Trump promises ‘aggressive’ action on trade to protect US

Donald Trump

President Donald Trump’s administration has signalled a new and “aggressive” approach to international trade.

In a new report to Congress, the administration promises to use “all possible leverage” to encourage other countries to give US producers fair reciprocal access to their markets.

The aim is to enhance, not restrict, trade and competition,

But it says the “Trump administration will act aggressively as needed to… encourage true market competition”.

The new president’s election campaign featured sharp criticism of US trade agreements and the conduct of some of the US’s trading partners.

Mr Trump rapidly took one step in this area, by deciding to pull out of the major trade agreement negotiated by the Obama Administration, the Trans-Pacific Partnership (TPP).

The document sent to Congress, called the “President’s 2017 Trade Policy Agenda”, gives some further insight into how his administration is likely to proceed.

There is a strong flavour of the “economic nationalism,” favoured by the President’s chief strategist, Steve Bannon, although the report also expresses support for free and fair trade.

Too often, the report says, Americans have been put at an unfair disadvantage in global markets.

So, it says: “It is time for a new trade policy that defends American sovereignty, enforces US trade laws, uses American leverage to open markets abroad, and negotiates new trade agreements that are fairer and more effective both for the United States and for the world trading system, particularly those countries committed to a market-based economy.”

The report adds that the administration will not tolerate unfair trade practices and will “act aggressively” to discourage this type of behaviour.

There’s a list of the types of behaviour being targeted including:

  • dumping – when a foreign exporter sells goods abroad more cheaply than at home
  • government subsidies
  • theft of intellectual property – such as patents, copyright and trademarks
  • currency manipulation – which can make exporters more competitive

This presumably signals an intention to make greater use of the options already available under US law and World Trade Organization (WTO) rules. The Obama Administration, and its predecessors, have used these options, but we can expect President Trump to do it more.

The options include using the WTO’s dispute settlement system – a kind of judicial procedure. There are also actions that WTO rules allow countries to take unilaterally, against dumped or subsidised goods and sudden surges in imports.

But there are also hints that the US might be willing to by-pass the rules, “when the WTO adopts interpretations… that undermine the ability of the US and other WTO members to respond effectively to these real world unfair trade practices”. When that happens, the report says it undermines confidence in the global trading system.

It is also striking that the report emphasises the status of WTO rules in US law. Even if the US loses in a dispute “it does not automatically lead to a change in US law or practice.”

One complaint in the report is the fact that some countries maintain “high tariffs” (taxes applied only to traded goods) which block access to their markets.

But tariffs are allowed under WTO rules. Each WTO member country has made commitments to keep tariffs at or below a certain level. They are different for different countries and different goods.

These maximum tariff levels were the outcome of the long set of negotiations that established the WTO. And in some cases they are very high.

In the US and other rich countries they generally are relatively low, although there are some sectors – especially agriculture where there are some high tariffs. Any reduction in those maximum levels would have to be negotiated – something that WTO members have been trying to do with little success.

So, how will the US act on these ideas? We have to wait and see.

But the challenge has been noted at WTO Headquarters. The agency’s director-general Roberto Azevedo issued a statement saying:

“It is clear that the United States has a variety of trade concerns, including about the WTO dispute settlement system.

“I am ready to sit down and discuss these concerns and any others with the trade team in the US whenever they are ready to do so,”

House sellers ‘should pay stamp duty’

Monopoly pieces on map

Stamp duty should be a tax on property sellers, rather than buyers, to help those trying to buy their first home, a major UK building society has said.

The Yorkshire Building Society said that nearly three-quarters of first-time buyers now paid the tax, compared with just over half in 2006.

Many more buyers were being drawn into the tax as house prices rose but the threshold remained the same.

It is levied on properties of more than £125,000, or £145,000 in Scotland.

The rate steadily increases for more expensive properties.

The stamp duty threshold was increased to £125,000 in 2006 to keep pace with house price inflation.

The threshold outside of Scotland had remained the same since then, despite the fact that the average house price had risen by 35%, the Yorkshire said.

The building society has suggested that first-time buyers in the UK could save an average of £3,625, while Londoners could save £13,171, if the tax burden was shifted to sellers.

Those moving up the property ladder could save an average of £4,154 across the UK, and £9,762 in London, it said.

It is calling on Chancellor Philip Hammond to change the tax in his Budget on Wednesday.

“In its present form, stamp duty does not suit today’s housing market – it pushes up costs for those looking to buy, exacerbating affordability issues in a market where prices have vastly outpaced wage growth,” said Andrew McPhillips, the Yorkshire’s chief economist.

“Levying the charge against sellers rather than buyers will help to reduce costs for first-time buyers, helping more people to get on the property ladder. It would also help those moving up the property ladder, enabling them to move to a more suitable property and potentially freeing up smaller homes for first-time buyers to purchase.”

This would not solve the housing crisis, he said, but would help if accompanied by a major housebuilding programme.

Figures have shown that the UK government is raising a record amount of tax from property sales.

Cement firm Lafarge paid Syrian armed groups

Logo on a plant of French cement company Lafarge on 7 April 2014 in Paris

Cement maker LafargeHolcim says it has uncovered evidence that a Lafarge factory in Syria provided funding to local armed groups.

It said those in charge of the Jalabiya plant had taken “unacceptable” measures in order to keep the plant open and protect employees.

Various armed factions “controlled or sought to control” the area, it said.

The plant in northern Syria was shut down in 2014, the year before France’s Lafarge merged with Swiss rival Holcim.

LafargeHolcim said the evidence was revealed by an internal investigation.

“At times, different armed factions controlled or sought to control the areas around the plant,” the firm said.

“It appears from the investigation that the local company provided funds to third parties to work out arrangements with a number of these armed groups, including sanctioned parties, in order to maintain operations and ensure safe passage of employees and supplies to and from the plant,” it added.

“In hindsight, the measures required to continue operations at the plant were unacceptable.”

At the time, Syria was subject to EU sanctions imposed on President Bashar al-Assad’s government, which has lost control of large swathes of the country to various armed groups.

The French government believes that Lafarge’s local officials bought oil in Syria to power the factory, in defiance of those sanctions, according to the French news agency AFP.

At the same time, LafargeHolcim released better-than-expected fourth-quarter results, showing that underlying core earnings were up 15.5% year-on-year to 1.61bn Swiss francs (£1.3bn; $1.6bn).

Jimmy Choo revenues boosted by menswear range

Male model wearing Jimmy Choo

Jimmy Choo, the British luxury brand regularly seen on the red carpet, has reported strong revenue growth boosted by China and its menswear lines.

to £364m but pre-tax profits dropped to £18m.

Shoes account for the majority of its sales, with men’s remaining its “fastest growing category” accounting for 9% of revenue.

New store openings also helped to lift sales.

Now boasting 150 stores worldwide its operating profit was up 42.6% to £42.5m.

Celebrity fans include Meryl Streep and Diane Kruger who didn’t put a step wrong in their Jimmy Choos at this year’s now infamous ceremony.

The fashion brand also claims La La Land Oscar winner, Emma Stone as a devotee.

It said the breadth of its range allowed it to capitalise on the renewed popularity of the luxury trainer, leading to particular success with the Miami trainer.

During 2016 a further 16 of it new directly-operated stores were refitted, which it said continued to outperform those in the existing format.

Its online business now accounts for 6% of revenue.

Revenue fell in the US as it repositions its business along with a fall in demand from department stores.

Terrorists attacks in Europe reduced spending by tourists and slowed sales but it said trends improved in the second half of the year up 31st December 2016.

It said the drop in sterling following the UK referendum to leave the EU, had an impact on “the financial results and client purchasing behaviour.”

The company said exchange rate fluctuations remained a concern which it was monitoring, but the lower pound had been attracting foreigners to spend in London.

Pierre Denis, chief executive of Jimmy Choo, said: “2016 was a landmark year for Jimmy Choo.

“Not only did we successfully celebrate 20 years of heritage but record revenues and profitability are testament to the growing appeal and strength of our brand.

“We will continue to deliver on our long term strategy of growth through the creative and innovative development of our collections and the sustained expansion of our distribution network, particularly in areas such as Asia where we remain underpenetrated.”

The brand is trying to broaden its appeal investing in revamped shops, new websites and distribution networks.

Tom Gadsby, Liberum analyst said: “The company’s outlook is strong.

“Retail trends are improving across all regions and Choo has a very strong growth prospects across all its channels.

“We are encouraged to see the strength of the company’s retail business following sensible investment and there remains plenty of scope for further store expansion.” He added.

Jimmy Choo produces a wide range of luxury items, from handbags and scarves to sunglasses and perfume. But its shoes remain at its core.

Quorn recalls mince over fears it contains metal pieces

A packet of minced Quorn

Quorn Foods is recalling 12,000 packets of its frozen meat-free mince over fears it may contain small pieces of metal.

The warned customers not to eat the product because it represented a safety risk.

The recall only affects products sold at Tesco stores and does not include goods bought before 27 February 2017.

The 300g packets have a best-before date of 31 August 2018 and a batch code of 136331.

Quorn Foods said it was a precautionary measure resulting from an “isolated production issue.”

No other Quorn products are affected.

Customers are advised to return the product to Tesco where they will get a full refund.

Cobham in cash call to tackle debt

Lockheed Martin F-35 Lightning II

The aerospace company that pioneered in-flight refuelling has asked shareholders for a £500m injection to repair its finances – the second such cash call in just eight months.

Cobham unveiled the rights issue plan alongside a disastrous

The firm is still trading profitably and made a £225m operating profit.

But it was thumped heavily into the red after it wrote down the underlying value of its business. It declared a statutory pre-tax loss of nearly £850m.

Cobham – whose founder, Sir Alan Cobham, was one of the pioneers of British aviation – has annual sales of £2bn.

The rights issue will be a blow to shareholders, who were stunned last June when the company asked for . It then said the money would put it on a “sound financial footing”.

Analysts were puzzled when the company did not cancel its dividend payment to shareholders – worth £125m a year – at the time.

With the latest rights issue – which has been underwritten by a group of investment banks, meaning the company is sure to get the money even if investors decline to put more money in – the dividend has been scrapped.

Cobham chairman Michael Waring said while there had been significant management change in recent months, there would be more to come, promising “a rolling programme of board changes over the next two years”.

David Lockwood, chief executive since last summer, said he was confident Cobham could be “reinvigorated over time”.

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Capita boss to quit amid profit fall

Congestion charge sign

Capita, the outsourcing company that operates the London congestion charge, has said its chief executive is stepping down after it reported a big fall in profits.

The firm said Andy Parker would step down later this year once a replacement had been found.

The news came as it revealed that annual pre-tax profits had fallen 33% to £74.8m.

Capita has also been under fire over the way it collects the TV licence fee.

Capita, which collects the fee on behalf of the BBC, is now by the corporation after allegations that its collectors targeted vulnerable people, spurred on by an aggressive incentive scheme.

In addition, the company will index of leading shares later this month because its share price has fallen sharply.

Mr Parker said 2016 had been “a challenging year” and Capita had “delivered a disappointing performance”.

He added that this year was likely to be one of transition, with Capita not expected to return to growth until 2018.

In September last year, the firm issued a profit warning after delays in implementing new IT systems for the congestion charge.

It has also seen a slowdown in other parts of its business and delays in client decision-making, which it said were probably “compounded by the UK’s referendum decision to leave the EU market”.

Capita employs 75,000 people in the UK, Europe, India and South Africa.

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PPI claims deadline is announced

Bank notes

People seeking compensation over mis-sold payment protection insurance (PPI) will have to make their claims before 29 August 2019.

The final deadline has been set by the Financial Conduct Authority (FCA) in an effort to draw a line under one of the banking industry’s biggest scandals.

Millions of people have already been compensated and banks have set aside more than £40bn to cover the payouts.

It is believed that many more are yet to come forward.

The FCA said it would run a two-year public awareness campaign, starting in August this year, in an attempt to flush out the remaining complainants.

Last month, the Financial Ombudsman Service disclosed that it had received 78,000 new PPI complaints in the six months to last December.

The ombudsman deals with complaints which financial firms have been unable to settle themselves.

Since 2003, about one and a half million people have been so dissatisfied with the PPI offers that were made to them, or the outright rejection of their claims, that they have subsequently gone to the financial ombudsman.

Ford Bridgend: Welsh secretary ‘optimistic’ over future

Bridgend engine plant

Ford’s engine plant in Bridgend will have opportunities to bid for new work which could secure threatened jobs, the Welsh secretary has said.

A leaked document showed Ford was by 2021 at the plant.

But Alun Cairns said he was optimistic there would be chances “to bid for new engines along the way”.

He met Ford earlier this week to discuss the life cycle of its engines and said discussions would continue.

On Wednesday, Ford shared its five-year outlook with unions in the wake of reductions in planned investment in its new Dragon engine.

It said there were “healthy volumes” of work over the next two to three years but that “identified workload is reduced” beyond that.

But Mr Cairns told BBC Wales: “There are some good engines, some very good skills, and I’m determined to do everything I can in order to make those jobs as sustainable as possible over the long-term.

“There will be opportunities to bid for new engines along the way so long as we can make the plant in Bridgend, the plant in Dagenham and complementary industries as efficient as possible.”

He said Nissan’s investment in Sunderland since the referendum would boost Wales component companies while he also wanted to help secure jobs at Toyota’s engine plant on Deeside, Flintshire.

“This is about making an automotive sector of the highest standard, of the highest quality products in the most efficient way possible,” he said.

“I believe as we exit the European Union we can get to the position where these large organisations can drive the agenda and be part of this global Britain.”

First Minister Carwyn Jones said on Wednesday the .

Union Unite said it would “use all its might” while the GMB said the outlook, confirmed at a meeting, was a “real kick in the teeth”.

Australia cracks down on visas for fast food industry

Australia will largely end granting visas to foreign workers to fill jobs in the fast food industry, the nation’s immigration minister has said.

Peter Dutton said the decision was designed to protect Australian jobs.

Since 2012, more than 500 foreign staff have been granted a visa – known as 457 – to work at businesses including McDonald’s, KFC and Hungry Jack’s.

The skilled worker visa, designed to fill Australian shortages, also extends to family members.

“Australian workers, particularly young Australians, must be given priority,” Mr Dutton said in explaining the change.

He said visas would still be granted under exceptional circumstances.

According to , 95,758 people were living in Australia on 457 visas in September last year, compared with 103,862 in 2015.

The highest proportion came from India (24.6%), the UK (19.5%) and China (5.8%).

  • A four-year business visa which allows people to live in Australia with their immediate family
  • It is designed to staff industries where there are gaps in skilled labour
  • Employers must sponsor 457 holders, and only if they “cannot find an Australian or permanent resident”
  • Successful applicants can freely travel in and out of Australia
  • In 2016, the most 457s were granted to cooks, developers, programmers and medical workers

Foreign workers had been able to apply for fast-food industry jobs since an agreement in 2012, when the opposition Labor Party was in power.

But Labor’s employment spokesman Brendan O’Connor queried the new decision, saying the visa did not apply to unskilled workers.

“The notion that 457s can take jobs of flipping burgers means either Peter Dutton is lying or they are misapplying the 457 visa,” he said.

Mr Dutton conceded the change mostly affected managerial staff, but said the current arrangement did not put Australian workers first.

“Genuine business needs for overseas workers which contribute to economic growth will still be considered,” he said.

More than half of the 500 workers granted visas since 2012 were employed at McDonald’s, while almost 100 found work at both KFC and Hungry Jack’s.

Mr Dutton in December ordered a review of Australia’s , which lists more than 650 professions, to ensure that overseas workers “supplement rather than provide a substitute” for Australians.