Mattel, home of Barbie dolls and Hot Wheels, is cutting 2,200 jobs in order to save money after the closing of U.S. toy retail giant Toys R Us.

The toymaker said the cuts amount to 22 percent of its nonmanufacturing employees worldwide. Mattel has about 28,000 employees.

It also plans to sell factories in Mexico as part of a $650 million cost-saving plan.

Mattel’s stock fell nearly 9 percent to $14.85 in after-hours trading Wednesday, after dropping 1 percent during the regular trading day.

Mattel reported a loss of $240.9 million in the second quarter, bigger than the $56.1 million loss in the same period a year ago.

Revenues fell nearly 14 percent to $840.7 million, below the $863.1 million analysts had predicted.

Ynon Kreiz, who was named CEO in April, said Wednesday that he expects the negative impact of Toys R Us closing to subside by next year.

The toymaker has lagged behind its competitors in digital media, analysts say, and is trying to catch up with other brands that have spawned apps, movies and TV shows.

Kreiz said the company is working closely with other retailers and looking for more ways to sell its toys online.
…

Mexican and Canadian officials are stressing that talks on the North American Free Trade Agreement will remain a three-way negotiation, despite suggestions by U.S. President Donald Trump that he might pursue separate trade deals with both countries.

Mexican Foreign Minister Luis Videgaray says “Canada and Mexico not only share geography, history and friendship, but also principles and common goals, and we are a team and act as a team.”

Visiting Canadian Foreign Affairs Minister Chrystia Freeland also stressed that NAFTA is a three-country agreement. She said that Canada also opposes a “sunset” clause proposed by Trump that would allow countries to opt out of the pact every five years.

Freeland also met Wednesday with Mexican President-elect Andres Manuel Lopez Obrador, who will take office on December 1.
…

Leaders from the five BRICS nations sounded the alarm over what South Africa’s president described as recent threats to multilateralism and sustainable global growth — a not-so-coded reference to a brewing trade war between the U.S. and BRICS’ wealthiest member, China.

Chinese President Xi Jinping raised his concerns as the three-day summit began in South Africa.

“A trade war should be rejected because there will be no winner,” he said. “Economic hegemony is even more objectionable, because it will undermine the collective interest of the international community. Those who pursue this cause will only hurt themselves.”

WATCH: Leaders of BRICS Economic Bloc Cite Concerns at Protectionist Policies

South African President Cyril Ramaphosa echoed his sentiments.

“We are meeting here, ladies and gentlemen, at a time when the multilateral trading system is facing unprecedented challenges,” Ramaphosa said. “We are concerned by the rise in unilateral measures that are incompatible with World Trade Organization rules and we are worried about the impact of these measures, especially as they impact developing countries and economies. These developments call for thorough discussion on the role of trade in growing and in promoting sustainable development, particularly inclusive growth.”

BRICS comprises Brazil, Russia, India, China and South Africa. The bloc admitted South Africa in 2010 as part of its aim of leveling the global playing field by representing nontraditional powers.

U.S. President Donald Trump has threatened to slap tariffs on all $505 billion worth of Chinese imports, a move that has caused global concern. Summit watchers say his blunt rhetoric will influence this year’s summit.

“I think that something that is pertinent that relates to the United States and President Trump’s administration is of course their protectionist measures that they have put on in terms of trade, and the trade wars that have every country in the globe speaking,” analyst Luanda Mpungose told VOA. “But something that the BRICS have actually come out and actually spoken about quite strongly, is that they want to support multilateralism and a rules-based world order.”

But, she says, BRICS may use that adversity to seek to build a new world order, even beyond the five-member bloc.

“Something that’s different about BRICS this year, specifically about South Africa as a host country, is that this initiative is not only about the BRICS member countries, the five countries, but actually, we’ve actually seen an outreach of neighborhood countries being invited,” she said. “So this is taking along the Africa developmental agenda and bringing it Into the BRICS agenda, I mean countries like Rwanda, like Senegal, like Togo have been invited to come and attend.”

The summit continues through Friday.
…

Sergio Marchionne, a charismatic and demanding leader who engineered two long-shot corporate turnarounds to save both Fiat and Chrysler from near-certain failure, died Wednesday. He was 66.

The holding company of Fiat’s founders, the Agnelli family, announced in a statement Marchionne’s death after complications from surgery in Zurich.

“Unfortunately what we feared has come to pass,” Fiat heir John Elkann said. “Sergio Marchionne, man and friend, is gone.”

Marchionne built the dysfunctional companies into the world’s seventh-largest automaker almost by personal force of will, living on a corporate jet crossing the Atlantic to push employees to accomplish what most people thought was impossible amid a devastating global recession.

Marchionne, who was Italian and Canadian, had revived Fiat by 2009 when he was picked by the U.S. government to save U.S.-based Chrysler from its trip through bankruptcy protection after being owned by a private equity company.

“It’s highly unlikely that Chrysler would exist today had he not taken that gamble,” said Autotrader.com analyst Michelle Krebs. “The company was in such bad shape, being stripped of any kind of resources by the previous owners.”

Marchionne met most of his goals, even though at times he was doubted by nearly everyone in the automobile business. But he didn’t live long enough to complete his last two: personally hand over the reins of Fiat Chrysler Automobiles to a hand-picked protege and lay out plans for transforming supercar maker Ferrari.

Marchionne had shoulder surgery in summer 2018, and the company said last weekend that complications meant he would not be able to return.

The manager, known for his folksy, colorful turns of phrase and for his dark cashmere sweaters no matter the occasion, was the darling of the automotive analyst community. Even when expressing doubts at his audacious targets, they expressed admiration for his adept deal-making. That included getting GM to pay $2 billion to sever ties with Fiat, key to relaunching the long-struggling Italian carmaker, and the deal with the U.S. government to take Chrysler without a penny down in exchange for Fiat’s small-car technology.

Marchionne joined Fiat after being tapped by the Agnelli family to save the company. Fiat had for generations been a family-run enterprise, and having someone at the helm from outside Italy’s clubby management circles — even a dynamo like Marchionne — was an enormous change.

Other key corporate moves included the spinoff of the heavy industrial vehicle and truck maker CNH and of the Ferrari supercar maker. Both deals unlocked considerable shareholder value for Agnelli family heirs led by John Elkann. Elkann came into his own under Marchionne’s stewardship, taking over as chairman in 2010 having been tapped more than a decade earlier by his grandfather, the late Gianni Agnelli, to run the family business.

As Marchionne’s health failed following surgery, a clearly emotional Elkann delivered what amounted to an impromptu eulogy and message of gratitude to a man he called his mentor.

“He taught us to think differently and to have the courage to change, often in unconventional ways, always acting with a sense of responsibility for the companies and their people,” Elkann said over the weekend. “He taught us that the only question that’s worth asking oneself at the end of every day is whether we have been able to change something for the better, whether we have been able to make a difference.”

It was Marchionne’s success in turning around a pair of Swiss businesses that drew the attention of the Agnelli family. He joined Fiat’s board in May 2003, four months after the death of Gianni Agnelli. He became CEO in June 2004, following the death of Gianni Agnelli’s brother, Umberto, Fiat’s chairman, leaving a family void in the company.

As an outsider, Marchionne was unfettered by local loyalties and he set about cutting jobs and expenses, slimming management ranks and increasing shareholder value along the way. He brought in other outsiders to key positions and relaunched the iconic 500, which became one of the new Fiat’s calling cards as it expanded abroad.

While he started small with limited industrial alliances, his ambitions soon grew. The bankruptcy of Chrysler gave him the opportunity to create a global car company with brands including Jeep, Ram, Alfa Romeo, Ferrari and Maserati that he envisioned would grow to 6 million cars a year. A global economic crisis that bottomed out car sales in key U.S. and European markets prevented him from reaching that goal, but his industrial vision never faltered as he spun off CNH and Ferrari into stand-alone entities.

His most quoted presentation to analysts, titled “Confessions of a Capital Junkie,” argued that consolidation was inevitable in the investment-heavy car industry. But though he tried for another merger with General Motors, talks never led to a deal. Still, newspaper photographs of a chain-smoking Marchionne awaiting talks with German Chancellor Angela Merkel outside the Chancellery in Berlin on the role of GM’s then-subsidiary, Opel, made clear just how personally he took the negotiations.

Marchionne had planned to step down as CEO of FCA after the close of 2018, with the presentation of the year-end results in April. He always insisted that his successor would come from inside — so it was no surprise when British manager Mike Manley, who helped boost Jeep to global success and get Fiat a foothold in Asia, was named as his successor as Marchionne’s health failed.

He had never indicated plans for Ferrari or CNH, leaving many to speculate that the tireless manager known for his short sleep cycles and globe-trotting style would use those positions to keep a foothold in the automotive world.

In June, he laid out FCA’s five-year plan — raising the eyebrows of analysts who pointed out he would not be the one to execute the plans. He responded by expressing confidence in his hand-picked team that helped draft the targets.

The plans included launching electrified powertrains across Fiat brands — a tacit acknowledgement that the company had lagged in introducing hybrid, hybrid-electric and full-electric engines. They also were to put Ferrari engines in Maserati cars as Marchionne sought to take on electric-car pioneer Tesla — but unlike at Tesla, which has so far failed to turn a profit, earnings were fundamental at FCA.

Marchionne’s penchant for numbers was always clear in his attentive quarterly presentations. He let his real satisfaction show during the June 2018 presentation when he announced the company had reached zero debt, by donning a necktie for the first time in a decade — albeit briefly.

His next major move was to be the presentation of a new business plan in September for Ferrari, which he aimed to turn into a luxury company beyond just cars to further boost earnings.

At his last public appearance in his role as CEO, Marchionne in June attended a ceremony in Rome where a Jeep was presented to the paramilitary Carabinieri police. Marchionne began his brief remarks noting that he grew up in a household where his father was a Carabinieri officer.

He said he recognized in the Carabinieri “the same values at the basis of my own education: seriousness, honesty, sense of duty, discipline and spirit of service.”

Marchionne was divorced. He is survived by his companion, Manuela Battezzato, and two adult sons.

 
…

Прем’єр вказав, що держава вчасно перераховує всі бюджетні трансферти
…

На міжбанківському валютному ринку триває знецінення національної валюти. Як повідомляє профільний сайт «Мінфін», який відстежує перебіг торгів, станом на 11:00 25 липня укладено 60 угод на суму 32,2 мільйона доларів за середньозваженим курсом 26,6360 гривні.

24 липня вперше за чотири місяці Національний банк України встановив офіційний курс на рівні понад 26 з половиною гривень за долар – 26,58.

На міжбанківському валютному ринку 24 липня тривало зростання котирувань американського долара, на міжбанку фіксувалося «переважання попиту на тлі низької ліквідності». «Гривневий навіс на транзитних і кореспондентських рахунках НБУ помітно зріс, попри превентивні заходи регулятора щодо вилучення з ринку надлишкової гривневої ліквідності», – вказували фахівці на початку тижня

Котирування на рівні понад 26 з половиною гривень за долар є найвищими за останні чотири місяці. Офіційний курс Національного банку України на 30 березня становив 26 гривень 54 копійки за долар. Після цього національна валюта міцнішала до рівня близько 26 гривень за долар. 
…

Tariffs are set to top the agenda in a meeting Wednesday between U.S. President Donald Trump and European Commission President Jean-Claude Juncker.

Juncker is coming to Washington with the hopes the European Union can avoid an all-out trade war by convincing Trump to hold off punitive tariffs on European cars. The potential car tariffs would hurt Germany’s thriving automobile industry and come on top of hefty tariffs that Trump has already imposed on aluminum and steel imports.

But on the eve of the meeting, Trump appeared pessimistic the two sides would come to any agreement after the U.S. leader threatened more tariffs on U.S. trading partners. In a tweet late Tuesday, Trump said both the United States and the European Union should drop all tariffs, barriers and subsidies.

“That would finally be called Free Market and Fair Trade!” Trump said. “Hope they do it, we are ready — but they won’t!” he added.

Earlier Tuesday, the U.S. president declared “Tariffs are the greatest!” and threatened to impose additional penalties on U.S. trading partners. “Either a country which has treated the United States unfairly on trade negotiates a fair deal, or it gets hit with tariffs. It’s as simple as that.”

Trump again complained the world uses the United States as a “piggy bank” that everyone likes to rob. 

The European Commission has responded with retaliatory tariffs, but new levies on cars could prompt Europe to take further action.

German Foreign Minister Heiko Maas said Tuesday Europe won’t cave in to Trump’s threats.

“No one has an interest in having punitive tariffs, because everyone loses in the end,” Maas wrote on Twitter. “Europe will not be threatened by President Trump If we cede once, we will often have to deal with such behavior in the future.”

Republican Speaker of the House Paul Ryan told reporters Tuesday he does not think “the tariff route is the smart way to go.”

Ryan said he understands Trump is seeking “a better deal for Americans” but added the U.S. should instead “work together to reduce trade barriers and trade restrictions between our countries.”
…

Qian Zhiya may be Starbucks’ worst nightmare.

The 42-year-old Chinese entrepreneur says she is betting that her fledgling Luckin Coffee brand will eventually have more cafes in China than Starbucks, and she has Singapore’s sovereign wealth fund and other investors bankrolling her plan.

Luckin, which only officially launched in January, has opened more than 660 outlets in 13 Chinese cities thanks to a supercharged growth plan based on cheap delivery, online ordering, big discounts and premium pay for its staff.

Its assault comes at a crucial time for Starbucks, which has 3,400 stores in China — its second biggest market after the U.S. — and plans to almost double that number by 2022.

And the speed of the attack is a warning to other established consumer brands in China that they too could be vulnerable to a start-up’s attempt to reinvent a market, brand consultants say.

Starbucks’ shares were pummeled in June after it warned same store sales growth in China had plunged to zero or worse last quarter, against 7 percent growth a year earlier.

Its fiscal third-quarter results are due out on Thursday.

Starbucks said some new café openings were cannibalizing customer visits at nearby stores and it also blamed a drop-off in orders through delivery firms.

While it did not mention increased competition, investors and analysts said it is clear that Luckin does represent a threat.

However, they also point out that Starbucks’ brand has been very resilient to challenges from rivals around the world over the years, largely because of the ambience of its stores, its service and the consistent quality of the coffee served.

There is also no sign that Chinese consumers have turned against such a very American brand as a protest over U.S. President Donald Trump’s imposition of punitive tariffs on Chinese exports.

Big Promotions

Reuters spoke to 30 consumers in Beijing Yintai Center, a shopping mall that has a Starbucks, Costa Coffee and Luckin outlet, among others. Half of those polled said they had tried Luckin; most said they liked it, though more than two-thirds said their top choice remained Starbucks.

The majority drank coffee in-store or bought to take away, with only a small number saying they had coffee delivered, a potential challenge for Luckin’s delivery-focused strategy.

Taste, convenience and environment were their top three priorities, more than price.

Luckin’s customers can order coffee via an app, watch a livestream of their coffee being made, and have it delivered to their door in an average of 18 minutes, the company says.  A regular latte, roughly the size of a Starbucks grande, costs 24 yuan plus 6 yuan for delivery (free delivery for orders of more than 35 yuan), but can be half price after promotions. A grande latte at Starbucks costs 31 yuan.

More than half of Luckin’s stores are larger “relax” outlets or pick-up stores with some seating. The rest are delivery kitchens.

The speed of Luckin’s growth is extraordinary — it took Starbucks about 12 years to open as many stores. In many ways it echoes the way in which some major Chinese technology firms, such as ride hailing platform Didi Chuxing, have burned through cash to grab market share and been valued highly as a result.

Qian, who was previously chief operating officer at Chinese ride hailing firm Ucar, says Luckin’s focus now is all about increasing customers.

“I don’t have a timeline for profit,” Qian told Reuters at the firm’s Beijing headquarters as she sipped her third Luckin coffee of the day. “For us, what we care about now is the number of users and if they are coming back to us, whether they recognize us, whether we can take market share.”

The firm raised $200 million this month to help fund its expansion, including an undisclosed sum from Singapore government fund GIC, a funding round which Luckin said valued the firm at $1 billion.

“In the future we will have more cafes than Starbucks,” she declared.

One of the investors in the latest fundraising said it is the logical time for there to be a shake-up of the coffee world in China.

“This model will appeal to young customers amid the country’s consumption upgrade,” said David Li, former head of Warburg Pincus Asia Pacific. He led the financing round for Luckin via his new investment firm Centurium Capital.

The use of online ordering and delivery should be  enough to unnerve many established brands, said Bruno Lannes, Shanghai-based partner with consultancy Bain & Co.

“It’s a big threat, that’s why western brands need to pay attention,” he said.

“Flash Mob”

Still, not everyone agrees the internet model translates easily to the coffee business, given the need for costly stores and quality control.

“It remains to be seen if they can really hook consumers in and create a monopoly in the market, like those we see in sectors like cab-hailing,” said Liu Xingliang, president of tech consultancy China Internet Data Center.

And some of the consumers Reuters spoke to in the Beijing mall saw hurdles ahead for Luckin.

Liu Xu, 23, an advertising professional, who compares Luckin to a “flash mob” that came out of nowhere, said he tried the firm’s coffee out of curiosity but prefers hand-drip single-origin coffee.

And Lian Yiheng, 22, a student, said she was attracted by Luckin’s promotions and the convenience of delivery, but felt it needed to improve its selection of coffees and store decoration to lure people in the longer run.

Qian said the plan was to have more sit-in stores and reduce the proportion of delivery-only outlets, which would require higher spending on setting up in better locations and on décor.

On the question of quality, she says that it uses select arabica beans from Ethiopia.

Luckin’s expansion comes as Starbucks’ global rivals, like Canadian chain Tim Hortons, are also pushing hard in China. Tim Hortons plans to open 1,500 outlets in China over the next 10 years, while smaller local chains are also popping up fast.

As China’s middle class continues to increase in size and the coffee chains move into many smaller towns and cities, the market is growing at 5-7 percent a year, according to research firm Mintel.

Li Yibei, owner of Double Win Café, which has a chain of eight coffee shops in Shanghai, said Luckin would have an impact on the market, but there was plenty of space left.

“Maybe they will hit Starbucks to some extent, but remember Starbucks has many die-hard fans. Maybe they can grab some followers from them, but I don’t think that many,” she said.

Starbucks may also soon be moving more formally into online delivery in China.

Howard Schultz, Starbucks’ departing executive chairman, said in Shanghai this month that he was close friends with Jack Ma, the head of Alibaba Group Holding Ltd., which controls food delivery platform Ele.me., and suggested the two could work together on Starbuck’s online delivery in China.

Schultz also said he isn’t wasn’t worried about the China slowdown.

“The more good coffee and competition that comes into the market, the more the Chinese people will be exposed to good coffee,” he said. “Emerging new players that are coming into the market will actually benefit Starbucks.”

($1 = 6.8142 Chinese yuan renminbi)
…

Harley-Davidson executives said Tuesday they had seen no U.S. sales hit so far over its decision to relocate some American manufacturing overseas as it navigates amid trade conflicts.

“We’ve actually done quite a lot of consumer research… and we see no discernible shift in the sales patterns” or to brand favorability, chief executive Matt Levatich said on an analyst conference call.

The motorcycle company found itself in the firing line of President Donald Trump, who repeatedly attacked the company on Twitter after Harley announced the move on June 26 in response to European Union tariffs on US-made bikes.

Trump’s attacks on Harley for being the first to “wave the White Flag” had raised fears among investors that the company’s sales could be impacted given the president’s popularity in areas of the United States where Harleys sell well.

But Harley executives said direct consumer research, as well as sales, showed no evidence of a hit due to the uproar.

“We’ll continue to be sure we monitor it… and correct errors in interpretation that seem to pop up from time to time,” he said. “We’re on it.”

Trump’s name did not come up during a 60-minute earnings conference call, although Levatich did say at one point that the company was working with US administration officials and other governments to “get these tariffs removed.”

Shares of Harley-Davidson jumped after it reported a second-quarter dip of six percent in profits to $242.3 million. But the results topped analyst expectations in terms of earnings-per-share and revenues.

Harley-Davidson suffered another fall in US motorcycle sales, this time by 6.4 percent from the year-ago period to 46,490.

Executives characterized the drop as part of a longterm challenge as it steps up marketing campaigns to lure in young consumers that have so far shown lackluster interest in motorcycles.

Harley signaled it expects lasting business impacts from the EU tariffs, which targeted Harley and other brands from politically consequential regions of the United States and were taken in response to US tariffs on imported steel and aluminum.

Harley is based in Wisconsin, home to House Republican leader Paul Ryan.

The EU tariffs add $90 to $100 million in annual costs to EU sales. Executives said they hope to mitigate those effects in 2019 through corporate efficiencies and by shifting production from the US to an overseas plant.

Harley-Davidson has not reached a decision whether the EU-market bikes will be manufactured at existing overseas plants in Brazil or India or at a new plant being built in Thailand.

The company trimmed its 2019 profit margin to a range of 9 to 10 percent from the prior 9.5 to the 10.5 percent. Trade actions will subtract $45 to $55 million in 2018, with $30 to $35 million due to the EU tariffs and the rest coming from US tariffs on steel and aluminum.

“We never contemplated moving our European volume out of the United States,” Levatich said.

Shares jumped nine percent to $45.16 in late- morning trading.

 
…

The International Monetary Fund warned Tuesday there are few indications international trade imbalances are narrowing, a trend that could raise trade tensions and lower economic growth.

In its annual External Sector Report, the IMF also said almost half of the world’s current-account balances are excessive and that current-account surpluses and deficits are increasingly concentrated in developed countries.

Excessive current-account balances mean they cannot be defended by a country’s fundamentals, such as unemployment and supply and demand, and its ideal economic policies.

The current account documents a country’s transactions with the rest of the world over a defined period of time.

The annual IMF report gauges the trade position and exchange rates of the world’s largest economies. Tuesday’s report was based on data and IMF staff projections as of June 22.

The report said China’s current account surplus grew slightly last year to 1.7-percent of its gross domestic product. The IMF also included China on the list of countries with excessive balances. Germany, South Korea, the Netherlands, Sweden and Singapore are also listed.

Countries with excessive current account deficits, those that borrow too much money, included the U.S., Britain, Argentina and Turkey, the report said.

The IMF said big trade surpluses in Germany and China, coupled with the large U.S. trade deficit, could worsen trade conflicts that are engulfing much of the world.

“Large and sustained excess external imbalances in the world’s key economies — amid policy actions detrimental to external balances — pose risk to global stability,” the report said.

U.S. President Donald Trump’s tax cuts and increased U.S. government spending are contributing to an increase in borrowing rates, a stronger U.S. dollar and a ballooning U.S. current-account deficit, according to the report.

In addition to potentially exacerbating trade tensions, the report said the trends could weaken emerging markets by causing interest rates to increase faster than expected.
…

U.S. President Donald Trump’s family business has outlined its 150-million-pound ($196 million) investment plan for the second phase of development of its golf course north of Aberdeen in Scotland.

The Trump Organization’s proposals submitted to Aberdeenshire Council include 50 cottages, a sports center and equestrian facilities at the Menie estate near Balmedie. The first phase of development included a championship golf course, clubhouse and hotel.

The controversial development, which was first approved in 2008, has been accused of failing to deliver on promises of investment and jobs.

But the Trump company says the next phase will support nearly 2,000 jobs during construction, and some 300 permanent jobs.

Eric Trump, who leads the business with his brother Donald Jr, says “the timing is now right for us.”

 
…

На міжбанківському валютному ринку 24 липня триває зростання котирувань американського долара, валюта США нині оцінюється на рівні 26 гривень і майже 58 копійок. Як повідомляє профільний сайт «Мінфін», який відстежує перебіг торгів, на міжбанку фіксується «переважання попиту на тлі низької ліквідності».

«Гривневий навіс на транзитних і кореспондентських рахунках НБУ помітно зріс, попри превентивні заходи регулятора щодо вилучення з ринку надлишкової гривневої ліквідності», – вказують фахівці.

Читайте також: Нова девальвація: долар штурмує позначку 26 гривень 50 копійок

Котирування на рівні понад 26 гривень 50 копійок за долар є найвищими за останні чотири місяці. Офіційний курс Національного банку України на 30 березня становив 26 гривень 54 копійки за долар. Після цього національна валюта міцнішала до рівня близько 26 гривень за долар.
…

Checking out a speedboat, a fighter jet and a giant industrial magnet parked on the White House driveway, President Donald Trump showcased an array of “Made in America” products Monday as his administration pushes back aggressively against critics who say his punishing tariffs on imported goods threaten to harm the U.S. economy.

Trump’s event with a smorgasbord of American goods came at the start of a week in which trade discussions are expected to dominate, including talks with European officials and a trip to Illinois in which the president is planning to visit a community helped along by his steel tariffs.

Trump has vowed to force international trading partners to bend to his will as he seeks to renegotiate a series of trade deals he has long argued hurt American workers. But as he deepens the U.S. involvement in trade fights, it raises questions on whether American consumers will feel the pain of retaliatory tariffs — and whether the president will incur a political price for his nationalistic trade policies in the 2018 midterm elections.

“Our leaders in Washington did nothing, they did nothing. They let our factories leave, they let our people lose their jobs,” Trump said at the White House. “That’s not free trade, that’s fool’s trade, that’s stupid trade and we don’t do that kind of trade anymore.”

Trump noted that he would be meeting Wednesday with European officials, including European Commission President Jean-Claude Juncker. The U.S. and European allies have been at odds over the president’s tariffs on steel imports and are meeting as the dispute threatens to spread to the lucrative automobile business. “Maybe we can work something out,” he said.

On Thursday, the president will visit Granite City, Illinois, the home of a U.S. Steel Corp. mill that has reopened after he imposed tariffs on steel imports.

On the South Lawn, the president walked among a number of products manufactured across the nation, including a Lockheed Martin F-35 aircraft from Maryland, a Ford F-150 pickup truck from Michigan, a Newmar recreational vehicle from Indiana and a Ranger speedboat from Arkansas.

National security

Trump has already put taxes on imported steel and aluminum, saying they pose a threat to U.S. national security, an argument that enrages staunch U.S. allies such as the European Union and Canada.

He’s threatening to use the national security justification again to slap tariffs on imported cars, trucks and auto parts, potentially targeting imports that last year totaled $335 billion.

And he’s already imposed tariffs on $34 billion in Chinese imports in a separate dispute over Beijing’s high-tech industrial policies. He has threatened to ratchet that up past $500 billion.

“He likes tariffs,” said William Reinsch, a former U.S. trade official under President Bill Clinton now at the Center for Strategic and International Studies. “His preferred remedy is always tariffs, whether it makes any sense or not.”

“It’s a policy of victimization: ‘Other people have been taking advantage of the United States for years. … Now they have to pay,”‘ Reinsch said, echoing the president’s argument.

Trade analysts say the United States has not pursued such aggressive trade policies in decades.

“I can’t think of another time when you had as many battles and, particularly, as many battles with no resolution in sight,” said Edward Alden, senior fellow at the Council on Foreign Relations.

Trade war

In 1971, President Richard Nixon imposed a broad 10 percent import tax for four months to pressure Japan and European countries to drive up the value of their currencies. The idea: provide relief to American exporters, who were being put at a price disadvantage by a strong dollar.

In 1930, the U.S. raised tariffs dramatically to protect American industry, encouraging other countries to do the same in a global trade war that made the Great Depression worse.

Economists said the tariffs that Trump has imposed so far — and the resulting retaliation — are unlikely to do much economic damage. But things could escalate rapidly.

“If you look at what’s teed up, particularly with China and with the auto tariffs, pretty soon you are talking about some pretty large numbers. Those will do some real damage,” Alden said.

Oxford Economics has calculated that a full-blown U.S.-China trade war — in which each country taxes all the other’s imports — would shave 1 percent off the U.S. economy and wipe out 700,000 jobs in the United States by 2020.

The Peterson Institute for International Economics has estimated that a trade war over autos could cost up to 1.2 million American jobs.

Critics said Trump’s aggressive approach makes it tough for other countries to offer concessions, lest they be seen by their own people as caving in to bullying.

“The Trump administration has not left an easy path to walk away from the fights they’ve created,” Alden said.
…