Officials in Charlottesville, Virginia, have voted to divest the city’s operating budget investments from any entity involved in the production of fossil fuels or weapons.

 

WVIR-TV reports the City Council voted 4-1 last week to complete those divestments within the next 30 days.

 

Supporters of divestment argued that weapons and fossil fuels do not align with the city’s strategic plan goals, including being responsible stewards of natural resources.

 

Officials said fossil fuel and weapons companies make up only a small portion of the city’s operating fund investment portfolio. They said the divestment will have little or no financial impact on the city.

 

Several cities worldwide have fully committed to divestment from fossil fuels according to 350.org’s Fossil Free project, including other college towns like Ann Arbor, Michigan, and Berkeley, California.

 

 

 

A U.S. State Department official has called for an end to Kosovo’s taxes on Serbian goods so that European Union-mediated talks on resolving the dispute between the former war foes could resume.

Deputy Assistant Secretary of State Matthew Palmer said Monday full normalization of relations between Serbia and its former province is “essential” for the future of Western Balkans.

Kosovo declared independence in 2008 which Serbia does not recognize. The EU-mediated dialogue has stalled after Kosovo introduced a 100% tariff on all goods coming from Serbia and Bosnia last year.

Palmer said the tariffs present an “obstacle” for the dialogue and should be “lifted or suspended in such a way that would allow for the parties to return to the negotiating table.”

Former Foreign Secretary Boris Johnson is stepping up his campaign to be Britain’s next prime minister by challenging the European Union over Brexit terms.

Johnson told the Sunday Times he would refuse to pay the agreed-upon 39 billion-pound ($50 billion) divorce settlement unless the EU offers Britain a better withdrawal agreement than the one currently on the table.

 

The contest for leadership of the Conservative Party officially begins Monday. The post was vacated Friday by Prime Minister Theresa May, who will serve as a caretaker until a new leader is chosen and moves into 10 Downing Street.

 

The party expects to name its new leader in late July.

 

Johnson, the early frontrunner in a crowded field, told the newspaper he is the only contender who can triumph over the Labour Party led by Jeremy Corbyn and Nigel Farage’s Brexit Party.

 

Johnson is a hard-line Brexit advocate who vows to take Britain out of the EU on the Oct. 31 deadline even if there is no deal in place.

 

He and other contenders say they can get better terms from EU leaders in Brussels than the deal that May agreed to but was unable to push through Parliament. Those failures led to her decision to resign before achieving her goal of delivering Brexit.

 

But EU officials have said they are not willing to change the terms of the deal May agreed to.

 

One of Johnson’s main rivals for the post, Environment Secretary Michael Gove, continued to be sidetracked Sunday by questions about his acknowledged cocaine use when he was a youthful journalist.

 

He told BBC Sunday that he was “fortunate” not to have gone to prison following his admission of cocaine use. He said he was “very, very aware” of the damage drugs can cause.

 

Nominations for the leadership post close Monday afternoon.

 

 

Rising trade tensions between the U.S. and China have sparked worries about the 17 exotic-sounding rare earth minerals needed for high-tech products like robotics, drones and electric cars. 

 

China recently raised tariffs to 25% on rare earth exports to the U.S. and has threatened to halt exports altogether after the Trump administration raised tariffs on Chinese products and blacklisted telecommunications giant Huawei.  

  

With names like europium, scandium and ytterbium, the bulk of rare earth minerals are extracted from mines in China, where lower wages and lax environmental standards make production cheaper and easier.  

  

But trade experts say no one should panic over China’s threats to stop exporting the elements to the U.S. 

 

There is a U.S. rare minerals mine in California. And Australia, Myanmar, Russia and India are also top producers of the somewhat obscure minerals. Vietnam and Brazil both have huge rare earth reserves.  

  

“The sky is not falling,” said Mary B. Teagarden, a China specialist, professor and associate dean at the Thunderbird School of Global Management in Phoenix. “There are alternatives.” 

 

Simon Lester, associate director of the center for trade policy studies at the Cato Institute think tank in Washington, agreed. “Over the short term, it could be a big disruption, but companies that want to stay in business will find a way,” he said.    

Although the U.S. is among the world’s top 10 countries for rare earths production, it’s also a major importer of the minerals, looking to China for 80% of what it buys from other countries, according to the U.S. Geological Survey. China last year produced 120,000 metric tons of rare earths, while the United States produced 15,000 metric tons.  

Mountain Pass Mine

 

The United States also depends on China to separate the minerals pulled from Mountain Pass Mine, the sole rare earths mine in the U.S., which was bought two years ago by the Chicago-based JHL Capital Group LLC .  

  

“We need to develop a U.S.-based supply chain so there is no possibility we can be threatened,” said Ryan S. Corbett, managing director of JHL Capital. 

 

The mine’s top products are neodymium and praseodymium, two elements that are used together to make the lightweight magnets that help power electric cars and wind turbines and are found in electronics such as laptop hard drives. 

 

Mountain Pass, located in San Bernardino County, Calif., was once the top supplier of the world’s rare earth minerals, but China began taking over the market in the 1990s and the U.S. mine stopped production in 2002.  

  

Mountain Pass later restarted production, only to close again amid a 2015 bankruptcy. Corbett said extraction resumed last year after JHL Capital purchased the site with QVT Financial LP of New York, which holds 30%, and Shenghe Resources Holding Co. Ltd. of China, a nonvoting shareholder with 9.9%.  

  

Since then, Mountain Pass has focused on achieving greater autonomy with a $1.7 billion separation system set to go online late next year that would allow it to skip sending rare earths ore to China for that step. 

 

China could hurt itself in the long run by cutting off the U.S., specialists said.  

  

David Merriman, a rare earths analyst for Roskill commodity research in London, said that during a similar trade flap with China in 2011, Japan began looking to other countries, including Australia, for the minerals needed to manufacture electronics.   

Australian rare earths production giant Lynas Corp. Ltd. this month announced a proposed deal with Blue Line Corp. of Texas for a separation facility at an industrial site in Hondo, Texas.  

Other deposits

  

There may be other options, too. Deposits of rare earths have been detected in other U.S. states, including Wyoming and Alaska, as well in several remote areas of Canada. The Interior Department is calling for more prospecting and mining of “critical minerals,” including on public lands currently considered off-limits, and even in oceans. 

 

“We have to be more forward-thinking,” said Alexander Gysi, an assistant professor in geology and geological engineering at the Colorado School of Mines in Golden. “It would be better for the U.S. to have a greater range of sources for rare earths.”

Financial leaders of the Group of 20 gathered Saturday to brainstorm ways to adapt global finance to an age of trade turmoil and digital disruptions.

The central bank governors and other financial regulators meeting in this southern Japanese port city also flagged risks from upsets to the global economy as Beijing and Washington clash over trade and technology.

Asked if other financial leaders attending the meetings in Fukuoka were raising concerns over the impact on global markets and trade from President Donald Trump’s crusade against huge, chronic U.S. trade deficits, especially with China, U.S. Treasury Secretary Steven Mnuchin said no.

Trump and members of his administration contend that the ripple effects of the billions of dollars in tariffs imposed by Washington on Chinese exports over the past year are creating new business opportunities for other businesses in the U.S. and other countries.

But Mnuchin acknowledged that growth has been slowing in Europe, China and other regions.

“I’m hearing concerns if we continue on this path there could be issues. There will be winners and losers,” he said.

The G-20 officials were expected to express their support for adjusting monetary policy, for example by making borrowing cheaper through interest rate cuts, in a communique to be issued as meetings wrap up on Sunday.

Their official agenda on Saturday was focused on longer-term, more technical issues such as improving standards for corporate governance, policing cyber-currencies and reforming tax systems to ensure they are fair for both traditional and new, online-based industries.

Ensuring that governments capture a fair share of profits from the massive growth of businesses like Google and Amazon has grown in importance over the many years the G-20 finance chiefs have been debating the reforms aimed at preventing tax evasion and modernizing policies to match a financial landscape transformed by technology.

One aim is to prevent a “race to the bottom” by countries trying to lure companies by offering unsustainably and unfairly low tax rates as an incentive.

Mnuchin said he disagreed with details of some of the proposals but not with the need for action.

“Everyone, we are now facing a turning point,” Japanese Finance Minister Taro Aso told the group. “This could be the biggest reform of the long established international framework in over 100 years.”

Some European members of the G-20, especially, want to see minimum corporate tax rates for big multinationals. France and Britain have already enacted stop-gap tax systems for digital businesses, but they are not adequate, said French Finance Minister Bruno Le Maire.

“For the time being there is no fair taxation of this new economic model,” Le Maire said, adding that the hope is to have an agreement by the year’s end.

The issue is not confined to the wealthiest nations. Indonesia, a developing country of 260 million with more than 100 million internet users, is also struggling to keep up.

“The growth has been exponential but we cannot capture this growth in our GDP as well as in our tax revenue,” said Indonesian Finance Minister Mulyani Indrawati.

Mobile banking, big data, artificial intelligence and cloud computing are among many technologies that are expanding access to financial services for many people who in the past might not have even used banks.

But such innovations raise questions about protecting privacy and cybersecurity, Aso said.

“We need to stay vigilant against risks or challenges,” Aso said.

Japan, the world’s third-largest economy, is hosting the G-20 for the first time since it was founded in 1999. The venue for the annual financial meeting, Fukuoka, is a thriving regional hub and base for start-ups.

The G-20 groups include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.

One down, still others to go. President Donald Trump claimed a victory after Washington and Mexico agreed on measures to stem the flow of Central American migrants into the United States.

Trump called off plans to impose a 5% tax on Mexican exports, and Treasury Secretary Steven Mnuchin, speaking to reporters Saturday in Fukuoka on the sidelines of a meeting of financial leaders of the Group of 20 major economies, urged China to follow suit and return to stalled negotiations.

Mnuchin said he planned to have a private conversation with the head of China’s central bank, Yi Gang. In a G-20 group meeting later in the day, the two were seen exchanging friendly remarks, but there were no fresh signs Beijing is ready to compromise in the dispute over trade and technology.

“From our perspective of where we are now, it is a result of them backtracking on significant commitments,” Mnuchin said. “I don’t think it’s a breakdown in trust or good or bad faith. … If they want to come back and complete the deal on the terms we were negotiating, that would be great.”

Mnuchin said he had no direct message to give to Yi, who has participated in the 11 rounds of talks so far on resolving the dispute between the world’s two largest economies over technology and trade.

He said there were no plans for trade talks in Washington or Beijing before Presidents Donald Trump and Xi Jinping are due to meet in Osaka for the G-20 summit on June 28-29.

“This will be a one-on-one with Gov. Yi to talk alone about the trade issues,” Mnuchin said. But he added, “I would expect the main progress will be at the G-20 meetings of the presidents.”

The Trump administration began slapping tariffs on imports of Chinese goods nearly a year ago, accusing Beijing of using predatory means to lend Chinese companies an edge in advanced technologies such as artificial intelligence, robotics and electric vehicles. Those tactics, the U.S. contends, include hacking into U.S. companies’ computers to steal trade secrets, forcing foreign companies to hand over sensitive technology in exchange for access to the Chinese market and unfairly subsidizing Chinese tech firms.

The deal with Mexico helps alleviate uncertainty over the deal Washington recently reached on revising the North American Free Trade Agreement. The new U.S.-Mexico-Canada deal has been heading toward a vote in Congress and might have been stymied by new tariffs. But the U.S. is still negotiating new trade deals with Japan after withdrawing from a Pacific Rim arrangement, the Obama-era proposed Trans-Pacific Partnership.

America’s huge trade deficit with China — a record $379 billion last year — is one factor driving Trump’s frustrations with Beijing.

The United States now is imposing 25% taxes on $250 billion in Chinese goods. Beijing has counterpunched by targeting $110 billion worth of American products, focusing on farm goods such as soybeans in a deliberate effort to inflict pain on Trump supporters in the U.S. heartland.

The U.S. side has been preparing to expand retaliatory tariff hikes of 25% on another $300 billion of Chinese products, and Mnuchin indicated it was prepared to take that step if negotiations with Beijing fail. But he said Trump had not yet made a decision on that, suggesting room for further delays depending on the outcome of his discussion with Xi later this month.

“As the president has said, if we can get the right agreement, that’s great. If we can’t, we will proceed with tariffs,” he said.

 

In May, Arkansas became the latest state to cash in on the sale of medical marijuana. Lines of people wrapped around a newly opened dispensary, drawing in customers from all four corners of the Southern U.S. state.

“I see them standing outside the window with a big smile on their face,” said Bud Watkins, manager of Doctor’s Orders RX in Hot Springs. “They love it.”

In the first week of business, Arkansan dispensaries sold more than 22.6 kg (50 pounds) of cannabis in nearly 5,000 transactions.

According to Marijuana Business Daily, that revenue will contribute to a growing national market of retail medical and recreational cannabis that is expected to eclipse $12 billion in sales by the end of 2019.

​Business good, money managing isn’t

Passed in the 2016 general election by popular vote, the Arkansas Medical Marijuana Amendment made the state one of only a few in the South to allow legal purchase of the drug. It joined, however, a majority of U.S. states that had passed similar legislation.

While business is doing well, managing the money is difficult. Despite more states coming on board, plant-touching businesses are still operating as mostly cash-only enterprises.

Plant-touching businesses handle the cannabis plant itself, either cultivating, distributing or processing it. These tend to be the businesses most people think of when they imagine the cannabis industry. Plant-touching businesses are generally subject to the strictest regulations and licensing processes in the industry, as well.

“The vast majority of the businesses that touch the plant have a very difficult time finding banking partners,” said Sal Barnes, a director at Marijuana Policy Group. “The majority of those that do (bank) are going to be through credit unions and state banks, especially in California and Colorado, where we have what we like to call an adult-use market, and that is essentially just a glorified checking account.”

​Federally outlawed since 1970

Since 1970, cannabis has been officially outlawed at a federal level for any use, including medical. This means that federally insured banks operate under prohibitive restrictions about doing any business with any plant-touching businesses, which affects everyone along the supply chain, from the growth of the plant to the production or sale of a cannabis gummy.

In spite of this, states have increasingly passed legislation to allow for the legal purchase, putting them at odds with the federal government.

“The industry is hindered. Right now, the current as-is method is not safe. You literally have companies hiring ex-Marines to guard their cash, and that just doesn’t fly,” Barnes said.

Not having access to banking services means that cannabis businesses must pay for everything in cash, from salaries to taxes. And, because the cash is usually stored on-site, robberies are very common.

“We have one of the most secure buildings in the state,” said Watkins, who didn’t want to go into too many details.

Marijuana in the mainstream

Legalizing marijuana is no longer considered a fringe issue. According to a 2018 Gallop poll, two-thirds of Americans support legalizing marijuana.

There is also bipartisan traction in Congress. In March, a U.S. House of Representatives committee passed the Secure and Fair Enforcement Banking Act of 2019, more commonly known as the SAFE Banking Act. It would provide legal protection from persecution for banks and federally regulated creditors that do business with state-legal cannabis businesses.

State attorneys, including Arkansas’ Leslie Rutledge, are now also applying pressure to see changes in federal law.

“After careful consideration and speaking with members of the banking industry, as well as our state regulatory authority, the attorney general felt that it was important for the office to support the SAFE Banking Act to help minimize fraud, tax evasion and money laundering that arises from cash only businesses,” said Rutledge’s office in an emailed statement.

Earlier this month, 38 Republican and Democratic state attorneys general sent a letter in support of the SAFE Banking Act.

“This is not just an issue facing Arkansans, but affects a majority of states,” Rutledge’s office stated. “If passed, this legislation will help Arkansas minimize the dangerous problems seen by other states, such as burglaries and robberies of dispensaries who can maintain a large quantity of cash, while at the same time, allowing legitimate businesses and service providers to also conduct business within the regulated banking system.”

As for whether the SAFE Banking Act eventually makes it to a vote, or future federal bills attempt to change banking regulations, Barnes said it’s only a matter of time.

“Next year, no. Next two to three years, possibly. Within the next four to five, definitely,” he said.

U.S. Treasury Secretary Steven Mnuchin said Saturday that he plans to speak privately with China’s central bank governor about trade on the sidelines of annual Group of 20 finance talks in southern Japan, but has no direct message to give him.

Mnuchin and Yi Gang, chairman of the People’s Bank of China, are to hold routine talks on various issues and then break away for their discussion on trade. Yi, he noted, has participated in now-stalled talks between Washington and Beijing over the trade and technology dispute between the two largest economies.

“This will be a one-on-one with Gov. Yi to talk alone about the trade issues,” Mnuchin told reporters in the Japanese city of Fukuoka. But he added, “I would expect the main progress will be at the G-20 meetings of the presidents.”

He said there were no plans for trade talks in Washington or Beijing before Presidents Donald Trump and Xi Jinping are to meet in Osaka for the G-20 summit June 28-29.

​Trump tariffs

The Trump administration began slapping tariffs on imports of Chinese goods nearly a year ago, accusing Beijing of using predatory means to lend Chinese companies an edge in advanced technologies such as artificial intelligence, robotics and electric vehicles. Those tactics, the U.S. contends, include hacking into U.S. companies’ computers to steal trade secrets, forcing foreign companies to hand over sensitive technology in exchange for access to the Chinese market and unfairly subsidizing Chinese tech firms.

Trump has also complained repeatedly about America’s huge trade deficit with China, a record $379 billion last year.

The United States now is imposing 25% taxes on $250 billion in Chinese goods. Beijing has counterpunched by targeting $110 billion worth of American products, focusing on farm goods such as soybeans in a deliberate effort to inflict pain on Trump supporters in the U.S. heartland.

The U.S. side has been preparing to expand retaliatory tariff hikes of 25% on another $300 billion of Chinese products, and Mnuchin indicated it was prepared to take that step if negotiations with Beijing fail. But he said Trump had not yet made a decision on that, suggesting room for further delays depending on the outcome of his discussion with Xi later this month.

​‘Hearing concerns’

Asked if other financial leaders attending the meetings in Fukuoka were raising the issue, Mnuchin said no. But he acknowledged the slowdown in Europe, China and other regions.

“I’m hearing concerns if we continue on this path there could be issues. There will be winners and losers,” he said.

Mnuchin and other officials in the Trump administration assert that the winners from the tariffs standoff, including the United States, will benefit from investments by companies moving their operations out of China to avoid the tariffs.

Countries were welcoming news that after a flurry of negotiations, Trump said he would refrain from imposing 5% tariffs on products from Mexico after it “agreed to take strong measures” to stem the flow of Central American migrants into the United States.

The tariffs that had been scheduled for Monday were “indefinitely suspended” after the two sides signed an agreement, he said in a tweet.

“It’s a good thing,” Japan’s central bank governor, Haruhiko Kuroda, told reporters.

On the agenda: taxes and crime

The agenda for the G-20 talks in Fukuoka on Saturday were mainly concerned with reforms of tax policies, combatting money laundering and cybercrimes, and innovations in financial technologies.

Japan is hosting the G-20 for the first time since it was founded in 1999.

Uber is parting ways with two of its top executives less than a month after the company’s rocky stock market debut.

CEO Dara Khosrowshahi told employees in an email Friday that he plans to be more involved in day-to-day operations now that the initial public offering of stock has passed. He said the heads of the company’s global rides and food-delivery teams will report directly to him, and Chief Operating Officer Barney Harford will leave the company.

Khosrowshahi said he plans to combine the marketing, communications and policy teams, and Chief Marketing Officer Rebecca Messina also will leave the company.

“It’s increasingly clear that it’s crucial for us to have a consistent, unified narrative to consumers, partners, the press and policymakers,” Khosrowshahi said.

Stock struggling

San Francisco-based Uber’s stock has struggled since its initial public offering last month. The company posted strong revenue growth in its first quarter as a public company, but also $1 billion in losses.

The stock closed Friday down 76 cents, or 1.7%, at $44.16. It went public at $45 a share.

“This is Dara asserting more control over the company and taking over the wheels at a time the company really needs to execute in the eyes of the public investors,” said Dan Ives, managing director of equity research at Wedbush Securities. “It’s a double-edged sword for him, because it’s going to put that much more pressure on the success of Uber riding on his shoulders.”

FedEx Corp. Friday decided not to renew its contract with Amazon.com Inc. for U.S. cargo delivery through FedEx Express, the unit that delivers packages on planes, a move that reflects the broader trend of the e-commerce company moving services in-house.

Amazon has been building out its own delivery network of planes, trucks and vans, a development that is seen posing a potential long-term challenge to FedEx and delivery rival United Parcel Service Inc., both of which count Amazon as a customer.

FedEx described the decision as a strategic move that would allow it to focus on the broader e-commerce market, a group that would include rivals of Amazon scaling up one- and two-day delivery. FedEx forecast that the market would double to 100 million packages per day in the United States by 2026.

“Amazon had a better rate with UPS, so it made no sense for them to use FedEx,” said Dean Maciuba, director of consulting services at Logistics Trends and Insights.

Other FedEx contracts unaffected

The decision does not impact any existing contracts between Amazon and other FedEx business units or relating to international services, the package delivery company said.

Amazon accounted for less than 1.3% of FedEx’s revenue last year, the company said in its statement.

Analysts said that the ending of FedEx Express’ contract with Amazon is likely to benefit UPS, which gets a relatively larger share of revenue from the online retailer.

“We would expect UPS to report much stronger volume growth in next-day air products over the next several quarters,” Bernstein analyst David Vernon wrote in a client note.

UPS volumes have been boosted by Amazon’s move to one-day shipping for its paid Prime service, and “this news means more growth in lower priced, lower weight, lower service level … domestic express products at UPS,” Vernon said.

Amazon building its fleet

In recent years, Amazon has steadily expanded its fleet of delivery aircraft, which Air Transport Services Group Inc. and Atlas Air Worldwide Holdings have operated.

The company is investing $1.5 billion to build an air cargo hub in northern Kentucky, setting it up to rely less on others for air shipping.

Amazon has 40 leased cargo planes and has signed an agreement to bring 10 more planes into the fleet in the next two years.

“We respect FedEx’s decision and thank them for their role serving Amazon customers over the years,” Amazon said in an emailed statement.

Shares of FedEx, which rose as much as 1.65% earlier in the session, pared gains and closed up 0.75% at $158.02. Amazon shares ended the day 2.8% higher at $1,804.03.

UPS shares closed up 0.2% at $98.23 after rising as much as 1% earlier in the session.

Cindy Saine at the State Department contributed to this report. 

 

U.S. President Donald Trump said late Friday that the United States and Mexico had reached a deal on migration to avert tariffs.

“I am pleased to inform you that The United States of America has reached a signed agreement with Mexico. The Tariffs scheduled to be implemented by the U.S. on Monday, against Mexico, are hereby indefinitely suspended,” he tweeted.

“Mexico, in turn, has agreed to take strong measures to stem the tide of Migration through Mexico, and to our Southern Border. This is being done to greatly reduce, or eliminate, Illegal Immigration coming from Mexico and into the United States,” Trump said.

Earlier Friday, Trump had tweeted that there was a “good chance” the two sides would reach a deal to avert tariffs over the surge of migrants across the U.S. border. However, he added, “If we are unable to make the deal, Mexico will begin paying Tariffs at the 5% level on Monday!”  

U.S. and Mexican officials returned to the negotiating table Friday for a third day of talks to find a way to stem the migrant flow.

Effect on hiring?

Trump’s trade wars with Mexico and other countries appeared to have spooked American companies into putting the brakes on hiring. They added just 75,000 jobs in May, far fewer than the 180,000 economists expected, the Labor Department reported Friday.  

 

Although the jobless rate held steady at a 50-year low of 3.6%, Friday’s figures were the latest signal that the U.S. economy, while healthy, is weakening. Manufacturers, which are particularly sensitive to trade disputes, added only 3,000 jobs, extending an anemic streak of hiring in the sector.

U.S. and Mexican officials discussed a deal calling for Mexico to sharply increase patrols of its border with Guatemala to curb migration, The Washington Post reported, with the deployment of 6,000 National Guard troops. The newspaper said Mexico and the U.S. could overhaul asylum rules throughout the region, requiring Central Americans to first seek refuge in Mexico rather than traveling through it to reach the U.S. 

 

With such a plan in place, the United States could send Guatemala asylum seekers to Mexico, and those from Honduras and El Salvador to Guatemala.  

Earlier Friday in Mexico City, President Andres Manuel Lopez Obrador reiterated his own optimistic position. 

Causes of ‘chaos’

 

“There is dialogue and an agreement can be reached,” Lopez Obrador said. “I’m optimistic we can achieve that.” He added it was a mistake, though, for the U.S. to link migration with trade, saying again that migration must be addressed by solving social and economic problems in Central America.

“The causes of the migratory chaos aren’t being analyzed, only the effects,” he said.  

U.S. authorities have said more than 100,000 undocumented migrants, mostly from the three Central American countries, have crossed into the United States in recent months. The U.S. government announced Wednesday that in May, 144,000 migrants were detained at the border, up 32% from April. It was the highest monthly figure in 13 years. 

 

Some Republican lawmakers, normally close political allies of Trump, had said they would try to block any potential tariffs with legislation, which would have drawn wide support from opposition Democrats. Numerous lawmakers feared rising consumer costs for Americans if the tariffs were imposed on Mexican goods, including cars and numerous food products exported to the U.S.

Finance ministers and central bank governors meeting in Japan this weekend will try to make headway on long-standing issues such as how much global giants like Facebook and Amazon should pay in taxes. 

 

They’re likely to end up focusing a large share of their attention on how to keep global growth on track when the world’s two biggest economies are entrenched in an escalating trade war. 

 

U.S. Treasury Secretary Steven Mnuchin, who has headed trade talks with Beijing along with U.S. Trade Representative Robert Lighthizer, was due to meet with Yi Gang, governor of China’s central bank, on the sidelines of the G-20’s annual financial gathering in Fukuoka in southern Japan. 

 

But it was unclear if their meeting, a possible prelude to talks at the G-20 summit later this month between President Donald Trump and Chinese President Xi Jinping, might lead to a restart of those talks after weeks of stalemate. 

China’s ability to endure

 

As the Trump administration prepares to expand retaliatory tariff hikes of up to 25% to another $300 billion of Chinese products, Beijing has sought to highlight China’s capacity to endure and overcome hardship.  

 

Yi told Bloomberg Television in an interview broadcast Friday that he expected the meeting with Mnuchin to be “difficult.” But he said China’s central bank, the People’s Bank of China, had plenty of room to maneuver to help keep the economy growing despite the pounding the country’s export manufacturers are taking as the toll from higher tariffs mounts. 

 

Speaking Thursday in France, Trump said he plans to make a decision about ramping up tariffs on China after speaking with Xi at the summit in Osaka at the month’s end.

“I will make that decision, I would say, over the next two weeks — probably right after the G-20,” he said.

The Trump administration began slapping tariffs on imports of Chinese goods nearly a year ago, accusing China of resorting to predatory tactics to give Chinese companies an edge in advanced technologies such as artificial intelligence, robotics and electric vehicles. These tactics, the U.S. contends, include hacking into U.S. companies’ computers to steal trade secrets, forcing foreign companies to hand over sensitive technology in exchange for access to the Chinese market and unfairly subsidizing Chinese tech firms.

Trade deficit

Trump has also complained repeatedly about America’s huge trade deficit with China — a record $379 billion last year — which he blames on weak and naive negotiating by previous U.S. administrations.

The United States now is imposing 25% taxes on $250 billion in Chinese goods. Beijing has counterpunched by targeting $110 billion worth of American products, focusing on farm goods such as soybeans in a deliberate effort to inflict pain on Trump supporters in the U.S. heartland.

Unease over trade tensions and their potential impact on other economies has deepened since Trump announced he would impose a 5% tax on Mexican products starting Monday — a tax that would reach 25% by Oct. 1 if the Mexican government fails to stop the flow of Central American migrants into the United States.

While the tariffs have taken a minor toll on the U.S. economy, the uncertainty and slowing demand are rippling across the globe. Earlier this week, the World Bank downgraded its forecast for the global economy in light of trade conflicts, financial strains and unexpectedly sharp slowdowns in wealthier countries.

Slashing rates

The weakness has prompted central banks, most recently in Australia and India, to slash interest rates to fend off recession. 

 

Japan, hosting the G-20 for the first time since it was founded in 1999, has plumbed the limits of that strategy. The Bank of Japan’s policy interest rate has been at minus 0.1% for years, to keep credit cheap and support a modest pace of expansion.

As the trade conflicts percolate, the officials gathering in Fukuoka, a bustling port city on the southern main island of Kyushu, will carry on chipping away at financial reforms and other perennial issues. 

 

Some European members of the G-20, especially, want to see minimum corporate tax rates for big multinationals. 

 

Japan’s Kyodo News service reported Friday, citing a draft communique, that the finance leaders are also discussing the issue of how developing countries are handling debts incurred through major construction projects, efforts to combat money laundering, and efforts to prevent terrorist groups from using cybercurrencies as a source of funding.

U.S. job growth slowed sharply in May and wages rose less than expected, suggesting the loss of momentum in economic activity was spreading to the labor market, which could increase calls for the Federal Reserve to cut interest rates this year.

The cool-off in hiring reported by the Labor Department on Friday was even before a recent escalation in trade tensions between the United States and two of its major trading partners, China and Mexico. Economists have warned that the trade fights could undermine the economy, which will celebrate 10 years of expansion next month, the longest on record.

The economy thus far has been largely resilient to the trade war with China. President Donald Trump in early May slapped additional tariffs of up to 25% on $200 billion of Chinese goods, which prompted retaliation by Beijing.

Last week, Trump said he would impose a tariff on all goods from Mexico in a bid to stem the tide of migrants across the U.S.-Mexican border. Talks are ongoing to prevent the duties from kicking in at 5% on June 10.

Nonfarm payrolls increased by 75,000 jobs last month, the government said in its closely watched employment report, falling below the roughly 100,000 needed per month to keep up with growth in the working-age population.

The economy created 75,000 fewer jobs in March and April than previously reported. Economists polled by Reuters had forecast payrolls rising by 185,000 jobs last month.

May’s disappointing job growth was flagged by a report on Wednesday from payrolls processing firm ADP showing the smallest gain in private payrolls in nine years last month. Another report this week showed a drop in online ads by businesses looking for help.

Last month’s slowdown in job gains, however, probably understates the health of the labor market as measures such as weekly applications for unemployment benefits and the Institute for Supply Management’s services employment gauge have suggested underlying strength.

Monthly wage growth remained moderate in May, with average hourly earnings increasing six cents, or 0.2% following a similar gain in April. That lowered the annual increase in wages to 3.1% from 3.2% in April. The average workweek was unchanged at 34.4 hours last month.

The moderation in wage gains, if sustained could cast doubts on the Fed’s optimism that inflation would return to the U.S. central bank’s 2% target. Financial markets are pricing in two rate cuts this year.

The tepid employment report added to soft data on consumer spending, business investment, manufacturing and homes sales in suggesting the economy was losing momentum in the second quarter following a temporary boost from exports, inventory accumulation and defense spending. Growth is cooling as the massive stimulus from last year’s tax cuts and spending increases fades.

The Atlanta Fed is forecasting gross domestic product rising at a 1.5% annualized rate in the second quarter. The economy grew at a 3.1% pace in the first quarter.

The unemployment rate remained near a 50-year low of 3.6% in May. The jobless rate was partly pushed down by workers dropping out of the labor force over the last four months.

Employment gains in May slowed across all sectors. Manufacturing payrolls increased by 3,000 last month.

Manufacturing employment will be watched closely for signs of the impact of the tariffs on the economy. Factory output has been weak and sentiment dropped to a 31-month low in May, with manufacturers worried mostly about the trade tensions. Employers in the construction sector hired 4,000 workers in May. Government payrolls fell by 15,000 jobs.

 

Russian President Vladimir Putin has criticized the United States for using pressure and sanctions to maintain its economic supremacy.

Speaking Friday at an investment forum in St. Petersburg, Putin said the U.S. attempt to “spread its jurisdiction to the entire world” challenges the global order.

He said globalization “becomes a parody of itself when common international rules are replaced with laws, administrative and judicial mechanisms of one country or a group of countries.”

Flanked by Chinese President Xi Jinping at the forum’s panel, Putin said the U.S. action against Chinese telecom giant Huawei represented an attempt to “blatantly squeeze it out of the global market.”

It is, he said, “the first technological war of the digital era.”

Putin warned that the “fragmentation of the global economic space, the policy of unrestrained political egoism” paves the way to “endless conflicts and trade wars … fights without rules between all.”

He specifically criticized U.S. attempts to hamper the construction of the Nord Stream 2 pipeline intended to carry Russian natural gas to Germany and further on in Europe, saying it reflects the U.S. desire to win advantages for itself.

Xi said Russia and China would coordinate their efforts in the energy sphere more closely.

Liz Hung supports a lot of the imaginative concepts being discussed to make Vietnam “greener” economically and in terms of urban planning.

 

Consider traffic lights. Hung described how government authorities could collect smartphone data to see which streets are crowded, and then calibrate the stoplights to optimize traffic flow.

 

Hung and others in the private sector are giving Vietnamese officials their wish list for a green economy, from more renewable energy to buildings that collect rain water for use.

 

“Road congestion costs us at least 2 to 5% of our [gross domestic product] growth every year because of the time we lost or the high transportation cost, so that is why being smart [in] mobility is very crucial,” said Hung, who is CBRE associate director of Asia Pacific Research.

 

Hung’s comment highlights the link between good city planning and economic benefits.

Emulating China, Australia

 

There is also a larger debate about whether the economic benefits outweigh the costs of going green.

 

There is a financial cost of technology to make Vietnam more efficient. But there also is a security cost, as “smart devices,” like lights connected to the internet, have looser security settings that make them easier to hack.

 

In looking for inspiration for Vietnam’s future, Hung looked at places from Hangzhou, China, where she heard about the traffic data, to Adelaide, Australia, where authorities installed smart sensors in trash bins, which alert garbage collectors when the bins are nearly full.

 

If the idea is to increase efficiency, Vietnam should think about energy use, said Tomaso Andreatta, vice chair at the European Chamber of Commerce in Vietnam.

 

Last month, the chamber held a forum on sustainable cities. In addition to rooftop solar panels and wind turbines, some cities are exploring ways to create energy from things that would otherwise be tossed out.

 

Trash can be burned, for example, to boil water for steam generators that produce electricity, a process known as waste-to-energy. This does risk increasing carbon emissions or decreasing incentives for recycling, however.

Aiming for zero waste

 

“More and more we realize that resources are limited, and producing waste destroys the quality of life,” Andreatta said. “Therefore, there’s been a movement worldwide to reducing waste to an absolute minimum, ideally zero.”

 

He went on to say, “The rapid development of the middle class and its lifestyle, which includes intensive air conditioning use, accounts for a considerable proportion of energy consumption growth.”

 

It may be the middle class that benefits most from a greener Vietnam, where the private sector steps in to create greater efficiencies, when the government is not involved.

 

Property developers are building enclosed communities where sustainability is part of the design, whether it’s motion-detecting lights, or insulation that keeps indoor temperatures manageable. One developer introduced pollution warnings. Another made a transportation app just for its residents.

 

But what about those who are not lucky enough to live in a gated community?

 

Government officials say they are listening to proposals across all sectors. They say that as Vietnam faces a major threat from climate change, it needs to make greater efforts at green planning.

 

“Climate change will have a big impact on the region,” said Huynh Xuan Thu, deputy chief officer of the Ho Chi Minh City Department of Architecture and Urban Planning.

 

Some of the ideas, such as a country full of electric cars, may be a pipe dream or years down the road. But Vietnam is getting started on some of the proposals.

 

In Ho Chi Minh City, officials are looking at traffic sensors and gathering data on congestion, which they hope to reduce through technology in the near future.

 

Italian-U.S. carmaker Fiat Chrysler on Thursday pulled the plug on its proposed merger with Renault, saying negotiations had become “unreasonable” because of  political resistance in Paris.  

 

Fiat Chrysler Automobiles, or FCA, had stunned the markets last week with a proposed “merger of equals” with the French group that would — together with Renault’s Japanese partners, Nissan and Mitsubishi Motors — create an auto giant spanning the globe.  

 

The French government, which controls 15 percent of Renault, gave the deal a conditional green light, with analysts suggesting it wanted more control over the combined group alongside Fiat’s Agnelli family. 

 

FCA said late Wednesday that it “remains firmly convinced of the compelling, transformational rationale” of the tie-up, which it said was “carefully balanced to deliver substantial benefits to all parties.”

 

“However it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully,” it said in a statement.  

 

On Thursday, FCA chief John Elkann stood by the decision to start, and then leave, the merger talks. 

 

“When it becomes clear that the conversations have been brought to the point beyond which it becomes unreasonable to go, it is necessary to be equally brave to interrupt them,” Elkann wrote in a letter to employees published by Italian media.  

Renault expressed its “disappointment” at the turnabout. 

 

“We view the [Fiat] opportunity as timely, having compelling industrial logic and great financial merit, and which would result in a European-based global auto powerhouse,” it said in a statement. 

 

The combined group, including Nissan and Mitsubishi, would have been by far the world’s biggest, with total sales of 15 million vehicles, compared with both Volkswagen and Toyota, which sell around 10.6 million apiece. 

 

Shares in Renault plunged by more than 6 percent on the Paris stock exchange. In Milan, FCA shares also initially slid but then recovered to close up 0.1 percent.

Nissan holds key

Despite the verbal sparring that erupted after FCA’s announcement, industry experts did not rule out talks being resumed.  

 

“The collapse of the proposed Fiat Chrysler/Renault merger leaves both firms exposed to the shifting dynamics of a sector at a crossroads,” Ilana Elbim, credit analyst for Hermes Investment Management, said in a note.  

 

Pointing to falling sales volumes in major auto markets, she said “mega-mergers designed to save on capital expenditures remain inevitable.” 

 

On Tuesday, Renault’s board had said it was studying FCA’s offer “with interest,” but held off final approval pending further deliberations.  

 

By Wednesday, all Renault directors had come around in favor of the merger, with the exception of the employee representative affiliated with the powerful CGT union and two from Nissan who abstained, according to a source close to Renault.   

The two Nissan directors were said to have asked for more time to approve the deal. There was no official comment from Nissan headquarters in Tokyo. 

 

Relations between Renault and Nissan have come under strain since the arrest in November of their joint boss, Carlos Ghosn, who awaits trial in Japan on charges of financial misconduct. 

 

French Finance Minister Bruno Le Maire had laid down conditions for the tie-up with FCA, insisting there be no plant closures and that the Renault-Nissan alliance be preserved.  

 

The Renault source said Le Maire had asked for another board meeting next Tuesday following his return from a trip to Japan, where he was to discuss the proposal with his Japanese counterpart at a meeting of G-20 finance ministers.  

Blame game

A source close to FCA said it was the “sudden and incomprehensible” objections by Le Maire’s ministry that had caused the deal to collapse. 

 

Italian Deputy Prime Minister Luigi Di Maio said: “When politics tries to intervene in economic procedures, they don’t always behave correctly, I don’t want to say any more.”   

But Le Maire stressed that, of his conditions, only the explicit approval of Nissan remained to be secured, while aides denied that the ministry had played politics with the deal. 

 

A source close to the finance ministry said the French government “regrets the hasty decision of FCA.” 

 

“Despite significant progress, a short delay was still necessary so that all conditions set by the state could be met,” it said. 

 

Le Maire indicated the French government was amenable to changes at Renault despite FCA’s U-turn. 

 

“We remain open to the prospect of industrial consolidation, but once again, in calmness, without haste, to guarantee the industrial interests of Renault and the industrial interests of the French nation,” he told the French parliament. 

 

For his part, Elkann said FCA “will continue to be open to opportunities of all kinds that offer the possibility of strengthening and accelerating the realization of this strategy and creating value.” 

The U.S. economy could be weakened by escalating trade wars or a sudden downturn in global financial markets, the International Monetary Fund (IMF) warns.

In an annual review of the U.S. economy, the IMF said it was on a 2.6 percent growth track this year, greater than the 2.3 percent growth rate forecast in April.

But the report also said the U.S. economy appears to be increasingly vulnerable amid investor concern over America’s trade wars, noting they could trigger worsening global financial conditions.

The IMF criticized U.S. President Donald Trump’s administration for efforts to remake global trade relationships through higher tariffs and said it was “especially important” to resolve the trade dispute with China.

The report said the U.S. economy has recovered from the financial crisis that began in 2008, but millions of Americans did not benefit from the recovery. Household income increased a meager 2.2 percent from the end of the last century, the report said, while the U.S. economy expanded 23 percent per capita during the same period.

“The poorest 40 percent of households have a level of net wealth that is lower today than it was in 1983,” the report said.

The report called on the Trump administration to avert an economic slowdown by adopting measures to cut public and corporate debt and address inequality.

On Wednesday, the IMF warned the U.S.-China trade war could cut world economic growth next year.

IMF Managing Director Christine Lagarde said Trump’s threat to tax all trade between the two countries would shrink the global Gross Domestic Product (GDP) by one-half-of-one percent.

“This amounts to a loss of about about $455 billion, larger than the size of South Africa’s economy,” Lagarde said in a briefing note for the Group of Twenty (G-20), a collection of the world’s largest advanced and emerging economies. “These are self-inflicted wounds that must be avoided… by removing the recently implemented trade barriers and by avoiding further barriers in whatever form,” she added.

The warning came as G-20 finance ministers and central bankers prepare to meet in Japan later this month. They will gather just weeks after U.S.-China talks collapsed amid claims of broken promises and another round of punishing tariffs.

A rising share of older Americans is forgoing the concept of a traditional retirement at the age of 65, a trend that some younger workers aren’t particularly thrilled to see.

A recent poll by The Associated Press-NORC Center for Public Affairs Research found that workers under the age of 50 were significantly more likely to view America’s aging workforce as a negative development when compared with their older counterparts. About 4 in 10 respondents ages 18 to 49 and 44% of the youngest respondents ages 18 to 29 said they consider the trend to be a bad thing for American workers. Just 14% of those age 60 and over said the same.

“I don’t think in things like IT and medicine you’re as effective a worker (at 65 years old) as you are at 50,” says Katie Otting, a 29-year-old living in Southern California. “If some 65-year-old is in a position that he’s not ready to quit because he wants a better pension and there’s someone else ready to take that job, they’re not going to replace him.”

An aging population, elevated health care costs and lingering financial uncertainty following the Great Recession all are believed to be contributing to America’s steadily graying workforce. Nearly 20% of Americans over the age of 65 were employed or actively looking for work last year, up from less than 12% two decades prior, according to the Bureau of Labor Statistics.

But the increased prevalence of older workers has led some to believe seniors are holding back the country’s economic momentum by remaining in the workforce. Men were slightly more likely than women to cite the aging workforce as a problem for U.S. workers (32% to 27%). And about a third (34%) of more affluent respondents earning more than $100,000 annually said the same, slightly more than the 24% of those earning less than $30,000 who said so.

By contrast, about 6 in 10 Americans age 60 and over say the trend has actually been a good thing for the economy, compared with 3 in 10 Americans under 30 who think that.

About a third of Americans under 50 who have noticed the trend in their own workplace believe the aging workforce has negative implications for their own careers.

“One of the myths that’s out there causing younger and older people to butt heads is the idea that `Oh, it’s because these older people are on the job preventing me from getting the job I want,”’ says Steve Burghardt, a 74-year-old professor of social work at the City University of New York who thinks Americans are “looking for someone younger or someone older to blame” for inequality, job displacement and other economic problems.

Research is mixed on the aging workforce’s overall impact on the U.S. economy. Adam Ozimek, a senior economist at Moody’s Analytics, says his prior research efforts have suggested a growing population of older workers can slow productivity and ultimately hamper wage growth for the rest of the labor market.

But he says there’s little evidence to suggest that the presence of older workers is “crowding younger workers out of promotions,” noting that many of the workers who would naturally move up and replace positions currently held by baby boomers are not millennials but rather middle-aged members of Generation X.

“In anxious times, we look for scapegoats. And old people are a ready scapegoat, especially if you are forced out of having a public presence or are forced (out of a job),” says Ashton Applewhite, a New York-based writer and ageism activist.

The idea that older workers are keeping jobs away from younger Americans, preventing them from moving up the corporate ladder into higher-ranking, higher-paying positions, is not a new one. But economists say it doesn’t have much basis in economic reality.

“The more of those seniors continue to work, that means they’re also spending. And that spending helps build a rich economy that gives you jobs and lots of opportunities,” says Andrew Chamberlain, chief economist at employment hub Glassdoor.

But Chamberlain and Ozimek say it might be easier to believe older workers are holding back their younger counterparts when looking at the economy on a smaller scale. One particular company, for example, may only employ one chief of marketing. Should that person choose to remain in the workforce until he or she is 80 years old, lower ranking employees may perceive a lack of upward mobility.

A comparable job may be ripe for the taking elsewhere, Chamberlain says, but it may be at another company or in another city that would require a move that many employees may be unwilling to make.

“They feel like their opportunities are only within that firm,” Chamberlain says. “I think it’s just simple confusion. I think people are mixing up (opportunities) just inside one company versus the overall job market.”

Meanwhile, many older workers are coming to terms with the fact that they’ll need to remain in the workforce to keep their heads above water or maintain their current lifestyles. Mitch Rothschild, 61, lives and works in New York City and says he expects he is “probably going to have to work until I die.”

He says the aging workforce is less of an economic problem and more of a financial reality to which workers of all ages need to adapt.

“Hey, look, I wished I’d been skiing in the Alps since I was 40,” he says. “But you think I’m going to stop working a year from now and rely on Social Security for the next 20 years? No.”

 

The U.S. trade deficit shrank in April, but the politically sensitive deficit with China moved higher.

The Commerce Department said Thursday that the gap between the goods and services the U.S. buys and those it sells abroad fell 2.1% to $50.8 billion in April from March. Exports fell 2.2% to $206.8 billion on a big drop in orders for civilian aircraft, a category that is often volatile. Imports dropped 2.2% to $257.6 billion on tumbling purchases of semiconductors, chemicals and diamonds.

The deficit in the trade of goods with China rose 29.7% to $26.9 billion. Merchandise exports to China dropped 24.3%, and imports climbed 11.6%.

President Donald Trump has sought to reduce America’s persistent trade deficit, which he sees as a sign of economic weakness and the result of bad trade agreements crafted by naive U.S. negotiators. He has slapped tariffs on foreign steel, aluminum, dishwashers, solar panels and on thousands of Chinese goods.

Mainstream economists say the trade gap is the product of an enduring economic factor that doesn’t respond much to changes in trade policy: Americans buy more than they produce, and imports fill the gap.

Trump has escalated trade hostilities over the past month. In May, he more than doubled import taxes on $200 billion in Chinese goods and prepared to extend tariffs to the $300 billion in imports from China he hasn’t already targeted.

The world’s two biggest economies are locked in a dispute over U.S. allegations that China steals American technology and forces foreign companies to hand over trade secrets in a sharp-elbowed drive to supplant U.S. technological dominance.

Trump is fighting with Mexico, too. On Monday, he is set to impose 5% tariffs on all Mexican imports, ratcheting them up to 25% Oct. 1 if Mexico doesn’t do more to stop the flow of Central American migrants to the U.S. border.

The U.S. trade deficit in goods and services is running at $205.4 billion this year, up 2% from $201.3 billion in January-April 2018.

In April, the United States recorded a $71.7 billion deficit in the trade goods like cars and aircraft but a $20.9 billion surplus in the trade of services such as banking and education.

In a double blow for Mexico, credit ratings agency Fitch downgraded the nation’s sovereign debt rating on Wednesday, citing risks posed by heavily indebted oil company Pemex and trade tensions, while Moody’s lowered its outlook to negative.

The Mexican peso weakened as much as 1.3% on the news.

Cutting Mexico’s rating to BBB, nearing junk status, Fitch said the financial woes of state oil company Pemex were taking a toll on the nation’s prospects.

Fitch said mounting trade tensions influenced its view, according to a statement issued shortly after the end of a meeting in the White House in which Mexican officials tried to stave off tariffs U.S. President Donald Trump has vowed to impose next week.

Following a surge in mostly Central American migrants arriving at the U.S. border, Trump threatened blanket tariffs on Mexican imports if it did not do more to stem the flow.

“Growth continues to underperform, and downside risks are magnified by threats by U.S. President Trump,” Fitch said.

Mexican President Andres Manuel Lopez Obrador took office in December with ambitious plans to build a $8 billion refinery, a decision ratings agencies and investors warned would divert funds from its more profitable production and exploration business.

“Further evidence that medium-term growth is in decline, whether as a result of policies that actively undermine growth or because of continued policy unpredictability, would put downward pressure,” Moody’s said in a statement.

Mexico’s finance ministry declined to comment.

Lopez Obrador has said the ratings agencies were punishing Mexico for the “neo-liberal” policies of previous administrations.

A Reuters analysis of Pemex accounts from the past decade shows debt increased by 75% during the term of Lopez Obrador’s predecessor, Enrique Pena Nieto, amid a landmark energy reform.

Pemex

Moody’s highlighted the risks posed by Pemex, formally known as Petroleos Mexicanos, the world’s most indebted oil company.

“The impact of the contingent liability represented by Pemex weighs increasingly heavily on the sovereign credit profile,” Fitch said in a statement.

The latest moves by the ratings agencies on Mexico’s sovereign rating could also ratchet up pressure on the oil company’s own rating, which is teetering on the brink being downgraded from investment grade.

In March, S&P cut its stand-alone assessment of Pemex by three notches, following Fitch’s move to downgrade its credit in January. S&P pegs the rating of Pemex to that of the sovereign rating and the stand-alone assessment does not equal a rating.