent] probably tells you people were spending the tax cuts that they enjoyed back in January, but that’s extremely unlikely to happen again.”

 

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G-20 Ag Ministers Slam Protectionism, Pledge WTO Reforms

Agriculture ministers from the G-20 countries criticized protectionism in a joint statement 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 nontariff trade measures, inconsistently with WTO rules.”

The ministers from countries including the United States and China, in Buenos Aires for the G-20 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.

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.

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AP Fact Check: Trump Falsely Claims Historic Turnaround

President Donald Trump falsely claimed he’s pulled off “an economic turnaround of historic proportions.”

Speaking at the White House Friday after the government reported that the economy grew at an annual rate of 4.1 percent in the second quarter, Trump declared that the gains were sustainable and would only accelerate. Few economists outside the administration agree with this claim.

His remarks followed events Thursday in Iowa and Illinois, where Trump falsely repeated a claim that the U.S. economy is the best “we’ve ever had” and incorrectly asserted that Canada’s trade market is “totally closed.”

 

WATCH: Trump Says Economy Numbers Sustainable, But Experts Doubtful

A look at the claims:

Historic turnaround

TRUMP: “We’ve accomplished an economic turnaround of historic proportions.” — remarks Friday at the White House.

THE FACTS: Trump didn’t inherit a fixer-upper economy.

The U.S. economy just entered its 10th year of growth, a recovery that began under President Barack Obama, who inherited the Great Recession. The data show that the falling unemployment rate and gains in home values reflect the duration of the recovery, rather than any major changes made since 2017 by the Trump administration.

While Trump praised the 4.1 percent annual growth rate in the second quarter, it exceeded that level four times during the Obama presidency. But quarterly figures are volatile and strength in one quarter can be reversed in the next. While Obama never achieved the 3 percent annual growth that Trump hopes to see, he came close. The economy grew 2.9 percent in 2015.

The economy faces two significant structural drags that could keep growth closer to 2 percent than 3 percent: an aging population, which means fewer people are working and more are retired, and weak productivity growth, which means that those who are working aren’t increasing their output as quickly as in the past.

Both of those factors are largely beyond Trump’s control.

Trade deficit

TRUMP: “One of the biggest wins in the report, and it is, indeed a big one, is that the trade deficit — very dear to my heart because we’ve been ripped off by the world — has dropped.”

THE FACTS: Trump is correct that a lower trade deficit helped growth in the April-June quarter, but it’s not necessarily for a positive reason.

The president has been floating plans to slap import taxes on hundreds of billions of dollars of foreign goods, which has led to the risk of retaliatory tariffs by foreign companies on U.S. goods.

This threat of an escalating trade war has led many companies to increase their levels of trade before any tariffs hit, causing the temporary boost in exports being celebrated by Trump.

Richard Moody, chief economist at Regions Financial, said the result is that the gains from trade in the second quarter will not be repeated.

​Best economy ever

TRUMP: “We’re having the best economy we’ve ever had in the history of our country.” — remarks in Granite City, Illinois.

THE FACTS: Even allowing for Trump’s tendency to exaggerate, this overstates things.

The unemployment rate is near a 40-year low and growth is solid, but by many measures the current economy trails other periods in U.S. history. Average hourly pay, before adjusting for inflation, is rising around a 2.5 percent annual rate, below the 4 percent level reached in the late 1990s when the unemployment rate was as low as it is now.

Pay was growing even faster in the late 1960s, when the jobless rate remained below 4 percent for nearly four years. And economic growth topped 4 percent for three full years from 1998 through 2000, an annual rate it hasn’t touched since.

Canada market closed

TRUMP: “The Canadians, you have a totally closed market … they have a 375 percent tax on dairy products, other than that it’s wonderful to deal. And we have a very big deficit with Canada, a trade deficit.” — remarks in Peosta, Iowa.

THE FACTS: No, it’s not totally closed. Because of the North American Free Trade Agreement, Canada’s market is almost totally open to the United States. Each country has a few products that are still largely protected, such as dairy in Canada and sugar in the United States.

Trump also repeated his claim that the U.S. has a trade deficit with Canada, but that is true only in goods. When services are included, such as insurance, tourism, and engineering, the U.S. had a $2.8 billion surplus with Canada last year.

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Trump Says Economy Numbers Sustainable, But Experts Doubtful

Friday’s positive numbers on the U.S. economic growth are “very, very sustainable,” according to U.S. President Donald Trump. His comments came after figures showed U.S. GDP growth hit 4.1 percent in the second quarter. The question is whether that growth is sustainable, as VOA’s Bill Gallo reports from the White House.

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Twitter Reports Drop in Active Users; Share Price Sinks

Twitter’s share price fell more than 20 percent Friday after the social media giant reported a drop in active users. 

Twitter said it had 335 million monthly users in the second quarter of the year, which was down a million from the amount of monthly users in the first quarter of the year, and below the 339 million users Wall Street was expecting.

Twitter said that the number of monthly users could continue to fall next quarter as the company continues to ban accounts that violate its terms of service and as it makes other accounts less visible.

The company says it is putting the long-term stability of its platform above user growth. However, the move has made it more difficult for investors to value the company, as they rely on data pertaining to the platform’s potential user reach.

Shares in Twitter tumbled 20.5 percent to close at $34.12 Friday. The fall in the share price came despite Twitter’s report of higher than expected revenue. During the last quarter, Twitter posted a profit of $100 million, marking the company’s third consecutive profitable quarter.

The drop in Twitter’s share price came a day after Facebook lost 19 percent of its value. Facebook said Thursday that slower user growth in big markets and increased spending to improve privacy would hit margins for years, leading to the company’s worst trading day since it went public in 2012.

Both Twitter and Facebook have been under pressure from regulators in several countries to protect user data as well as stamp out hate speech and misinformation.

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Facebook Sued after Stock Plunge

Facebook Inc and its chief executive, Mark Zuckerberg, were sued Friday in what could be the first of many lawsuits over a disappointing earnings announcement by the social media company that wiped out about $120 billion of shareholder wealth.

The complaint filed by shareholder James Kacouris in Manhattan federal court accused Facebook, Zuckerberg and Chief Financial Officer David Wehner of making misleading statements about or failing to disclose slowing revenue growth, falling operating margins, and declines in active users.

Kacouris said the marketplace was “shocked” when “the truth” began to emerge Wednesday from the Menlo Park, California-based company. He said the 19 percent plunge in Facebook shares the next day stemmed from federal securities law violations by the defendants.

The lawsuit seeks class-action status and unspecified damages. A Facebook spokeswoman declined to comment.

Shareholders often sue companies in the United States after unexpected stock price declines, especially if the loss of wealth is large.

Facebook has faced dozens of lawsuits over its handling of user data in a scandal also concerning the U.K. firm Cambridge Analytica. Many have been consolidated in the federal court in San Francisco.

Thursday’s plunge also hit Zuckerberg’s bottom line.

Zuckerberg had been tied with Warren Buffett as the world’s fourth-richest person, but the Berkshire Hathaway Inc chairman’s current $83 billion fortune tops Zuckerberg’s $66 billion, Forbes magazine said.

Buffett now ranks third among the world’s billionaires, while Zuckerberg is sixth.

Facebook shares fell another 0.8 percent on Friday, closing at $174.89 on the Nasdaq.

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Factbox: Impact of US Trade Tariffs on European Companies

Some European companies are rethinking their strategies to cushion the impact of trade tensions between the world’s two biggest economies, the United States and China.

The focus will switch back to China after a truce on tariffs emerged from U.S. President Donald Trump’s meeting with European Commission President Jean-Claude Juncker on July 25.

Trump and Juncker agreed to suspend any new tariffs on the European Union, including a proposed 25 percent levy on auto imports, and hold talks over duties on imports of European steel and aluminum.

However, Trump retained the power to impose tariffs, if no progress is made.

In the case of China, Trump threatened this month that he was ready to impose tariffs on an additional $500 billion of imports.

The United States has already imposed tariffs on $34 billion of Chinese imports. In return, China has levied taxes on the same value of U.S. products.

Below are recent comments from European companies on trade tensions:

– Mercedes maker Daimler blamed U.S.-China tariffs for a 30 percent drop in second-quarter profit announced on July 26 and prefigured in a profit warning last month.

– French electrical equipment company Schneider Electric said on July 26 that it foresaw growth slowing in the second half of the year and expected the first extra costs linked to higher U.S. tariffs, which could reach 20 million

euros.

– “If the trade war escalates we are more concerned about the consequences that it can have on global macro environment,” STMicro’s new Chief Executive Jean-Marc Chery, said on July 25, adding that direct impact of trade war risks were currently “negligible.”

– Fiat Chrysler cut 2018 outlook on July 25, hurt by weaker performance in China. Its operating profit for the second-quarter was negatively impacted by China import duty changes.

– French mining group Eramet warned that current favorable markets could be hurt by trade rows.

– Chief Executive Frans van Houten confirmed Philips’ sales growth target for this year on July 23, but added that trade worries and the unknown consequences of Brexit continued to cause uncertainty.

– Finnish steel maker Outokumpu sees two-fold impact from the U.S. tariffs, with surging imports to Europe resulting in heavy price pressure, whilst in the Americas, base prices have risen throughout spring benefiting local manufacturers, including the company.

– Fellow Finnish company Valmet said tariff increases could derail the recovery and depress its medium-term growth prospects.

– Chinese-owned Volvo Cars (IPO-VOLVO.ST) said it was shifting production of its top-selling SUV production for the U.S. market to Europe from China to avoid Washington’s new duties on Chinese imports.

– German automaker BMW said this month that it would be unable to “completely absorb” a new 25 percent Chinese tariff on imported U.S.-made models and would have to raise prices on the vehicles made in South Carolina.

– The Alliance of Automobile Manufacturers, whose members include General Motors Co, Volkswagen AG and Toyota Motor Corp, also warned on the impact of the tariffs. A study released by a U.S. auto dealer group warned

that the tariffs could cut U.S. auto sales by 2 million vehicles.

– Sweden’s Electrolux said on July 18 that the U.S. tariffs announced at the beginning of July would have an impact of $10 million plus this year. In the third quarter, it expects raw material costs to rise by 0.5 billion Swedish

crowns.

– Belgian steel wire maker Bekaert reported on the same day that it sees underlying operating profit 20 percent below analysts’ estimates in the first half, blaming wire rod costs partly driven up by tariffs.

– Swedish lock maker Assa Abloy’s CEO said on July 18 that he sees an important further increase in steel prices in the second part of the year in U.S., partly due to new import tariffs. He expects price hikes to compensate better for the higher cost in the last six month of the year than in the second quarter.

– Austrian steelmaker Voestalpine said on June 6 that about a third of its U.S. sales would be impacted by Washington’s steel import tariffs, adding that it was talking to its customers about who would bear the cost.

– Norway’s REC Silicon booked an impairment charge of $340 million “due to the market disruption from the curtailment of solar incentives in China, as well as continued trade barriers that prevent access to primary markets inside

China.”

“We need the U.S. and Chinese governments to cooperate in ending the solar trade dispute … to prevent additional job losses and to enhance the value of the solar industry in the U.S. and China.”

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Court: Starbucks, Others Must Pay Workers for Off-Clock Work

Starbucks and other employers in California must pay workers for minutes they routinely spend off the clock on tasks such as locking up or setting the store alarm, the state Supreme Court ruled Thursday.

The unanimous ruling was a big victory for hourly workers in California and could prompt additional lawsuits against employers in the state.

The ruling came in a lawsuit by a Starbucks employee, Douglas Troester, who argued that he was entitled to be paid for the time he spent closing the store after he had clocked out.

Troester said he activated the store alarm, locked the front door and walked co-workers to their cars — tasks that he said required him to work for four to 10 additional minutes a day.

Starbucks said it was disappointed with the ruling. In a brief filed with the California Supreme Court, attorneys for Starbucks said Troester’s argument could lead to “innumerable lawsuits over a few seconds of time.” The U.S. Chamber of Commerce in a court filing also warned of the possibility of “significant liability” to businesses in the state.

A U.S. District Court rejected Troester’s lawsuit on the grounds that the time he spent on those tasks was minimal. But the California Supreme Court said a few extra minutes of work each day could “add up.”

Troester was seeking payment for 12 hours and 50 minutes of work over a 17-month period. At $8 an hour, that amounts to $102.67, the California Supreme Court said.

“That is enough to pay a utility bill, buy a week of groceries, or cover a month of bus fares,” Associate Justice Goodwin Liu wrote. “What Starbucks calls ‘de minimis’ is not de minimis at all to many ordinary people who work for hourly wages.”

Trivial and not trivial

The ruling also applies to tasks done before the workday begins, said Bryan Lazarski, an attorney in Los Angeles who handles wage claims against employers.

Lazarski said he expects the ruling to open the door to additional lawsuits by workers in similar situations as Troester. But he also expects lawsuits that “test the boundary of what this case says” to determine how much time spent doing work off the clock is enough to get paid.

The court in Thursday’s ruling said it was not closing the door on all claims by employers that the amount of additional work was too negligible.

“The court is saying, ‘We haven’t really drawn a line with regard to what is trivial and what is not trivial, but in this case, the time that the employee was not compensated was significant,'” said Veena Dubal, a labor law expert at the University of California, Hastings College of the Law.

Associate Justice Leondra Kruger wrote separately to say that there may be some periods of time that are “so brief, irregular of occurrence, or difficult to accurately measure or estimate,” that requiring an employer to account for them would not be reasonable.

She cited as examples a glitch that delays logging in to a computer to start a shift or having to read and acknowledge an email or text message about a schedule change while off the clock.

Tracking time

The federal court that threw out Troester’s lawsuit also said it would be hard for an employer to track the additional time that he worked. But Liu said employers could use technology for that or restructure employees’ work so they don’t have any tasks after they clock out.

Employers can also estimate the additional time, he said.

Troester appealed the U.S. District Court’s decision to the 9th U.S. Circuit Court of Appeals. The appeals court asked the California Supreme Court to determine whether a federal rule permitting employers under some circumstances to require employees to work as much as 10 minutes a day without compensation applied under state law.

The lawsuit now returns to the 9th Circuit. 

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Facebook Shares Sink; Further Growth Drops Expected

Social media giant Facebook, which has weathered storms about privacy and data protection, is now looking at cooler growth following a years-long breakneck pace.

Shares in Facebook plummeted 19 percent to close at $176.26 Thursday, wiping out $100 billion. It was believed to be the worst ever single-day evaporation of market value for any company.

The plunge came one day after the firm missed revenue forecasts for the second quarter and warned that growth would be far weaker than previously estimated.

Chief Financial Officer David Wehner warned Wednesday in an earnings call with analysts that revenue growth had already “decelerated” in the second quarter and would drop “by high single-digit percentages” in coming quarters.

At one point during the call, Facebook shares were trading down as much as 24 percent, an unprecedented drop for a large firm.

On the call, Jefferies & Co. analyst Brent Thill said that “many investors are having a hard time reconciling that deceleration. … It just seems like the magnitude is beyond anything we’ve seen.”

Facebook said the slowdown would come in part from a new approach to privacy and security, but also appeared to acknowledge the limits of growth in advertising, which accounts for virtually all its revenue.

Brian Sheehan, a Syracuse University professor of communication and advertising, said the weak forecast “made investors nervous about more basic long-term issues” with the huge social network, notably its diminished appeal to younger users.

“With or without privacy issues, investors are scared that Facebook’s interactions, particularly with those under 25, are falling,” Sheehan said.

For the second quarter, profit was up 31 percent at $5.1 billion; revenues rose 42 percent to $13.2 billion, only slightly below most forecasts.

User base still growing

Facebook reported its user base was still growing but not as fast as some expected. Monthly active users rose 11 percent to 2.23 billion — below most estimates of 2.25 billion.

Richard Windsor, a technology analyst who writes the Radio Free Mobile blog, said the new outlook should not be surprising.

“This is a direct result of scale as it becomes increasingly difficult to grow at such high rates when a company hits this size,” Windsor wrote.

Windsor added that Facebook is forced to hire more people to handle tasks such as filtering inappropriate content after discovering the limits of artificial intelligence.

“Weaknesses in AI are forcing [Facebook] to keep hiring humans to do the jobs that the machines are incapable of,” he said.

Brian Wieser at Pivotal Research Group said the company appears to have hit a “wall” on growth in advertising.

In a research note, he said Facebook’s outlook “suggests that while the company is still growing at a fast clip, the days of 30 percent-plus growth are numbered.”

Until Wednesday, Facebook shares had been at record highs as investors seemed to shrug off fears about data protection and probes into the hijacking of private information by the political consultancy Cambridge Analytica.

Chief Executive Mark Zuckerberg said Facebook has invested heavily in “safety, security and privacy” after being rocked by concerns of manipulation of the platform to spread misinformation, warning of an “impact” on profitability.

Some analysts however said it was too soon to write off Facebook or its growth prospects, and that the company may have simply been warning of the worst-case scenario.

“The company has a track record of resetting revenue growth and expense expectations only to turn around and exceed those expectations the following quarter,” said Gene Munster of Loup Ventures. “We suspect Facebook is sticking with its historical playbook and will, in fact, beat these lower numbers.”

A positive view

Richard Greenfield of BTIG Research said he remained upbeat on Facebook despite the abrupt forecast shift.

“Facebook is actively choosing to make less money, deprioritizing near-term monetization to drive engagement to even higher levels,” Greenfield said in a note to clients.

Greenfield said he could “sense the fear/panic in investors’ voices” after the Facebook analyst call, but that he had maintained his outlook.

“Mobile is eating the world and Facebook is a core holding to benefit from that shift,” he said.

RBC Capital Markets analyst Mark Mahaney said the drop creates a rare buying opportunity for Facebook shares.

“Facebook stills owns two of the largest media assets in the world [Facebook and Instagram] and the two largest messaging assets in the world [Messenger and WhatsApp],” Mahaney said in a note to clients, adding that he sees “no material change in marketer views of the attractiveness” of Facebook platforms. 

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Trump Says He Has Opened Europe Markets for US Farmers 

U.S. President Donald Trump, a day after reaching a truce in the escalating trade dispute with Europe, characterized his talks with European Commission President Jean-Claude Juncker as a big economic victory and a historic agreement. But he provided few details.  

“We just opened up Europe for you farmers,” Trump said at a roundtable event in Iowa. “You have just gotten yourself one big market.”

Iowa is among the Midwestern farming states hit by retaliatory tariffs on soybeans and other products, imposed by China in response to tariffs imposed on Chinese goods by the U.S. president. 

Later in the afternoon, Trump addressed steelmakers in Granite City, Illinois, saying, “We’re not going to give China or any other country a veto on United States national security.” 

Europe has “agreed to purchase, almost immediately, large amounts of American soybeans because China tried to hurt the American farmer,” Trump said.

The president said his administration had taken the “toughest-ever actions in response to China’s very abusive trade practices,” accusing Beijing of massive theft of American intellectual property.

Trump also said that as a result of his tariffs imposed on trading partners, “idle factories throughout our nation are roaring back to life.”

Amid the vague commitments for European purchases of soybeans, and constructing terminals to store additional liquified natural gas from the United States, Trump and Juncker on Wednesday committed to holding off on additional tariffs while trans-Atlantic negotiations are held.

U.S. Treasury Secretary Steven Mnuchin describes it as “an agreement in principle,” while Trump told the Iowa audience he and Juncker “agreed to a letter of intent.”

French President Emmanuel Macron on Thursday threw cold water on any sweeping agreement, arguing “the context doesn’t allow it.”

Macron explained he is against agricultural discussions in the trade talks, also adding that the Trump administration must make clear gestures over the “illegal” steel and aluminum tariffs still in place.

Commerce Secretary Wilbur Ross, speaking to reporters during the Air Force One flight to Iowa, credited Trump’s tariffs on the metals for the previous day’s breakthrough at the White House.

“To get there, we had to take a route of trying to make it more painful for the other parties to continue bad practices than to drop them,” Ross said. “This is a real vindication of the president’s trade policy.”

While no auto tariffs will be imposed on the EU while talks continue, Ross said, “We’ve been directed by the president to continue the investigation, get our material together but not actually implement anything, pending the outcome of the negotiation.”

He said they would submit their report on auto tariffs sometime in August. Imposing them “may not be necessary,” he added.

In the meantime, “steel and aluminum tariffs stay in place,” Ross said.

The comments by Trump and Ross indicate the administration could be willing to negotiate a pact akin to the Transatlantic Trade and Investment Partnership (TTIP), on which negotiations have stopped.

A day before the Oval Office meeting between Trump and Juncker, the U.S. Agriculture Department announced it was making $12 billion available to American farmers harmed by tariffs.

Pressed whether the money was a bailout, Mnuchin on Thursday responded, “We’re not bailing out any farmers, that’s a ridiculous comment. It’s not a bailout.” He added that when “other countries unfairly and illegally target our farmers, we will stand up and fight for them.”

Appearing before the Senate Appropriations Subcommittee for Commerce on Thursday, U.S. Trade Representative Robert Lighthizer told lawmakers, “It is certainly not our plan to have small business or agriculture or anyone else in America feel the brunt of a change in trade policy which is designed to make the U.S. stronger and richer, help our exports, and help all American businesses and farmers and ranchers.”

The tariffs imposed by the Trump administration came under criticism during the hearing, including from members of Trump’s party.

Tennessee Republican Lamar Alexander said the “tariff taxes that the administration had placed began to look like, ‘I’ve got a problem, so I’ll shoot myself in one foot; I’ve got [another] problem, so I’ll shoot myself in the other foot.'”

Another Republican senator, Jerry Moran of Kansas, said, “Trade and exports are how we earn a living in Kansas, and farmers, ranchers, and our nation’s manufacturers cannot afford a prolonged trade war.”

Following a closed-door meeting of congressional Republicans, Representative Roger Williams, who owns a car dealership in Texas, said dealers are canceling orders with auto manufacturers because they are fearful of tariffs, as well as rising interest rates.

Twenty-two Republican members of the House Ways and Means Subcommittee on Trade have sent a letter to Trump urging him to meet directly with Chinese President Xi Jinping to forge a trade agreement.

“Our shared objective is long-term and enduring reform in Chinese subsidies, tariffs, and other trade barriers,” the lawmakers say in their letter. “While tariffs cause short-term economic pain to China, they also boomerang on American companies, farmers, workers, and consumers — and we hear every day from Americans who are caught in a destructive cycle of escalation. A lasting solution can be established only through fundamental change to the Chinese system. Timely and astute negotiations under your leadership are essential to accomplishing this goal.”

Mike Bowman contributed to this report.

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US Toymaker Mattel to Lay Off 2,200 Worldwide

Mattel, home of Barbie dolls and Hot Wheels, is cutting 2,200 jobs in order to save money after the closing of U.S. toy retail giant Toys R Us.

The toymaker said the cuts amount to 22 percent of its nonmanufacturing employees worldwide. Mattel has about 28,000 employees.

It also plans to sell factories in Mexico as part of a $650 million cost-saving plan.

Mattel’s stock fell nearly 9 percent to $14.85 in after-hours trading Wednesday, after dropping 1 percent during the regular trading day.

Mattel reported a loss of $240.9 million in the second quarter, bigger than the $56.1 million loss in the same period a year ago.

Revenues fell nearly 14 percent to $840.7 million, below the $863.1 million analysts had predicted.

Ynon Kreiz, who was named CEO in April, said Wednesday that he expects the negative impact of Toys R Us closing to subside by next year.

The toymaker has lagged behind its competitors in digital media, analysts say, and is trying to catch up with other brands that have spawned apps, movies and TV shows.

Kreiz said the company is working closely with other retailers and looking for more ways to sell its toys online.