Business

The political squabbling between China and the United States over trade and other issues affect the world’s two largest economies through a variety of mechanisms with unpredictable results. 

For example, prices of stock in both nations have been hurt as some shareholders sold their shares and other investors were reluctant to buy shares of companies that might be hurt by rising tariffs. These actions cut demand for certain stocks, making prices fall. Shareholders are part-owners of companies who hope to profit when the company prospers and grows. Rising tariff costs make growth less likely, and that hurts investor confidence.

World Trade Organization spokesman Dan Pruzin told Reuters that worries about trade are already being felt.

“Companies are hesitating to invest, markets are getting jittery, and some prices are rising,” he said, adding that further escalation could hurt “jobs and growth,” sending “economic shock waves” around the world. 

Confidence

Trade squabbles can hurt business confidence, because managers are less willing to take the risk of buying new machines, building new factories or hiring new workers. Less expansion means less demand for equipment, and a smaller workforce means fewer people have the money to rent apartments, buy food or finance a new car. Less demand for goods and services ripples through the economy and sparks less economic activity and less growth.

​Agriculture

U.S. farmers are another group feeling the effects of this trade dispute, as Beijing raises tariffs on U.S. soybeans. Higher tariffs raise food costs for Chinese consumers, so demand falls for U.S. farm products, a key American export. Anticipating slackening demand for U.S. soybeans, market prices dropped even before the tariffs were imposed. That means U.S. farmers can no longer afford to buy as many tractors and hire as many workers. Fewer workers mean fewer people with the money to buy products, which slows economic growth in farm states. 

Consumers

Meantime, new U.S. tariffs hit Chinese-made vehicles, aircraft, boats, engines, heavy equipment and many other industrial products. China’s Xinhua news agency said new U.S. tariffs are an effort to “bully” Beijing. The agency says the new tariffs violate international trade rules, and will hurt many companies and “ordinary consumers.” 

Experts say Washington tried to avoid tariffs on China that would directly raise costs to U.S. consumers. Economists say increasing taxes on products that help create consumer goods will still raise costs to consumers, fuel inflation and hurt demand. 

​Currency

PNC Bank Senior Economist Bill Adams, an expert on China’s economy, says one step China could take, but has not, would be to let its currency value drop. A weaker currency would mean Chinese-made products are cheaper and more competitive on international markets. Adams says China has taken steps recently to prop up the value of its currency. While a weaker currency helps exports, it can fuel inflation by raising the costs of imported products like oil or other raw materials needed by Chinese companies.

In the meantime, uncertainty fueled by trade disputes puts upward pressure on the value of the U.S. dollar, because investors see the United States as a safe haven in times of economic strife. But a stronger, more expensive dollar means U.S. products are more expensive for foreign customers, which hurts American exports and economic growth. 

All of this means it is hard to predict how this trade dispute will play out. Experts say it will depend in large measure on how many times the two sides raise tariffs in response to each other, how high the tariffs go, and how long the bickering lasts.

William Zarit, the chairman of the American Chamber of Commerce in China, writes that this is the biggest trade dispute between China and the United States in 40 years.

The two sides must work something out, Zarit says, because a “strong bilateral trade and investment relationship is too important to both countries for it to be mired in verbal and trade remedy attacks and counterattacks.”

He says a new agreement would “significantly benefit both economies.”
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So is this what a trade war looks like?

The Trump administration and China’s leadership have imposed tens of billions of dollars in tariffs on each other’s goods. President Donald Trump has proposed slapping duties on, all told, up to $550 billion if China keeps retaliating and doesn’t cave in to U.S. demands to scale back its aggressive industrial policies.

Until the past couple of years, tariffs had been losing favor as a tool of national trade policy. They were largely a relic of 19th and early 20th centuries that most experts viewed as mutually harmful to all nations involved. But Trump has restored tariffs to a prominent place in his self-described America First approach.

Trump enraged such U.S. allies as Canada, Mexico and the European Union this spring by slapping tariffs on their steel and aluminum shipments to the United States. The tariffs have been in place on most other countries since March.

The president has also asked the U.S. Commerce Department to look into imposing tariffs on imported cars, trucks and auto parts, arguing that they pose a threat to U.S. national security.

Here is a look at what tariffs are, how they work, how they’ve been used in the past and what to expect now: 

Are we in a trade war?

Economists have no set definition of a trade war. But with the world’s two largest economies now slapping potentially punishing tariffs on each other, it looks as if a trade war has arrived. The value of goods that Trump has threatened to hit with tariffs exceeds the $506 billion in goods that China exported to the United States last year. 

It’s not uncommon for countries, even close allies, to fight over trade in specific products. The United States and Canada, for example, have squabbled for decades over softwood lumber. 

But the U.S. and China are fighting over much broader issues, like China’s requirements that American companies share advanced technology to access China’s market, and the overall U.S. trade deficit with China. So far, neither side has shown any sign of bending.

​So what are tariffs?

Tariffs are a tax on imports. They’re typically charged as a percentage of the transaction price that a buyer pays a foreign seller. Say an American retailer buys 100 garden umbrellas from China for $5 apiece, or $500. The U.S. tariff rate for the umbrellas is 6.5 percent. The retailer would have to pay a $32.50 tariff on the shipment, raising the total price from $500 to $532.50.

In the United States, tariffs — also called duties or levies — are collected by Customs and Border Protection agents at 328 ports of entry across the country. Proceeds go to the Treasury. The tariff rates are published by the U.S. International Trade Commission in the Harmonized Tariff Schedule, which lists U.S. tariffs on everything from dried plantains (1.4 percent) to parachutes (3 percent).

Sometimes, the U.S. will impose additional duties on foreign imports that it determines are being sold at unfairly low prices or are being supported by foreign government subsidies. 

Do other countries have higher tariffs than the United States?

Most key U.S. trading partners do not have significantly higher average tariffs. According to an analysis by Greg Daco at Oxford Economics, U.S. tariffs on imported goods, adjusted for trade volumes, average 2.4 percent, above Japan’s 2 percent and just below the 3 percent for the European Union and 3.1 percent for Canada.

The comparable figures for Mexico and China are higher. Both have higher duties that top 4 percent.

Trump has complained about the 270 percent duty that Canada imposes on dairy products. But the United States has its own ultra-high tariffs — 168 percent on peanuts and 350 percent on tobacco.

​What are tariffs supposed to accomplish?

Two things: Raise government revenue and protect domestic industries from foreign competition. Before the establishment of the federal income tax in 1913, tariffs were a big money-raiser for the U.S. government. From 1790 to 1860, for example, they produced 90 percent of federal revenue, according to Clashing Over Commerce: A History of US Trade Policy by Douglas Irwin, an economist at Dartmouth College. By contrast, last year tariffs accounted for only about 1 percent of federal revenue.

In the fiscal year that ended last September 30, the U.S. government collected $34.6 billion in customs duties and fees. The White House Office of Management and Budget expects tariffs to fetch $40.4 billion this year.

Tariffs also are meant to increase the price of imports or to punish foreign countries for committing unfair trade practices, like subsidizing their exporters and dumping their products at unfairly low prices. Tariffs discourage imports by making them more expensive. They also reduce competitive pressure on domestic competitors and can allow them to raise prices.

Tariffs fell out of favor as global trade expanded after World War II.

The formation of the World Trade Organization and the advent of trade deals like the North American Free Trade Agreement among the U.S., Mexico and Canada reduced or eliminated tariffs. 

​Why are tariffs making a comeback?

After years of trade agreements that bound the countries of the world more closely and erased restrictions on trade, a populist backlash has grown against globalization. This was evident in Trump’s 2016 election and the British vote that year to leave the European Union — both surprise setbacks for the free-trade establishment.

Critics note that big corporations in rich countries exploited looser rules to move factories to China and other low-wage countries, then shipped goods back to their wealthy home countries while paying low tariffs or none at all. Since China joined the WTO in 2001, the United States has shed 3.1 million factory jobs, though many economists attribute much of that loss not just to trade but to robots and other technologies that replace human workers.

Trump campaigned on a pledge to rewrite trade agreements and crack down on China, Mexico and other countries. He blames what he calls their abusive trade policies for America’s persistent trade deficits — $566 billion last year. Most economists, by contrast, say the deficit simply reflects the reality that the United States spends more than it saves. By imposing tariffs, he is beginning to turn his hard-line campaign rhetoric into action.

Are tariffs wise?

Most economists — Trump trade adviser Peter Navarro is a notable exception — say no. The tariffs drive up the cost of imports. And by reducing competitive pressure, they give U.S. producers leeway to raise their prices, too. That’s good for those producers, but bad for almost everyone else.

Rising costs especially hurt consumers and companies that rely on imported components. Some U.S. companies that buy steel are complaining that Trump’s tariffs put them at a competitive disadvantage. Their foreign rivals can buy steel more cheaply and offer their products at lower prices.

More broadly, economists say trade restrictions make the economy less efficient. Facing less competition from abroad, domestic companies lose the incentive to increase efficiency or to focus on what they do best. 
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U.S. employers kept up a brisk hiring pace in June by adding 213,000 jobs, a sign of confidence in the economy despite the start of a potentially punishing trade war with China.

The job growth wasn’t enough to keep the unemployment rate from rising from 3.8 percent to 4 percent, the government said Friday. But the jobless rate rose for an encouraging reason: More people felt it was a good time to begin looking for a job, though not all of them immediately found one.

The growing optimism that people can find work suggested that the 9-year old U.S. economic expansion — the second-longest on record — has the momentum to keep chugging along. Yet its path ahead is uncertain. Just hours before the monthly jobs report was released, the Trump administration imposed taxes on $34 billion in Chinese imports, and Beijing hit back with tariffs on the same amount of U.S. goods.

“The tariffs jumble things about what we should expect to see in the next few months,” said Cathy Barrera, chief economist at ZipRecruiter, the online jobs marketplace.

Some companies are likely to respond to the tariffs by putting their hiring plans on hold until the trade picture becomes clearer.

Major U.S. stock indexes were mostly higher in early trading Friday after the jobs report was issued, keeping the market on track for a weekly gain after two weeks of losses.

The June jobs data showed an economy that may be on the cusp of producing stronger pay growth, something that could be disrupted if additional tariffs are imposed. Trump has suggested that more than $500 billion worth of Chinese imports could be taxed in his drive to force Beijing to reform its trade policies, which he insists have unfairly victimized the United States.

Average hourly pay rose just 2.7 percent in June from 12 months earlier. That relatively modest increases means that, after adjusting for inflation, overall wages remain nearly flat. But the average was skewed downward in June because the influx of jobseekers was due mainly to those with only a high school education or less, who are generally paid lower wages,

The ranks of unemployed people seeking jobs jumped by 499,000 in June, which caused the unemployment rate to rise from its previous 18 year-low. With 93 straight months of job growth — a historical record — many employers have said they’re feeling pressure to raise wages. But significant pay gains have yet to emerge in the economic data.

Manufacturers added 36,000 jobs last month; the education and health sector added 54,000. But retailers shed 21,600 jobs, with the losses concentrated at general merchandise stores.

In its report Friday, the government revised up its estimate of job growth in May and April by a combined 37,000. Over the past three months, the economy has produced a robust average monthly job gain of 211,000.

The broader U.S. economy appears sturdy. Economists are forecasting that economic growth accelerated to an annual pace of roughly 4 percent during the April-June quarter, about double the previous quarter’s pace.

Signs of strength have helped bolster hiring despite the difficulty many employers say they’re having in finding enough qualified workers to fill jobs.

Manufacturers and services firms have said in recent surveys that their business is improving despite anxiety about the tariff showdown between the United States and China. Housing starts have climbed 11 percent so far this year. Retail sales jumped a strong 0.8 percent in May in a sign that consumers feel secure enough to spend.

Though economic growth appears to be solid, the gains have been spread unevenly. President Donald Trump’s tax cuts have provided a dose of stimulus this year, but the benefits have been tilted significantly toward wealthy individuals and corporations. Savings from the tax cuts enabled companies in the Standard & Poor’s 500 stock index to buy back a record number of shares in the first three months of 2018.

Yet the tax cuts have done little to generate substantial pay growth. Most economists say they still think the low unemployment rate will eventually force more employers to offer higher pay in order to fill jobs.

The economy also faces a substantial threat from the Trump administration’s trade war with China and from other, ongoing trade disputes with U.S. allies, including Canada and Europe. Any escalation in the conflict with China could disrupt hiring as companies grapple with higher import prices and diminished demand for their exports. On Thursday, Trump floated the prospect of imposing tariffs on more than $500 billion in Chinese imports.

The Trump administration has also applied tariffs on steel and aluminum from allies like Canada and Mexico and has threatened to abandon the North American Free Trade Agreement with those two countries. Trump has also spoken about slapping tariffs on imported cars, trucks and auto parts, which General Motors has warned could hurt the U.S. auto industry and drive up car prices.

Automakers added 12,000 jobs in June, but the tariffs could weigh on that industry’s job growth in the coming months.
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U.S. tariffs against Chinese imports took effect early Friday and President Donald Trump made clear Thursday that he is prepared to sharply escalate a trade war between the world’s two biggest economies.

The administration started imposing tariffs at 12:01 a.m. Eastern time Friday on $34 billion worth of Chinese imports, a first step in what could become an accelerating series of tariffs. China has promised a swift retaliatory strike on an equal amount of U.S. goods. 

China responds

Shortly after the tariffs took effect, China said it is “forced to make a necessary counterattack” to a U.S. tariff hike on billions of dollars of Chinese goods but gave no immediate details of possible retaliation.

 

The Commerce Ministry on Friday criticized Washington for “trade bullying” following the tariff hike that took effect at noon Beijing time in a spiraling dispute over technology policy that companies worry could chill global economic growth.

 

A ministry statement said, “the Chinese side promised not to fire the first shot, but to defend the core interests of the country and people, it is forced to make a necessary counterattack.”

 

Beijing earlier released a list of American goods targeted for possible tariff hikes including soybeans, electric cars and whiskey.

Hostilities could grow

Trump discussed the trade war Thursday with journalists who flew with him to Montana for a campaign rally. The president said U.S. tariffs on an additional $16 billion in Chinese goods are set to take effect in two weeks. 

 

After that, the hostilities could intensify: Trump said the U.S. is ready to target an additional $200 billion in Chinese imports — and then $300 billion more — if Beijing refuses to yield to U.S. demands and continues to retaliate.

That would bring the total of targeted Chinese goods to potentially $550 billion, which is more than the $506 billion in goods that China actually shipped to the United States last year.

 

The Trump administration has argued that China has deployed predatory tactics in a push to overtake U.S. technological dominance. These tactics include cyber-theft as well as requiring American companies to hand over technology in exchange for access to China’s market.
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Drivers of Kenya’s digital taxis shut down operations Monday in protest of what they term as exploitative corporate practices. They say the firms are charging low rates to their clients, yet imposing high commissions on the drivers, leading them to work longer hours with little pay.

The Digital Taxi Association of Kenya, representing more than 2,000 digital taxi drivers, is in the fourth day of a protest that has seen drivers switch off their services, stalling transportation in the country.

The drivers say client charges have reduced over time as more digital taxi apps enter the market, but their commissions to the taxi firms have remained the same.

The drivers are demanding a review of their rates and working conditions. Through their association, they want the digital taxi services to double their client rates and reduce driver commissions to the companies so they can earn decent wages.

“The fare itself, it has been very low from the word go,” said Anthony Maina, an Uber driver in Kenya. “The percentage after they get their commission, we get very little returns.”

The main digital taxi services in Kenya are the American brand Uber and Estonian Taxify, as well as at least three others.

Uber charges a 25 percent commission on each ride, while apps like Taxify charge 15 percent. The drivers want rates at least doubled per kilometer, and commissions slashed to 10 percent.

Kenya Digital Taxi Services Director David Muteru is calling on Kenya’s Ministry of Transport to resolve the issue.

“All these things are happening where we have government agencies who can [take care of all these things] without having pressure from us,” Muteru said. “It is not our wish to come here and start demonstrating. Our demand is that we must have regulations. [The pricing] is very skewed in favor of the app companies to the detriment of drivers.”

Maina says Uber reduced the maximum working hours from 18 to 12 in an effort to better the working conditions, but drivers overwork to earn more to meet expenses.

“We cannot afford daily maintenance, he said. “An example, each and every day you have to fuel the vehicle, you have to wash the car, and if you happen to be in the city center, you have to pay the city council. All those expenses, when you put them together and maybe you do not own the vehicle yourself, you have to pay the partner and you know fuel has been going up every day and they are not adjusting their commission or fare. So that has been a big problem for us.”

Earlier in the week, Uber drivers in South Africa also went on strike to protest the 25 percent fee charged by Uber.

Digital Taxi Association representatives in Kenya are in negotiations with the taxi firms and Kenya’s Ministry of Transport as their strike continues.
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South Africa has become one of the biggest markets for illegal cigarette sales and is losing out on 7 billion rand ($514 million) a year in potential tax revenue, a report funded by a tobacco industry group said on Thursday.

The study carried out by Ipsos found illegal cigarette trade spiked between 2014 and 2017 after a probe into the underground industry was dropped by the South African Revenue Service (SARS) under suspended commissioner Tom Moyane.

Moyane, an ally of former President Jacob Zuma, is the main focus of an ongoing SARS commission of inquiry over allegations of widespread corruption at the tax agency under his watch. He denies any wrongdoing.

Former head of enforcement at SARS, Gene Ravele, told the inquiry last week the decision to drop the investigation into illegal tobacco trade was intended to let it continue.

“After I left [in 2015], there was no inspections at cigarette factories. It was planned,” said Ravele.

A packet of cigarettes should incur a minimum tax of 17.85 rand ($1.31), yet packs are sold on the black market for as little as 5 rand as manufacturers dodge official sales channels to avoid paying tax, the Ipsos study found.

Three-quarters of all South Africa’s informal vendors — totaling 100,000 — sell illegal cigarettes in an industry that was worth 15 billion rand ($1.10 billion) over the last three years, the report said.

“Independent superettes, corner cafes and general dealers are the key channels for ultra-cheap brands, with hawkers providing a key entry point, mainly through the loose cigarette sales,” Ipsos head of measurement Zibusiso Ngulube said. “These manufacturers are perfectly primed to continue to grow at a fast rate.”

The study was funded by The Tobacco Institute of Southern Africa, which includes arms of global manufacturers like Philip Morris International, Alliance One and British American Tobacco.
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U.S. car maker Ford Motor Co said on Thursday it has no plans currently to hike retail prices of its imported Ford and Lincoln models in China, despite steep additional tariffs on imported U.S. vehicles set to come into play on Friday.

The firm, which has been facing sluggish sales in the world’s largest auto market, said in a statement “it has no current plans to increase the manufacturer’s suggested retail price (MSRP) on its import line-up in China.”

Ford is the first foreign automaker to address pricing issues ahead of the new tariffs that will affect around $34 billion of U.S. imports from soybeans and cars to lobsters.

China, which just days ago cut tariffs on all imported automobiles, has said that it will slap an additional 25 percent levy on 545 American products, including U.S.-made cars, should the Trump administration go ahead with plans to implement tariffs on $34 billion of Chinese imports from July 6.

Ford added it encouraged Washington and Beijing to resolve their issues over trade and that it would “continue to monitor the situation as it evolves.”

 
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U.S. car maker Ford Motor Co said on Thursday it has no plans currently to hike retail prices of its imported Ford and Lincoln models in China, despite steep additional tariffs on imported U.S. vehicles set to come into play on Friday.

The firm, which has been facing sluggish sales in the world’s largest auto market, said in a statement “it has no current plans to increase the manufacturer’s suggested retail price (MSRP) on its import line-up in China.”

Ford is the first foreign automaker to address pricing issues ahead of the new tariffs that will affect around $34 billion of U.S. imports from soybeans and cars to lobsters.

China, which just days ago cut tariffs on all imported automobiles, has said that it will slap an additional 25 percent levy on 545 American products, including U.S.-made cars, should the Trump administration go ahead with plans to implement tariffs on $34 billion of Chinese imports from July 6.

Ford added it encouraged Washington and Beijing to resolve their issues over trade and that it would “continue to monitor the situation as it evolves.”

 
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Trade rhetoric is spilling into the real world of jobs and consumer goods. The United States is set to impose tariffs on $34 billion worth of goods from China on July 6. Beijing is fighting back with its own $34 billion of tariffs on American goods. As VOA’s Arash Arabasadi reports, investors are understandably on edge.
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Trade rhetoric is spilling into the real world of jobs and consumer goods. The United States is set to impose tariffs on $34 billion worth of goods from China on July 6. Beijing is fighting back with its own $34 billion of tariffs on American goods. As VOA’s Arash Arabasadi reports, investors are understandably on edge.
…

United States Ambassador to Germany Richard Grenell reportedly told German auto makers Wednesday the U.S. would back off threats of tariffs on European car imports in exchange for the European Union’s elimination of duties on U.S. cars.

The German newspaper Handelsblatt reported Grenell told BMW, Daimler and Volkswagen executives of the proposal during a meeting Wednesday at the embassy in Berlin.

Daimler and Volkswagen declined to comment and BMW was not immediately available for comment, the report said.

The reported proposal comes after the European Union warned U.S. President Donald Trump last Friday the potential indirect costs of imposing tariffs on cars could amount to $294 billion.

The EU report, submitted to the U.S. Commerce Department, maintained the tariffs would disrupt cross-border supply chains in the automotive industry. The report said the tariffs could possibly trigger higher U.S. industrial costs, raise consumer prices, hurt exports and cost jobs.  

The World Trade Organization said Wednesday trade barriers being set by world economic powers could jeopardize the global economic recovery.

“This continued escalation poses a serious threat to growth and recovery in all countries, and we are beginning to see this reflected in some forward-looking indicators,” WTO Director General Roberto Azevendo said.

Azevendo did not expound on his remarks, but the WTO’s quarter trade outlook indicator in May suggested trade growth in the second quarter would decelerate.

 
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United States Ambassador to Germany Richard Grenell reportedly told German auto makers Wednesday the U.S. would back off threats of tariffs on European car imports in exchange for the European Union’s elimination of duties on U.S. cars.

The German newspaper Handelsblatt reported Grenell told BMW, Daimler and Volkswagen executives of the proposal during a meeting Wednesday at the embassy in Berlin.

Daimler and Volkswagen declined to comment and BMW was not immediately available for comment, the report said.

The reported proposal comes after the European Union warned U.S. President Donald Trump last Friday the potential indirect costs of imposing tariffs on cars could amount to $294 billion.

The EU report, submitted to the U.S. Commerce Department, maintained the tariffs would disrupt cross-border supply chains in the automotive industry. The report said the tariffs could possibly trigger higher U.S. industrial costs, raise consumer prices, hurt exports and cost jobs.  

The World Trade Organization said Wednesday trade barriers being set by world economic powers could jeopardize the global economic recovery.

“This continued escalation poses a serious threat to growth and recovery in all countries, and we are beginning to see this reflected in some forward-looking indicators,” WTO Director General Roberto Azevendo said.

Azevendo did not expound on his remarks, but the WTO’s quarter trade outlook indicator in May suggested trade growth in the second quarter would decelerate.

 
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European businesses are unsettled as they watch the U.S. and China collide over trade. And for good reason: the nascent global trade war could represent the biggest single threat to the economic upswing that has helped the region get past its financial crisis.

In theory, some European companies could benefit, jumping into market niches if Chinese businesses are kept out of the U.S. market. But that would only be a few companies or sectors.

When your entire economy is heavily dependent on trade, an overall slowdown in global commerce caused by tit-for-tat import taxes provokes fear and undermines confidence.

And that’s just what’s happening in Europe. By one measure, business confidence has fallen in six of the past seven months in Germany, where exports are almost half of annual economic output.

“It’s worth all our efforts to defuse this conflict, so it doesn’t become a war,” German Chancellor Angela Merkel said Wednesday.

The U.S. is due to put tariffs on $34 billion worth of Chinese goods on Friday. The Chinese will respond with tariffs on an equivalent value of U.S. products such as soybeans, seafood and crude oil.

Amid all this, Europe has its own trade dispute with the U.S. After the U.S. put tariffs on steel and aluminum from many allies, including the European Union, the 28-country bloc responded with import taxes on some $3.25 billion of U.S. goods. The Trump administration is also studying the option of putting tariffs on cars, which would significantly escalate the confrontation.

The head of the EU’s executive, Jean-Claude Juncker, will head to Washington in late July to try to personally persuade Trump against further measures targeting Europe.

The disputes over trade threaten to spoil the good times for Europe’s economy.

Growth last year was the strongest in a decade, since before the global financial crisis. While that has eased in recent quarters, the economy is still strong enough to create jobs. The number of unemployed fell by 125,000 in May, leaving unemployment in the 19 countries that use the euro at 8.4 percent, the lowest since 2008 and down from a high of 12.1 percent in 2013.

“Trade tensions stoked by U.S. President Donald Trump are clouding the economic outlook in Europe,” wrote analysts at Berenberg bank in London. They rated the trade risk ahead of troubles from Italy’s heavy debt load or faster than expected interest rate increases from the U.S. Federal Reserve.

Many European companies would suffer because they both produce and sell goods in the U.S. and China, the world’s biggest economies.

For example, tariffs that China is expected to impose Friday on U.S.-made autos would hit German carmakers Daimler and BMW since they both make vehicles in the United States and export them to China.

Daimler has already lowered its outlook for profits, citing higher than expected costs from the new tariffs. BMW warned in a letter to Commerce Secretary Wilbur Ross on Friday that tariffs would make it harder for it to sell in China the vehicles it builds at its factory in Spartanburg, South Carolina, “potentially leading to a strongly reduced export volumes and negative effects on investment and employment in the United States.”

Last year, BMW exported 272,000 vehicles from the Spartanburg plant, more than half its total production. Of those, 81,000 — worth $2.37 billion — went to China. BMW says its exports reduced the U.S. trade deficit by around $1 billion.

By themselves, the tariffs that take effect Friday won’t immediately have a dramatic impact on global trade. The fear is that retaliation will spiral, hitting the total amount of global commerce.

Even if the overall effect is to harm growth, there could be benefits for some European companies and sectors. Economists Alicia Garcia Herrero and Jianwei Xu at the French bank Natixis say that European makers of cars, aircraft, chemicals, computer chips and factory machinery could in theory snare market share by substituting for Chinese or American products in the two markets. But that’s only if Europe’s own trade dispute with the U.S. does not escalate — a big if.

Europe is waiting to see whether the Trump administration will go ahead separately with tariffs on auto imports. European companies like BMW, Daimler’s Mercedes-Benz, Volkswagen’s Porsche and Audi divisions, and Fiat Chrysler send $46.6 billion worth of vehicles every year to the U.S. Some 13.3 million people, or 6.1 percent of the employed population of the EU, work in the automotive sector, according to the European Automobile Manufacturers Association.

“Europe cannot win anything” on an overall basis “for one obvious reason: we are net exporters,” said Garcia Herrero, chief economist for Asia Pacific at Natixis and a senior fellow at European research institute Bruegel. “But we should not understate the view that some sectors could get something out of a U.S.-China trade war.”

Amid the brewing conflict, China has sought to get Europe on its side, putting on a diplomatic charm offensive during visits by Merkel and French Prime Minister Edouard Philippe. The EU and China agreed last month to deepen commercial ties and support trade rules. But the EU remains a close, longtime ally of the U.S. on a range of issues, despite the current tensions with the Trump administration.

One negative outcome for Europe, Herrero said, would be if Trump can push the Chinese into a trade agreement aimed at reducing the U.S. trade deficit. The additional U.S. goods to China could come at the expense of European competitors.

“If China concedes to the U.S. proposed agreement, the whole situation faced by the EU would be much tougher,” she and Xu wrote in a research note. “For China to massively reduce its trade surplus with the U.S., it has to in some way substitute its imports away from the EU to the U.S., which would have a significant negative impact on the EU producers.”
…

European businesses are unsettled as they watch the U.S. and China collide over trade. And for good reason: the nascent global trade war could represent the biggest single threat to the economic upswing that has helped the region get past its financial crisis.

In theory, some European companies could benefit, jumping into market niches if Chinese businesses are kept out of the U.S. market. But that would only be a few companies or sectors.

When your entire economy is heavily dependent on trade, an overall slowdown in global commerce caused by tit-for-tat import taxes provokes fear and undermines confidence.

And that’s just what’s happening in Europe. By one measure, business confidence has fallen in six of the past seven months in Germany, where exports are almost half of annual economic output.

“It’s worth all our efforts to defuse this conflict, so it doesn’t become a war,” German Chancellor Angela Merkel said Wednesday.

The U.S. is due to put tariffs on $34 billion worth of Chinese goods on Friday. The Chinese will respond with tariffs on an equivalent value of U.S. products such as soybeans, seafood and crude oil.

Amid all this, Europe has its own trade dispute with the U.S. After the U.S. put tariffs on steel and aluminum from many allies, including the European Union, the 28-country bloc responded with import taxes on some $3.25 billion of U.S. goods. The Trump administration is also studying the option of putting tariffs on cars, which would significantly escalate the confrontation.

The head of the EU’s executive, Jean-Claude Juncker, will head to Washington in late July to try to personally persuade Trump against further measures targeting Europe.

The disputes over trade threaten to spoil the good times for Europe’s economy.

Growth last year was the strongest in a decade, since before the global financial crisis. While that has eased in recent quarters, the economy is still strong enough to create jobs. The number of unemployed fell by 125,000 in May, leaving unemployment in the 19 countries that use the euro at 8.4 percent, the lowest since 2008 and down from a high of 12.1 percent in 2013.

“Trade tensions stoked by U.S. President Donald Trump are clouding the economic outlook in Europe,” wrote analysts at Berenberg bank in London. They rated the trade risk ahead of troubles from Italy’s heavy debt load or faster than expected interest rate increases from the U.S. Federal Reserve.

Many European companies would suffer because they both produce and sell goods in the U.S. and China, the world’s biggest economies.

For example, tariffs that China is expected to impose Friday on U.S.-made autos would hit German carmakers Daimler and BMW since they both make vehicles in the United States and export them to China.

Daimler has already lowered its outlook for profits, citing higher than expected costs from the new tariffs. BMW warned in a letter to Commerce Secretary Wilbur Ross on Friday that tariffs would make it harder for it to sell in China the vehicles it builds at its factory in Spartanburg, South Carolina, “potentially leading to a strongly reduced export volumes and negative effects on investment and employment in the United States.”

Last year, BMW exported 272,000 vehicles from the Spartanburg plant, more than half its total production. Of those, 81,000 — worth $2.37 billion — went to China. BMW says its exports reduced the U.S. trade deficit by around $1 billion.

By themselves, the tariffs that take effect Friday won’t immediately have a dramatic impact on global trade. The fear is that retaliation will spiral, hitting the total amount of global commerce.

Even if the overall effect is to harm growth, there could be benefits for some European companies and sectors. Economists Alicia Garcia Herrero and Jianwei Xu at the French bank Natixis say that European makers of cars, aircraft, chemicals, computer chips and factory machinery could in theory snare market share by substituting for Chinese or American products in the two markets. But that’s only if Europe’s own trade dispute with the U.S. does not escalate — a big if.

Europe is waiting to see whether the Trump administration will go ahead separately with tariffs on auto imports. European companies like BMW, Daimler’s Mercedes-Benz, Volkswagen’s Porsche and Audi divisions, and Fiat Chrysler send $46.6 billion worth of vehicles every year to the U.S. Some 13.3 million people, or 6.1 percent of the employed population of the EU, work in the automotive sector, according to the European Automobile Manufacturers Association.

“Europe cannot win anything” on an overall basis “for one obvious reason: we are net exporters,” said Garcia Herrero, chief economist for Asia Pacific at Natixis and a senior fellow at European research institute Bruegel. “But we should not understate the view that some sectors could get something out of a U.S.-China trade war.”

Amid the brewing conflict, China has sought to get Europe on its side, putting on a diplomatic charm offensive during visits by Merkel and French Prime Minister Edouard Philippe. The EU and China agreed last month to deepen commercial ties and support trade rules. But the EU remains a close, longtime ally of the U.S. on a range of issues, despite the current tensions with the Trump administration.

One negative outcome for Europe, Herrero said, would be if Trump can push the Chinese into a trade agreement aimed at reducing the U.S. trade deficit. The additional U.S. goods to China could come at the expense of European competitors.

“If China concedes to the U.S. proposed agreement, the whole situation faced by the EU would be much tougher,” she and Xu wrote in a research note. “For China to massively reduce its trade surplus with the U.S., it has to in some way substitute its imports away from the EU to the U.S., which would have a significant negative impact on the EU producers.”
…

China is putting pressure on the European Union to issue a strong joint statement against President Donald Trump’s trade policies at a summit

this month, but it’s facing resistance, European officials said.

In meetings in Brussels, Berlin and Beijing, senior Chinese officials, including Vice Premier Liu He and the Chinese government’s top diplomat, State Councillor Wang Yi, have proposed an alliance between the two economic powers and offered to open more of the Chinese market in a gesture of goodwill.

One proposal has been for China and the European Union to launch joint action against the United States at the World Trade Organization.

But the European Union, the world’s largest trading bloc, has rejected the idea of allying with Beijing against Washington, five EU officials and diplomats told Reuters, ahead of the Sino-European summit in Beijing on July 16-17.

Instead, the summit is expected to produce a modest communique that affirms the commitment of both sides to the multilateral trading system and promises to set up a working group on modernizing the WTO, EU officials said.

Liu has said privately that China is ready to set out for the first time what sectors it can open to European investment at the annual summit, expected to be attended by President Xi Jinping, China’s Premier Li Keqiang and top EU officials.

Chinese state media have promoted the message that the EU is on China’s side, officials said, putting the bloc in a delicate position. The past two summits, in 2016 and 2017, ended without a statement because of disagreements about the South China Sea and trade.

“China wants the European Union to stand with Beijing against Washington, to take sides,” said one European diplomat. “We won’t do it and we have told them that.”

China’s Foreign Ministry did not immediately respond to a request for comment on Beijing’s summit aims.

In a commentary on Wednesday, China’s official Xinhua news agency said China and Europe “should resist trade protectionism hand in hand.”

“China and European countries are natural partners,” it said. “They firmly believe that free trade is a powerful engine for global economic growth.”

China’s moment?

Despite Trump’s tariffs on European metals exports and threats to hit the EU’s automobile industry, Brussels shares Washington’s concern about China’s closed markets and what Western governments say is Beijing’s manipulation of trade to dominate global markets.

“We agree with almost all the complaints the U.S. has against China. It’s just we don’t agree with how the United States is handling it,” another diplomat said.

Still, China’s stance is striking, given Washington’s deep economic and security ties with European nations. It shows the depth of Chinese concern about a trade war with Washington, as Trump is set to impose tariffs on billions of dollars’ worth of Chinese imports on Friday.

It also underscores China’s new boldness in trying to seize leadership amid divisions between the United States and its European, Canadian and Japanese allies over issues including free trade, climate change and foreign policy.

“Trump has split the West, and China is seeking to capitalize on that. It was never comfortable with the West being one bloc,” said a European official involved in EU-China diplomacy.

“China now feels it can try to split off the European Union in so many areas — on trade, on human rights,” the official said.

Another official described the dispute between Trump and Western allies at the Group of Seven summit last month as a gift to Beijing because it showed European leaders losing a longtime ally, at least in trade policy.

European envoys say they already sensed a greater urgency from China in 2017 to find like-minded countries willing to stand up against Trump’s “America First” policies.

No ‘systemic change’

An April report by New York-based Rhodium Group, a research consultancy, showed that Chinese restrictions on foreign investment were higher in every single sector save real estate, compared with the European Union, while many of the big Chinese takeovers in the bloc would not have been possible for EU companies in China.

China has promised to open up. But EU officials expect any moves to be more symbolic than substantive.

They say China’s decision in May to lower tariffs on imported cars will make little difference because imports make up such a small part of the market.

China’s plans to move rapidly to electric vehicles mean that any new benefits it offers traditional European carmakers will be fleeting.

“Whenever the train has left the station, we are allowed to enter the platform,” a Beijing-based European executive said.

However, China’s offer at the upcoming summit to open up reflects Beijing’s concern that it is set to face tighter EU controls, and regulators are also blocking Chinese takeover attempts in the United States.

The European Union is seeking to pass legislation to allow greater scrutiny of foreign investments.

“We don’t know if this offer to open up is genuine yet,” a third EU diplomat said. “It’s unlikely to mark a systemic change.”
…

The U.S. Commerce Department on Tuesday granted a temporary reprieve to ZTE that allows China’s No. 2 telecommunications equipment maker to conduct business needed to maintain existing networks and equipment in the United States as it works toward the lifting of a U.S. sales ban.

The authorization from the department’s Bureau of Industry and Services, dated July 2 and seen by Reuters, runs until August 1.

ZTE and spokespeople for the Commerce Department did not respond to requests for comment.

ZTE, which makes smartphones and networking gear, was forced to cease major operations in April after the United States slapped it with a supplier ban saying it broke an agreement to discipline executives who conspired to evade U.S. sanctions on Iran and North Korea.

The company had also agreed to pay a $1 billion penalty and put $400 million in an escrow account as part of the deal to resume business with U.S. suppliers — which provide almost a third of the components used in ZTE’s equipment.

The escrow agreement is still pending, according to a source. Until it is executed, ZTE cannot deposit the $400 million in escrow necessary to get the ban lifted.

While the denial order is still in place, the authorization grants a waiver to some companies that do business with ZTE to do so for one month, a source told Reuters.

The waivers allow for a limited type of activity but do not authorize any new business.

The uncertainty about the ban amid intensifying U.S.-China trade tensions has hammered ZTE shares, which have fallen 60 percent since trading resumed last month following a two-month hiatus, wiping out more than $11 billion of the company’s market valuation.

ZTE announced a new board last week in a radical management shakeup as part of a $1.4 billion deal with the United States.
…

Eike Batista, the former mining and oil magnate who was once Brazil’s richest man, was convicted and sentenced to 30 years in prison for bribing Rio de Janeiro state’s disgraced ex-governor, according to a court document published Tuesday.

Batista’s conviction and sentencing by federal judge Marcelo Bretas are the latest in a wave of graft investigations that have sent scores of powerful businessmen and politicians to jail.

The eccentric former billionaire’s meteoric rise and fall mirrored the recent fortunes of Brazil, where the commodities boom faded as his energy, mineral and logistics empire fell apart earlier this decade.

His swashbuckling attitude and confident forecasts of a prolonged golden era for Brazil evaporated just as Latin America’s largest economy suffered its worst recession on record.

Batista, whose legal team said he would appeal, was found guilty of paying a $16.5 million bribe to former Rio governor Sergio Cabral, who also was found guilty in the case.

Batista’s companies won state contracts in exchange for the bribe, including one awarding his consortium the rights to run Brazil’s temple of soccer, the Maracana in Rio, the stadium where the 2014 World Cup final was played and the 2016 Olympic Games’ opening and closing ceremonies were held.

The bribes were also linked to the construction of the $3.7 billion Acu port facility, controlled since 2013 by Prumo Logistica, which is majority owned by U.S.-based EIG Energy Partners.

Prosecutors said Batista paid a quarter of the bribes to Cabral in cash and the rest in shares of state-led oil company Petroleo Brasileiro SA, miner Vale SA and drinks company Ambev SA, a unit of Anheuser Busch Inbev NV.

Batista was last year fined 21 million reais ($5.4 million) for trading shares based on insider information about shipbuilding company OSX Brasil.

Tuesday’s ruling was the sixth corruption conviction for Cabral, who has been sentenced to over 120 years.

Six years ago, Batista, 61, had a net worth exceeding $30 billion and ranked among the world’s 10 richest people, according to Forbes magazine, and he had declared he would soon top the list. He sat atop EBX, then one of the world’s most expansive industrial conglomerates, with units ranging from oil and shipping to entertainment and beauty care.

However, Batista made massive bets on offshore oil plays that did not pan out and the extension of a commodity boom that fizzled as he inflated investors’ hopes.
…

Major U.S. trading partners including the European Union, China and Japan voiced deep concern at the World Trade Organization (WTO) on Tuesday about possible U.S. measures imposing additional duties on imported autos and parts.

Japan, which along with Russia had initiated the discussion at the WTO Council on Trade in Goods, warned that such measures could trigger a spiral of countermeasures and result in the collapse of the rules-based multilateral trading system, an official who attended the meeting said.

More than 40 WTO members — including the 28 countries of the European Union — warned that the U.S. action could seriously disrupt the world market and threaten the WTO system, given the importance of cars to world trade.

The United States has imposed tariffs on European steel and aluminum imports and is conducting another national security study that could lead to tariffs on imports of cars and car parts. Both sets of tariffs would be based on concerns about U.S. national security.

U.S. President Donald Trump said on June 29 that the probe would be completed in 3 to 4 weeks.

But the European Union has warned the United States that imposing import tariffs on cars and car parts would harm its own automotive industry and likely lead to countermeasures by its trading partners on $294 billion of U.S. exports.

A Russian official told the WTO meeting that the issue of U.S. investigations had been raised over the past year in different WTO meetings, only to see things change for the worse.

The United States was losing its reputation as a trusted trade partner, the Russian delegate told the meeting, adding that the United States could soon start an investigation into the case for import tariffs on uranium products.

China, Canada, Switzerland, Norway, Turkey, Costa Rica, Hong Kong, Venezuela, Singapore, Brazil, South Korea, Mexico, Qatar, Thailand and India all echoed the same concerns and said they doubted the U.S. tariffs were in line with WTO rules.

The U.S. diplomat at the meeting said the matter was already the subject of formal disputes at the WTO, so it should not be on the committee’s agenda, the official who attended the meeting said.
…

Halima Sheikh Ali is the proud owner of one of the few ATMs in Wajir town in northeast Kenya. But rather than doling out shilling notes, it dispenses something tastier: a fresh pint of camel milk.

“For 100 Kenyan shillings ($1), you get one liter of the freshest milk in Wajir County,” she says, opening a vending machine advertising “fresh, hygienic and affordable camel milk” in order to check the liquid’s temperature.

One of the world’s biggest camel producers, East Africa also produces much of the world’s camel milk, almost all of it consumed domestically.

In the northeast Kenyan county of Wajir, demand is booming among local people, who say it is healthier and more nutritious than cow’s milk.

“Camel milk is everything,” said Noor Abdullahi, a project officer for U.S.-based aid agency Mercy Corps. “It is good for diabetes, blood pressure and indigestion.”

But temperatures averaging 40 degrees Celsius (104 degrees Fahrenheit) in the dry season, combined with the risk of dirty collection containers, mean the liquid can go sour in a matter of hours, he added, making it much harder to sell.

To remedy this, an initiative is equipping about 50 women in Hadado, a village 80km from Wajir, with refrigerators to cool the milk that remote camel herders send them via tuk-tuk taxi, plus a van to transport it daily to Wajir.

There a dozen women milk traders, including Sheikh Ali, sell it through four ATM-like vending machines, after receiving training on business skills such as accounting.

“The (milk) supply and demand are there. We just have to make it easier for the milk to get from one point to another,” said Abdullahi.

The project, which is part of the Building Resilience and Adaptation to Climate Extremes and Disasters (BRACED) program, is funded by the U.K. Department for International Development (DFID) and led by Mercy Corps.

Fresh and Lucrative

Asha Abdi, a milk trader in Hadado who operates one of the refrigerators with 11 other women, said she used to have to boil camel’s milk — using costly and smoky firewood — to prevent it turning sour.

“I spent 100 shillings ($1) a day on firewood, and the milk would often go bad by the time it got to Wajir as the (public) transport took over three hours,” she said.

Now Abdi and the other women in her group send about 500 liters of fresh milk to Wajir every day — a trip that takes just over an hour by van. They then reinvest the profits in other ventures.

“With the milk money I bought 20 goats,” said Abdi as she rearranged bags of sugar in her crowded kiosk. “But my dream would be to export the camel milk to the United States,” she added. “I hear it’s like gold over there.”

Drought-safe Investment

Amid hundreds of camels roaming stretches of orange dirt outside of Hadado, Gedi Mohammed sits under the shade of a small acacia tree.

“The (tuk-tuk) drivers should be here soon to buy my camel milk,” he said, sipping the precious liquid from a large wooden bowl.

In Kenya’s largely pastoralist Wajir County, prolonged drought is pushing growing numbers of the region’s nomadic herders to see camels — and their milk — as a drought-safe investment.

Mohammed, who used to own over 100 cows, said he exchanged them a decade ago for camels, “which drink a lot of water but can then survive eight days without another drop, when a cow will die after two days.”

But even camels suffer when the weather is really dry, he added.

“Drought is bad for business because with less food and water the camels produce less milk,” he said, impatiently waving at a teenage boy to fetch a straying camel.

“Business would be better if I had a vehicle to transport the milk to buyers myself,” said Mohammed, who said he has to travel ever-longer distances to find pastures for his animals. “Right now I rely on the (tuk-tuk) drivers to find me, and you never know how long they will be.”

Technical Issues

Back in Wajir, Sheikh Ali said her group’s cooled milk ATM allows her to save about 5,000 shillings ($50) per month, as she no longer has to buy firewood to boil milk and can sell the fresh liquid at a higher price.

But although the vending machines are proving popular, they also have been plagued by technical issues, said Amina Abikar, who also works for Mercy Corps in Wajir.

“Sometimes the machines break down, or indicate that there is no milk left when there are still 100 liters” inside, she explained.

“So we have to wait for the machine supplier’s technician to travel all the way from Nairobi. It would be better to train someone locally,” she said.

Also slowing down business growth is the high rate of illiteracy among women involved in the project, Abikar said.

Sheikh Ali, who cannot read or write, relies on her son to operate the machine and check its various indicators.

“I would love to do it myself but I don’t know my ABCs,” she said, adding that she still feels “proud that I am one of the only fresh milk traders in Wajir.”
…

Halima Sheikh Ali is the proud owner of one of the few ATMs in Wajir town in northeast Kenya. But rather than doling out shilling notes, it dispenses something tastier: a fresh pint of camel milk.

“For 100 Kenyan shillings ($1), you get one liter of the freshest milk in Wajir County,” she says, opening a vending machine advertising “fresh, hygienic and affordable camel milk” in order to check the liquid’s temperature.

One of the world’s biggest camel producers, East Africa also produces much of the world’s camel milk, almost all of it consumed domestically.

In the northeast Kenyan county of Wajir, demand is booming among local people, who say it is healthier and more nutritious than cow’s milk.

“Camel milk is everything,” said Noor Abdullahi, a project officer for U.S.-based aid agency Mercy Corps. “It is good for diabetes, blood pressure and indigestion.”

But temperatures averaging 40 degrees Celsius (104 degrees Fahrenheit) in the dry season, combined with the risk of dirty collection containers, mean the liquid can go sour in a matter of hours, he added, making it much harder to sell.

To remedy this, an initiative is equipping about 50 women in Hadado, a village 80km from Wajir, with refrigerators to cool the milk that remote camel herders send them via tuk-tuk taxi, plus a van to transport it daily to Wajir.

There a dozen women milk traders, including Sheikh Ali, sell it through four ATM-like vending machines, after receiving training on business skills such as accounting.

“The (milk) supply and demand are there. We just have to make it easier for the milk to get from one point to another,” said Abdullahi.

The project, which is part of the Building Resilience and Adaptation to Climate Extremes and Disasters (BRACED) program, is funded by the U.K. Department for International Development (DFID) and led by Mercy Corps.

Fresh and Lucrative

Asha Abdi, a milk trader in Hadado who operates one of the refrigerators with 11 other women, said she used to have to boil camel’s milk — using costly and smoky firewood — to prevent it turning sour.

“I spent 100 shillings ($1) a day on firewood, and the milk would often go bad by the time it got to Wajir as the (public) transport took over three hours,” she said.

Now Abdi and the other women in her group send about 500 liters of fresh milk to Wajir every day — a trip that takes just over an hour by van. They then reinvest the profits in other ventures.

“With the milk money I bought 20 goats,” said Abdi as she rearranged bags of sugar in her crowded kiosk. “But my dream would be to export the camel milk to the United States,” she added. “I hear it’s like gold over there.”

Drought-safe Investment

Amid hundreds of camels roaming stretches of orange dirt outside of Hadado, Gedi Mohammed sits under the shade of a small acacia tree.

“The (tuk-tuk) drivers should be here soon to buy my camel milk,” he said, sipping the precious liquid from a large wooden bowl.

In Kenya’s largely pastoralist Wajir County, prolonged drought is pushing growing numbers of the region’s nomadic herders to see camels — and their milk — as a drought-safe investment.

Mohammed, who used to own over 100 cows, said he exchanged them a decade ago for camels, “which drink a lot of water but can then survive eight days without another drop, when a cow will die after two days.”

But even camels suffer when the weather is really dry, he added.

“Drought is bad for business because with less food and water the camels produce less milk,” he said, impatiently waving at a teenage boy to fetch a straying camel.

“Business would be better if I had a vehicle to transport the milk to buyers myself,” said Mohammed, who said he has to travel ever-longer distances to find pastures for his animals. “Right now I rely on the (tuk-tuk) drivers to find me, and you never know how long they will be.”

Technical Issues

Back in Wajir, Sheikh Ali said her group’s cooled milk ATM allows her to save about 5,000 shillings ($50) per month, as she no longer has to buy firewood to boil milk and can sell the fresh liquid at a higher price.

But although the vending machines are proving popular, they also have been plagued by technical issues, said Amina Abikar, who also works for Mercy Corps in Wajir.

“Sometimes the machines break down, or indicate that there is no milk left when there are still 100 liters” inside, she explained.

“So we have to wait for the machine supplier’s technician to travel all the way from Nairobi. It would be better to train someone locally,” she said.

Also slowing down business growth is the high rate of illiteracy among women involved in the project, Abikar said.

Sheikh Ali, who cannot read or write, relies on her son to operate the machine and check its various indicators.

“I would love to do it myself but I don’t know my ABCs,” she said, adding that she still feels “proud that I am one of the only fresh milk traders in Wajir.”
…