U.S. refiners warned the Trump administration that tariffs on imports from Mexico could deliver a punishing blow to refiners and raise the cost of gasoline just as the U.S. driving season kicks into high gear, according to sources familiar with the discussions.

Trump surprised Mexico last week with a threat to impose 5% tariffs on all its exports to the United States unless the Mexican government took measures to stem the flow of illegal immigrants into the United States.

The United States imports more than 650,000 barrels of crude per day from Mexico, about 10% of total crude imports, according to U.S. government data. Refiners are also worried that Mexico could retaliate with tariffs on its imports of U.S. fuel, a major source of revenue for the U.S. industry.

“If these tariffs take hold, particularly if they’re able to get up to 25%, that could really impact the overall competitiveness of the U.S. refining industry,” said Chet Thompson, chief executive of the American Fuel and Petrochemical Manufacturers trade association. The group has had discussions with the administration and Congress on the issue, Thompson said.

​Mexico oil complements US oil

Mexico’s oil is heavy and refiners need it to blend with lighter U.S. oil to produce diesel fuel, gasoline and other products. Tariffs would drive up the cost of those imports — and Trump has said he would increase levies by 5% monthly until they reach 25% in October.

Mexico is a prime supplier of heavy crude, which has been harder to come by since the United States imposed sanctions on Venezuela in January.

Gasoline prices have remained subdued as global oil prices have declined because of worries about worldwide economic demand. But without enough heavy crude, U.S. refineries could run plants at lower rates to save money if heavy crude feedstock becomes too costly, lobbyists said.

“The heavy crude market is tight and it’s only Mexico at the moment. The tariff would essentially make the crude uneconomical and we may have no choice but to consider run cuts,” said one Washington-based refinery lobbyist.

Refiners have said that could drive up the price of gasoline at the pump, just as American drivers take to the road in the period of the highest gasoline demand in the United States.

Texas lawmakers alarmed

International crude prices are near a six-month low, so any rise in gasoline prices is unlikely to be prohibitive.

Right now a regular gallon of gasoline in the United States averages $2.80, according to the American Automobile Association, but it tends to rise in the summer months.

“We are trying to educate the administration on what this means for gas prices,” the lobbyist said. The potential for tariffs has alarmed lawmakers of both major U.S. parties, including members of Congress from Texas, a reliably Republican state that voted for Donald Trump in 2016 but depends on the oil industry and cross-border trade with Mexico, which accounts for 39 percent of the state’s exports, according to the Texas-Mexico Trade Coalition.

“We shouldn’t be imposing tariffs on Mexico,” said Senator Ted Cruz, Republican of Texas. He told Reuters that Republican senators “had a vigorous and frank discussion” with White House officials on the issue.

Texas has 5.7 million barrels of daily refining capacity, more than any other state.

U.S. refiners are also concerned about retaliatory actions by Mexico, which buys about one-quarter of U.S. refined product exports. In March, Mexico bought about 1.3 million bpd of oil products from the United States, according to U.S. Energy Department data.

“It would be pretty devastating to us,” a second Washington-based lobbyist said.

Lazaro Hernandez, who has made a good living showing U.S. cruise ship passengers around Havana in his pink 1950s Chevrolet, says the new U.S. ban on cruises to Cuba will wipe out 90% of his business overnight.

Hernandez is one of thousands of Cubans who benefited from the boom in American visitors to the Caribbean’s largest island following the loosening of travel restrictions under former U.S. President Barack Obama during the short-lived 2014-2016 detente between the Cold War foes.

Obama’s successor, President Donald Trump, aims to punish Cuba’s Communist government, especially for its alliance with Venezuela, by tightening the rules once more. Yet Cubans say those who will really suffer are the people, including the private-sector workers the United States purports to support.

“This is a fatal blow for us,” said Hernandez, 27, who makes $30 an hour — the equivalent of the average monthly state salary — doing tours of Havana. “If there’s no tourism, we don’t have work.”

​Second-biggest group of tourists

U.S. travelers excluding Cuban-Americans became the second-biggest group of tourists on the island in recent years after Canadians, with cruise travelers making up half of those.

Although they typically contributed less to the economy as they stayed on ships rather than in hotels or bed-and-breakfasts, they hired drivers and tour guides and spent at private shops, bars and restaurants.

“We bought T-shirts as souvenirs and bags,” said Sarah Freeman, 42, one of the passengers on the last U.S. cruise ship to sail from Havana, using a handcrafted wooden Cuban fan to fend off the Caribbean heat.

The new restrictions on U.S. travel to Cuba also include the elimination of so-called group people-to-people educational travel, one of the most popular exemptions to the overall ban on U.S. tourism to Cuba.

‘Negative perceptions’

William LeoGrande, a Cuba expert at American University in Washington, estimated the measures could reduce the number of non-Cuban-American U.S. visitors by two-thirds or more.

That could cut overall tourist arrivals in Cuba by about 10%, he said. Another expert, John Kavulich, said the drop could be as much as 20%.

“Optically, not having Carnival, Norwegian and Royal Caribbean in the marketplace will recreate negative perceptions about Cuba,” said Kavulich, president of the U.S.-Cuba Trade and Economic Council Inc., referring to the three main cruise lines forced to cancel service.

Earlier restrictions cut revenues

Tourism revenues, the country’s second-biggest source of hard currency, already slumped nearly 5% last year, according to official data.

That was partly the result of an earlier round of Trump administration restrictions.

Washington says it is pressuring Cuba to reform and tamp down its support for socialist Venezuelan President Nicolas Maduro, whom Trump has been seeking to force out in favor of opposition leader Juan Guaido, who is backed by most Western countries.

Critics say Trump is seeking to drum up support from the Cuban-American community in the swing state of Florida ahead of next year’s election.

Starting Thursday, many Cubans will be feeling the sudden absence in revenue from cruise passengers.

“For me, it will have a domino effect,” said Nichdaly Gonzalez, who earns her living posing for photos, dressed up in her colorful colonial garb, adding she expected to have to rein in her spending. As such, it will have a trickle-down impact on the local economy, especially in the ports of Havana, Santiago de Cuba and Cienfuegos that received the U.S. cruise ships.

The Cuban government has said it is aiming for tourism income to increase 5.8% this year, but it is hard to see how it can reach that goal now.

“We’ve lived with U.S. hostility now for 60 years, since the revolution, so we’ll get by,” said Abel Amador, 46, selling sketches to tourists on a cobbled street. “But this new move will still affect us.”

Democratic presidential hopeful Elizabeth Warren on Wednesday criticized U.S. President Donald Trump’s decision to impose tariffs on Mexico as “random dart throwing” that lacks a coherent strategy.

Trump unexpectedly told Mexico last week to take a harder line on curbing illegal immigration or face 5% tariffs on all its exports to the United States, rising to as much as 25% later in the year. On Tuesday, Trump said he expected to impose the tariffs as of Monday.

“Trump’s random dart throwing ain’t helping anybody,” Warren, a U.S. Senator from Massachusetts, told reporters after a campaign event in Elkhart, Indiana.

Moments earlier, before a crowd of about 600 in the town with a large manufacturing sector, Warren assailed companies that are moving production abroad. While that echoed Trump’s criticism, she faulted his approach.

“Lets be clear — tariff policy by tweet does not work,” Warren said. “Randomly raising tariffs on a handful of goods with no coherent policy and doing it nation by nation makes no sense at all.”

Warren is one of more than 20 Democrats vying for the Democratic nomination to challenge Trump in the November 2020 election.

Mexican officials will seek to persuade the White House in talks hosted by U.S. Vice President Mike Pence on Wednesday that their government has done enough to stem immigration and avoid looming tariffs. The tariff fight merges two of Trump’s biggest campaign promises, on immigration and fair trade.

“Nobody goes into battle by themselves when they can be stronger by having allies in it,” Warren said, calling for a “coherent trade policy.”

Other Candidates Weigh In

U.S. Senator Amy Klobuchar, who is also running to be a Democratic presidential nominee, criticized Trump for creating “chaos” by creating the tariffs and promising more.

“That’s the kind of chaos he likes,” Klobuchar said in an appearance on CNN on Tuesday. “And I just think that’s not how you embark on international diplomacy with one of our best allies.

U.S. Senator Kirsten Gillibrand, another Democratic presidential hopeful, had a similar criticism.

“This president has no plan and no ability to have a thoughtful approach towards trade or the economy,” Gillibrand said on Monday in a town hall on Fox News. “Because if he wanted to reduce the trade deficit, he’s only grown it.”

Ghana could end child labor on cocoa farms by increasing the prices it pays impoverished farmers by about 50%, a U.S. study said on Wednesday, as global efforts to end child labor stall.

Paying just 3% more at the farm gate could stop children in Ghana doing the most hazardous tasks, like using machetes, or working more than 42 hours a week, researchers said, as the illegal practice is driven by poverty and rarely prosecuted.

“We figured there has to be some kind of incentive, on top of the laws, to get the farmers to stop using child labor,” said Jeff Luckstead, an agricultural economist at the University of Arkansas, co-author of the study in the journal PLoS ONE.

“It’s a really difficult issue because these are very poor farmers … They don’t have many options – they can’t just go and hire people,” he told the Thomson Reuters Foundation.

A PLoS spokeswoman later added that while the underlying conclusions of the report were all accurate, some of the numbers cited in the study were under review with an update to follow shortly. No further details were given.

Ghana is the world’s second largest cocoa grower, with more than 700,000 children producing the crop, often doing dangerous jobs on family farms like carrying heavy loads or using sharp tools, the anti-slavery group Walk Free Foundation says.

Big chocolate makers have been under pressure to clean up their supply chains since reports of child labor on West African cocoa farms emerged in the 1990s, with major names like Mars and Hershey promising to only buy ethical cocoa by 2020.

The International Labor Organization has said the world is unlikely to meet a target of ending child labor by 2025, which is part of 17 global development goals agreed in 2015 at the United Nations.

Researchers came up with the price premiums by analysing data between 2003 and 2015, including household budgets, cocoa prices and production and children’s education and leisure time.

While recognizing a 50% price increase was “implausible,” the study suggested that Ghana could become more competitive globally if it could certify its cocoa as “child labor-free”.

All cocoa produced in Ghana is sold to the regulator, COCOBOD, which paid farmers 7,600 cedi ($1,435) per ton last year. Ghana exports almost 20% of global cocoa output of some 4.8 million tons a year.

Most cocoa farming families live below the World Bank’s poverty line of $2 a day, according to the charity International Cocoa Initiative (ICI), fueling child labor.

But Genevieve LeBaron of Britain’s Sheffield University, who was not part of the study, said the key to ending poverty among cocoa farmers was not necessarily raising COCOBOD’s prices but fairer distribution of profits within the chocolate sector.

The global chocolate industry was worth about $85 billion in 2018, and is projected to jump to $102 billion by 2022, according to leading research firm Mintel.

“If you look at the annual profits of the largest cocoa and chocolate confectionary companies in the world, there’s plenty of money in that supply chain that could be redistributed downwards along the value chain,” said the politics professor.

The trade war between the United States and China could cut world economic growth next year, the International Monetary Fund (IMF) warned Wednesday.

IMF Managing Director Christine Lagarde said U.S. President Donald 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 traded 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 this weekend. They will gather just weeks after U.S.-China talks collapsed amid claims of broken promises and another round of punishing tariffs.

Lagarde urged governments to adopt polices that support economic growth to avoid a global economic decline. “Should growth substantially disappoint,” she wrote, policymakers must do more, including “making use of conventional and unconventional monetary policy and fiscal stimulus.”

The GDP is a monetary measure of the value of all goods and services produced in an economy during a specific period of time.

The escalating trade dispute between the United States and China could distract Beijing from dealing with nuclear North Korea and undermine its efforts to enforce international sanctions, potentially hampering the U.S. attempt to denuclearize the country, experts said.

Even as the Trump administration pursues its “maximum pressure” campaign to push North Korea to denuclearize, Washington has engaged in rounds of talks with China that have turned into a bitter tit-for-tat trade war. 

With the aim of making American-made goods competitive in the United States relative to cheaper Chinese imports, the U.S. launched an investigation into Chinese trade policies in 2017. Washington imposed tariffs on more than $250 billion out of total $539 billion worth of Chinese goods the United States imported in 2018.

Beijing retaliated by raising tariffs on $110 billion of a total $120 billion U.S. goods imported last year. 

The latest hike came earlier in May when the Trump administration raised U.S. tariffs on $200 billion in Chinese imports from 10% to 24%. Trump threatened to add a 24% tariff on the remaining $325 billion worth of imports from China.

This was followed by Beijing’s retaliatory tariff hike on American goods as high as 25% from 10%, affecting $60 billion in American imported goods starting June 1. 

China has accused the United States of starting what it called “the largest war in economic history” and an “economic terrorism.” On Sunday, China said it will “not back down’ in the escalating trade war with the United States.

Tension between Beijing and Washington over a trade deal has caused concern among North Korean watchers wondering if the dispute will affect the U.S. effort to denuclearize North Korea. 

China, as North Korea’s largest trading partner, is responsible for approximately 90% of its imports and exports. As such, Beijing could play a pivotal role in denuclearizing the nation on its southeastern border, because according to William Overholt, a senior research fellow and Asia expert at Harvard’s Kennedy School of Government, “China is very determined to eliminate North Korea’s nuclear weapons.”

The consuming battles in the U.S.-China bilateral trade agreements could distract China from the North Korean nuclear issue, said Scott Snyder, director of the U.S.-Korea policy program at the Council of Foreign Relations.

“The main impact of trade tensions between the U.S. and China is (lowering) the priority of North Korea as an issue on the agenda of U.S.-China relations,” said Snyder. “And so, it’s going to be harder to get China to cooperate as much as the United States would like because they’re focused on other issues in the relationship.”

The biggest role China could play in denuclearizing North Korea is enforcing international sanctions issued since 2016. Targeting Pyongyang’s key export commodities such as coal and seafood, the sanctions were designed to cut off foreign income that could be used to support its nuclear weapons and missile programs.

Joseph DeTrani, a former U.S. special envoy for nuclear talks with North Korea, emphasized China’s role in enforcing sanctions, saying, “Failure to work in concert (with China) in sanctions implementation would weaken our efforts to succeed with North Korea and its nuclear and missile programs.”

But a drawn-out trade war could make Beijing do less to enforce the sanctions, according to Ryan Hass, who served as the director for China, Taiwan and Mongolia at the National Security Council from 2013 to 2017. 

“The level of rigor that sanctions are enforced (with) depends upon the level of manpower and the level of resources that are devoted to the task,” said Hass.“It isn’t necessarily the case that China would turn its back on the sanctions, but it may just choose to allocate its resources and its manpower to other priorities.”

After all, Beijing is more concerned with achieving its chief objective of stability than it is with sanctions, said Robert Manning, a senior fellow at the Atlantic Council.

“While the sour climate and rising tensions in U.S.-China relations complicates U.S. diplomacy on North Korea, China’s cooperation was never a favor to the U.S.,” said Manning. “Beijing’s interests on the Korean Peninsula toward North Korea (have) been based on a sober assessment of China’s desire to see a non-nuclear Korea and stability on the Korean Peninsula.”

China, as one of five permanent members of the United Nations Security Council (UNSC), joined the rest of the UNSC members in issuing stronger sanctions on North Korea in response to multiple missile and nuclear tests it conducted in 2016 and 2017. 

When Washington and Pyongyang began engaging diplomatically in 2018, culminating in their first historical summit in Singapore in June 2018, Beijing suggested international sanctions on North Korea be eased. Several months after the Singapore summit, a report by the U.S.-China Economic and Security Review Commission came out indicating China has relaxed enforcing sanctions on North Korea.

Diplomatic efforts have been stalled since the breakdown of their second summit in Hanoi in February. At issue were conflicting demands and expectations: Pyongyang wanted all sanctions lifted before undertaking a step-by-step denuclearization process, while Washington wanted full denuclearization before lifting sanctions. Given that, the trade disagreements between Washington and Beijing could push China to truncate its support on sanctions, said Stapleton Roy, former U.S. ambassador to China during the George H.W. Bush and Bill Clinton administrations.

“Under those circumstances, it’s not clear whether China will be as willing as it was before to support very strong sanctions on North Korea,” said Roy.

Bruce Klingner, former CIA deputy division chief for Korea and current senior research fellow at the Heritage Foundation, said Beijing could not threaten outright to refuse to implement sanctions as a trade negotiations tactic since doing so would be defying the U.N. But “Beijing could, however, be less vigilant in implementing and enforcing U.N. sanctions,” said Klingner.

Complicating the matter, Snyder said if Beijing views Washington attempting to prevent China’s economic ascendency over the U.S. while engaged in the trade war, its interpretation of the U.S. attitude could induce it to curtail “the amount of cooperation that (it could) provide the United States on North Korea.”

 

Vietnam is likely to make concessions to the United States so it can escape a U.S. watch list of possible currency manipulators and head off a hit to its fast-growing economy led by exchange rate-sensitive exports, analysts who follow the country say.

The Southeast Asian country, they forecast, will probably talk to the U.S. side over the next six to nine months, consider approving fewer changes in its foreign exchange rate and accept more high-value American imports.

Those measures would help Vietnam get off the U.S. Treasury’s list of nine countries that Washington will examine further for whether those states are currency “manipulators.” Manipulation implies deliberate state-driven currency rate changes that favor a country’s own exporters and make trade more costly for importers. The U.S. list released in late May added Vietnam, Malaysia and Singapore.

The policy changes might place a speed bump in the economy, which has grown around 6% every year since 2012, but a “manipulator” label could lead to tariffs on Vietnamese goods shipped to the United States and choke economic expansion.

“I think they’ll definitely (take action), because they’re extremely worried about this matter, so they’ll carry out some necessary communications and make some adjustments,” said Tai Wan-ping, Southeast Asia-specialized international business professor at Cheng Shiu University in Taiwan. “If they keep going, to be on this list is disadvantageous for Vietnam.”

Exports and the local currency

Vietnam, a growing manufacturing powerhouse that reels in factory investors from around Asia for its lost costs, posted a $39.5 billion surplus in trade with the United States last year and a $13.5 billion surplus in the first quarter this year.

The same country also adjusts its dong currency exchange rate within a band but trending toward weakness versus the U.S. dollar. That trend favors exporters, a majority of the $238 billion Vietnamese economy.

“The reality is, it’s what we call in economics a dirty float currency. It’s not grossly manipulated — it basically reflects market rate for the dong,” said Adam McCarty, chief economist with Mekong Economics in Hanoi. 

“But it’s sort of controlled to stop big fluctuations, so that the change in the exchange rate month to month is rather small, but it’s always been slowly and steadily in the direction of depreciation of the Vietnamese dong,” McCarty said.

​Inflows of “hot money” into Vietnam, which could hurt exports eventually, sometimes require the country to adjust its foreign exchange rate, Tai said.

Measures to get off the list

Vietnam’s limiting of any further fluctuations would put the U.S. government more at ease, said Rajiv Biswas, Asia-Pacific chief economist at the market research firm IHS Markit.

“The U.S. Treasury did say that Vietnam should reduce its intervention in the exchange rate and let the currency move in line with economic fundamentals,” Biswas said. “If you’re not intervening in your currency, that automatically reduces the risk of being named a currency manipulator.”

But Vietnamese net purchases of foreign currency last year came to just 1.7% of GDP, below the 2% that Washington uses to define “persistent one-sided intervention in the foreign exchange market,” Hanoi-based SSI Research said in a note Monday. Governments can adjust exchange rates by buying or selling foreign currency.

Vietnam, where many of the top companies are state-invested, could reduce the trade balance by buying more “capital intensive equipment” and aerospace goods such as aircraft from the United States, Biswas said.

India left the U.S. list in May after easing a trade surplus, though China – in the thick of a trade dispute with Washington – was kept on it.

There are few other “policy levers” Vietnam can use to answer the U.S. Treasury concerns, said Gene Fang, an associate managing director with Moody’s Investors Service in Singapore.

Negotiations with Washington

Vietnam will probably remain on the U.S. list over at least the next half a year, when the document is due for an update, analysts believe. The two sides are likely to discuss the currency rate and the trade imbalance as Vietnam deliberates its response measures, they say.

Eventually the U.S. government could seek negotiations with Vietnam and place tariffs on Vietnamese exports if it sees fit, Fang said.

“I guess one of the things we could see as a result would be that the U.S. places higher tariffs on Vietnamese exports to the U.S., and that would be certainly negative from a growth perspective,” he said.

The U.S. Internal Revenue Service is auditing Uber Technologies’s taxes for 2013 and 2014 and the ride-hailing company expects unrecognized tax benefits to be reduced within the next year by at least $141 million.

In its full quarterly report on Tuesday, Uber said various state and foreign tax authorities were also looking into its taxes and that it was currently unable to put a definite timeline or estimate on the overall adjustments that might result.

The $141 million amount related only to its transfer pricing positions, which refers to the common multinational practice of charging for services between wholly-owned businesses in different countries or jurisdictions to reduce the tax it pays.

Earlier this year, the company had said in a regulatory filing that it expected unrecognized tax benefits related to the audit to be reduced within the next year by at least $127 million.

Industry experts characterize transfer pricing as a relatively risky strategy, which typically is among multinationals’ top tax concerns and has been used by authorities in the past to go after Apple and Amazon.

“Although the timing of the resolution and/or closure of the audits is highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits could significantly change in the next 12 months,” the company said.

The announcement came on a day when at least 11 of the brokerages, whose underwriting arms backed Uber’s Wall Street debut last month, weighed in with “buy” recommendations on the company’s shares as a statutory embargo lifted. Citi, however, initiated coverage with a “neutral” rating.

Uber shares gained 2.8% in afternoon trading as the technology sector bounced back from a sell-off on Monday.

The company’s stock has struggled since its market debut on May 10 and is trading below its IPO price of $45.

Still, the shares have outperformed rival Lyft, which have fallen by a third in value since its own debut in March, and analysts from Deutsche Bank said Uber’s stock remained the best internet IPO for investors since Facebook’s launch in 2012.

“Uber should trade at a premium to LYFT given Uber’s larger global scale and reach, cross product growth opportunity and larger ability for long-term leverage,” said analysts at Morgan Stanley. “It is still in the early innings in its core and emerging opportunities.”

In its first quarterly report as a public company last week, Uber reported a $1 billion loss as it spent heavily to build up its food delivery and freight businesses.

But many of the analysts covering the stock on Tuesday said they believed Uber had the scale and time to develop into another powerful U.S. global tech player.

RBC analysts believe the market under-appreciates Uber’s profit potential while analysts at Mizuho Securities expect the intense competition to rationalize over the next few years due to continued consolidation and listings of private peers.

“…Uber has ample room to gain operating leverage from economies of scale,” analysts at Mizuho said.

Democratic U.S. presidential hopeful Elizabeth Warren proposed on Tuesday spending $2 trillion on a new “green manufacturing” program to address climate change that would invest in research and exporting American clean energy technology.

The manufacturing program is the first in a new series of “economic patriotism” proposals Warren is unveiling intended to create American jobs and help U.S. industry.

“This is going to be a big plan for bold structural changes,” Warren said at a campaign rally in Detroit, Michigan.

Warren told the crowd of about 500 in a facility that teaches manufacturing skills that her proposal would be paid for by cutting subsidies in the oil and gas industry. Additionally, by all companies paying more taxes, she said, singling out Amazon.com.

Among the more than 20 Democrats in the field hoping to challenge Republican President Donald Trump in November 2020, Warren has distinguished herself as the most prolific proposer of new policy positions.

Several candidates have offered climate-related policy proposals, including Washington Governor Jay Inslee, who has made it the singular focus of his campaign, and former Vice President Joe Biden, who also announced a climate plan on Tuesday.

Warren said she had not read Biden’s proposal when asked by reporters after her campaign event.

The newest proposal from Warren, a U.S. senator from Massachusetts, lays out how she would carry out some of the policy goals outlined in the Green New Deal, which has the backing of liberal members of her party.

Warren began touting the proposal in a campaign trip to Michigan, a Midwestern state with a large manufacturing sector that shocked political observers in 2016 when voters backed Trump and helped propel him to the White House.

“When we’re talking about manufacturing, when we’re talking about real expertise, we’re talking about Detroit,” Warren said.

The plan is likely to draw criticism from opponents who will argue the price tag is too high and that trying to quickly overhaul the U.S. energy sector would have crippling economic effects.

But Warren also released an evaluation of her three-part proposal conducted by Moody’s economist Mark Zandi, who argued the plan would help the economy on a large scale.

“There is no free lunch, and big businesses, oil and gas companies, and multinationals pay for the cost of this plan,” Zandi wrote. “The economy benefits, although it would take more than a decade for this benefit to be fully realized.”

The first part of Warren’s plan calls for spending $400 billion over 10 years on clean energy research and development.

Warren said she believes the United States could one day use no fossil fuels. “It’s part of our technological bandwidth,” she said in a brief news conference after the Detroit rally.

Next, Warren proposed increasing the amount the United States spends on “American-made clean, renewable, and emission-free energy products for federal, state, and local use, and for export.”

Warren said the United States currently spends $1.5 trillion on defense procurement, which she called “bloated,” and argued that an equal amount should be spent on clean energy.

As part of this proposal, Warren would require companies that sell to the federal government pay their employees at least $15 an hour, that employees receive 12 weeks paid family and medical leave and be able to form unions. Labor practices were included in Green New Deal proposals.

Finally, Warren called for creating a new federal office responsible for trying to get foreign countries to purchase U.S. clean energy technology.

Likening it to programs that help foreign countries buy U.S.-made weapons, Warren would allocate $100 billion to assist countries buying U.S. energy technologies.

While acknowledging ambitious goals that liberal advocates have supported to reduce greenhouse gas emissions to net-zero by 2050, Warren said it was important that other countries cut emissions as well.

“We need other countries to slash their emissions, and that means we need to supply the world with clean energy products (at low enough prices to displace dirty alternatives) to put us on the right path,” Warren wrote on Medium.

The U.S. Commerce Department on Tuesday recommended urgent steps to boost domestic production of rare earths and other critical minerals, warning that a halt in Chinese or Russian exports could cause “significant shocks” in global supply chains.

The report includes 61 specific recommendations — including low-interest loans and “Buy American” requirements for defense companies — to boost domestic production of minerals essential for the manufacture of mobile phones and a host of other consumer goods, as well as fighter jets.

It also called for closer cooperation with allies such as Japan, Australia and the European Union, and directed reviews of government permitting processes to speed up domestic mining.

U.S. reliance on foreign minerals has worried U.S. officials since 2010, when China embargoed exports of so-called rare earth minerals to Japan during a diplomatic row. The issue took on new urgency in recent weeks after Chinese officials suggested rare earths and other critical minerals could be used as leverage in the trade war between the world’s largest economic powers.

“The United States is heavily dependent on foreign sources of critical minerals and on foreign supply chains resulting in the potential for strategic vulnerabilities to both our economy and military,” the Commerce Department said in a long-awaited report outlining a new federal strategy on critical minerals.

“If China or Russia were to stop exports to the United States and its allies for a prolonged period — similar to China’s rare earths embargo in 2010 — an extended supply disruption could cause significant shocks throughout U.S. and foreign critical mineral supply chains,” the report said.

Boosting trade with other countries could reduce U.S. reliance on sources of critical minerals that could be disrupted, and robust enforcement of U.S. trade laws and international agreements could also help address adverse impacts of market-distorting foreign trade measures, it said.

The report was cheered by U.S. miners, including MP Materials, which owns California’s Mountain Pass mine, the only current rare earths facility in the United States.

For now, it must pay a 25 percent tariff to ship its rare earths to China for processing, collateral damage in the U.S.-China trade war.

“We welcome this report and hope that the Commerce Department’s ‘Call to Action’ results in some real action from Washington,” said James Litinsky, co-chairman of MP Materials.

Recommendations

The report called for a combination of short-term measures, such as stockpiling, and longer-term moves to catalyze exploration, design and construction of new mines, as well as re-establishing domestic downstream manufacturing supply chains.

It recommended several measures for the Interior Department and its subagencies, including the Bureau of Land Management and the Forest Service, to remove obstacles to critical mineral development and make it easier to get permits.

It said the BLM and Forest Service should review all areas that are currently “withdrawn” — or protected — from development and assess whether those restrictions should be lifted or reduced to allow for critical mineral development.

Commerce also proposed altering how the Interior Department and its agencies review mining projects under the bedrock National Environmental Policy Act, urging expedited environmental studies and identifying minerals which can be excluded from environmental reviews.

The report drew immediate fire from Democrats who said the new strategy would harm the environment and amounted to fresh concessions to multinational corporations.

“This administration has set shameful new records for industry giveaways, and this is one of the worst,” said Raul Grijalva, Democratic chairman of the House of Representatives Natural Resources Committee.

The industry applauded the report, however.

“The steps outlined in this report will go a long way in unlocking the value of all our domestic mineral resources while continuing strict environmental protections,” said Hal Quinn, president of the National Mining Association.

The Buy American recommendation, which would require defense weapons and related products be built with domestically-sourced rare earths, could make it easier to secure financing if investors knew there would be a guaranteed revenue source for new projects, prospective U.S. rare earth miners said.

“I would encourage the federal government to move as quickly as possible, and ‘buy American’ is one way to do that,” said Anthony Marchese, chairman of Texas Mineral Resources Corp, which is seeking $300 million to develop the Round Top rare earth deposit in Texas.

VOA’s Michael Bowman contributed to this story.

U.S. President Donald Trump said Tuesday that it is “more likely” than not that next week he will impose a new 5% tariff on imported products from Mexico.

Trump offered his assessment at a London news conference alongside British Prime Minister Theresa May, even as U.S. and Mexican officials continued talks in Washington about the tariffs and the surge of Central American migrants traveling through Mexico to reach the United States that Trump wants to block.

“Mexico should step up and stop this invasion into our country,” Trump said, contending that “millions and millions” of undocumented migrants from Guatemala, Honduras and El Salvador are entering the U.S. to escape poverty and violence in their homelands.

“I think Mexico will step up and do what they need to,” Trump said. “I want to see security at our border and great trade.”

He said, “We are going to see if we can do something, but I think it’s more likely the tariffs go on [next Monday], and we will probably be talking during the time that the tariffs are on.”

Trump has threatened to increase the tariffs monthly in 5% increments if the migration is not curbed.

In the U.S., some Republican lawmakers, normally political allies of Trump, are opening discussions on whether to try to pass legislation to block his imposition of the 5% tariff, fearing the extra taxation would be passed on to U.S. consumers in the form of higher retail prices on an array of goods, including automobiles and farm produce.

But Trump said, “I think if they do that, it’s foolish,” citing his high political standing among Republican voters, even as surveys in the U.S. show that overall, American voters disapprove of his performance as president.

Talks between the two countries started Monday, with U.S. Secretary of State Mike Pompeo set to meet Wednesday at the White House with his Mexican counterpart, Foreign Minister Marcelo Ebrard, along with other U.S. and Mexican officials.

Ebrard said Tuesday he believes a deal can be reached to avert imposition of the tariffs, but if not, Mexico plans to announce its response on Thursday. It remains unclear exactly what the Trump administration would consider sufficient migration control to not impose the tariffs.

Mexico warned Monday that Trump’s threatened new tariff would hurt both countries’ economies and cause even more Central American migrants to travel through Mexico to reach the United States.

At the start of talks in Washington, Mexican officials said they could only go so far in meeting Trump’s demand to block migrants’ passage through Mexico. The officials specifically ruled out a “third safe country” agreement requiring U.S. asylum-seekers to first apply for refuge in Mexico.

“There is a clear limit to what we can negotiate, and the limit is Mexican dignity,” said Mexico’s ambassador to the United States, Martha Barcena.

Barcena added that U.S. tariffs “could cause financial and economic instability,” reducing Mexico’s capacity to address the flow of migrants and “offer alternatives” to people fleeing the three Central American countries.

Mexican officials contended that an additional quarter million migrants could try to reach the U.S. if the tariff is imposed, on top of the tens of thousands already reaching the southern U.S. border each month.

U.S. lawmakers returning to Washington after a week-long congressional recess sharply criticized Trump’s latest tariff tactic aimed at a major U.S. trading partner.

“This [tariffs] is not a popular concept,” Republican Sen. John Cornyn said of public opinion in Texas, which he represents. “Mexico is our biggest export market.”

Another Republican, Missouri Sen. Roy Blunt, expressed concerns that trade friction could harm a newly negotiated free trade pact between the United States, Mexico and Canada.

“I’m not a big advocate of tariffs, and I’d like to get the USMCA agreement approved,” Blunt told VOA. “I don’t see how the addition of a tariff [on Mexican goods] right now helps make that happen.”

“Mexico is a critical trading partner of the United States,” Democratic Sen. Ben Cardin of Maryland said. “You put up barriers, it’s going to end up costing us jobs, and it’s going to cost consumers.”

Cardin added that Trump’s threatened tariff “would be counterproductive,” as far as boosting U.S. border security.

“If we need cooperation on the southern border, they [Mexican officials] are not going to give us cooperation. Why bother if we’re going to have an antagonistic relationship?” Cardin said.

No more Nutella?! French workers are threatening as much, bringing the world’s biggest Nutella factory to a near-standstill in a showdown over salary negotiations.

Tensions have been mounting at the site in Villers-Ecalles in Normandy, where activists from the Workers’ Force union have been barring trucks from entering or leaving the factory for a week.

The plant produces a staggering 600,000 jars of the chocolate and hazelnut spread every day — a quarter of the world’s production of a product cherished by children and adults alike.

After six days of failed efforts to end the standoff, Nutella owner Ferrero on Monday started threatening fines for workers involved in the blockade, according to a company statement.

But that didn’t deter unions. Workers’ Force says 160 of the factory’s 350 workers are taking part in a walkout to demand 4.5% salary increases, one-time 900-euro bonuses and better working conditions.

“It’s war, anger is mounting,” union activist Fabien Lacabanne said in a statement.

He said the company agreed to a 1.7% raise for the lowest paid workers, and one-time bonuses between zero and 400 euros, which unions say isn’t enough given rising living costs. Unions also complain of deteriorating factory conditions and increasing pressure to be more productive.

Italian-owned Ferrero said it is trying to protect workers who aren’t on strike, and wants to resume dialogue — but not until the workers stop blocking the factory.

The next negotiation meeting is scheduled for June 13.

French workers frequently go on strike during salary negotiations and occasionally resort to more dramatic methods. The last strike to hit the Villers-Ecalles factory was in 2011.

The action comes amid anger among many low-income French workers at pro-business policies by President Emmanuel Macron seen as favoring the rich — and that prompted the yellow vest protest movement.

Michael Bowman contributed to this report.

Mexico warned Monday that President Donald Trump’s threatened new tariff on its exports to the United States would hurt both countries’ economies and cause even more Central American migrants to travel through Mexico to reach the United States.

At the start of talks in Washington, Mexican officials said they could only go so far in meeting Trump’s demand to block migrants’ passage through Mexico to avert Trump’s imposition of a 5% tariff next week. The officials specifically ruled out a “third safe country” agreement requiring U.S. asylum-seekers to first apply for refuge in Mexico.

​”There is a clear limit to what we can negotiate, and the limit is Mexican dignity,” Mexico’s ambassador to the United States, Martha Barcena, said.

Barcena added that U.S. tariffs “could cause financial and economic instability,” reducing Mexico’s capacity to address the flow of migrants and “offer alternatives” to people fleeing Guatemala, Honduras and El Salvador.

Mexican officials contended that an additional quarter million migrants could try to reach the U.S. if the tariff is imposed, on top of the tens of thousands already reaching the southern U.S. border each month.

Trump showed no sign of softening his demand as he tweeted during a visit to London.

Mexican President Andres Manuel Lopez Obrador remained confident the two sides would reach an agreement, telling reporters Monday that he was optimistic.

He said his government would not engage in confrontation, and would always defend those who migrate out of necessity due to violence or a lack of food or job opportunities. He also remained positive that no matter what happens in the dispute with the United States, Mexico has “exception, extraordinary,” people and can push through any adversity.

U.S. Secretary of State Mike Pompeo and Mexican Foreign Relations Secretary Marcelo Ebrard are due to hold further talks about the dispute on Wednesday.

U.S. lawmakers returning to Washington after a weeklong congressional recess sharply criticized Trump’s latest tariff tactic aimed at a major U.S. trading partner.

“This (tariffs) is not a popular concept,” Republican Sen. John Cornyn said of public opinion in Texas, which he represents. “Mexico is our biggest export market.”

Another Republican, Missouri Sen. Roy Blunt, expressed concerns that trade friction could harm a newly negotiated free trade pact between the United States, Mexico and Canada.

“I’m not a big advocate of tariffs, and I’d like to get the USMCA agreement approved,” Blunt told VOA. “I don’t see how the addition of a tariff (on Mexican goods) right now helps make that happen.”

“Mexico is a critical trading partner of the United States,” Democratic Sen. Ben Cardin of Maryland said. “You put up barriers, it’s going to end up costing us jobs, and it’s going to cost consumers.”

Cardin added that Trump’s threatened tariff “would be counterproductive,” as far as boosting U.S. border security.

“If we need cooperation on the southern border, they (Mexican officials) are not going to give us cooperation. Why bother if we’re going to have an antagonistic relationship?” Cardin said.

The United States is again calling on European allies to be careful of what it says are security risks posed by Chinese telecommunication company Huawei, as countries build out their 5G networks.

“We’ve been clear: our ask is that our allies and our partners and our friends don’t do anything that would endanger our shared security interests or restrict our ability to share sensitive information,” said U.S. Secretary of State Mike Pompeo on Monday after meeting with Dutch Foreign Minister Stef Blok in The Hague.

The top U.S. diplomat’s remarks come amid the Dutch intelligence agency’s investigation over alleged hidden backdoors in the software that could have given Huawei unauthorized access to users’ data.

Huawei’s CEO Ren Zhengfei has maintained his company would not share confidential user information and Huawei denies it is controlled by Beijing. The company also says it does not work with the Chinese government, an assertion Pompeo and other U.S. officials have rejected.

Blok said while his government wants to align policies with allies, the Dutch will make its own security decisions as it prepares to auction off new 5G internet rights.

“There is a specialist committee working now to decide on what criteria to add to the 5G option and somewhere this summer those criteria will be published,” said the Dutch foreign minister.

Pompeo and Blok met on the sidelines of a three-day Global Entrepreneurship Summit co-hosted by the U.S. and the Netherlands in The Hague.

 

This preeminent annual gathering convenes entrepreneurs, investors, and their supporters from more than 120 countries.

 

Eyeing China, Pompeo said the United States is seeking terms for fair trade practices.

“Authoritarian states can steal ideas and prop up their own business enterprises, but they’ll never match the entrepreneurship and innovation found in free societies,” said Pompeo, stressing the importance of intellectual property rights protection, the rule of law, as well as a predictable and consistent legal system.

Friday, Pompeo warned German authorities that the U.S. could withhold national security information if Germany adopts 5G networks run by Huawei because “it is not possible to mitigate” the security risks.

 

The White House has effectively blacklisted Huawei, making it harder to continue doing business with American companies.

 

In response, China says it plans to target organizations or individuals that deemed to damage Chinese companies’ interests in a so-called “unreliable foreigners list.”

 

Mexican President Andres Manuel Lopez Obrador reiterated on Sunday the need for oil independence as his government said it would tender six construction contracts in June for a planned oil refinery in the southern state of Tabasco.

Tensions between Mexico and the United States have been running high in recent days after President Donald Trump threatened to impose punitive tariffs on Mexican goods unless Mexico halts a surge in illegal migration.

“We, our children and grandchildren aspire to live in a free, independent, sovereign country and we do not want to be a colony of any foreign country,” Lopez Obrador told a cheering crowd at an event to mark the start of the refinery’s construction.

“The most important thing at this moment in time is producing petroleum,” he added, saying the country needed to work toward “energy self-sufficiency.”

Much of Mexico’s gasoline need is met by U.S. imports, and Lopez Obrador wants Mexico to be able to cover its own demand.

“We have, I repeat, a good relationship with the United States, and with all governments in the world, but we do not want to be exposed and therefore it’s important that we are self-sufficient,” the president added.

Lopez Obrador has used similar language in the past when talking about oil, but his comments were lent extra weight because of the recent flare-up in tensions with Trump.

At the event, he repeated his desire to have good relations with Trump, but was at pains to say that maintaining the friendship of the American people was of paramount importance.

Mexican Energy Minister Rocio Nahle said at the same event that Mexico would tender six contracts for the plan to build the country’s first oil refinery in four decades.

“We will be tendering six construction contracts at the end of June so that all the parts that are under construction can start at the same time and we can finish the refinery in three years,” she said, without giving more details.

Investors in highly indebted state oil company Pemex, which will build the refinery, have repeatedly expressed concern that the project would divert funds from the more profitable exploration and production business. 

Joyce Huang contributed to this report.

China says Washington bears the “sole and entire responsibility” for the breakdown in trade talks earlier this month and that Beijing won’t back down on matters of principle. In a defiant rebuttal of who is to blame, China released a white paper Sunday, arguing that it is the United States that has backtracked in the talks and that tariffs will not resolve the two country’s trade issues.

Since talks broke down earlier this month, Beijing has doubled-down, issuing its own tit-for-tat tariffs in response to Washington’s increase to 25% of a tax on $200 billion in Chinese goods. Beijing has also been stepping up anti-American propaganda through state media. On Friday, China’s Commerce Ministry announced the establishment of a “non-reliable entity list.”

That move was a response to Washington’s ban on the sale of American made goods to Huawei and 68 of its affiliates. The ban is expected to go into effect in less than 90-days.

Speaking at a press conference on Sunday, China’s vice minister of commerce Wang Shouwen said it was Washington, not Beijing that was backpedaling.

“If the U.S. side wants to use extreme pressure, to escalate trade friction, to force China to submit and make concessions, this is absolutely impossible,” he said. Wang is a member of China’s trade negotiating team.

Speaking to reporters, he said that by announcing a decision to raise tariffs earlier this month while talks were ongoing and then later launching procedures for tariffs to cover $300 billion more in Chinese goods, Washington had broken an agreement reached by President Donald Trump and Xi Jinping late last year in Argentina.

“During the consultations, China has overcome many difficulties and put forward pragmatic solutions. However, the U.S. has backtracked, and when you give them an inch, they want a yard,” he said.

In Argentina, Xi and Trump agreed to a temporary truce on raising tariffs. But there was no agreement to take that option off the table. Trump originally agreed to 90 days and later extended that period in early March citing progress in talks.

In early May, however, Trump Tweeted that talks were moving too slowly and accused Chinese negotiators of trying to renegotiate the text of the agreement.

That was one instance where the white paper argues that Washington backtracked, it also gives two other examples.

The white paper also said American negotiators “insisted on mandatory requirements concerning China’s sovereign affairs in the deal.” It was not clear what that refers to, but earlier reports have suggested that having an enforcement mechanism as part of a trade agreement between the two sides has long been a tough pill for Beijing to swallow.

In an April interview with CNBC, Treasury Secretary Steven Mnuchin said that the countries had “pretty much agreed” on an enforcement mechanism, adding that both sides would set up “trade offices.”

It is unclear when the two sides may be able to resume talks, if at all. President Trump has said he is willing to meet with Xi later this month on the sidelines of Group of 20 Nations summit in Japan. China has yet to confirm the meeting.

When asked about it on Sunday, Wang said he did not have any information to provide.

One thing that is clear from the white paper is that China cares a lot about tariffs. The white paper said that one prerequisite for a trade deal is that the U.S. should remove all additional tariffs imposed on Chinese exports and keep demands for Beijing’s purchase of goods “realistic.”

The paper gave several examples of how tariffs are having an impact on the United States and not good for either country or the global economy, but those critiques have all been part of the robust debate that is ongoing in the United States and elsewhere.

In China, however, as Beijing struggles with a slowing economy, concerns about jobs and ballooning debt, authorities have clamped down on any reporting about the trade war that strays from the communist party’s narrative.

China has also stepped up anti-American propaganda, airing decades old movies about the Korean War, which Beijing fought alongside the North against international forces led by the United States.

The Global Times claims the trade dispute “reminds Chinese of the military struggles between China and the U.S. during the Korean War.” Some state media have called the trade war a “people’s war” and there have been suggestions Chinese consumers should boycott American goods. But the effort to stir up nationalist fervor is a risky one for Beijing, analysts note.

Too much public backlash could have an impact on stability and hurt investment as well, said Liu Meng-chun, director of the Chung-Hua Institution of Economic Research’s mainland China division in Taiwan.

“The reason why there are arising calls or nationalistic sentiment is because China is to a certain degree trying to reach a consensus in society and rally support behind the government so that the country can shoulder the consequences of the breakdown of the trade talks,” Liu said.

 

The Trump administration had taken steps in recent weeks to work with Democratic and Republican lawmakers to address concerns about the proposed United States-Mexico-Canada trade agreement — and then came the threat of a new tariff.

President Donald Trump said this past week that he would put a 5% tariff on Mexican imports unless America’s southern neighbor cracked down on Central American migrants’ efforts to cross the U.S. border.  

  

His recent decision to remove U.S. tariffs on steel and aluminum imports from Canada and Mexico had appeased mostly Republicans who were using their trade votes as leverage to do away with those penalties. 

 

The administration also had committed to meeting with a group of House Democrats to allay their concerns. That gesture created goodwill, and as House Speaker Nancy Pelosi, D-Calif., described it, put Democrats “on a path to yes.” 

 

Now it’s unclear where that path may lead. 

​Jobs at stake

 

Influential business groups fear that Trump’s threat against Mexico could derail the proposed trade agreement. 

 

“The last thing we want to do is put that landmark deal — and the 2 million manufacturing jobs that depend on North American trade — in jeopardy,” said Jay Timmons, president and CEO of the National Association of Manufacturers. 

 

The U.S. Chamber of Commerce said it was considering legal action to block the tariffs from going into effect.  

  

Some GOP senators are rankled, too, most notably Charles Grassley of Iowa, chairman of the Senate Finance Committee. 

 

“This is a misuse of presidential tariff authority and counter to congressional intent,” Grassley said. 

 

Congressional aides from both parties said that it’s too soon to say whether Trump’s proposal will derail the agreement. But it does make it harder for lawmakers to assess how the agreement would improve the economic landscape if the tariffs on Mexico go into place.  

  

Democrats seem mostly concerned with other breaking developments. 

 

Hours before Trump announced his tariff plan, his administration tried to set up the agreement for a possible congressional vote before the August recess. The administration completed the formal steps necessary to start the clock for submitting legislation to Congress.   

​Not ‘positive’

  

Pelosi said that was “not a positive step” and “indicates a lack of knowledge on the part of the administration on the policy and process to pass a trade agreement.” 

 

Democrats want to strengthen enforcement of labor and environmental standards in Mexico.  They have pushed for Mexico to change labor laws that have encouraged wages as low as $1 or $2 per hour at some plants, giving U.S. companies a strong incentive to move operations south of the U.S.-Mexico border. 

 

Mexico lawmakers have approved a law that requires secret-ballot union votes and proof of workers’ consent for contracts. Democrats in Washington want to ensure follow-through, and Pelosi still holds the final say in determining when, or whether, the agreement comes up for a vote. 

 

Pelosi also joined several Republican senators in slamming Trump’s tariff threat, saying it is “not rooted in wise trade policy but has more to do with bad immigration policy on his part.” 

 

“Yet again, the president is sowing chaos over the border instead of delivering solutions for American workers and for American consumers,” Pelosi said. 

 

White House counselor Kellyanne Conway said the tariffs should not jeopardize passage of the trade pact and that the president simply wants Mexico to do more to stem the flow of migrants. 

 

She said the White House is confident it would pass the Democratic-run House, if Pelosi put it to a vote. 

​Investors unhappy

 

Trump said he had the authority to impose a 5 percent levy on all goods imported from Mexico and pledged to increase those duties to as high as 25 percent if Mexico did not dramatically reduce the number of migrants crossing the border. 

 

Investors have responded negatively, with the Dow Jones industrial average closing Friday down roughly 355 points, or 1.4%. 

 

Still, Conway told reporters that “tariffs are a good way to get a trading partner’s attention, and apparently it did.” 

 

Mexico’s foreign relations secretary, Marcelo Ebrard, announced that he and Secretary of State Mike Pompeo would lead talks Wednesday in Washington, a move seen as potentially easing tensions and avoiding retaliatory tariffs.  

  

Both Mexico and Canada are moving ahead with steps toward ratifying the trade agreement. 

 

Canada’s foreign minister, Chrystia Freeland, indicated that it’s up to the U.S. and Mexico to work out their dispute. “This is a bilateral issue,” she said. 

VOA News Center associate producer Jesusemen Oni contributed reporting from Washington. 

Mexico’s president suggested Saturday that his country could clamp down on migration, and he said he thought the United States was ready to discuss its threatened use of tariffs as a means to combat illegal migration from Central America.

President Andres Manuel Lopez Obrador said at a Mexico City news conference that “there is willingness on the part of U.S. government officials to establish dialogue and reach agreement and compromises.”

His comments came ahead of talks in Washington next week, and Obrador said he said he expected “good results.” He added that Mexico was willing to “reinforce” existing “measures without violating human rights.”

Mexican Foreign Minister Marcelo Ebrard said Friday that he began negotiating with U.S. officials after U.S. President Donald Trump threatened to impose tariffs on Mexican products related to the migrant surge at the border.

Ebrard said on Twitter that he had spoken to U.S. Secretary of State Mike Pompeo by phone and said face-to-face talks between the two would take place Wednesday in Washington.

“We will be firm and defend the dignity of Mexico” at the talks, Ebrard said.

Obrador also responded Friday to the U.S. tariff threats with caution, urging “dialogue” over “coercive measures.” 

 

“I want to reiterate that we are not going to fall into any provocation. But we are going to be prudent, and we are going to respect the authorities of the United States and President Donald Trump,” Obrador said.  

That statement followed a two-page letter to Trump made public late Thursday, similar in tone, responding to Trump’s announcement on Twitter earlier in the day that the United States would begin imposing an escalating tax on imports from Mexico. 

 

“On June 10, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP,” Trump tweeted. Until “the illegal immigration problem is remedied,” tariffs will continue to rise monthly, going as high as 25% by Oct. 1. 

 

U.S. border agents have apprehended an increasing number of people, largely from Central America, who crossed the southern U.S. border without authorization in recent months. 

 

In contrast to previous spikes in arrivals, recent groups have included a large number of children, prompting U.S. officials to scramble to support families and children traveling without parents — some of whom are seeking asylum.  

In an indication of the pressing demands at the border, U.S. Customs and Border Protection solicited bids for the purchase of tens of thousands of diapers, baby wipes and bottles this past week, according to documents reviewed by VOA on a government contracting website.

 

Trump’s announcement of the new tariffs came on the same day Mexico began the formal process of ratifying the United States-Mexico-Canada Agreement (USMCA) on trade. 

 

Mexico’s deputy foreign minister for North America, Jesus Seade, said such tariffs would be disastrous, expressing more alarm than the Mexican president. 

 

“If this threat is carried out, it would be extremely serious,” he told reporters. “If this is put in place, we must respond vigorously.” 

 

For one trade expert, who previously served as Mexico’s ambassador to China — a top trading partner for that country and the U.S. — the timing of Trump’s tariff statement raised questions about the future of the USMCA. 

 

“By mixing two things — immigration and now, just lately, drug flow, with trade — I think it confuses the issue,” said Jorge Guajardo, a senior director at the Washington-based international trade consulting firm McLarty Associates.  

The trade deal “was a triumph for all three countries, and now of course, that all comes into doubt,” Guajardo added. 

 

Some Republican members of Congress but no Democrats were consulted about White House plan, according to acting White House Chief of Staff Mick Mulvaney. 

 

Asked in a hastily arranged conference call with reporters about benchmarks Mexico would need to achieve to have the tariffs lifted, Mulvaney said there needed to be significant and substantial reductions in arrivals from Central America crossing into the United States. 

 

“We’re going to take this and look at it on a day-to-day and week-to-week basis,” said Mulvaney. “We are interested in seeing the Mexican government act tonight, tomorrow.” 

 

Trump has repeatedly accused Mexico of not doing enough to stop Central American migrants from traveling through the country on their way to the United States. 

 

The U.S. system, however, is not infallible. While the country has increased its apprehension rate at the border in recent years, U.S. border agents stop an estimated 65% to 80% of people crossing into the country without authorization, according to a 2018 DHS report.

The Trump administration is committed to making fossil fuels cleaner rather than imposing “draconian” regulations on coal and oil, U.S. Energy Secretary Rick Perry said Thursday at an energy conference in Salt Lake City.

Perry previously said the administration wants to spend $500 million next year on fossil fuel research and development as demand plummets for coal and surges for natural gas. 

 

“Instead of punishing fuels that produce emissions through regulation, we’re seeking to reduce those emissions by innovation,” Perry said at the conference.

Fossil fuel emissions have been cited by scientists as a major source of global warming. 

 

U.N. Secretary-General Antonio Guterres recently said the world must change how it fuels factories, vehicles and homes to limit future global warming.

Perry said the Trump administration has proven it can make energy cleaner, but he provided no details involving coal and other fossil fuels, other than the closing of old, inefficient coal-burning power plants and exporting increasing volumes of natural gas, an alternative to coal.  

Department of Energy spokesman Dirk Vande Beek didn’t immediately return an email and voicemail seeking more details about Perry’s claim.

Perry pointed to an overall drop in emissions as proof of progress.

Greenhouse gas emissions dropped 13 percent from 2005 to 2017, according to the most recent report from the Environmental Protection Agency.

Lindsay Beebe of the Sierra Club in Utah said trying to make fossil fuels cleaner is misspent energy.

“I don’t know that it’s possible right now, but what is ready right now are renewables. Wind, solar and geothermal are commercially viable and at scale,” Beebe said.

The summit Thursday was briefly interrupted when 15 protesters took the stage to criticize the administration’s fixation on fossil fuels. 

 

They said the misguided approach ignores climate change. Police then escorted them out.

After they left, Utah Gov. Gary Herbert, who sponsored the event, said he and other leaders appreciated the “youthful enthusiasm” but their call to immediately discard fossil fuels and shift entirely to renewable energy isn’t realistic.

“They would like us to quit by Friday and not take anything out of the ground,” Herbert said. “That obviously doesn’t work from a practical standpoint.”

Americans burned a record amount of energy in 2018, with a 10% jump in consumption from booming natural gas helping lead the way, the U.S. Energy Information Administration said.

Fossil fuels in all accounted for 80% of Americans’ energy use. 

The International Monetary Fund said on Thursday it had not pressured Venezuela to release economic indicators after years of silence, while two sources said the country’s surprise data release this week was due to pressure from China.

The central bank on Tuesday unexpectedly released data confirming Venezuela is suffering hyperinflation and massive economic contraction. The release reversed President Nicolas Maduro’s unofficial policy of classifying economic indicators as state secrets.

The data reported a 22.5 percent contraction in Venezuela’s economy in the third quarter of 2018 from the same period of the previous year. The bank did not provide a full-year 2018 figure for economic activity.

Monthly inflation in April 2019 was 33.8 percent, while 2018 full-year inflation reached 130,060 percent, the bank said.

The IMF said it suspended work with Venezuela on its economic data in January, when opposition leader Juan Guaido invoked the constitution to assume the interim presidency, arguing Maduro’s 2018 re-election was illegitimate.

Most Western countries, including the United States, have backed Guaido as the OPEC nation’s interim head of state.

However, Maduro and ruling socialist party continue to control state institutions including the military, state oil company PDVSA and the central bank.

The Fund said in March it was awaiting guidance from member countries on whether to recognize Guaido as the country’s leader. The United States and Venezuelan ally China are important IMF members, as they have the world’s two largest economies.

“Work in this area has been suspended since late January as political developments gave rise to questions regarding government recognition,” the spokesman said.

Last year, the IMF issued a “declaration of censure” against Venezuela for failing to report timely and accurate economic data, such as gross domestic product and inflation.

The move was a warning that Caracas could be barred from voting on IMF policies, and eventually expelled, unless it resumed timely and accurate reporting.

Maduro has repeatedly dismissed the IMF as an agent of U.S. colonialism and criticized the institution for leading harsh austerity programs in developing countries.

China, which has for years sought to increase its influence within the IMF, had pressured Maduro’s government to release the data, according to two sources with knowledge of the matter.

One of the sources said China had hoped releasing the data would help bring Venezuela into compliance with the IMF, making it harder for the institution to recognize Guaido.

An IMF spokesman said the fund could not fully assess the quality of the data because there was no contact with the government.

“We cannot offer a view on data quality as we have not had the opportunity to make a full assessment in the absence of contacts with the authorities,” the spokesman said.