DealBook Briefing: Why the U.S. Is Spinning Its Wheels on Trade


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Shari Redstone

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Mike Cohen for The New York Times

CBS heads to court against Shari Redstone today

The broadcaster’s case in Delaware’s Court of Chancery against its corporate parent, the Redstones’ National Amusements, is one of a number recently that challenge the kind of dual-class stock system used by the Redstones (and indeed by The New York Times Company).

Another part of CBS’s argument — that Ms. Redstone warned Verizon off bidding for CBS — took a hit yesterday. Verizon’s C.E.O., Lowell McAdam, told CNBC he didn’t want to invest in “linear TV.” (Read: CBS or 21st Century Fox.)

Speaking of Fox: An all-cash bid by Comcast for its assets could pit Rupert Murdoch, who would pay less tax on Disney’s share-based offer, against fellow shareholders. And in the middle of all this, Fox’s TV chiefs are in contract talks.

Elsewhere in deals: PaddyPower is reportedly close to buying FanDuel after the Supreme Court legalized sports betting. The hedge-fund mogul David Tepper signed a deal to buy the N.F.L.’s Carolina Panthers for $2.2 billion. FIFA is reportedly preparing a vote on the $25 billion offer by SoftBank and others for two new soccer tournaments. The two big proxy advisory firms urged Hyundai shareholders to side with Elliott Management against the management’s restructuring plan.

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Ng Han Guan/Associated Press

Who doesn’t like Trump’s lifeline to ZTE

Lawmakers from both parties aren’t likely to support easing sanctions on the Chinese telecom company, even if the White House reckons it might persuade Beijing to lift import limits on American agriculture. Representative Mac Thornberry, the head of the House Armed Services Committee, told Bloomberg, “It is not a question to me of economics, it is a question of security.”

What others have said: John Harwood of CNBC said it was the president shrinking from another fight. And Lex said Mr. Trump was fighting from a position of weakness.

And the U.S. and China remain “very far apart” in trade talks, according to the U.S.’s ambassador to Beijing. Businesses are still lobbying for exemptions from Chinese tariffs, too.

The bigger picture: Is Huawei next for a reprieve?

The political flyaround

• The White House has eliminated the role of cybersecurity coordinator. (NYT)

• Novartis’s general counsel retired after its contract with Michael Cohen became public. Will President Trump’s latest financial disclosures reflect payments to Mr. Cohen?

• Robert Mueller was “squarely” within his rights as special counsel to indict Paul Manafort, a federal judge ruled. (Politico)

• The House is expected to vote on moves to roll back Dodd-Frank next week. Stephen Gandel of Bloomberg Opinion expects little to change, at least for the Volcker Rule.

• Preet Bharara is reportedly considering running for New York’s attorney general — as an independent. (Bloomberg)

• Mr. Trump may invoke a Cold War-era statute to keep coal and nuclear power plants online. (Bloomberg)

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Mike Bloomberg

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Krista Schlueter for The New York Times

Meet Mike Bloomberg’s answer to Davos

The New Economy Forum is designed for a world where China’s ascent looks unstoppable. So it’s in Beijing, rather than the Swiss Alps. Participants include the former Treasury secretary Hank Paulson, Henry Kissinger, Janet Yellen and Gary Cohn.

Mr. Bloomberg’s pitch in the FT:

“Davos has been around for a long time: It is a very big conference and it is focused on lots of world problems. This conference is focused on the world and China as an emerging power and how we all work together.”

Elsewhere in boldface-name endeavors: Richard Branson and Pierre Omidyar are backers of a financial instrument for nonprofit investments devised by NPX.

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The onetime headquarters of Cambridge Analytica.

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Andy Rain/EPA, via Shutterstock

Cambridge Analytica’s troubles aren’t over

The Justice Department and the F.B.I. are seeking to question the defunct firm’s former employees and banks, the NYT reports. That’s likely to keep concerns about Facebook’s privacy policies and role in the 2016 elections in the news.

Elsewhere on Facebook: The company says it deleted 583 million fake accounts, and has reportedly pushed up its content-review budget. Mark Zuckerberg is snubbing Britain’s Parliament. Some nurses at San Francisco’s general hospital want his name off the building.

Elsewhere in tech: Inside Tencent’s frenetic deal-making. Masa Son has high hopes for SoftBank’s next Vision Fund, and Japan probably should, too. Lyft joined Uber in eliminating mandatory arbitration for sexual misconduct cases. The Pentagon wants a nuclear-grade cloud.

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Charles Rex Arbogast/Associated Press

The quarterly investor holdings flyaround

• Investors’ holdings of Apple dropped by the most since the first quarter of 2008.

• Warren Buffett’s Berkshire Hathaway raised its stakes in Teva Pharmaceutical and Monsanto.

• Bill Ackman’s Pershing Square Capital Management bought nearly 2 million shares in United Technologies. (A new book criticizes several of Mr. Ackman’s big moves.)

• David Einhorn’s Greenlight Capital invested in Office Depot and Abercrombie & Fitch.

• Stanley Druckenmiller bet on Alibaba and sold out of Facebook.

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Tom Wolfe

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Bebeto Matthews/Associated Press

Remembering Tom Wolfe’s chronicles of capital

The famed author died yesterday at 88. Business was one of his big subjects, as his obituaries noted:

• On “The Bonfire of the Vanities”: “a sweeping, bitingly satirical picture of money, power, greed and vanity in New York during the shameless excesses of the 1980s.” (NYT)

• “‘The Bonfire of the Vanities’ wickedly dissected the Wall Street money-grubbing crowd who thought they were rulers of the universe. ‘A Man In Full’ did the same for the American myth of the self-made mogul, as well as, perhaps, being a disguised story of himself.” (FT)

• On “The Electric Kool-Aid Acid Test”: “one of the great chronicles of Silicon Valley culture — although it wasn’t clear that it was about Silicon Valley at the time.” (CNBC)

Revolving door

• Two Tesla energy executives, Arch Padmanabhan and Bob Rudd, have left. (Bloomberg)

• Two senior UBS bankers — Severin Brizay, its head of M. & A. for Europe, the Middle East and Africa, and Laurent Dhome, a private equity specialist — are reportedly joining Bank of America. (Bloomberg)

• The human resources start-up Namely ousted its C.E.O., Matt Straz, over unspecified misconduct claims. (Bloomberg)

The speed read

• Jay-Z finally sat down for questioning by the S.E.C. It may be getting harder to prove fraud against sophisticated investors.

• The world is borrowing more. Investors are wary of companies spending more.

• Fox settled discrimination lawsuits involving 18 current or former employees for $10 million. (NYT)

• The messaging business WeChat is reportedly considering a service for bankers in China. (FT)

• Six more states sued the maker of OxyContin, Purdue Pharma. That makes 22. (Reuters)

• How Qatar is rebuilding in the face of a blockade led by Saudi Arabia. (FT)

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You can find live updates throughout the day at nytimes.com/dealbook.

We’d love your feedback. Please email thoughts and suggestions to bizday@nytimes.com.

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U.S. Seeks Quick Nafta Deal, but Allies Balk as It Gives Little Ground


Trump administration officials are eager to conclude negotiations quickly, largely because they must secure a deal by May to meet all of the necessary deadlines to have their revised Nafta agreement approved by the current Republican-controlled Congress. Some trade advisers say the possibility of Democrats retaking the majority in the House in November’s midterm elections could put congressional approval of Mr. Trump’s Nafta deal at risk, given that many Democrats oppose Nafta.

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The plant for ArcelorMittal Dofasco, a steel producer, in Hamilton, Ontario. American Nafta negotiators want to require that 70 percent of certain auto parts made of steel and aluminum to be made in North America.

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Peter Power/Reuters

Mexico is also facing a presidential election July 1 that could complicate talks by bringing a different political party into power. Trump administration trade advisers are also enmeshed in an escalating conflict with China that threatens to become a trade war.

On Monday, the president said the United States was “fairly close” on a Nafta deal, but he also reiterated his threat to withdraw from the pact if a new agreement is not reached.

The administration’s desire to quickly resolve Nafta could give Canada and Mexico more leverage. Trade experts say a Nafta deal seems more likely than it has in months, since the United States sees new urgency to conclude talks and is at least offering different proposals. But the United States does not appear to be ceding much ground. Larger concessions will need to be made to reach a deal, observers say — and those could come in the final moments.

Antonio Ortiz-Mena, a former Mexican diplomat in the United States, said he believed a deal would be possible in the coming weeks if negotiators were prepared to compromise. However, he said, “I think the biggest threat to Nafta is the United States overplaying its hand and not being flexible enough.”

The Nafta provision regarding automobiles has been among the most contentious, given Mr. Trump’s focus on the car industry and its importance to all three nations’ economies.

American negotiators have dropped an earlier demand that half of the value of an automobile be made solely in the United States to qualify for Nafta’s zero tariffs. Instead, they are asking for an unspecified percentage of each vehicle to be made by workers earning at least an average wage rate for the North American industry, to be recalculated each year. According to preliminary calculations, that wage could be approximately $16 to $17 an hour.

However, other parts of the proposal are unchanged, or add layers of rules. In keeping with its earlier proposal, the United States is asking for 85 percent of the value of a car to be made in North America to qualify for Nafta’s benefits, up from 62.5 percent under the current Nafta deal. But it has set up a complex tiered system for other auto parts, for example requiring 85 percent of engines and advanced batteries to be made in North America, as well as 70 percent of monitors, wiring sets and autonomous vehicles parts, and 50 percent of brake pads and spark plugs.

It also requires 70 percent of certain auto parts made of steel and aluminum to be made in North America — a further boon to the American steel and aluminum industry, which the Trump administration has sought to protect.

These auto rules may be subject to a periodic review, for example every five years. Car companies would have three years to work on redesigning their supply chains before the rules went into effect.

Mexico has countered with an offer to raise the overall requirement for North American content in Nafta cars to 70 percent, up from 62.5 percent currently, people close to the talks said. It has also agreed to accept a proposal by Canada to add in the value of research and development when calculating how much of a car is produced in North America. But Mexico continues to reject the other provisions in the American proposal on automobiles, and insists that the industry be given seven years to transition to the new rules, rather than three.

Auto parts makers, which would likely see their sales rise as a result of the new rules, seemed more amenable to the proposal. But some auto manufacturer representatives said the new proposals were as “equally unworkable” as the original ones. They said the tiered system was excessively complicated and could drive up administrative costs as companies try to comply with the rules.

Many valuable car components — electronic systems, for example — are largely made in Asia, and rebuilding a manufacturing base for these parts in North America in just three years would be no simple matter.

Since the United States levies only a 2.5 percent tariff on cars imported into the country, tougher Nafta rules might just push companies to automate their production facilities or make cars elsewhere, critics say. At a certain point, companies may find it cheaper to manufacture cars in China or Southeast Asia, and import them into the United States instead.

The United States also appears to be largely standing firm on other contentious issues, including rules for government purchases, methods of settling trade disputes and a provision under which Nafta would automatically expire every five years, unless the countries voted to reapprove it.

The Trump administration has said those changes are necessary to revive American manufacturing and undo incentives that encourage companies to move their factories to low-cost countries like China and Mexico. Company representatives counter that the use of global supply chains has now become the norm in many industries, and without the ability to source products from around the world, American companies would simply not be able to compete.

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White House Tries to Pull Nafta Back From Brink as Deadlines Loom


“They said, ‘Oh, let’s have Nafta before.’ I said, ‘Don’t rush it. We’ll take it nice and easy, get it done right or we’ll terminate it,” the president said.

The talks, which appeared to be on the brink of collapse just a few months ago, kicked back into gear in recent weeks as political and practical realities prompted a newfound urgency among American negotiators. For a revised Nafta to be approved by the current Republican-controlled congress, the Trump administration would probably have to finalize it before the end of May to allow time for congressional review given the House and Senate calendar.

Other trade tensions helped jump-start the discussions, including the administration’s new steel and aluminum tariffs. The White House temporarily exempted Canada and Mexico from the tariffs through May 1, saying it would make those exemptions permanent if the three nations could agree to a revised Nafta. The administration must now make good on that promise and negotiate a deal that would allow key allies to continue importing metals into the United States. Canada is a top supplier of metal to the United States military.

A quick resolution would also allow negotiators to bypass complications stemming from the upcoming Mexican elections on July 1, which appear likely to usher in a left-leaning president who has sharply criticized Mr. Trump over his broadsides against Mexico. And the White House could promote a revised Nafta as a political win ahead of the congressional midterm elections in November, while giving the president’s top trade advisers room to turn their attention to resolving a potential trade war with China, which has fired back against American trade actions with punitive measures of its own.

White House trade advisers are meeting with their Mexican and Canadian counterparts in Washington this week to try to hammer out areas of consensus on the most difficult issues of the talks. Robert Lighthizer, the United States trade representative, Foreign Minister Chrystia Freeland of Canada and Economy Minister Ildefonso Guajardo of Mexico were expected to kick off trilateral talks on some of the pact’s thorniest issues over dinner in Washington on Thursday night.

Prime Minister Justin Trudeau of Canada struck an optimistic note on Thursday, saying the countries were having a “very productive moment,” a sharp change in tone from previous comments about a Nafta resolution.

“We are in a moment where we are moving forward in a significant way,,” Mr. Trudeau said. “Hopefully there will be some good news coming.”

He is expected to attend the two-day Summit of the Americas in Peru next week, alongside Mr. Trump and President Enrique Peña Nieto of Mexico.

Yet hurdles remain, including how far the United States is willing to go in surrendering many of its negotiating goals, given Mr. Trump’s frequent and vocal criticism of Nafta. Negotiating partners are still waiting to see whether the United States will compromise on the tough requests it has made over the past eight months of negotiations. Many of those demands, including those linked to American auto production, have angered business groups and lawmakers, who say such requirements would actually hurt companies and workers by shifting more manufacturing out of the United States.

A quick resolution would necessitate concessions from the Trump administration, potentially resulting in a deal not significantly different from the one Mr. Trump has denounced as a travesty and embarrassment.

“Unless the United States is quite a bit more flexible, I don’t see how it’s possible to have a quick agreement, even just an agreement in principle,” said Antonio Ortiz-Mena, a senior vice president at the Albright Stonebridge Group and a former Mexican diplomat in the United States.

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A steel plant in Canada, which along with Mexico was temporarily exempted by the United States from new steel and aluminum tariffs. The White House gave the nations until May 1 to work out a revised Nafta deal.

Credit
Ian Willms for The New York Times

Some concessions appear to be in the offing. The United States has now backed away from a proposal that would require half of the value of an automobile to be manufactured in the United States to qualify for Nafta’s preferential tariffs. Instead, it is proposing a system that would require a certain proportion of auto parts to be made by workers earning certain wages.

That proposal is likely to be more palatable to Canada and could also encourage Mexico to ultimately pay higher wages. And it could help Mr. Trump court the votes of congressional Democrats, who complain that Mexico’s low wages are the reason companies have relocated auto production from the United States.

Still, the proposal is likely to face opposition from Mexican negotiators, given that their current wage scales are too low to qualify. And some auto executives also criticized the new proposal, saying it would be nearly as difficult for companies to comply with as earlier ideas, and could ultimately push manufacturing out of North America to cheaper areas.

Other key areas of dispute also remain: Negotiators have so far concluded work on only six of the trade agreement’s roughly 30 chapters, and little progress has been made on contentious issues like mechanisms for settling trade disputes or rules for government purchases.

Yet the renewed push to revise Nafta could usher in an agreement that until recently seemed at risk of collapse. Both supporters and critics of the Trump administration have pointed to the trade deal that the United States recently concluded with South Korea at the end of March as a possible precedent. Mr. Trump fiercely criticized that pact, but in the end his administration declared victory after renegotiating fairly modest changes.

Labor unions, which have backed Mr. Trump’s plan to dramatically remake trade policy, were disappointed with that deal, which did not include changes to labor standards, investment rules or content requirements for automotive manufacturing.

“You see what you get if your priority is speed over quality,” said Celeste Drake, trade and globalization policy specialist at the A.F.L.-C.I.O. “A quick deal that’s not a good deal — is that what the administration wants to sell in these next few months? Or is it really looking to take the time it needs to get a good deal?”

Even an agreement in principle would not rule out the possibility of months or years of wrangling over an eventual deal. Patrick Leblond, senior fellow at the Center for International Governance Innovation, noted that Canada and Europe signed an agreement in principle for a trade pact in the fall of 2013, but that the final deal did not come into effect until September 2017, after almost being derailed.

“As trade negotiators repeatedly point out, nothing is agreed until everything is agreed,” Mr. Leblond said.

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White House Unveils Tariffs on 1,300 Chinese Products


The designation of targeted products will be followed by a comment period in which American companies can provide feedback to the Trump administration on the product choices. The administration will hold a public hearing on the submissions on May 15 in Washington, and companies will have until May 22 to file final objections.

Business groups, concerned about the effect on companies and workers, swiftly criticized the move.

“Unilaterally imposing $50 billion of new tariffs without a long-term strategy that leads to economic reforms in China will only hurt America’s businesses, workers, and families,” the Business Roundtable, a corporate trade group, said in a statement. “Instead, the administration should work with U.S. allies on an approach that advances meaningful reform in China without imposing significant harm on America’s economy.”

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The products targeted by the White House are part of an effort to go after China’s dominance in cutting-edge technologies like semiconductors, electric vehicles and advanced medical products — industries that China is pursuing dominance in as part of an industrial plan known as “Made in China 2025.”

Credit
Gilles Sabrié/Bloomberg

Jay Timmons, the president of the National Association of Manufacturers, said that American manufacturers were concerned about the trade relationship with China, including intellectual property theft, counterfeit goods and unfair subsidies, but also that tariffs were not the best response.

In a strongly worded statement on Tuesday, the Chinese Embassy in the United States condemned the tariffs. “Such unilateralistic and protectionist action has gravely violated fundamental principles and values of the W.T.O.,” the statement said. “It serves neither China’s interest, nor U.S. interest, even less the interest of the global economy.”

The Chinese would resort to “measures of equal scale and strength against U.S. products in accordance with Chinese law,” the statement said.

While many American companies say they are unfairly treated in China, they have rued the possibility of a trade war between the world’s two largest economies, and the economic harm it could cause, and have begun pushing back against the White House’s plans. China remains a crucial and growing market for companies like John Deere and Apple, as well as for soybean farmers and growers of other agricultural products.

Financial markets fell sharply on Monday as China imposed its own retaliatory tariffs on American products but regained most of their lost territory on Tuesday.

President Trump, who has repeatedly promised tough action on China’s trade practices, said Tuesday that he intended to get along with China but that its unfair trade behavior had gone on too long. “It’s not something we can live with,” Mr. Trump said at the White House, adding, “I campaigned on that.”

Trump advisers have criticized past administrations for allowing China to receive the benefits of global trade while continuing to break the international trade rules imposed by organizations like the World Trade Organization — a charge China denies.

But the administration has struggled to persuade its critics that the kind of tough trade measures Mr. Trump favors can alter China’s behavior without tipping the world into a trade war and ultimately harming American workers and consumers. In addition to the tariffs, the White House is preparing to restrict Chinese investment in American technology and innovation, and to start a case against China at the World Trade Organization.

“The administration is rightly focused on restoring equity and fairness in our trade relationship with China,” said Myron Brilliant, an executive vice president and the head of international affairs at the U.S. Chamber of Commerce. “However, imposing taxes on products used daily by American consumers and job creators is not the way to achieve those ends.”

The Coalition for a Prosperous America, an organization that has supported the president’s trade agenda, called the China action a shift from “naïve” to “strategic” trade. “The age of appeasement must end,” said Paola Masman, the group’s media director.

But the administration’s trade measures are prompting concern among many American companies, who are wary of Beijing’s response.

The United States’ largest exports to China last year were aircraft and aircraft parts, which totaled more than $16 billion, according to IHS Markit. These products featured heavily on Tuesday’s list, setting off fears that China could retaliate with similar penalties against American plane maker Boeing.

Dan Stohr, a spokesman for the Aerospace Industries Association, said the group was still reviewing the tariff list but would almost certainly file comments with the administration.

Farming communities, one of the country’s largest exporters and a solid base for Mr. Trump, are among the most vulnerable. Chinese tariffs of 25 percent will particularly hurt American pork farmers, who sent more than $1 billion worth of products to China last year.

Senator Joni Ernst, Republican of Iowa, said American farmers were already struggling to make ends meet. “Increasing tariffs on exports will harm Iowa producers and undermine the rural economy,” Ms. Ernst said. “It’s my hope that we can pursue policies that enhance our competitiveness, rather than reduce our access to foreign markets.”

Continue reading the main story

White House Unveils Tariffs on 1,300 Chinese Products


The designation of targeted products will be followed by a comment period in which American companies can provide feedback to the Trump administration on the product choices. The administration will hold a public hearing on the submissions on May 15 in Washington, and companies will have until May 22 to file final objections.

Business groups, concerned about the effect on companies and workers, swiftly criticized the move.

“Unilaterally imposing $50 billion of new tariffs without a long-term strategy that leads to economic reforms in China will only hurt America’s businesses, workers, and families,” the Business Roundtable, a corporate trade group, said in a statement. “Instead, the administration should work with U.S. allies on an approach that advances meaningful reform in China without imposing significant harm on America’s economy.”

Photo

The products targeted by the White House are part of an effort to go after China’s dominance in cutting-edge technologies like semiconductors, electric vehicles and advanced medical products — industries that China is pursuing dominance in as part of an industrial plan known as “Made in China 2025.”

Credit
Gilles Sabrié/Bloomberg

Jay Timmons, the president of the National Association of Manufacturers, said that American manufacturers were concerned about the trade relationship with China, including intellectual property theft, counterfeit goods and unfair subsidies, but also that tariffs were not the best response.

In a strongly worded statement on Tuesday, the Chinese Embassy in the United States condemned the tariffs. “Such unilateralistic and protectionist action has gravely violated fundamental principles and values of the W.T.O.,” the statement said. “It serves neither China’s interest, nor U.S. interest, even less the interest of the global economy.”

The Chinese would resort to “measures of equal scale and strength against U.S. products in accordance with Chinese law,” the statement said.

While many American companies say they are unfairly treated in China, they have rued the possibility of a trade war between the world’s two largest economies, and the economic harm it could cause, and have begun pushing back against the White House’s plans. China remains a crucial and growing market for companies like John Deere and Apple, as well as for soybean farmers and growers of other agricultural products.

Financial markets fell sharply on Monday as China imposed its own retaliatory tariffs on American products but regained most of their lost territory on Tuesday.

President Trump, who has repeatedly promised tough action on China’s trade practices, said Tuesday that he intended to get along with China but that its unfair trade behavior had gone on too long. “It’s not something we can live with,” Mr. Trump said at the White House, adding, “I campaigned on that.”

Trump advisers have criticized past administrations for allowing China to receive the benefits of global trade while continuing to break the international trade rules imposed by organizations like the World Trade Organization — a charge China denies.

But the administration has struggled to persuade its critics that the kind of tough trade measures Mr. Trump favors can alter China’s behavior without tipping the world into a trade war and ultimately harming American workers and consumers. In addition to the tariffs, the White House is preparing to restrict Chinese investment in American technology and innovation, and to start a case against China at the World Trade Organization.

“The administration is rightly focused on restoring equity and fairness in our trade relationship with China,” said Myron Brilliant, an executive vice president and the head of international affairs at the U.S. Chamber of Commerce. “However, imposing taxes on products used daily by American consumers and job creators is not the way to achieve those ends.”

The Coalition for a Prosperous America, an organization that has supported the president’s trade agenda, called the China action a shift from “naïve” to “strategic” trade. “The age of appeasement must end,” said Paola Masman, the group’s media director.

But the administration’s trade measures are prompting concern among many American companies, who are wary of Beijing’s response.

The United States’ largest exports to China last year were aircraft and aircraft parts, which totaled more than $16 billion, according to IHS Markit. These products featured heavily on Tuesday’s list, setting off fears that China could retaliate with similar penalties against American plane maker Boeing.

Dan Stohr, a spokesman for the Aerospace Industries Association, said the group was still reviewing the tariff list but would almost certainly file comments with the administration.

Farming communities, one of the country’s largest exporters and a solid base for Mr. Trump, are among the most vulnerable. Chinese tariffs of 25 percent will particularly hurt American pork farmers, who sent more than $1 billion worth of products to China last year.

Senator Joni Ernst, Republican of Iowa, said American farmers were already struggling to make ends meet. “Increasing tariffs on exports will harm Iowa producers and undermine the rural economy,” Ms. Ernst said. “It’s my hope that we can pursue policies that enhance our competitiveness, rather than reduce our access to foreign markets.”

Continue reading the main story

Trump Says He Plans to Order Military to Guard Border


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President Trump and Defense Secretary Jim Mattis at the White House on Tuesday after Mr. Trump’s third consecutive day of tweeting about America’s “weak” border laws.

Credit
Doug Mills/The New York Times

WASHINGTON — President Trump said on Tuesday that he planned to order the military to guard parts of the southern border until he can build a wall and tighten immigration restrictions, proposing a remarkable escalation of his efforts to crack down on migrants entering the country illegally.

Mr. Trump, who has been stewing publicly for days about what he characterizes as lax immigration laws and the potential for an influx of Central American migrants to stream into the United States, said he had been discussing with Jim Mattis, the secretary of defense, about resorting to military deployments.

“We have very bad laws for our border, and we are going to be doing some things — I’ve been speaking with General Mattis — we’re going to be doing things militarily,” Mr. Trump said at the White House, seated beside the defense secretary at a meeting with visiting leaders of Baltic nations. “Until we can have a wall and proper security, we’re going to be guarding our border with the military. That’s a big step. We really haven’t done that before, or certainly not very much before.”

Mr. Trump’s comments came after he kicked off his third consecutive day of tweeting about America’s “weak” border laws on Tuesday and called on Congress to act, following a new push for legislation to enforce immigration laws for those living illegally in the United States.

Mr. Trump’s Twitter thread on immigration policy started Sunday and, since then, he has consistently threatened to pull out of the North American Free Trade Agreement, known as Nafta. On Tuesday, Mr. Trump said Nafta “is in play,” and repeated his contention that Nafta was a “cash cow” for other nations.

The president’s tweets do not always lead to a new policy, but on Monday afternoon the White House announced Mr. Trump’s new push for legislation to make it more difficult to enter and stay in the United States illegally. It was not immediately clear what impact Tuesday’s tweet would have on immigration policy or Nafta negotiations.

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On Money: How the Avocado Became the Fruit of Global Trade


Donald Trump has often railed at Nafta as “the worst trade deal ever.” But his focus on the loss of United States manufacturing jobs — felt keenly in the auto and textile industries — misses one of Nafta’s far-reaching benefits: the huge lift it has given to agricultural trade and consumer satisfaction in all three countries. Under Nafta, avocados have led an influx of year-round Mexican produce that has filled the seasonal voids in United States grocery stores and changed the way Americans eat. The avocado boom has caused environmental damage — some of Michoacán’s pine forests have been thinned out for avocado orchards — but it has been good for Americans gorging on guacamole in wintertime and Mexican farmers fending off the urge to join the drug trade or immigrate to the United States. According to a 2016 study commissioned by a marketing group for buyers and producers of Mexican avocados, the avocado supply chain has also created nearly 19,000 jobs in the United States and added more than $2.2 billion to the gross national product.

Even California growers, once vociferous opponents of Mexican imports, are happy with the situation. Land and water are too scarce to expand their seasonal harvests — which are around 10 percent of Mexico’s annual production — but surging demand and prices have buoyed their businesses, too. “Avocados are Nafta’s shining star,” says Monica Ganley, an expert on Latin American trade and the founder of Quarterra, a consulting firm based in Buenos Aires. “But it’s important to remember that the benefits flow in both directions.” Under Nafta, United States agricultural exports to Mexico have expanded nearly fivefold, to $18 billion, with sales of American corn, soybeans and dairy products booming south of the border. “Trade is a multiplier, not a zero-sum game,” Ganley says. “We tend to overstate how much Mexico is dependent on the U.S. But American producers may have more to lose than Mexican producers if Nafta disappears.”

Trump hasn’t killed Nafta yet. But as negotiations over a revamped agreement head into their eighth round, a trade war looms. The United States decision last month to impose steel and aluminum tariffs on most countries hangs over the talks, as do the planned trade sanctions against China. Trump offered temporary exemptions to Canada and Mexico, but only with the proviso that they remake Nafta to his liking. Even within the talks, avocado growers in Mexico and California worry that new anti-dumping duties proposed by the United States side could lead to a tit-for-tat retaliation that would harm both sides. “Once it starts,” Barnard asks, “where does it end?”

So long as global demand keeps growing, though, the avocado seems almost impervious to upheaval at home and abroad. The violence in Michoacán, for example, has not curtailed the avocado industry’s goal of increasing exports to the United States by 15 percent this year. Nor would new tariffs necessarily stop Mexican avocado imports: The United States can’t sate its appetite for avocados elsewhere (no other producer is big enough), and the Mexicans have no other market so big and so near. The price of guacamole and avocado toast would go up again, but consumers already showed last year, during a spike in prices, that they might be willing to pay more. The bigger effect might be that avocado producers heighten their efforts in other developing markets, especially the one with most potential: China.

When I lived in Shanghai, I often bicycled to an open-air grocery store run by a woman everybody knew simply as the avocado lady. She was one of the first grocers in the city to carry what is known in Chinese as “butter fruit,” though her clients were mostly grateful expatriates like me or Chinese returning from abroad. Even on days of heavy storms or bitter cold, this hardy entrepreneur was always in her shop before dawn, wearing rubber boots and tallying prices with a pencil. I never learned her name, but last year, in an unnecessary bit of marketing, she hung a crudely painted sign — “The Avocado Lady” — in front of her store.

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Illustration by Andrew Rae

A decade ago, avocados were virtually unknown in China. The country imported only two tons in 2010; last year, it brought in 32,100 tons. The trend accelerated in 2017 when KFC ran an ad campaign for its avocado wraps called “Green Is Going Red” (to be hot, that is). It featured a pop star sporting an avocado mustache. The wraps didn’t sell so well, but the ads made avocados cool for China’s millennials.

Mexico was China’s largest supplier of avocados until last year, when it was surpassed by Chile. (Peru is moving in quickly, too.) In the future, the competition may come from China itself. With state backing, some Chinese businessmen are developing avocado plantations in the southern province of Guangxi. If they can come up with an avocado that matches the Latin American variety, at a lower cost, then the global market could shift.

For now, though, China is adjusting. Most avocados sold there are hard and green — often to the confusion of the uninitiated. To solve this problem, Barnard’s Mission Produce built China’s first “ripe center” in Shanghai last year, with another to follow in Shenzhen next year. And Barnard is dreaming big. “If I could put four avocado chunks in every bowl of noodle soup in China,” he muses, “we wouldn’t have enough avocados in the world.” Only Mexican production would come close. And who knows? If American trade policy lurches toward a trade war, the farmers under the volcanoes in Michoacán might be eager to start sending their harvests to China instead.

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In Nafta Talks, U.S. Tries to Limit Junk Food Warning Labels


But the Office of the United States Trade Representative, which is leading the Nafta talks on the American side, is trying to head off the momentum. It is pushing to limit the ability of any Nafta member to require consumer warnings on the front of sugary drinks and fatty packaged foods, according to a draft of the proposal reviewed by The New York Times.

The American provision seeks to prevent any warning symbol, shape or color that “inappropriately denotes that a hazard exists from consumption of the food or nonalcoholic beverages.”

Some experts have likened the fight over food labeling to that over tobacco — and the fierce if ultimately unsuccessful opposition and lobbying that industry waged to prevent the imposition of health warnings on packaging. The Trump administration’s position on food labeling reflects the desires of a broad coalition of soft-drink and packaged-foods manufacturers in the United States.

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A kiosk in downtown Santiago, Chile’s capital, in January. Some food products with high levels of sugar, salt or fat are required to carry black warning labels in Chile.

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Victor Ruiz Caballero for The New York Times

The Grocery Manufacturers Association, a food industry trade group that sits on the advisory board to the trade talks, says it favors voluntary labeling programs. The group says it “supports a modernized Nafta that will ensure standards are based on science, minimize unnecessary trade barriers, and benefit consumers in all three countries.”

The organization is fighting to keep Chile’s model from being adopted more widely. Roger Lowe, a spokesman for the group — whose board members include executives from Coca-Cola, PepsiCo and Mondelez International, which owns brands like Oreos, Chips Ahoy and Ritz crackers — said it was concerned about the “evidence and impact” of Chile’s laws.

Emily Davis, a spokeswoman for the United States Trade Representative, said she could not comment on what she called “alleged negotiating documents.” In general, she said, “the United States supports science-based labeling that is truthful and not misleading.”

Proponents of more explicit labels said the Trump administration’s proposal and the corporate pressure behind it hold the potential to handcuff public health interests for decades.

“It is one of the most invasive forms of industrial interference we have seen,” said Alejandro Calvillo, the founder of El Poder del Consumidor, or Consumer Power, a health advocacy group in Mexico that was illegally targeted with government spyware when it fought for a soda tax in Mexico. “The collusion between the industry and the government is not only at the level of spying — it reaches the level of the renegotiation of Nafta and the nation’s own policy against obesity.”

The American proposal conflicts with the guidance from Mexico’s national health institute and from the World Health Organization. Both have recommended that Mexico pass regulations to help combat diabetes, which claims 80,000 lives a year there. That is one of the highest rates in the world — and more than double the record number of homicides in the nation in 2017.

Mexico’s Ministry of Health, which is directly involved in the trade negotiations, said it was reviewing the American proposal with the nation’s health authorities.

Public health experts have hailed Chile’s rules as a new standard. They include a ban on the use of cartoon characters like Tony the Tiger, but the package warnings are considered the most aggressive of the tactics.

“We have shown that a simple message and a symbol is enough to communicate that you should be consuming less of certain foods,” said Dr. Camila Corvalán, a nutritionist at the University of Chile who helped develop the logos. “There’s nothing misleading about a warning logo, and clearly this is what worries the industry.”

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Dr. Simón Barquera, the director of nutrition policy at the Mexico National Institute of Public Health.

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Adriana Zehbrauskas for The New York Times

Food companies have been forced to take note. Over the past two years, more than 1,500 products have been reformulated to make them healthier and to avoid having to carry a warning logo, according to AB Chile, a food industry association.

But passage of the regulation in Chile did not happen without a fight. Eleven countries, led by the United States, raised issues with the proposal before the World Trade Organization.

The Chilean government successfully argued that the measures were a necessary tool to fight the nation’s mounting obesity crisis. Today, Chile’s success has inspired nutrition advocates around the world, including those in Mexico.

“The fact that the industry is freaking out is reassuring, but at the same time it’s worrisome that the U.S. government is trying to defend the position of the food industry,” Dr. Corvalán said.

All told, at least 23 countries use some version of front-of-label consumer education. Some of the warnings already adopted or proposed include black boxes or red octagons that draw attention to foods that regulators deem unhealthy, using less intense imagery but the same approach as cigarette packaging.

Still, public health experts consider most of the labels other than those required by Chile to be relatively weak or ineffective.

“Chile’s warnings are the new frontier,” said Alexandra Jones, a lawyer at the George Institute for Global Health in Australia. “They represent a potentially much more effective public health intervention: Warn people away from the ubiquitous junk foods.”

Heading off pressure for more explicit warnings through the Nafta negotiation is especially appealing to the food and beverage industry because it could help limit domestic regulation in the United States as well as avert a broad global move to adopt mandatory health-labeling standards.

“It kind of kills a law before it can be written,” said Lora Verheecke, a researcher at the Corporate Europe Observatory, a group that tracks lobbying efforts. “And once you put it in one trade agreement, it can become the precedent for all future deals with future countries.”

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A fast-food shop in downtown Santiago in January.

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Victor Ruiz Caballero for The New York Times

In most cases, trade law allows governments to retain the right to make rules in the interest of public health, experts say, but the proposal by the United States appears to be aimed at curbing that.

Ms. Jones of the George Institute said research found that trade policy had also been used to try to block efforts to adopt warnings in Ecuador, Peru, Thailand, Chile and Indonesia. Chile has moved forward as has Ecuador, but with a less aggressive labeling system, Ms. Jones said.

Thailand and Indonesia “appear to have been deterred,” she said, adding, “We call this ‘regulatory chill.’”

One reason that the warning labels are seen as so vital to the efforts to curb obesity is that consumers appear to heed them.

Mexico’s current labeling rules allow for — but do not require — the display of daily intake recommendations of salt, sugar and fat. But they are “indecipherable to consumers” and “totally useless to people,” Ms. Jones said.

Government researchers at Mexico’s National Institute for Public Health recently found that only 17 percent of consumers bothered to look at the front-of-pack labels mandated by law.

In separate research, scientists asked college students to try and crack the current labeling system, which, to use effectively, requires mathematics.

“These college kids couldn’t even do it,” said Dr. Simón Barquera, the director of health research and nutrition policy at the Mexican public health institute. After starting a campaign several years ago to impose a tax on soda, Dr. Barquera and two other backers of the soda tax were targeted by sophisticated spyware sold only to governments on the explicit understanding that it be used strictly against terrorists and criminals.

Mexicans drink on average 167 liters — more than 44 gallons — of soda a year per person, eclipsing what are considered high consumption rates in the United States. In some remote areas of the country, soda is more readily available than clean drinking water.

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