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Faced with plunging U.S. orders, surgical glove maker Ren Jiding is hunting for new markets amid Chinese government calls to reduce reliance on the United States. But no other market can absorb the 60 percent of his sales that went to American customers last year.

“Other countries import much less than the United States,” said Ren, a co-owner of Hongyeshangqin Medical Science and Technology Co. Ltd. in the eastern city of Zibo.

From medical products to smartphone chips to soybeans, Beijing is responding to President Donald Trump’s tariff hikes by pushing companies to trade more with other countries. But there are few substitutes for the United States as an export market and source of technology for industries including telecom equipment makers that Chinese leaders are eager to develop.

Beijing has announced tariff cuts and other changes while rejecting U.S. demands to scale back plans such as “Made in China 2025,” which calls for state-led creation of Chinese champions in robotics, biotech and other fields. American leaders say those violate Beijing’s market-opening promises and might erode U.S. industrial leadership.

The response highlights the cost the ruling Communist Party is willing to pay in lost sales and jobs to stick to plans that are fueling conflict with Washington, Europe and other trading partners.

​’Fundamental’ to growth

“China sees its technology and industrial policies as fundamental to its growth,” Tianjie He of Oxford Economics said in an email. “It is thus hard to see China’s leadership committing to significant changes.”

Trump has raised duties on $50 billion worth of Chinese imports, including ultrasound scanners and industrial components that Washington says benefit from improper policies. China retaliated with similar penalties.

The U.S. is poised to raise duties on $200 billion worth of imports, including the gloves made by Ren’s company. Beijing has issued a list of American goods for retaliation.

The impact on China is “small and is containable, at least for the time being,” said Vincent Chan of Credit Suisse. He said the “worst case” outlook if all threatened U.S. tariff hikes go ahead would cut China’s growth by 0.2 percentage point this year and 1.3 percent in 2019.

Chinese leaders have tried to cushion the blow to their own economy by targeting American goods its importers can get from other countries — soybeans from Brazil, gas from Russia, cars from Germany and fish from Vietnam.

Beijing has promised to use revenue from the higher tariffs to help struggling exporters and has ordered banks to lend more freely to them.

The biggest jolt so far came from Beijing’s cancellation of orders for soybeans, the biggest American export to China at $21 billion last year. That hammered farm states that voted for Trump in the 2016 election. It also pushed up prices for Chinese farmers that use soybeans for animal feed and food processors that crush them for cooking oil.

That could be a windfall for Brazil. But China already is its top market and consumes two-thirds of the global supply. Chinese total imports last year of 95 million metric tons were 50 percent more than the South American giant’s entire exports.

​Few sources

“The Chinese can talk all they want about finding other sources of soybeans,” but 80 percent come from the United States, Brazil and Argentina, said Michael Cordonnier, president of Soybean & Corn Advisor Inc., a U.S. research firm.

“If you want to import soybeans, it generally must be from one of those three countries,” Cordonnier wrote in an email.

Regulators also cut import duties on automobiles on July 1 but raised them on vehicles from the United States. That helps luxury brands that import from Germany and Japan.

Replacing markets for Chinese exporters that support tens of millions of jobs will be harder.

The United States bought $430 billion of China’s exports last year, or 20 percent of the $2.2 trillion total. The No. 2 market was the 28-nation European Union at $370 billion.

“We can’t afford to lose the U.S. market,” said David Hu, general manager of Sinohood Bags Factory Ltd. in the southeastern city of Yiwu.

Americans bought 40 percent of Hu’s canvas tote bags last year, including the most profitable customized versions with Christmas and other designs.

“What we export to Europe is lower-end products with lower prices,” said Hu. “We could explore the Indian, Vietnamese or Philippine markets. But the prices they offer would be too low.”

Chinese officials point to potential markets in the Belt and Road Initiative, a multibillion-dollar plan led by President Xi Jinping to boost trade by building ports, railways and other infrastructure across Asia to Europe.

That has brought a flood of contracts to Chinese state-owned builders, but complaints about costs have hurt its appeal. Prime Minister Mahathir Mohamad of Malaysia announced this month the cancellation of plans for Chinese-built projects, including a $20 billion rail line.

“There is potential for development in areas such as Central Asia, Eastern Europe, Africa and South America. But their problems are development imbalance and economic instability,” said Li Yong, a senior fellow at the China Association of International Trade, an industry group.

​Focus on diversification

Local officials have met with exporters to exhort them to “diversify markets,” according to the state press.

Authorities in the central city of Jingzhou visited exporters to help with customs forms, financing and other details, the website China Industry and Commerce News said.

Ren, the surgical glove maker, said his 300-employee company was looking at Europe and developing countries, but demand was sluggish.

Some companies are confident of keeping their U.S. market share. That reflects the possible success of official efforts to develop higher-tech goods instead of competing on price alone.

The general manager of Yihua Electronic Equipment Co. in southern China’s Guangdong said the tariffs should not affect sales of its digital soldering guns, one-fifth of which are sold to the United States.

“With the 25 percent tariffs, ours still are cheaper than similar German- or Japanese-made products,” said the manager, who would give only his surname, Gou. “We are not producing something like shoes and clothing that could be easily replaced.”

Trump’s pressure could encourage Beijing to throw even more resources at nurturing its own technology creators.

China’s search for non-U.S. suppliers could help companies such as Taiwanese chipmaker MediaTek Inc. But redesigning a phone or network gear and then gaining regulatory and customer approval can take a minimum of three to five years.

“For now,” said He of Oxford Economics, “China remains technologically dependent on the U.S.”
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More than a week after the floodwater began subsiding, animal carcasses are  still floating in Kerala’s backwaters, and in places a nauseating stench rises like a wall when the wake from a passing boat breaks the surface.

These inland lagoons running parallel to the coast are one of the biggest tourist draws in India’s most southwesterly state, but the stain of death and devastation wrought by Kerala’s worst flood in a century will take longer than a season to wash away.

The quaint towns and villages scattered between the lush forests and paddy fields bordering the backwaters are now communities in despair.

Houses in low-lying areas are still submerged, roads are waterlogged and the sewage from drains have washed into channels that are too slow-moving to effectively flush out the effluent.

Sudarsanan T.K., a houseboat owner in the town of Alappuzha,  had been looking forward to the peak tourist season, but as his home disappeared under 2.5 meters (8 feet) of water his family now have to live aboard the boat he would otherwise be renting to tourists from Europe, China, Malaysia and India.

“I’ve nothing left, but this houseboat. I don’t know how I can repay my bank loan in this condition. The bank may take back my boat. I will have nothing at all then,”  Sudarsanan, a 64-year-old father of two, told Reuters.

​Some 1,500 houseboats are tied up at Alappuzha, going nowhere, with many of the owners still paying off loans taken to buy the boats.

Sudarsanan owes about $8,600 on the loan taken eight years ago to buy the boat, and he could have earned up to $7,000 by December if the deluge hadn’t washed away his hopes.

Hundreds of people perished in the flood and more than one million of Kerala’s 35 million people were forced to abandon their homes and take shelter in relief camps.

Blessed with natural beauty, fertile land and bountiful seas, Kerala has been dubbed “God’s own country” by its people, but the Marxists running the state government reckon it will need $3.57 billion to rebuild over the next two years.

“Kerala’s GDP growth may fall by 2 percent,” state Finance Minister T.M. Thomas Isaac told Reuters, forecasting growth of 6 percent for the financial year ending next March.

Crops have been lost, the construction industry was dead for a month, and tourism, which contributes 10 percent of the state’s economy but accounts for about 25 percent of jobs creation, has been badly hit.

Festival washout

For discerning tourists looking for a more laid back Indian experience, Kerala has it all — long sandy beaches, lazy waterways, charming, historic towns like Kochi and the cool, forested hills of the Western Ghats.

Kerala doesn’t draw numbers like the northern tourist circuit, the so-called “Golden Triangle” running from New Delhi to the Taj Mahal in Agra, and Jaipur’s palaces in the desert state of Rajasthan, but it has carved out a sizable niche.

Last year, one million foreigners visited Kerala, along with 15 million domestic tourists, but state government and industry officials reckon the flood will result in losses for the tourism sector of $357 million.

The floods struck just as Kerala was gearing up for Onam,

the harvest festival which is one of the highlights of the state’s cultural calendar.

Festivities, including the spectacular Vallam Kali races involving traditional war canoes, some manned by more than 100 paddlers, were postponed.

“Kerala has lost out on one of the best seasons, as the calamity struck during the 10-day run up to Onam,” said Ranjini Nambiar, who heads a travel consultancy.

Thousands of volunteers have joined a clean-up campaign mounted by the state, and Shilendran M., an executive with the CGH Earth luxury hotel chain, expected some kind of order to be restored within the next few weeks.

“The state administration is working on a war footing,” said Shilendran, whose group has more than a dozen properties in Kerala. “We are limping back to normal.”

Hardly anywhere in the state escaped the calamity.

Ernakulam district, the biggest industrial and tourism contributor to Kerala’s economy and home to the historic city of Kochi, suffered major damage, and its busy international airport was shut for nearly two weeks.

Munnar, a hill resort overlooking the tea and cardamom plantations high in the Ghats was cut off, as bridges were washed away and landslides blocked roads.

Once every dozen years a bright purplish-blue bell-shaped flower called the Neelakurinji, blossoms on the slopes around Munnar — and this was one of those years.

The state tourism had marketed 2018 as the Kurunji year, but people in Kerala are more likely to remember the mud.
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President Donald Trump’s trade deal with Mexico could struggle to win approval from Congress unless Canada comes on board, lawmakers from both parties said on Tuesday, saying support from Democrats would be needed to pass a purely bilateral deal.

Trump unveiled the Mexico deal on Monday and threatened to slap tariffs on Canadian-made cars if Canada did not join the revamp of the trilateral North American Free Trade Agreement (NAFTA), which Trump has long criticized.

If Trump, a Republican, tries to get the Senate to vote in favor of a bilateral deal as a replacement for NAFTA, he will face an uphill struggle to win passage, lawmakers said. Some lawmakers said only a trilateral pact would be eligible for fast-track, 51-vote Senate approval.

A bilateral deal, on the other hand, would need 60 votes and that would require some support from Democrats, who likely would be reluctant to help Trump, they said. There are now 50 Republican-held seats in the 100-member Senate.

To get fast-track Senate ratification, “the administration must also reach an agreement with Canada,” said Republican Senator Pat Toomey in a statement.

“NAFTA was a tri-party agreement only made operative with legislation enacted by Congress,” said Toomey, a member of the committee that oversees trade policy.

“Any change, such as NAFTA’s termination, would require additional legislation from Congress. Conversion into a bilateral agreement would not qualify for … ‘fast track’ procedures and would therefore require 60 votes in the Senate.”

The White House did not immediately respond to a request for comment about fast track treatment for the Mexico deal. Canada’s top trade negotiator arrived in Washington on Tuesday for talks with her Mexican and U.S. counterparts, in a bid to remain part of the trade pact.

Democratic Senate Leader Chuck Schumer said a bilateral deal would face “serious legal concerns,” while he also questioned a lack of details on the terms of the Mexico pact

“I’m a little worried that this one is like North Korea. They have a nice announcement, but then we don’t see the details,” Schumer told reporters in a Capitol hallway. U.S. stock markets surged on Monday after Trump said he had reached an understanding with Mexico. On Tuesday, stocks had given up some of their early gains by the closing bell.

Senator Ron Wyden, the senior Democrat on the trade committee, said: “We know very few details right now. There are real questions about whether this is even enforceable … We are far from being done on this and the fact is you cannot really move this substantively without the Canadians.”

In the House of Representatives, Democrat Bill Pascrell urged Republicans in a statement to convene a bipartisan House trade council to advise the White House.

 
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Kenya’s President Uhuru Kenyatta says his country wants to increase bilateral trade with the United States and attract more U.S. investors. U.S. President Donald Trump received Kenyatta at the White House on Monday for talks that focused on trade and security. Ahead of the talks, Kenyatta told VOA African Service in an interview that his country is battling corruption and boosting security to create the right environment for foreign investment. VOA’s Zlatica Hoke reports.
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The United States and Mexico agreed on Monday to a sweeping trade deal that pressures Canada to accept new terms on autos trade, dispute settlement and agriculture to keep the trilateral North American Free Trade Agreement (NAFTA).

U.S. Trade Representative Robert Lighthizer said the White House was ready to notify the U.S. Congress by Friday of President Donald Trump’s intent to sign the bilateral document, but that it was open to Canada joining the pact.

The 24-year-old NAFTA is a trilateral deal between the United States, Canada and Mexico that underpins $1.2 trillion in North American Trade.

Here are some of the main issues at the heart of the negotiations:

Autos Dominate

The new deal requires 75 percent of the value of a vehicle to be produced in the United States or Mexico, up from the NAFTA threshold of 62.5 percent.

The higher threshold is aimed at keeping more parts from Asia out, boosting North American automotive manufacturing and jobs. Even if more plants are built in Mexico, jobs will grow in the United States due to high levels of integration, with studies showing that U.S. parts make up 40 percent of the value of every Mexican-built car exported to the United States.

The pact also requires greater use of U.S. and Mexican steel, aluminum, glass and plastics.

The provision started out as a U.S. demand for 85 percent regional content, with 50 percent coming from U.S. factories.

That plan was vehemently opposed by Mexico, Canada and the auto industry. It later morphed into the U.S.-Mexico deal’s requirement of 40 to 45 percent of a vehicle’s value to be made in high wage areas paying at least $16 an hour, requiring significant automotive production in the United States.

Although full automotive details have not yet been released, auto industry officials say it will allow Trump the ability to impose higher national security tariffs on vehicles that do not comply with the new thresholds.

Most Mexican auto exports are in a position to comply with the new limits, the country’s economy minister said.

No Sunset

Trump backed off from an initial U.S. demand for a “sunset” clause that would kill the pact unless it was renegotiated every five years and which businesses said would stymie long term investment in the region.

Canada and Mexico were strictly opposed to the clause.

Instead, the United States and Mexico agreed to a 16-year lifespan for NAFTA, with a review every six years that can extend the pact for 16 years more, providing more business certainty.

Dispute Settlement

Mexico agreed to eliminate a settlement system for anti-dumping disputes, NAFTA’s Chapter 19.

The move, sought by the United States, puts Canada in a difficult position because Prime Minister Justin Trudeau had insisted on maintaining Chapter 19 as a way to fight U.S. duties on softwood lumber, paper and other products that it views as unfair. Ottawa now has less than a week to decide to accept a deal without that provision.

A settlement system for disputes between investors and states was scaled back, now only for expropriation, favoritism for local firms and state-dominated sectors such as oil, power and infrastructure.

Agriculture, Labor

The new deal will keep tariffs on agricultural products traded between the United States and Mexico at zero and seeks to support biotech and other innovations in agriculture. It lacks a previous U.S. demand to erect trade barriers to protect seasonal U.S. fruit and vegetable growers from Mexican competition.

It contains enforceable labor provisions that require Mexico to adhere to International Labor Organization labor rights standards in an effort to drive Mexican wages higher.

Now Canada

The U.S.-Mexico NAFTA deal opens the door for Canada to immediately rejoin the talks and is a major step forward in updating the accord.

Canada, which sat out the last leg of discussions while the United States and Mexico ironed out their bilateral differences, is now pressured to agree to the new terms on auto trade and other issues to remain part of the three-nation pact.

Trump has presented this as a bilateral deal and threatened Canada with car tariffs. Some lawmakers have said that a bilateral deal would face a higher vote threshold in Congress because the NAFTA fast-track negotiating authority law calls for a trilateral agreement.
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Mexican president-elect Andres Manuel Lopez Obrador welcomed a deal between Mexico and the United States to overhaul the North American Free Trade Agreement (NAFTA) that he said preserved Mexican “sovereignty” in the energy sector.

The U.S.-Mexico deal was announced by U.S. President Trump on Monday, putting pressure on Canada to agree to new terms and details that were only starting to emerge. Lopez Obrador said it was important that Canada be part of the deal.

Lopez Obrador, who is scheduled to take office on Dec. 1, said Trump “understood our position” and accepted his incoming administration’s proposals on the energy sector. The text of the new agreement has not yet been made public.

“We put the emphasis on defending national sovereignty on the energy issue and it was achieved,” Lopez Obrador told reporters after arriving in the southern state of Chiapas.

“We are satisfied because our sovereignty was saved. Mexico reserves the right to reform its constitution, its energy laws, and it was established that Mexico’s oil and natural resources belong to our nation,” he said.

Lopez Obrador opposed a constitutional change pushed through by Mexican President Enrique Pena Nieto that opened production and exploration in the energy sector to private capital.

Mexico has already awarded more than 100 oil exploration and production contracts to private companies.

Lopez Obrador has said he would pour resources into state oil company Pemex while still respecting private sector contracts, as long as a review does not find evidence of corruption.

He is expected to slow down or stall the process of offering more contracts to private players.

Jesus Seade, Lopez Obrador’s designated chief NAFTA negotiator, participated in the latest talks between the current Mexican administration and the U.S. Trade Representative to strike the new NAFTA agreement.

Seade said on Monday that both Pena Nieto’s team and the United States had agreed to change language in a draft proposal of the NAFTA overhaul on energy that had previously been a “cut and paste” from the text of Mexico’s energy reform.

The new language still preserved the same ideas and was consistent with Pena Nieto’s reform, Seade said, adding that Lopez Obrador was not seeking to change the legal framework for private energy projects in Mexico.

While the new administration planned to increase production at Pemex, Seade told a news conference in Washington “there will be areas where cooperation with the private sector is needed.”
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About 100 workers protested outside tire manufacturer Pirelli’s Venezuela plant on Monday after finding the gateslocked, ten days after the country announced a broad set of reforms including a massive hike in the minimum wage.

Employees were not told the plant would be shut, said union leader Luis Alvarez, who added it was not immediately known if it was temporary or if the operation had permanently closed its doors.

“Production was falling, but they always kept us on the job,” said worker Nicolas Altomaris, who was waiting at a gate for information. “Now they’ve made this decision to send us out without knowing if we’ll return.”

Union leaders say about 700 employees work at the plant. Pirelli and parent company China National Chemical Corp Ltd did not immediately respond to requests for comment. Venezuela’s Information Ministry also did not immediately reply to an email seeking comment.

On Aug. 17 President Nicolas Maduro ordered a 3,000 percent minimum wage increase while also requiring that companies leave prices of their products fixed amid a hyperinflationary crisis. Business leaders say the package is unsustainable and would force many firms to close their doors.

In the past, Pirelli Venezuela has temporarily halted operations due to a lack of raw materials. Currency controls make it difficult to import such materials, while price controls can at times force companies to sell below production costs.

The company, which supplies tires for Formula One, manufactures tires for cars, motorcycles, trucks and buses in Venezuela. It was acquired in 2015 by China National Chemical, known as ChemChina, which is owned by the Chinese government.

Multinational companies including Clorox Co and Kellogg Co have been steadily leaving the country amid shrinking demand caused by an economic collapse.

Maduro has said the country is victim of an “economic war” led by political adversaries with the help of Washington.
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The United States and Mexico have reached a trade agreement, leaving Canada as the odd man out in efforts to revise or replace the North American Free Trade Agreement (NAFTA), according to U.S. President Donald Trump.

The new deal will be called the United States-Mexico Trade Agreement, Trump said Monday.

“We’ll get rid of the name NAFTA, it has a bad connotation because the United States was hurt very badly by NAFTA for many years,” Trump said.

“It’s a big day for trade, it’s a big day for our country,” Trump said with reporters present, who were called to the Oval Office to watch as Trump spoke on the telephone with Mexican President Enrique Pena Nieto.

The Mexican leader expressed hope to “renew, modernize and update” NAFTA while Trump’s rhetoric indicated he sees that 24-year-old three-nation deal as dead.

“We’ll have a formal news conference in the not-too-distant future,” about the trade pact, Trump said to Pena Nieto.

“This is something very positive for the United States and Mexico,” Pena Nieto replied, saying he is looking forward to toasting Trump with tequila to celebrate, expressing to his American counterpart that he is “really grateful and greatly recognize and acknowledge your political will in all of this.”

Mexico has agreed to immediately begin purchasing as many agricultural products from the United States as possible, according to Trump.

Pena Nieto leaves office on December 1, turning over the Mexican government to his leftist successor, Andres Manuel Lopez Obrador. That means the clock is ticking to give Mexico’s legislature enough time to ratify it before the change of administration.

Congressional notification expected

The White House is also expected to formally notify Congress by the end of this week of its intention to sign a new trade agreement within 90 days.

“It will be likely be signed at the end of November,” said U.S. Trade Representative Robert Lighthizer, who was also in the Oval Office, along with Mexico’s foreign and trade ministers, for the Trump-Pena Nieto phone call.

The U.S. president, since the time of his 2016 election campaign has referred to NAFTA as the worst trade deal in history and repeated especially inflammatory rhetoric about America’s southern neighbor.

Trump, who blames NAFTA for the destruction of manufacturing jobs in the United States, repeatedly threatened to abandon the trade pact with Canada and Mexico, which came into effect during the Clinton administration in 1994.

Trump has rejected other multi-national deals, such as the Trans-Pacific Partnership (another trade pact) and the Paris Agreement on climate change mitigation, expressing a strong preference for one-on-one negotiations on trade and other matters with countries.

Negotiations with Canada

Trump said he would call Canadian Prime Minister Justin Trudeau soon and that the United States is open to talks with Canada if it is willing to negotiate fairly.

“I’ll be terminating the existing deal,” Trump said in reference to NAFTA.

The U.S. president also threatened America’s northern neighbor with penalties if there is no agreement.

“Frankly, a tariff on cars is the much easier way to go,” said Trump.

In Ottawa, officials are expressing resilience.

“We will only sign a new NAFTA that is good for Canada and good for the middle class,” said the Canadian foreign ministry in a statement, indicating Ottawa’s willingness to “continue to work toward a modernized NAFTA.”

“We hope that Canada can join in now,” Lighthizer subsequently told reporters during a conference call.

White House officials are denying that Monday’s announcement by the presidents of the United States and Mexico was designed to pressure the Canadians.

“Leaving Canada out of a new NAFTA would be a mistake and it is questionable whether the Office of the U.S. Trade Representative has the authority under current Trade Promotion Authority legislation to conclude just a bilateral with Mexico,” a visiting scholar at the Cato Institute, Inu Manak, who focuses on trade conflicts, tells VOA News.  “What happens next is anyone’s guess, but we should keep our eyes open for the return of Canada’s Foreign Minister, Chrystia Freeland, to Washington to wrap up the discussions soon.”

The three North American countries do about $1 trillion in trade among themselves annually.

 
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Economist Andrej Bertoncelj is to become Slovenia’s finance minister in the minority center-left government of Prime Minister designate Marjan Sarec, a spokeswoman for Sarec’s party said on Monday.

Bertoncelj’s main task will be to keep a lid on public spending in the small Alpine country and reduce public debt which reached 73.6 percent of GDP last year, down from 78.6 percent in 2016, but was still well above the 60 percent of GDP level allowed for European Union members.

Outgoing Prime Minister Miro Cerar will become foreign minister, replacing Karl Erjavec who shifts to defense, while Economy Minister Zdravko Pocivalsek will retain his portfolio, the spokeswoman, Nika Vrhovnik, told Reuters.

Parliament is due to confirm the new government in the first half of September after ministers have presented themselves to parliamentary hearings.

Bertoncelj, who is an independent, is a member of the management board of state investment fund Slovenian Sovereign Holding, which manages state assets and is in charge of privatization of state firms.

Before that he worked at a university as a professor of management after holding top positions in two pharmaceutical companies previously. He will replace the outgoing finance minister Mateja Vranicar Erman.

Earlier in August parliament elected Sarec as the next prime minister following a June 3 election in which the centre-right anti-immigrant Slovenian Democratic Party got most votes but lacked coalition partners to form a government.

Sarec, who heads the The List of Marjan Sarec (LMS) party, formed a coalition with four other center-left parties – the Social Democrats, the Party of Modern Center, the Party of Alenka Bratusek and pensioners’ party Desus.

The five parties hold 43 out of 90 parliamentary seats but have agreed with the left-wing party the Left, which holds 9 seats, that it will support the government in its key projects although it will not join the coalition.

Some analysts say the minority government will find it hard to complete its four year mandate due to differences between the coalition partners.

One of the first tasks of the new government will be to sell a majority in Slovenia’s largest bank Nova Ljubljanska Banka (NLB). Slovenia has committed itself to selling the bank in exchange for European Commission’s approval of state aid to the bank in 2013.

Slovenians will also be looking to the new government to improve the inefficient national health system. Pension reform to ease the burden of the rapidly ageing population on the state budget will also be a challenge.
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