Mexico Still Preparing for US Car Tariffs, Backs WTO Reform

Mexico is still preparing all options to respond to possible U.S. tariffs on car imports, Deputy Economy Minister Juan Carlos Baker said on Tuesday, despite U.S.-European talks last week that were supposed to have seen off the immediate threat.

Last week European Commission President Jean-Claude Juncker said he had secured a “major concession” from President Donald Trump, having agreed that as long as the two sides were negotiating on trade, they would hold off on imposing further measures, including U.S. tariffs on cars and auto parts.

Baker was speaking after meeting senior trade officials from Canada, Japan, South Korea and the European Union in Geneva, which is also home to the World Trade Organization.

The countries — long term U.S. allies which are at odds with Trump over trade relations — were not coordinating their response, Baker told reporters. However, they were all determined to respond if tariffs on cars were imposed, he said, noting that the U.S. process to introduce them had not stopped.

“We take that very seriously. Until that process is fully concluded and no tariffs are imposed, we need to be serious and consider the possibility that those tariffs may be established.

We need to make clear that we are prepared to react,” he said.

Over several hours of talks at the EU mission, the five powers — all of them hit by Trump’s steel tariffs imposed in March, and concerned about his disruption of the WTO — also discussed reform of the 23-year-old trading club.

Trump is demanding a shake-up of the WTO, saying it treats the United States unfairly and gives China undue advantages.

To force the issue, he has brought the WTO’s system for settling international trade disputes to the brink of collapse by blocking the appointment of judges when the terms of others expire, a situation that diplomats and trade officials have described as hostage taking and the “asphyxiation” of the WTO.

Baker said there were several sets of reform ideas on the table for the WTO and he was encouraged. “We would not be doing this if we believed the process is doomed to fail,” he said. “We all feel the sense of urgency here. We do not necessarily have a due date … but the sooner we start the better.”

Proposals are likely to be polished in the next few months, including at meetings of the G20 major economies, an APEC forum of Pacific rim countries, and at a Canadian-hosted meeting in October. A trade ministers’ meeting in Davos in January would be an important moment to take stock of progress, he said.

“Today was only a very initial, incipient discussion but I believe it was good in terms of knowing how much running round we have ahead of us.”


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Robotic Hand Can Juggle Cube — With Lots of Training

How long does it take a robotic hand to learn to juggle a cube?

About 100 years, give or take.

That’s how much virtual computing time it took researchers at OpenAI, the nonprofit artificial intelligence lab funded by Elon Musk and others, to train its disembodied hand. The team paid Google $3,500 to run its software on thousands of computers simultaneously, crunching the actual time to 48 hours. After training the robot in a virtual environment, the team put it to a test in the real world.

The hand, called Dactyl, learned to move itself, the team of two dozen researchers disclosed this week. Its job is simply to adjust the cube so that one of its letters — “O,” “P,” “E,” “N,” “A” or “I” — faces upward to match a random selection.

Ken Goldberg, a University of California, Berkeley robotics professor who isn’t affiliated with the project, said OpenAI’s achievement is a big deal because it demonstrates how robots trained in a virtual environment can operate in the real world. His lab is trying something similar with a robot called Dex-Net, though its hand is simpler and the objects it manipulates are more complex.

“The key is the idea that you can make so much progress in simulation,” he said. “This is a plausible path forward, when doing physical experiments is very hard.”

Dactyl’s real-world fingers are tracked by infrared dots and cameras. In training, every simulated movement that brought the cube closer to the goal gave Dactyl a small reward. Dropping the cube caused it to feel a penalty 20 times as big.

The process is called reinforcement learning. The robot software repeats the attempts millions of times in a simulated environment, trying over and over to get the highest reward. OpenAI used roughly the same algorithm it used to beat human players in a video game, Dota 2.

In real life, a team of researchers worked about a year to get the mechanical hand to this point.

Why?

For one, the hand in a simulated environment doesn’t understand friction. So even though its real fingers are rubbery, Dactyl lacks human understanding about the best grips.

Researchers injected their simulated environment with changes to gravity, hand angle and other variables so the software learns to operate in a way that is adaptable. That helped narrow the gap between real-world results and simulated ones, which were much better.

The variations helped the hand succeed putting the right letter face up more than a dozen times in a row before dropping the cube. In simulation, the hand typically succeeded 50 times in a row before the test was stopped.

OpenAI’s goal is to develop artificial general intelligence, or machines that think and learn like humans, in a way that is safe for people and widely distributed.

Musk has warned that if AI systems are developed only by for-profit companies or powerful governments, they could one day exceed human smarts and be more dangerous than nuclear war with North Korea.


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Facebook Removes Accounts ‘Involved in Coordinated Inauthentic Behavior’

Efforts to influence U.S. voters ahead of the 2018 midterm elections in November appear to be well underway, though private companies and government officials are hesitant to say who, exactly, is behind the recently discovered campaigns.

Facebook announced Tuesday it had shut down 32 Facebook and Instagram accounts because they were “involved in coordinated inauthentic behavior.”

Specifically, the social media company said it took down eight Facebook pages, 17 Facebook profiles, and seven Instagram accounts, the oldest of which were created in March 2017.

Facebook said the entities behind the accounts ran some 150 ads for about $11,000 on Facebook and Instagram, paid for with U.S. and Canadian currency.

“We’re still in the very early stages of our investigation and don’t have all the facts — including who may be behind this,” Facebook said in a blog post. “It’s clear that whoever set up these accounts went to much greater lengths to obscure their true identities than the Russian-based Internet Research Agency (IRA) has in the past.”

Effort to spark confrontations

At least 290,000 accounts followed the fake pages, most of which appeared to target left-wing American communities in an effort to spark confrontations with the far right, according to an analysis done by the Atlantic Council’s Digital Forensic Research Lab.

 

“They appear to have constituted an attempt by an external actor — possibly, though not certainly, in the Russian-speaking world,” the Digital Forensic Research Lab said in its own post.

It said similarities to activity by Russia’s IRA included “language patterns that indicate non-native English and consistent mistranslation, as well as an overwhelming focus on polarizing issues at the top of any given news cycle with content that remained emotive rather than fact-based.”

Facebook’s announcement came the same day top U.S. officials warned the country is now in “a crisis mode.”

“Our democracy itself is in the crosshairs,” Homeland Security Secretary Kirstjen Nielsen said at a National Cybersecurity Summit, citing Russian interference in the 2016 presidential elections.

“It is unacceptable, and it will not be tolerated,” Nielsen said. “The United States possesses a wide range of response options — some of them seen, others unseen — and we will no longer hesitate to use them to hold foreign adversaries accountable.”

Homeland Security officials said they had been in touch with Facebook about the fake accounts and applauded the move to take them down. The White House also praised Facebook’s actions.

“We applaud efforts by our private sector partners to combat an array of threats that occur in cyberspace, including malign influence,” NSC spokesman Garrett Marquis told VOA.

Nielsen, who did not comment on the Facebook announcement directly, also said officials were “dramatically ramping up” efforts to protect U.S. election systems with the help of a new Election Task Force.

She also announced the launch of a National Risk Management Center to make it easier for the government to work with private sector companies to counter threats in cyberspace.

U.S. President Donald Trump, who has at times cast doubt on findings by the U.S. intelligence community regarding Russian interference in the 2016 election, chaired a meeting of his National Security Council on election security on Friday, with the White House promising continued support to safeguard the country’s election systems.

Vice President Mike Pence, speaking Tuesday at a Homeland Security-sponsored summit, echoed that, saying, “Any attempt to interfere in our elections is an affront to our democracy, and it will not be allowed.”

Pence assured the audience that the White House did not doubt Russia’s attempts to influence U.S. elections, saying, “Gone are the days when America allows our adversaries to cyberattack us with impunity.”

“We’ve already done more than any administration in American history to preserve the integrity of the ballot box,” he added. “The American people demand and deserve the strongest possible defense, and we will give it to them.”

Hackers targeted congressional campaigns

Less than two weeks ago, Microsoft said hackers had targeted the campaigns of at least three congressional candidates in the upcoming election.

Tom Burt, Microsoft’s vice president for customer security and trust, refused to attribute the attacks, but said the hackers used tactics similar to those used by Russian operatives to target the Republican and Democratic parties during their presidential nominating conventions in 2016.

Late last week, The Daily Beast reported one of the targets of the attack was Missouri Democratic senator Claire McCaskill, who has been highly critical of Russia and is facing a tough re-election campaign.

Until recently, both U.S. government and private sector officials had said they had not been seeing the same pace of attacks or influence campaigns that they saw in the run-up to the 2016 election.

“I think we’re not seeing that same conduct,” Monika Bickert, head of Facebook’s product policy and counterterrorism, said during an appearance earlier this month at the Aspen Security Forum. “But we are watching for that activity.”

Still, many officials and analysts said it was likely just a matter of time before Russia would seek to strike again.

“I think we have been clear across the entire administration that even though we aren’t seeing this level of activity directed at elections, we continue to see Russian information operations directed at undermining our democracy,” Homeland Security undersecretary Chris Krebs said.

Facebook said it was sharing what it knows because of a connection between the “bad actors” behind the Facebook and Instagram pages and some protests that are planned next week in Washington, D.C.

Facebook also canceled an event posted by one of the accounts — a page called “Resisters” — calling for a counterprotest to a “Unite the Right” event scheduled for August in Washington, D.C.

U.S. lawmakers’ reactions

Key U.S. lawmakers applauded Facebook’s actions Tuesday, though they warned more still needs to be done.

“The goal of these operations is to sow discord, distrust and division in an attempt to undermine public faith in our institutions and our political system,” Sen. Richard Burr, chair of the Senate Intelligence Committee, said in a statement. “The Russians want a weak America.”

“Today’s announcement from Facebook demonstrates what we’ve long feared — that malicious foreign actors bearing the hallmarks of previously identified Russian influence campaigns continue to abuse and weaponize social media platforms to influence the U.S. electorate,” Rep. Adam Schiff, the top Democrat on the House Intelligence Committee, said in a statement.

“It is clear that much more work needs to be done before the midterm elections to harden our defenses, because foreign bad actors are using the exact same playbook they used in 2016,” Schiff added.


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Tehran: Trump Wrong to Expect Saudis to Cover Loss of Iran Oil Supply

Iran said on Tuesday U.S. President Donald Trump was mistaken to expect Saudi Arabia and other oil producers to compensate for supply losses caused by U.S. sanctions on Iran, after OPEC production rose only modestly in July.

The comments, from Iran’s OPEC governor, came a day after a Reuters survey showed OPEC production rose by 70,000 barrels per day in July. Saudi production increased but was offset by a decline in Iranian supply due to the restart of U.S. sanctions, the survey found.

“It seems President Trump has been taken hostage by Saudi Arabia and a few producers when they claimed they can replace 2.5 million barrels per day of Iranian exports, encouraging him to take action against Iran,” Hossein Kazempour Ardebili told Reuters. “Now they and Russia sell more oil and more expensively. Not even from their incremental production but their stocks.”

He said oil prices, which Trump has been pressuring the Organization of the Petroleum Exporting Countries to bring down by raising output, will rise unless the United States grants waivers to buyers of Iranian crude.

“They are also calling for the use of the U.S. SPR [Strategic Petroleum Reserve]. This will also mean higher prices. U.S. waivers to our clients if they come is due to the failure of bluffers [Saudi and the other producers] and, if not given, will again push the prices higher,” he said.

“So they hanged him [Trump] on the wall. Now they want to have a mega OPEC, congratulations to President Trump, Russia and Saudi Arabia.”

OPEC governors represent their respective country on the organization’s board of governors and are typically the second most senior person in a country’s OPEC delegation after the oil minister.

“The longer-term solution, Mr President, is to support and facilitate capacity building in all countries, proportionate to their reserves of oil and gas. And we will remain the biggest opportunity,” Kazempour said.

 


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From Homeless to Employment in Silicon Valley

As tech giants expand in San Francisco, homelessness and job displacement for locals continues to rise. Deana Mitchell explores one program, created by a formerly homeless man, that’s helping to merge the two worlds for local job seekers.


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With Drones and Satellites, India Gets to Know its Slums

Satellites and drones are driving efforts by Indian states to map informal settlements in order to speed up the process of delivering services and land titles, officials said.

The eastern state of Odisha aims to give titles to 200,000 households in urban slums and those on the outskirts of cities by the end of the year.

Officials used drones to map the settlements.

“What may have takes us years to do, we have done in a few months,” G. Mathi Vathanan, the state housing department commissioner, told the Thomson Reuters Foundation last week.

Land records across the country date back to the British colonial era, and most holdings have uncertain ownership, leading to fraud and lengthy disputes that often end in court.

Officials in Mumbai, where about 60 percent of the population lives in informal settlements, are also mapping slums with drones. Maharashtra state, where the city is located, is launching a similar exercise for rural land holdings.

In the southern city of Bengaluru, a seven-year study that recently concluded used satellite imaging and machine learning.

The study recorded about 2,000 informal settlements, compared with fewer than 600 in government records.

“Understanding human settlement patterns in rapidly urbanizing cities is important because of the stress on civic resources and public utilities,” said Nikhil Kaza, an associate professor at the University of North Carolina.

“Geospatial analysis can help identify stress zones, and allow civic authorities to focus their efforts in localized areas,” said Kaza, who analyzed the Bengaluru data.

About a third of the world’s urban population lives in informal settlements, according to United Nations data.

These settlements may account for 30 percent to 60 percent of housing in cities, yet they are generally undercounted, resulting in a lack of essential services, which can exacerbate poverty.

Identifying and monitoring settlements with traditional approaches such as door-to-door surveys is costly and time consuming. As technology gets cheaper, officials from Nairobi to Mumbai are using satellite images and drones instead.

About 65 million people live in India’s slums, according to census data, which activists say is a low estimate.

Lack of data can result in tenure insecurity, as only residents of “notified” slums – or those that are formally recognized – can receive property titles.

Lack of data also leads to poor policy because slums are “not homogenous,” said Anirudh Krishna, a professor at Duke University who led the Bengaluru study.

Some slums “are more likely to need water and sanitation facilities, while better off slums may require skills and entrepreneurship interventions,” he said.

“Lack of information on the nature and diversity of informal settlements is an important limitation in developing appropriate policies aimed at improving the lives of the urban poor.”


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50 Years on, McDonald’s and Fast-Food Evolve Around Big Mac

McDonald’s is fighting to hold onto customers as the Big Mac turns 50, but it isn’t changing the makings of its most famous burger.

The company is celebrating the 1968 national launch of the double-decker sandwich whose ingredients of “two all-beef patties, special sauce, lettuce, cheese, pickles, onions and a sesame seed bun” were seared into American memories by a TV jingle. But the milestone comes as the company reduces its number of U.S. stores. McDonald’s said Thursday that customers are visiting less often. Other trendy burger options are reaching into the heartland.

The “Golden Arches” still have a massive global reach, and the McDonald’s brand of cheeseburgers, chicken nuggets and french fries remains recognizable around the world. But on its critical home turf, the company is toiling to stay relevant. Kale now appears in salads, fresh has replaced frozen beef patties in Quarter Pounders, and some stores now offer ordering kiosks, food delivery and barista-style cafes.

The milestone for the Big Mac shows how much McDonald’s and the rest of fast-food have evolved around it.

“Clearly, we’ve gotten a little more sophisticated in our menu development,” McDonald’s CEO Steve Easterbrook said in a phone interview.

As with many of its popular and long-lasting menu items, the idea for the Big Mac came from a franchisee.

In 1967, Michael James “Jim” Delligatti lobbied the company to let him test the burger at his Pittsburgh restaurants. Later, he acknowledged the Big Mac’s similarity to a popular sandwich sold by the Big Boy chain.

“This wasn’t like discovering the light bulb. The bulb was already there. All I did was screw it in the socket,” Delligatti said, according to “Behind the Arches.”

McDonald’s agreed to let Delligatti sell the sandwich at a single location, on the condition that he use the company’s standard bun. It didn’t work. Delligatti tried a bigger sesame seed bun, and the burger soon lifted sales by more than 12 percent.

After similar results at more stores, the Big Mac was added to the national menu in 1968. Other ideas from franchisees that hit the big time include the Filet-O-Fish, Egg McMuffin, Apple Pie (once deep-fried but now baked), and the Shamrock Shake.

“The company has benefited from the ingenuity of its small business men,” wrote Ray Kroc, who transformed the McDonald’s into a global franchise, in his book, “Grinding It Out.”

Franchisees still play an important role, driving the recent switch to fresh from frozen for the beef in Quarter Pounders, Easterbrook says. They also participate in menu development, which in the U.S. has included a series of cooking tweaks intended to improve taste.

Messing with a signature menu item can be taboo, but keeping the Big Mac unchanged comes with its own risks. Newer chains such as Shake Shack and Five Guys offer burgers that can make the Big Mac seem outdated. Even White Castle is modernizing, recently adding plant-based “Impossible Burger” sliders at some locations.

A McDonald’s franchisee fretted in 2016 that only one out of five millennials has tried the Big Mac. The Big Mac had “gotten less relevant,” the franchisee wrote in a memo, according to the Wall Street Journal.

McDonald’s then ran promotions designed to introduce the Big Mac to more people. Those kind of periodic campaigns should help keep the Big Mac relevant for years to come, says Mike Delligatti, the son of the Big Mac inventor, who died in 2016.

“What iconic sandwich do you know that can beat the Big Mac as far as longevity?” said Delligatti, himself a McDonald’s franchisee.


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Accusations Fly as US Firms Seek to Avoid Trump’s Steel Tariff

U.S. companies seeking to be exempted from President Donald Trump’s tariff on imported steel are accusing American steel manufacturers of spreading inaccurate and misleading information, and they fear it may torpedo their requests.

Robert Miller, president and CEO of NLMK USA, said objections raised by U.S. Steel and Nucor to his bid for a waiver are “literal untruths.” He said his company, which imports huge slabs of steel from Russia, has already paid $80 million in duties and will be forced out of business if it isn’t excused from the 25 percent tariff. U.S. Steel and Nucor are two of the country’s largest steel producers.

“They ought to be ashamed of themselves,” said Miller, who employs more than 1,100 people at mills in Pennsylvania and Indiana.

Miller’s resentment, echoed by several other executives, is evidence of the backlash over how the Commerce Department is evaluating their requests to avoid the duty on steel imports. They fear the agency will be swayed by opposition from U.S. Steel, Nucor and other domestic steel suppliers that say they’ve been unfairly hurt by a glut of imports and back Trump’s tariff.

U.S. Steel said its objections are based on detailed information about the dimensions and chemistry of the steel included in the requests. “We read what is publicly posted and respond,” said spokeswoman Meghan Cox. Nucor did not reply to requests for comment.

The 20,000-plus waiver applications that the Commerce Department has received illustrate the chaos and uncertainty ignited by Trump’s trade war against America’s allies and adversaries. It’s a battle that critics of his trade policy, including a number of Republican lawmakers, have warned is misguided and will end up harming U.S. businesses.

Trump and European leaders agreed this past Wednesday not to escalate their dispute over trade, but the tariff on steel and a separate duty on aluminum imports remains in place as the U.S. and Europe aim for a broader trade agreement. The metal taxes would continue to hit U.S. trading partners such as Canada, Mexico and Japan even if the U.S. and the EU forge a deal.

Miller bristled over insistence by Nucor and U.S. Steel that steel slab is readily available in the United States. “That’s just not true,” he said.

His company isn’t the only one looking overseas for a product described as being consistently in short supply. California Steel Industries, a mill east of Los Angeles in Fontana, described the slab shortage as “acute” on the West Coast and declared that its waiver request is critical to its survival.

Aiming to rebuild the U.S. steel industry, Trump relied on a rarely used 1962 law that empowers him to impose tariffs on particular imports if the Commerce Department determines those goods threaten national security. He added a twist: Companies could be excused from the tariff if they could show, for example, that U.S. manufacturers don’t make the metal they need in sufficient quantities.

But there are hurdles to clear on the path to securing an exemption. A single company may have to file dozens of separate requests to account for even slight variations in the metal it’s buying. That means a mountain of paperwork to be filled out precisely. If not, the request is at risk of being rejected as incomplete. All this can be time-consuming and expensive, especially for smaller businesses.

The requests are open to objections. The Commerce Department posts the exemption requests online to allow third parties to offer comments — even from competitors who have an interest in seeing a rival’s request denied. But objections are frequently being submitted just as the comment period closes, undercutting the requester’s ability to fire back.

Willie Chiang, executive vice president of Plains All American Pipeline, told the House Ways and Means subcommittee on trade last week that his company had no opportunity to respond to objections that contained “incorrect information” before the Commerce Department denied its exclusion request. Chiang didn’t say who submitted the inaccurate information.

“The intent here is to restrict imports on a broad scale,” said Richard Chriss, executive director of the American Institute for International Steel, a free trade group opposed to tariffs. “It wouldn’t make sense from the administration’s perspective to design a process that readily granted exclusions.”

The Commerce Department declined to comment for this story.

Department officials have so far made public only a small number of their rulings.

An analysis of the numbers by the office of Rep. Jackie Walorski, an Indiana Republican and one of the most vocal opponents of the steel tariff on Capitol Hill, shows that 760 requests have been approved while 552 have been denied. The department hasn’t yet approved a waiver request that triggered objections, according to Walorski’s review.

The congresswoman’s office also examined the more than 5,600 publicly available comments and found they were submitted on average about four days before the end of the 30-day comment period. More than 50 percent of the comments weren’t delivered until 48 hours or less before the comment window closed. It took department an average of nine days to post comments online after receiving them, according to the analysis. The most prolific commenters were Nucor and U.S. Steel with 1,064 and 1,009, respectively.

A waiver request Seneca Foods Corporation submitted for tinplated steel it had already agreed to purchase from China was among the denials. U.S. Steel had objected, calling the tinplate a “standard product” that’s readily available in the United States. In fact, U.S. Steel said it currently supplies the material to Seneca Foods, the nation’s largest vegetable canner.

The New York-based Seneca Foods declined to comment. But in its waiver application, the company said domestically made tinplate “is of inferior quality to imported material.” Seneca Foods also said it’s unclear, at best, if U.S. suppliers have the ability or willingness to expand their production in the long term to meet the company’s annual demand for the material.

Philadelphia-based Crown Cork & Seal, a manufacturer of metal packaging for food and beverages, submitted a sharply worded attachment to its waiver application that anticipated pushback from domestic manufacturers. American steel mills, the document said, cannot meet aggregate demand for tinplate and have no plans to increase their capacity.

“We anticipate the U.S. mills will attempt to rebut this statement when they object to this exclusion request, but we encourage the Department of Commerce to see through their manipulative attempt to exploit the rules of the exclusion request process,” the application said.

Daniel Shackell, Crown Cork & Seal’s vice president for steel sourcing, said he’s not optimistic about the company’s chances of getting all 70 of its waiver requests approved. Eight have been granted so far primarily because the metal specified in those requests is not made in the United States. Twelve others have been denied, leaving 50 still to be decided.

“It’s hard not to interpret that the Commerce Department wants domestic suppliers to have an edge,” Shackell said.

Jay Zidell, president of Tube Forgings of America, a small company in Portland, Oregon, said he’s filed 54 exclusion requests and U.S. Steel has objected to 38 of them. U.S. Steel declared it is “willing and ready to satisfy” Tube Forgings’ demands for carbon steel tubing. But Zidell said the comments ignored past problems with metal quality and workmanship that led his company to sever a prior relationship with U.S. Steel.

Still, he’s worried the Commerce Department won’t approve all of the requests. Tube Forgings already has spent $600,000 on tariffs, he said, and may be on the hook for much more than that.

“The entire system is just screwed up,” Zidell said.


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Trump Suspends Duty-free Status for Rwanda’s Apparel Exports to US

U.S. President Donald Trump has suspended Rwanda’s ability to ship apparel products duty-free to the United States due to a trade dispute over Rwanda’s increased tariffs on American used clothing and footwear, the U.S. Trade Representative’s office said on Monday.

The ban, ordered by Trump in a proclamation that followed a 60-day notification period, will maintain Rwanda’s other duty-free benefits under the African Growth and Opportunity Act.

“We regret this outcome and hope it is temporary,” Deputy USTR C.J. Mahoney said in a statement. He adding that the move would affect about $1.5 million in annual Rwandan exports, or only about three percent of the country’s total exports to the United States.


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US’s Pompeo Warns Against IMF Bailout for Pakistan That Aids China

U.S. Secretary of State Mike Pompeo warned on Monday that any potential International Monetary Fund bailout for Pakistan’s new government should not provide funds to pay off Chinese lenders.

In an interview with CNBC television, Pompeo said the United States looked forward to engagement with the government of Pakistan’s expected new prime minister, Imran Khan, but said there was “no rationale” for a bailout that pays off Chinese loans to Pakistan.

“Make no mistake. We will be watching what the IMF does,” Pompeo said. “There’s no rationale for IMF tax dollars, and associated with that American dollars that are part of the IMF funding, for those to go to bail out Chinese bondholders or China itself,” Pompeo said.

The Financial Times reported on Sunday that senior Pakistani finance officials were drawing up options for Khan to seek an IMF bailout of up to $12 billion.

An IMF spokeswoman said: “We can confirm that we have so far not received a request for a Fund arrangement from Pakistan and that we have not had discussions with the authorities about any possible intentions.”

Pakistan is struggling to avert a currency crisis that has presented the new government with its biggest challenge. Many analysts and business leaders expect that another IMF bailout, the second in five years, will be needed to plug an external financing gap.

Pakistan, which already has around $5 billion in loans from China and its banks to fund major infrastructure projects, had sought another $1 billion in loans to stabilize its plummeting foreign currency reserves.

Officials in the Trump administration, including U.S. Treasury Secretary Steven Mnuchin, have criticized China’s infrastructure lending to developing countries, arguing that this has saddled them with unsustainable debt.

The China-Pakistan Economic Corridor, a series of port and rail improvements associated with China’s One Belt One Road infrastructure push, has led to massive imports of Chinese equipment and materials, swelling Pakistan’s current account deficit.

Pakistan has had 14 IMF financing programs since 1980, according to fund data, including a $6.7 billion three-year loan program in 2013.


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