Статті

The U.S. Department of Agriculture is seeking to lower food prices and boost competition by joining with 31 states and Washington, D.C., to target price fixing and other anticompetitive behavior in the food and agriculture sectors. 

The USDA on Wednesday said it would coordinate with the bipartisan group of attorneys general on antitrust enforcement amid concerns about industry practices. 

Farmers and ranchers have for decades complained of poor prices and unfair contracts from the biggest buyers and processors in the highly consolidated agriculture sector. 

Months of food price inflation, only recently abating, have also raised questions from farm groups and lawmakers about whether companies were artificially hiking prices. 

“We can ensure a more robust and competitive agricultural sector,” said Agriculture Secretary Tom Vilsack in a statement. 

The USDA partnership with states will focus on anticompetitive practices including price fixing and gouging, as well as create new research programs to study the issue, the department said. 

In the coming months, USDA will also finalize new rules under the Packers and Stockyards Act, a century-old antitrust law meant to protect farmers from anticompetitive conduct, a senior administration official said in a call with reporters. 

USDA has already proposed two of three expected rules. 

The agency will also disburse additional grants to expand meat and poultry processing capacity that would increase the number of options for ranchers, the official said. 

President Joe Biden, a Democrat who has pledged to tackle anticompetitive conduct across the economy, is scheduled to meet with Vilsack and other members of his competition council later Wednesday. 
…

U.S. Treasury Secretary Janet Yellen this week said that if the Biden administration issues expected new rules limiting outbound U.S. investment in China, they will not be highly disruptive to trade between the two countries, and will focus on national security concerns.

“We are looking carefully at outbound investment controls, and they would serve as a complement to the export controls that we have in place, to make sure that we’ve covered all the channels by which technologies can be transferred to China that we think pose national security concerns,” Yellen said.

The rules, expected from the Biden administration sometime this summer, would focus on semiconductors, quantum computing and artificial intelligence, the Treasury secretary said. Yellen added that they will be “narrowly scoped” and “would not be broad controls that would affect U.S. investment broadly in China, or in my opinion, have a fundamental impact on affecting the investment climate for China.”

Yellen’s remarks came in an interview with Bloomberg Television on Monday, from the sidelines of a meeting of the finance ministers of the world’s largest economies in Gandhinagar, India.

Yellen indicated that she had spoken to Chinese officials about the rules, saying, “What I tried to explain to our Chinese counterparts is that our desire is to make these U.S. policies clearly national-security focused, transparent and narrow, and that we’re not attempting to stifle economic progress in China. We have, and want to continue to have, deep economic ties.”

Yellen was careful in her language to suggest that a final decision about whether to issue the outbound investment rules has not been made.

Addition to export controls

The Biden administration’s effort over the past two years to prevent China from obtaining certain technologies, and a years-long effort by the U.S. to block certain Chinese technology firms from participating in essential infrastructure, like 5G broadband systems, have angered China.

Most recently, the administration has put measures in place to block Chinese companies from purchasing cutting-edge microchips and the equipment to manufacture them.

These policies have led to accusations by China that the aim of the U.S. is to block China’s economic progress in order to prevent it from playing a larger role in the global economy and in international relations.

Those concerns were repeated after Yellen’s recent remarks.

China replies

In a press conference on Monday, Chinese Foreign Ministry spokesperson Mao Ning commented on the coming restrictions.

“China opposes U.S. politicizing and weaponizing of trade and tech issues,” she said. “It is in no one’s interest to place arbitrary curbs on normal technology cooperation and trade, violate the market economy principles and destabilize global industrial and supply chains.”

She added, “We hope that the U.S. will follow through on President Biden’s commitment of not seeking to ‘decouple’ from China, halt China’s economic development or contain China and create a sound environment for China-U.S. economic cooperation and trade.”

In her remarks Monday, Yellen stressed the administration’s desire to improve relations with China, saying, “We now have a new economic team in China that we need to establish relationships with. We need to get our relationship back in a more stable place with a floor under it, and try to promote general understanding between our countries.”

Chinese economic woes

In the background of the discussion of U.S. restrictions on outbound investment in China is increasing evidence that the Chinese economy is struggling. Economic growth has slowed sharply, and the yuan has been losing value against other global currencies.

On Monday, official numbers released by Beijing said that the economy had grown by just 0.8% from the end of the first quarter of 2023 through the end of the second quarter, a rate much lower than expected.

Also this week, the country’s troubled real estate conglomerate, Evergrande, revealed that in 2021 and 2022, it lost more than $81 billion, and still carries obligations worth $340 billion, including some $140 billion to raw materials suppliers and many thousands of Chinese who paid in advance for homes that were never built. Evergrande has become a symbol of the country’s deeply troubled real estate sector, which is awash in bad debt.

In her remarks on Monday, Yellen noted China’s struggles, and said that there is some danger of weakness in its economy having an impact around the world.

“China has seen slower growth than they expected upon opening up from COVID,” Yellen said. “Consumer spending has been relatively weak. It looks like consumers are more focused on building back their savings buffers, and so growth has been slow when, as you know, youth unemployment is quite high there.”

She said that she expects a slowdown in China to have only a small impact on the U.S.

“Countries do depend on strong Chinese growth to promote growth in their own economies, particularly countries in Asia, and slow growth in China can have some negative spillover to the United States,” she said. “Our growth is slowed but our labor market continues to be quite strong. I don’t expect a recession.”
…

Consensus eluded a meeting of finance ministers and central bank governors of the Group of 20 countries that ended Tuesday in India as members failed to bridge their differences on Russia’s war in Ukraine.

“We still don’t have a common language on the Russia-Ukraine war,” Indian Finance Minister Nirmala Sitharaman told reporters after the two-day meeting wrapped up in Gandhinagar city without issuing a joint statement.

Instead, India, which is the president of the group this year, issued what is called a chair summary and an outcome document in which it summed up the talks and noted disagreements.

According to the chair summary, China and Russia objected to paragraphs referring to the war that said it was causing “immense human suffering” and “exacerbating existing fragilities in the global economy.”

The failure to reach an accord was not unexpected. As the war in Ukraine is a matter of sharp diplomatic differences, India has not been able to forge a consensus document at any of the key G20 events held so far.

Several G20 members also condemned Russia for refusing to extend a deal to allow critical Ukrainian grain exports through the Black Sea, India’s finance minister said at a press conference.

Several members condemned it saying that shouldn’t have happened,” Sitharaman said. “Food passing through the Black Sea shouldn’t have been stopped or suspended.”

Russia’s quitting the deal has sparked fears about the impact on low-income countries in Asia and Africa, where high food prices already have pushed more people into poverty.  

While India has remained mostly neutral on the Ukraine war, it has expressed concern about the impact of the conflict on developing countries. It said its priority during its presidency is to focus on the need to help nations grappling with a debt crisis in the wake of the COVID-19 pandemic and the Ukraine conflict.

Sitharaman said members discussed the overall global economic outlook, specifically food and energy issues, climate financing and how to improve assistance to debt-distressed countries. She indicated that progress had been made on key issues.

More than half of all low-income countries are near or in debt distress, twice as many as in 2015, according to U.S. Treasury Secretary Janet Yellen. Before the meeting began, she said that ending the war in Ukraine is “the single best thing we can do for the global economy.”

The chief of the International Monetary Fund, Kristalina Georgieva, emphasized the need for a more effective and speedier debt restructuring process at the meeting.

“The costs of delays in reaching agreement on needed debt treatments are borne acutely by borrower countries and their people, who are least able to bear this burden,” she said.

Global growth is slowing and divergence in the economic fortunes of countries was a persistent concern, Georgieva said. “The world today is more shock-prone and fragile, with climate change, pandemics and Russia’s invasion of Ukraine all causing widespread turmoil.”

World Bank President Ajay Banga echoed similar fears. He spoke of “mistrust that is quietly pulling the Global North and South apart at a time when we need to be uniting,” and said that that “lack of progress was in danger of splitting the global economy to the detriment of the world’s poorest.”

India, which wants to emerge as the voice of what it calls the “Global South” has also been urging the G20 to forge a consensus on reforms for multilateral development banks.

A G20 panel has said in a report that international development banks must create a new funding mechanism and triple sustainable lending by 2030 to eliminate poverty and achieve climate goals. It also called for big changes in their operations.

The summit meeting of the G20 is scheduled to be held in September.
…

Britain’s financial watchdog on Monday proposed toughening up safeguards against the illegal marketing of financial products on social media by applying a stringent “consumer duty” that is being rolled out to banks, funds and insurers on July 31.

The Financial Conduct Authority has said its new duty will be a step change in protecting retail investors after years of mis-selling scandals, by forcing firms to demonstrate how they are giving consumer good outcomes.

“Where applicable, the Consumer Duty will raise our expectations of firms communicating financial promotions on social media above the requirement… to be ‘clear, fair and not misleading’,” the FCA said in proposals out to public consultation.

“Firms advertising using social media must consider how their marketing strategies align with acting to deliver good outcomes for retail customers.”

In the fourth quarter of last year, nearly 70% of amended or withdrawn financial marketing following FCA intervention involved a promotion on websites or social media, the FCA said.

The watchdog is targeting so-called ‘finfluencers’ or widely followed people on social media who promote financial products.

“Consumers exhibit high levels of trust in finfluencers, but their advice can often be misleading,” the FCA said.

“Promoting a regulated financial product or service without approval of an FCA authorized person, or providing financial advice without FCA authorisation, may be a criminal offense.”

Promotions should also include risk warnings, it added.
…

China’s economic growth missed forecasts in the second quarter of the year, adding to worries over surging youth unemployment and a weak property sector and raising the likelihood the government will double down on support for the faltering post COVID-19 recovery.

The world’s second largest economy grew at a 6.3% annual pace in the April-June quarter, much slower than the 7% plus growth analysts had forecast given the anemic pace of activity the year before.

Unemployment of youths aged 16 to 24 rose to a record 21.3% in June, up from 20.8% the month before.

Investment in property development, a vital driver of both industrial and consumer demand, sank 7.9% in the first half of the year compared to a year earlier in a troubling sign of persisting weakness in an industry that slowed even before the pandemic as the government moved to rein in excessive borrowing.

Officials have acknowledged that the economy is facing stiff headwinds, but said they expected growth to still reach the ruling Communist Party’s official target for this year of about 5%.

The government will adjust policies to stabilize growth, National Bureau of Statistics spokesman Fu Linghui said at a news conference Monday.

Quarterly growth, the usual measure for other major economies, was 0.8%, according to government data released Monday, in line with expectations but down sharply from 2.2% in January-June.

Analysts have been far less optimistic than the Chinese government about the outlook for the year, given weakening demand for Chinese exports in other major economies.

The numbers are a “worrying result,” said Moody’s Analytics economist Harry Murphy Cruise.

“China’s recovery is going from bad to worse,” he said. “After a sugar injection in the opening months of 2023, the pandemic hangover is plaguing China’s recovery.”

Government spending is likely to help key industries like real estate and construction, but won’t be a “silver bullet,” he said in a commentary.

The 6.3% growth in China’s gross domestic product from April to June outpaced a 4.5% expansion in the previous quarter.

The still robust growth is largely due to the economy growing just 0.4% a year earlier in April-June of 2022 amid strict lockdowns in Shanghai and other cities during COVID-19 outbreaks.

Apart from more government spending, regulators may cut interest rates and take other measures to free up credit, Marcella Chow, global market strategist at J.P. Morgan Asset Management wrote in a report.

“The weak economic readings suggest an urgency in escalating policy support so as to stabilize expectations,” Chow said.

Earlier this year, growth was boosted as people flocked to shopping malls and restaurants after nearly three years of “zero-COVID” restrictions were removed in late 2022.

The government’s growth target of “around 5%” was seen as a conservative goal. It can only be met if the economy maintains close to its current level of growth.

Data released earlier showed exports declined 12.4% in June from a year earlier as global demand faltered after central banks in U.S. and Europe raised interest rates to curb inflation.

Retail sales, an indicator of consumer demand, in June rose 3.1% from the same period in 2022. That’s seen as a strong point, but not strong enough, analysts said.

Industrial output, which measures activity in the manufacturing, mining and utilities sectors, beat analyst’s expectations, rising by 4.4% in June compared to the same month a year earlier.

China’s policymakers are not having to fight inflation, but may end up having to contend with its opposite, deflation, or falling prices due to weak demand. In recent months, the authorities have tried to spur lending and spending, with mixed success.

Fixed-asset investment — spending on factory equipment, construction and other infrastructure projects to drive growth — rose by a still tepid 3.8% for the first half of 2023 compared to the same period of 2022.
…

Redoubling support for war-stricken Ukraine is the “single best” way to aid the global economy, U.S. Treasury Secretary Janet Yellen said Sunday, along with boosting emerging economies and tackling debt distress.Yellen also said on the sidelines of a G20 finance ministers’ summit in India she would “push back” on criticism there was a tradeoff between aid to Ukraine and developing nations.

“Ending this war is first and foremost a moral imperative,” she told reporters in Gandhinagar. “But it’s also the single best thing we can do for the global economy.”

Yellen also pointed to efforts to tackle debt distress faced by struggling economies, bank reform and a global tax deal, and warned it was “premature” to talk of lifting tariffs on China.

Russia’s invasion of Ukraine — both countries are global breadbaskets that together exported almost a quarter of the world’s wheat supply — triggered shockwaves in economies worldwide by sending prices for food and fuel shooting up.

Japan’s Finance Minister Shunichi Suzuki, speaking after a G7 meeting of ministers, “reconfirmed the G7’s unshakeable support” to Ukraine.

“We confirmed that Russia-owned assets that are under the G7’s supervision would not be transferred until Russia pays damages to Ukraine,” Suzuki said, adding that Moscow should also “pay long-term reconstruction costs.”

Any discussion on Ukraine is awkward for G20 host India, which has not condemned Russia’s invasion but is also part of the Quad grouping alongside Australia, the United States and Japan.

Yellen also cited debt restructuring progress in Zambia, which she discussed with Chinese officials in Beijing last week, and said she expected Ghana and Sri Lanka debt treatments would be finalized soon.

She said it was still too soon to lift restrictions placed on China during a trade war launched by former U.S. President Donald Trump.

“Tariffs were put in place because we had concerns with unfair trade practices on China’s side, and our concerns with those practices remain, they really haven’t been addressed,” Yellen said. “Perhaps over time this is an area where we could make progress, but I’d say it is premature to use this as an area for de-escalation.”

Yellen pointed to other work tackling debt distress and the reform of multilateral development banks, including the World Bank and other regional lenders, in efforts she said could unlock $200 billion over the next decade.

More than half of all low-income countries are near or in debt distress, double the case in 2015, she said.

G20 finance chiefs and central bank heads are due to meet Monday and Tuesday in Gandhinagar in Gujarat, the state where India’s independence leader Mahatma Gandhi was born.

World Bank chief Ajay Banga warned of a “deep mistrust… quietly pulling the Global North and South apart” over issues such as the climate change crisis, post-pandemic recovery efforts, the war in Ukraine and a lack of progress in the fight against poverty.

“The Global South’s frustration is understandable,” Banga said in an op-ed. “In many ways they are paying the price for the prosperity of others. When they should be ascendant, they’re concerned promised resources will be diverted to Ukraine’s reconstruction; they feel aspirations are being constrained because energy rules aren’t applied universally, and they’re worried a burgeoning generation will be locked into a prison of poverty.”

The International Monetary Fund said finding common efforts to tackle the weak global economy would be crucial.

The world will be looking for joint action to address rising economic fragmentation, slowing growth, and high inflation,” the IMF said in a statement ahead of the meeting.

The G20 will also discuss cryptocurrency regulations, as well as making access to financing to mitigate and adapt to the impacts of climate change easier for developing nations.”In the Global North, climate change means emissions reductions,” Banga said.  

“But in the Global South, it is a matter of survival, because hurricanes are stronger, heat-resistant seeds are in short supply, drought is destroying farms and towns, and floods are washing away decades of progress.”

A newly agreed first step on a fairer distribution of tax revenues from multinational firms reached by 138 countries Wednesday is also set to be delivered during the G20 talks.
…

Elon Musk says Twitter is still losing cash because advertising has dropped by half.

In a reply to a tweet offering business advice, Musk tweeted Saturday, “We’re still negative cash flow, due to (about a) 50% drop in advertising revenue plus heavy debt load.”

“Need to reach positive cash flow before we have the luxury of anything else,” he concluded.

Ever since he took over Twitter in a $44 billion deal last fall, Musk has tried to reassure advertisers who were concerned about the ouster of top executives, widespread layoffs and a different approach to content moderation. Some high-profile users who had been banned were allowed back on the site.

In April, Musk said most of the advertisers who left had returned and that the company might become cash-flow positive in the second quarter.

In May, he hired a new CEO, Linda Yaccarino, an NBCUniversal executive with deep ties to the advertising industry.

But since then, Twitter has upset some users by imposing new limits on how many tweets they can view in a day, and some users complained that they were locked out of the site. Musk said the restrictions were needed to prevent unauthorized scraping of potentially valuable data.

Twitter got a new competitor this month when Facebook owner Meta launched a text-focused app, Threads, and gained tens of millions of sign-ups in a few days. Twitter responded by threatening legal action.
…

On the heels of a trip to Beijing, U.S. Treasury Secretary Janet Yellen is back in India for the third time in nine months, this time to meet finance ministers from the Group of 20 nations about global economic challenges like the increased threat of debt defaults facing low-income countries.

Yellen will use her time in Gandhinagar to try to foster warming relations between the U.S. and India. She also plans a stop in Hanoi, Vietnam, to address supply chain reliability, clean energy transition and other matters of economic resilience.

Yellen’s goals for her time in India: press for debt restructuring in developing countries in economic distress, push to modernize global development banks to make them more climate-focused and deepen the ever-growing U.S.-India relationship.

Yellen’s frequent stops in the country signal the importance of that relationship at a time of of tensions with China.

India’s longstanding relationship with Russia also will loom as the Kremlin’s invasion of Ukraine continues despite U.S. and allied countries’ efforts to sanction and economically bludgeon Russia’s economy. India has not taken part in the efforts to punish Russia and maintains energy trade with that country despite a Group of Seven agreed-upon price cap on Russian oil, which has seen some success in slowing Russia’s economy.

Still, the U.S. increasingly relies on India and has courted its leaders.

President Joe Biden hosted a White House state visit honoring Indian Prime Minister Narendra Modi in June, designed to highlight and foster ties. The two leaders pronounced the U.S.-India relationship never stronger and rolled out new business deals between the nations.

Raymond Vickery Jr., a policy expert on U.S.-India relations at the Center for Strategic and International Studies, said Yellen’s coming to India shortly after visiting China is meaningful in that Indian officials “are going to want to know in great detail what happened in the meetings with her Chinese counterparts and see where it fits with their perspective on economic relations with China.”

“They’re going to want to know whether or not the United States is serious about moving some of its sourcing activity from China to India.”

A senior Treasury official, speaking on condition of anonymity to preview Yellen’s trip, said there was hope that debt treatments for Ghana and Sri Lanka will be discussed and completed quickly at the meetings.

Sri Lanka and Ghana defaulted on their international debts last year, roughly two years after Zambia defaulted. And more than half of all low-income countries face debt distress, which hurts their long-term ability to function and develop.

Last month, Zambia and its government creditors, including China, reached a deal to restructure $6.3 billion in loans, on the sidelines of a global finance summit in Paris.

The agreement covers loans from countries such as France, the U.K., South Africa, Israel and India as well as China — Zambia’s biggest creditor at $4.1 billion of the total. The deal may provide a roadmap for how China will handle restructuring deals with other nations in debt distress.

Yellen’s trip comes shortly after she spent a week in China, meeting the nation’s finance ministry and discussing mutual trade restrictions and national security concerns.

Harold W. Furchtgott-Roth, a senior fellow at the Hudson Institute, said Yellen’s trip to India “is a reflection of a naturally developing alliance.”

“India has a great deal of tension with China — they have constant border disputes,” he said.” And India wants to develop and has developed into sort of an Indian Ocean naval power, which is also a region that China wants to develop.”
…

On a recent cross-border shopping trip, four friends from Fray Bentos, Uruguay, visited the nearby Argentine city of Gualeguaychú, where they could afford to live lavishly and snap up eye-popping bargains.

Thanks to a huge disparity in the two South American countries’ currencies, Stella Ferreira and a friend treated themselves to a low-cost pampering at a hair salon, while two other friends looked for stylish but inexpensive pants.

With its economy faltering, Argentina’s peso has plunged against the U.S. dollar and its annual inflation is 115.6%, one of the highest rates in the world. In contrast, Uruguay’s economy is more stable, with low inflation and a stronger currency.

The result has been a huge flow of shoppers from Uruguay throwing an economic lifeline to struggling Argentine stores and restaurants in cities like Gualeguaychú, Concordia and Colón.

But there’s a downside for Uruguayan businesses along the border: In the provinces of Salto, Paysandú, Río Negro and Soriano, municipal authorities say 170 stores closed in the first five months of this year. Businesses still open complain they hardly have any customers.

With about $100 apiece, the four friends planned to get their hair done, buy clothing, gasoline and other goods and eat out in Gualeguaychú, in Entre Rios province, which for more than a year has been a shopping mecca for Uruguayans looking for deals. Back in Uruguay, Ferreira, 29, said that same $100 would “get your hair done and not much else.”

Uruguayan businesses just across the border are finding it hard to compete with such bargains.

“Everything is very quiet,” said Susana Guerrero, owner of a shop that sells cheese and sweets in Salto. “I lost an employee, and I did not replace him.”

Guerrero went to Gualeguaychú on an exploratory trip and now sees why Uruguayans are going there to shop. The price differences between the two countries can be staggering. A liter of sunflower oil that costs $5 in Uruguay is 50 cents in Argentina. A jar of skin-care cream that costs $10 in Uruguay can be had for a dollar across the border. And a liter of gasoline in Uruguay is close to $2. In the Argentine province of Entre Rios it is 52 cents.

“Yes, it’s cheap and we can’t fight it,” Guerrero said.

Fray Bentos storefronts, meanwhile, are covered with signs offering specials in a bid to attract customers.

“This year, sales have dropped by 40% or more,” said Alicia Nedor, who works in a pharmacy. She said the sector is seeing its worst crisis in decades.

Nedor, 70, said several small businesses have closed in Fray Bentos and the big ones have laid off staff.

Cross-border bargain hunters also hail from neighboring Chile, Paraguay and Brazil. In Uruguay, industry representatives have called the phenomenon a “border pandemic” and even the country’s president has acknowledged the problem.

“The prices of goods in Argentina are extremely cheap, and naturally its neighbors consume where it is cheaper for them,” President Luis Lacalle Pou said in early May. “This creates an imbalance. We have applied measures, but it is not enough.”

The government then introduced additional measures, including tax breaks for Uruguayan businesses and a 5-kilogram limit on what Uruguayans returning from Argentina can bring with them. But business leaders say the controls are not applied and are demanding a “zero-kilo” border policy, something that Lacalle Pou has rejected.

Lacalle Pou said the government will seek to make sure contraband doesn’t cross the border but added that “it is impossible to solve the exchange rate problem with Argentina.”

The Catholic University of Uruguay has developed a Border Price Indicator for the Argentine city of Concordia, about 200 kilometers (125 miles) north of Gualeguaychú. According to its latest data from May, it is 59% cheaper to buy a basket of food, drinks, clothing and household products in Concordia than in the Uruguayan town of Salto.

The price gap reflects the devaluation of the Argentine peso, which has lost 47% of its value against the U.S. dollar at the official rate so far this year.

Argentina has struggled with inflation multiple times over the last century. Its current crisis started in 2018 but has worsened in the past year and a half, said María Castiglioni, director of C&T Asesores Económicos. The inflation problem arose from several factors, she said, including government overspending and problems in monetary policy.

The country doesn’t have funds to solve its overspending because it has lost access to the international debt market after multiple defaults on its loans. The loss of access means other countries do not feel confident lending money to Argentina.

As this debt crisis arose, the government turned to the country’s central bank for assistance. In an effort to sustain the economy, the central bank hasn’t stopped printing pesos, which has led to the devaluing of the peso. The increase in the flow of pesos also led to ballooning inflation that Argentinians experience every day.

On holidays and weekends, long lines of cars wait to cross the General San Martín International Bridge that crosses the Uruguay River and joins Argentina’s Gualeguaychú with Fray Bentos in Uruguay.

Between June 30 and July 4, which included the first days of the southern winter vacation for Uruguayans, more than 100,000 people left Uruguay for Argentina, most of them through the three border crossings in Entre Ríos. The majority were Uruguayans, although there were other nationalities. Uruguay has a population of about 3.4 million people.

Claudio Gatt, who owns the hair salon Ferreira and her friends went to, said that the flow of Uruguayans into Argentina has been like oxygen.

“If they were not here, sales would drop by a minimum of 50%,” he said.

Signs reading “dollars accepted” hang in store windows in Gualeguaychú and its main streets are filled with visitors from different parts of Uruguay. Half of the purchases of medicines and cleaning supplies in the city are by Uruguayans, according to a local business chamber.

For Alejandro Ramos, a 49-year-old Argentine teacher who lives in Gualeguaychú, the problem is not the Uruguayans, because “they come and buy legally.”

The problem “is us,” he said. “We first have to realize that we are an economic disaster in this country.”
…

The chief executives of Intel Corp and Qualcomm Inc are planning to visit Washington next week to discuss China policy, according to two sources familiar with the matter.

The executives plan to hold meetings with U.S. officials to talk about market conditions, export controls and other matters affecting their businesses, one of the sources said. It was not immediately clear whom the executives would meet.

Intel and Qualcomm declined to comment, and officials at the White House did not immediately return a request for comment.

The sources said other semiconductor CEOs may also be in Washington next week. The sources declined to be named because they were not authorized to speak to the media.  

U.S. officials are considering tightening export rules affecting high-performance computing chips and shipments to Huawei Technologies Co Ltd, sources told Reuters in June. The rules would respectively affect Intel, which is preparing a new artificial intelligence chip that could be shipped to China, and Qualcomm, which has a license to sell chips to Huawei.

The Biden administration last October issued a sweeping set of rules designed to freeze China’s semiconductor industry in place while the U.S. pours billions of dollars in subsidies into its own chip industry.

The possible rule tightening would hit Nvidia particularly hard. The company’s strong position in the AI chip market helped boost its worth to $1 trillion earlier this year.

The chip industry has been warmly received in Washington in recent years as lawmakers and the White House work to shift more production to the U.S. and its allies, and away from China. Intel CEO Pat Gelsinger and Qualcomm CEO Cristiano Amon have met often with government officials.

Next week’s meetings, which one of the sources said could include joint sessions between executives and U.S. officials, come as Nvidia Corp NVDA.O and other chip companies fear a permanent loss of sales for an industry with large amounts of business in China while tensions escalate between Washington and Beijing.

One of the sources familiar with the matter said the executives’ goals for the meetings would be to ensure that government officials understand the possible impact of any further tightening of rules around what chips can be sold to China.

Many U.S. chip firms get more than one-fifth of their revenue from China, and industry executives have argued that reducing those sales would cut into profits that they reinvest into research and development.
…

Two U.S. senators are pursuing a legislative plan to track U.S. investments in China, as the White House works to complete long-awaited action that would also restrict investment in certain, highly targeted sectors.  

The Outbound Investment Transparency Act, filed late on Thursday as an amendment to a defense bill, is the latest bipartisan legislation introduced by Democratic Senator Bob Casey and Republican John Cornyn aimed at tackling the risks of U.S. investment going to foreign adversaries like China.

Unlike an unsuccessful version the senators introduced in 2021, the latest measure requires notification of some outbound investments, rather than review or prohibition of certain deals, and targets fewer industry sectors.  

“As a matter of national and economic security, we need greater insight into which of our nation’s critical technological capabilities have been moved overseas and at what scale,” Casey said in a statement.  

The Biden administration, meanwhile, is finalizing an executive order that would also restrict certain investment in sectors including advanced semiconductors, quantum computing and artificial intelligence.  

A senior administration official, who spoke on condition of anonymity, said the aim was to wrap up legal and other reviews of the outbound investment order by Labor Day.  

The White House had no comment.

U.S. Treasury Secretary Janet Yellen said on Sunday, at the end of a four-day trip to China, that she had spoken with her Chinese counterparts about the proposed order and said that any investment curbs would be “highly targeted, and clearly directed, narrowly at a few sectors where we have specific national security concerns.”

She said the order would enacted in a transparent way, through a rule-making process that would allow public input.  

Reuters reported in February that the proposed order was likely to track restrictions on artificial intelligence chips, chipmaking tools and supercomputers, among other technologies, imposed on exports to China in October. The order, which has been repeatedly postponed, was expected to also require notice for a broad swath of transactions.  

The senators’ proposed legislation was filed as an amendment to the annual National Defense Authorization Act.

On Friday, the U.S. House of Representatives passed its version of the NDAA. The chances of it becoming law were uncertain after Republicans added a series of culturally conservative amendments.

Debate in the Senate on its version of the must-pass bill is set to begin on Tuesday. The two houses of Congress must come to an agreement on a final version before it could go to President Joe Biden to approve or veto.
…

U.S. lawmakers Thursday charged the Chinese Communist Party is using coercive economic practices to achieve worldwide dominance over the United States.

The accusations came at a hearing of the House Select Committee on Strategic Competition Between the United States and the Chinese Communist Party days after U.S. Treasury Secretary Janet Yellen met with Chinese officials in Beijing to discuss the nations’ economic relationship.

Yellen said that while the United States was taking targeted national security actions, “a decoupling of the world’s two largest economies would be disastrous for interests for both countries and destabilizing for the world, and it would be virtually impossible to undertake. We want a dynamic and healthy global economy that is open, free and fair.”

Diplomatic relations between the two countries have been tense since the U.S. downed a Chinese spy balloon earlier this year. Witnesses told the House panel Thursday U.S. companies are facing increasing threats operating inside China.

“There’s no such thing as a private company in China, a raft of legislation like the updated counterespionage law, the data security law, the anti-foreign sanctions law has codified what was always true. China reserves the right to swipe any data, to seize any assets and take IP that it wishes,” committee Chairman Mike Gallagher said.

According to committee members, China’s restrictive environment is resulting in a so-called “brain-drain” of its own business people, turning China into the top country in the world for the departure of wealthy individuals, fleeing what they fear is the Communist Party’s ability to arbitrarily seize assets.

Witnesses testified the environment in China is becoming increasingly restrictive for American companies and individuals.

“In the last few months, PRC authorities are now charging any domestic or foreign businessperson with espionage simply for providing any services using PRC information to grant or give to third-country-based customers,” Piper Lounsbury, chief research and development officer at Strategy Risks, a risk management firm for companies doing business in China, said.

“The crackdown on consulting businesses, the enhanced data, secrecy laws and the flow of PRC information just highlight the negative symmetry that we have with China. This means that even companies now can’t even do due diligence in advance of any sort of business transaction,” Lounsbury, said.

The Chinese Foreign Affairs Ministry pushed back against criticism of its business practices Monday in response to a U.S. State Department travel advisory issued this month warning Americans citizens of the “risk of wrongful detention.”

“China is a country under the rule of law. The decision of relevant departments to carry out security review of foreign companies according to law is based on laws and facts. China welcomes citizens and enterprises from all over the world to visit China and do business in China, and protects their safety and legitimate rights and interests in China, including freedom of exit and entry,” said Mao Ning, a spokesperson for the ministry.

Witnesses, though, told the committee told lawmakers that American businesses face a restrictive environment led from the top down by President Xi Jinping, potential intellectual property theft and the constant threat of seized assets.

“The issue is how much do I need to lose to have access to the market, so it’s a balancing act,” said Desmond Shum, a businessman whose ex-wife, Whitney Duan, was arrested by the Chinese. Shum, the author of Red Roulette: An Insider’s Story of Wealth, Power, Corruption and Vengeance in Today’s China, told U.S. news program 60 Minutes that he and his then-wife participated in corrupt business practices in China.

In its latest report to Congress in 2022, the U.S.-China Economic and Security Review Commission, set up by Congress in 2000 to monitor and report on the national security implications of the U.S.-China economic relationship, as well as make recommendations, said U.S. businesses and investors are reevaluating their reengagement in China.

“China has subverted the global trade system and moved further from the spirit and letter of its obligations under its WTO accession protocol,” the report said. “China’s subsidies, overcapacity, intellectual property theft, and protectionist nonmarket policies exacerbate distortions to the global economy. These practices have harmed workers, producers, and innovators in the United States and other market-based countries.”

The commission went on to say the United States’ ability to overcome harmful trade practices was undermined by the lack of a coherent strategy.
…

Leaders of a Hollywood actors union voted Thursday to join screenwriters in the first joint strike in more than six decades, shutting down production across the entertainment industry after talks for a new contract with studios and streaming services broke down.

It’s the first time two major Hollywood unions have been on strike at the same time since 1960, when Ronald Reagan was the actors’ guild president.

In an impassioned speech as the strike, which begins at midnight, was announced, actors’ union president Fran Drescher, former star of “The Nanny,” chastised industry executives.

“Employers make Wall Street and greed their priority, and they forget about the essential contributors that make the machine run,” Drescher said. “It is disgusting. Shame on them. They stand on the wrong side of history.”

Hours earlier, a three-year contract had expired, and talks broke off between the Screen Actors Guild-American Federation of Television and Radio Artists and the Alliance of Motion Picture and Television Producers representing employers including Disney, Netflix, Amazon and others.

Outside Netflix’s Hollywood offices, picketing screenwriters chanted “Pay Your Actors!” immediately after the strike was declared. Actors will begin picketing alongside writers outside studio headquarters in New York and Los Angeles on Friday.

“It looks like it’s time to take down the MASKS. And pick up the SIGNS,” Oscar-winner Jamie Lee Curtis said in an Instagram post with a photo of the tragic and comic masks that represent acting.

The premiere of Christopher Nolan’s film “Oppenheimer” in London was moved up an hour so that the cast could walk the red carpet before the SAG board’s announcement. Stars including Cillian Murphy, Emily Blunt and Matt Damon left the event once the strike was announced.

The strike — the first for film and television actors since 1980 — casts a shadow over the upcoming 75th Emmy Awards, whose nominations were announced a day earlier. Union rules prevent actors from doing any interviews or promotions around the awards, and they may not appear at the ceremony.

The strike rules also prevent actors from making personal appearances or promoting their work on podcasts or at premieres. And they are barred from doing any production work, including auditions, readings, rehearsals or voiceovers, along with actual shooting.

While international shoots technically can continue, the stoppage among U.S.-based writers and performers is likely to have a drag on those, too.

Disney chief Bob Iger warned the strike would have a “very damaging effect on the whole industry.”

“This is the worst time in the world to add to that disruption,” Iger said on CNBC. “There’s a level of expectation that they have that is just not realistic.”

A nearly two-week extension of the actors union contract and negotiations only heightened the hostility between the two groups. Drescher said the extension made us “feel like we’d been duped, like maybe it was just to let studios promote their summer movies for another 12 days.”

Before the talks began June 7, the 65,000 actors who cast ballots voted overwhelmingly for union leaders to send them into a strike, as the Writers Guild of America did when their deal expired more than two months ago.

When the initial deadline approached in late June, more than 1,000 members of the union, including Meryl Streep, Jennifer Lawrence and Bob Odenkirk, added their names to a letter signaling to leaders their willingness to strike.

While famous names predominate, the strike also includes tens of thousands of little-known actors who scramble for small parts at sometimes meager pay. The union says modest-but-essential income streams, including long-term residuals for shows they appear in, have dried up.

Stakes in the negotiations included that kind of pay, which actors say has been undercut by inflation and the streaming ecosystem, benefits, the growing tendency to make performers create video auditions at their own expense, and the threat of unregulated use of artificial intelligence.

“At a moment when streaming and AI and digital was so prevalent, it has disemboweled the industry that we once knew,” Drescher said, drawing applause from her fellow union leaders. “When I did ‘The Nanny’ everybody was part of the gravy train. Now it’s a vacuum.”

The AMPTP said it presented a generous deal that included the biggest bump in minimum pay in 35 years, higher caps on pension and health contributions, and “a groundbreaking AI proposal that protects actors’ digital likenesses.”

“A strike is certainly not the outcome we hoped for as studios cannot operate without the performers that bring our TV shows and films to life,” the group said in a statement. “The Union has regrettably chosen a path that will lead to financial hardship for countless thousands of people who depend on the industry.”

SAG-AFTRA represents more than 160,000 screen actors, broadcast journalists, announcers, hosts and stunt performers. The walkout affects only the union’s actors from television and film productions, who voted overwhelmingly to authorize their leaders to call a strike before talks began on June 7. Broadway actors said in a statement that they stand “in solidarity” with SAG-AFTRA workers.

The 11,500 members of the Writers Guild of America have been on strike since their own talks collapsed and their contract expired on May 2. The stoppage has showed no signs of a solution, with no negotiations even planned.

That strike brought the immediate shutdown of late-night talk shows and “Saturday Night Live,” and several scripted shows, including “Stranger Things” on Netflix,” “Hacks” on Max, and “Family Guy” on Fox, which have either had their writers’ rooms or their production paused. Many more are sure to follow them now that performers have been pulled too.
…

Some homeowners looking to switch out their heating and cooling systems are turning to home geothermal — also known as ground source — heat pumps. It’s a technology that relies on a simple physical fact: Dig several feet below Earth’s surface, in the coldest winter or the hottest summer, and the temperature will be around 55 degrees.

Geothermal takes advantage of that constant temperature by pushing water with some antifreeze through a loop of flexible pipe that runs deep underground. The water gets circulated by a heat pump system, usually located in the basement.

When the house needs cooling — say on an 85-degree July day — a refrigerant, which is a special fluid, absorbs unwanted heat indoors and transfers it to water in the long piping, circulating it underground, giving it time to cool to the constant mid-50s below. House air blows across the cool fluid. Having dumped its heat, it can absorb more for transfer to the outdoors.

Warming the building works much the same, in reverse. On a sub-freezing January day, the system circulates the water underground, warming it to about 55 degrees. Arriving back at the pump, the water in the loop now heats the refrigerant, making it want to expand. An electric pump then compresses it, which spikes the temperature. The system then pushes air over the hot refrigerant and into the house until the air in the house reaches thermostat temperature.

In apartment buildings, schools or other commercial buildings, the underground loop may be just a few feet deep and extend horizontally over a wide area. For smaller residential lots, the solution is to drill deeper — as much as 300 feet or more — to get a loop that is long enough for the water be in contact with the ground and equalize with its constant temperature.

Geothermal systems cost more up front than typical furnaces, sometimes tends of thousands of dollars. Supporters say lower operating costs eventually make that worthwhile, because the superpower of ground source heat pumps is that they use very little electricity to move heat around. They’re designed to last more than 50 years for the underground parts, with the above-ground components expected to last 25 years or more. Gas furnaces typically last 15 to 30 years on average.

Geothermal or ground-source heat pumps are still the exception rather than the rule. Air-source heat pump are far more common and work by extracting energy from outdoor air to both heat and cool the home.
…

Warmer, drier weather because of an earlier-than-usual El Nino is expected to hamper rice production across Asia, hitting global food security in a world still reeling from the impacts of the war in Ukraine. 

An El Nino is a natural, temporary and occasional warming of part of the Pacific that shifts global weather patterns, and climate change is making them stronger. The National Oceanic and Atmospheric Administration announced this one in June, a month or two earlier than it usually does. This gives it time to grow. Scientists say there’s a one in four chance it will expand to supersized levels. 

That’s bad news for rice farmers, particularly in Asia where 90% of the world’s rice is grown and eaten, since a strong El Nino typically means less rainfall for the thirsty crop. 

Past El Ninos have resulted in extreme weather, ranging from drought to floods. 

There are already “alarm bells,” said Abdullah Mamun, a research analyst at the International Food Policy Research Institute or IFPRI, pointing to rising rice prices due to shortfalls in production. The average price of 5% broken white rice in June in Thailand was about 16% higher than last year’s average. 

Global stocks have run low since last year, in part due to devastating floods in Pakistan, a major rice exporter. This year’s El Nino may amplify other woes for rice-producing countries, such as reduced availability of fertilizer due to the war and some countries’ export restrictions on rice. Myanmar, Cambodia and Nepal are particularly vulnerable, warned a recent report by research firm BMI. 

“There is uncertainty over the horizon,” Mamun said. 

Recently, global average temperatures have hit record highs. Monsoon rains over India were lighter than usual by the end of June. Indonesian President Joko Widodo on Monday asked his ministers to anticipate a long dry season. And in the Philippines, authorities are carefully managing water to protect vulnerable areas. 

Some countries are bracing for food shortages. Indonesia was among the worst hit by India’s decision to restrict rice exports last year after less rain fell than expected and a historic heat wave scorched wheat, raising worries that domestic food prices would surge. 

Last month, India said it would send more than 1 million metric tons (1.1 million U.S. tons) to Indonesia, Senegal and Gambia to help them meet “their food security needs.” 

Challenges finding fertilizer

Fertilizer is another crucial variable. Last year China, a major producer, restricted exports to keep domestic prices in check after fertilizers were among exports affected by sanctions on Russian ally Belarus for human rights violations. Sanctions on Russia for its invasion of Ukraine don’t target fertilizers but the war has disrupted shipments of the three main chemical fertilizers: potash, phosphorus, and nitrogen. 

Bangladesh found suppliers in Canada to make up for lost potash shipments from Belarus, but many countries are still scrambling to find new sources. 

Farmers such as Abu Bakar Siddique, who cultivates 1.2 hectares (3 acres) in northern Bangladesh, had enough fertilizer to keep his yields steady last year. But less rainfall meant he had to rely more on electric pumps for his winter harvest at a time of power shortages due to war-related shortfalls of diesel and coal. 

“This increased my costs,” he said. 

Attempting to adapt

Each El Nino is different, but historical trends suggest scarce rainfall in South and Southeast Asia will parch the soil, causing cascading effects in coming years, said Beau Damen, a natural resources officer with the Food and Agriculture Organization based in Bangkok, Thailand. Some countries, like Indonesia, may be more vulnerable in the early stages of the phenomenon, he said. 

Kusnan, a farmer in Indonesia’s East Java, said rice farmers there have tried to anticipate that by planting earlier so that when the El Nino hits, the rice might be ready for harvest and not need so much water. Kusnan, who like many Indonesians uses only one name, said he hoped high yields last year would help offset any losses this year. 

Widodo, the Indonesian leader, stressed the need to manage water in coming weeks, warning that various factors — including export restrictions and fertilizer shortages — could combine with the El Nino to “make this a particularly damaging event.” 

Baldev Singh, a 52-year-old farmer in northern India’s Punjab state, is already worried. He typically sows rice from late June until mid-July, then needs the monsoon rains to flood the paddies. Less than a tenth of the usual rainfall had come by early this month, and then floods ravaged northern India, battering young crops that had just been planted. 

The government has encouraged Punjab farmers to grow rice along with their traditional wheat crops since the 1960s to improve India’s food security, even though farmers like Singh don’t typically eat rice and irrigation of rice fields has drained the area’s aquifers. But he keeps growing it, counting on the certainty of government purchases at fixed prices. 

With rain scarce, Singh may need to dig wells. Last year, he dug down 200 feet (60 meters) to find water. 

“Rice has been our ruin … I don’t know what will happen in the future,” he said. 

 
…

U.S. consumer prices rose 3% in June compared with a year ago, a marked drop in the inflation rate that was the smallest 12-month increase in more than two years, the government reported Wednesday.

A year ago, the U.S. inflation rate soared to an annualized rate of more than 9%, a four-decade high, but since then it has dipped steadily. Last month’s figure is close to the 2% annual inflation rate sought by policymakers at the country’s central bank, the Federal Reserve, and a further drop from the 4% annualized figure recorded in May.

The 3% annualized advance recorded in June was the smallest since March 2021 and affords U.S. consumers further financial relief, with the Bureau of Labor Statistics saying that prices for such diverse items as used cars, gasoline at service stations, meats and airfares dropped. 

The Federal Reserve policymakers have steadily raised their benchmark interest rate over the last 16 months, boosting the cost of consumer and business borrowing in an effort to curb inflation. The Fed is expected to impose another rate increase later this month.  

But with inflation now slowing, further rate increases could be delayed or curtailed. 

The U.S economy, the world’s largest, has remained resilient in the aftermath of the coronavirus pandemic, continuing to grow. Hundreds of thousands of new jobs have been added month after month and pushed the unemployment rate to a near five-decade low.

Even so, voters have given President Joe Biden low marks for his handling of the U.S. economy because of the high inflation rate, which has squeezed family budgets, especially for the purchase of groceries and gas and monthly rental payments. 

Biden, running for a second term in the November 2024 election, was quick to take credit for the lowered inflation rate. 

“Good jobs and lower costs: That’s Bidenomics in action,” he said. “Today’s report brings new and encouraging evidence that inflation is falling while our economy remains strong. 

“Real wages for the average American worker are now higher than they were before the pandemic, with lower wage workers seeing the largest gains,” he added. “Our progress creating jobs while lowering costs for families is no accident.”

Bankrate.com economic analyst Mark Hamrick said, “The key readings of the Consumer Price Index turn out to be lower than expected across the board both on a month-over-month and year-over-year basis.”

He predicted that “the Fed will almost certainly raise its benchmark rate in a couple of weeks because officials have said as much. It remains to be seen whether they will feel compelled to raise rates further in September or beyond, but it is likely in doubt.”

The three major U.S. indexes all advanced sharply in midday trading on news of the taming of inflation. The benchmark Dow Jones average of 30 blue chip stocks was up nearly a percentage point, while the broader S&P 500 index and the tech-heavy NASDAQ exchange moved even higher.
…

Global demand for all forms of energy is forecast to rise by 23% through 2045, OPEC Secretary General Haitham Al Ghais told a Nigerian oil and gas conference on Tuesday.

Oil executives and officials from the Organization of the Petroleum Exporting Countries (OPEC) have repeatedly made the case for continued investment in oil, warning that prices will otherwise spike higher.

Al Ghais also said calls to limit or stop funding new oil projects were unrealistic and unwise. He acknowledged, however, the need for technology to tackle continued fossil fuel emissions.

“Global primary energy demand is forecast to increase by a significant 23% in the period up to 2045, which means we will need all forms of energy,” he said.

“We will require innovative solutions such as carbon capture utilization and storage, and hydrogen projects in addition to a circular carbon economy, which has received a positive endorsement from the G20.”

The global oil industry needs $12.1 trillion in investment during the same period, Al Ghais said, adding the industry was not on track to reach that level of investment yet.

Sources close to OPEC have said it will likely maintain an upbeat view on oil demand growth for next year when it publishes its first outlook later this month, predicting a slowdown from this year but still an above-average increase.

OPEC’s forecast for 2024 will likely be lower than the growth it expects for this year of 2.35 million barrels per day, or 2.4%, an abnormally high rate as the world moves out of the COVID-19 pandemic.
…