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The Dow and S&P 500 closed at all-time highs on Wednesday on a boost from retailers including Walgreens and Nike as investors shrugged off concerns on the spreading omicron variant. 

The Dow has now risen six straight trading days, marking the longest streak of gains since a seven-session run from March 5-15 this year. 

Walgreens Boots Alliance and Nike rose 1.59% and 1.42% respectively against the backdrop of recent reports suggesting holiday sales were strong for U.S. retailers. 

Data on Wednesday showed the U.S. trade deficit in goods mushroomed to the widest ever in November as imports of consumer goods shot to a record and the coronavirus pandemic has limited spending by Americans on services. 

Some early studies pointing to a reduced risk of hospitalization in omicron cases have eased some investors’ concerns over the travel disruptions and powered the S&P 500 to record highs this week. 

Meanwhile, the S&P 1500 airlines index dipped. Delta Air Lines and Alaska Air Group canceled hundreds of flights again on Tuesday as the daily tally of infections in the United States surged. 

Typically, the final five trading days of the year and the first two of the subsequent year are seasonally strong for U.S. stocks, in a phenomenon known as the “Santa Claus Rally.” Market participants, however, warned against reading too much into daily moves as the holiday season tends to record some of the lowest volume turnovers, which can cause exaggerated price action. 

The Dow Jones Industrial Average rose 90.42 points, or 0.25%, to 36,488.63, the S&P 500 gained 6.71 points, or 0.14%, to 4,793.06 and the Nasdaq Composite dropped 15.51 points, or 0.1%, to 15,766.22. 

As 2021 draws to a close, the main U.S. stock indexes are on pace for their third straight year of stunning annual returns, boosted by historic fiscal and monetary stimulus. The S&P 500 is looking at its strongest three-year performance since 1999. 

The focus next year will shift to the U.S. Federal Reserve’s path of interest rate hikes amid a surge in prices caused by supply chain bottlenecks and a strong economic rebound. 

Volume on U.S. exchanges was 7.89 billion shares, compared with the 11.15 billion average for the full session over the past 20 trading days. 

 
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Rights groups in Kenya are pushing authorities to resettle tens of thousands of squatters evicted just ahead of the holidays to make way for a Chinese-backed expressway.  

Kenyan Lucy Wangare, in her forties, cleans a makeshift tent that has provided her family flimsy shelter since October, when Nairobi city authorities evicted them from their home of almost two decades.

She, her husband, and her sister spent the holiday season living in the tent, enduring cold and wet nights. 

City authorities evicted more than 40,000 squatters like Wangare from the Mukuru Kwa Njenga slum and razed their homes to make way for construction of the Nairobi Expressway.  

What is left of the Mukuru slum looks like a wasteland, with scores of makeshift tents forming a small island.  

Authorities gave them just days’ notice to vacate their homes, says Wangare.

“If you look at where I sleep, you’d think I wasn’t a Kenyan citizen, you’d think I was a refugee, said Wangare. 

They used to have property and houses but, right now, they’ve been left destitute. She blames Kenya’s government.

The half a billion dollars elevated expressway aims to ease Nairobi’s notorious traffic by connecting the main international airport to the city center and wealthy suburbs.      

The Chinese state-owned China Road and Bridge Corporation is building and financing the expressway, which should be working in 2022, and will collect the tolls for nearly three decades.    

Despite critics calling it a road for the rich, Kenya’s President Uhuru Kenyatta defended the project while taking a tour of it the day before Christmas.  

“The difference that is being occasioned by the road building, the drainage being build, by the sewage being put in — I do believe that within another two years, Nairobi will be a truly 21st century city, catering for its population in a positive manner and in a manner befitting our people,” said Kenyatta.    

But Kenyan rights activists fault the government for not striking a balance between the need for infrastructure and human dignity for those evicted.  

Anami Daudi, 25, is with the Mukuru Community Justice Center.

“It’s so traumatizing, people are having mental issues here, we have other special challenges, they should get like special attention.  But you find out that even the facilities we have around they can’t even accommodate to create maybe that space to provide such services,” he said. 

The single squatters left homeless, like 38-year-old Pauline Gathoni, struggle with security fears.      

“It’s very dangerous to spend the night here, especially for us, women,” she said. The men can defend themselves if attacked,  but she can’t fight anybody. ”If someone attacks me and steals my property, tells me to leave, I will have no choice but to obey them,” she said.

City authorities’ promises to compensate and help resettle the evicted families have yet to come true.    
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With the arrival of winter in Europe and energy prices soaring, tensions are running high over the provision of gas from Russia — especially through the Yamal-Europe pipeline that runs through Poland and Belarus. 

But the Yamal pipeline is just one part of a complex gas infrastructure network shaped not only by energy needs but also wider economic interests and politics, including strife between Russia and Ukraine. 

The pipeline, opened in 1994, runs over 2,000 kilometers (1,242 miles) to Germany from the city of Torjok in central Russia, transiting through Belarus and Poland. 

It delivers 30 billion cubic meters of gas to Europe each year, making it one of the most important vehicles for the provision of Russian gas to the continent. 

Russia sells Germany gas at a cheaper rate than it does to Poland, in part to make up for the higher transit fees through the longer delivery distance. 

But this means that it is more cost efficient for Poland to buy Russian gas from Germany. 

Some of the gas sold by German traders to Poland flows directly into Polish territory, or if that is not sufficient, the pipeline can also operate in reverse to send more to Germany’s eastern neighbor. 

Since December 21, the pipeline has been operating in reverse, with gas flowing east back into Poland from the German border, according to data from management company Gascade seen by AFP. 

This means that over the last days, Germany itself has not been receiving gas via Yamal. 

Meanwhile, Russian gas continues to flow to Europe through other major pipelines such as Nord Stream I and TurkStream. 

It is not unusual for the Yamal pipeline to operate in reverse for short periods, but this latest about-turn comes against a backdrop of political tension over fears that Russia may invade Ukraine. 

Political pressure 

In Germany, the government has said that in the event of any “escalation”, it will put the brakes on another gas pipeline, Nord Stream 2, which is still awaiting the green light from the authorities. 

Some European states, such as Poland and Ukraine, have accused Moscow and Russian energy company Gazprom of cutting gas supplies to Europe to exert political pressure over these tensions. 

Russian President Vladimir Putin has said the change in gas flow through the Yamal pipeline is purely down to fluctuating orders and denied any political motive. 

Gazprom, for its part, has called accusations that it is failing to deliver enough gas to Europe “absolutely groundless and unacceptable” and blamed Germany for dipping into its reserves to supply neighboring Poland. 

Berlin on Monday denied any intervention on its part. “It is not the government that decides on gas flows, but the market, the traders,” the Economy and Climate Ministry said. 

According to George Zachmann, a specialist in energy issues for the Brussels-based Bruegel think tank, Gazprom may also be “favoring its own pipelines” over those it does not 100% control, such as the Yamal pipeline. 

Low reserves

A spokeswoman for the German Economy and Climate Ministry told AFP that “security of supply is still guaranteed.” 

But Berlin, which has “relatively low” gas reserves with its tanks just 53 percent full, could soon have “difficulties”, according to Christophe Bonnery, president of the Association of Energy Economists. 

“If contracts are adhered to there will be no problems until at least March,” said Zachmann. But “if Russia cannot or will not deliver gas for technical or other reasons, then supplies could fall short.” 

The wrangling comes amid an explosion in gas prices, which are up to seven times higher than at the beginning of the year.

The surge is thought to be partly down to a particularly cold winter and an increase in activity linked to the post-coronavirus economic recovery. 

With 40% of gas consumed in Europe coming from Russia, Moscow is suspected of taking advantage of the tensions on the world market to reduce supply and drive up prices. 

The International Energy Agency (IEA) in September called on Russia to be a “reliable supplier” and send more gas to Europe. 
…

As Europe rang in the New Year 20 years ago, 12 of its nations said goodbye to their deutschmarks, French francs, liras and pesetas as they welcomed the euro single currency. 

On January 1, 2002, euro notes and coins became a reality for some 300 million people from Athens to Dublin, three years after the currency was formally launched in “virtual” form. 

Here is a recap of the event, drawn from AFP reporting at the time: 

In a far cry from the austere New Year’s celebrations imposed by the COVID-19 pandemic 20 years later, fireworks, music and lights blazed at midnight into the early morning of January 1, 2002, to mark the biggest monetary switch in history. 

AFP reported that many people passed on their traditional New Year’s Eve parties, choosing instead to queue up at cash dispensers in their enthusiasm to get hold of the first pristine euro notes. 

In Berlin, Germans said hello to the euro and goodbye to their beloved mark at a special ceremony at the Brandenburg Gate, as up to 1 million people thronged the streets for the traditional giant New Year’s Eve street party there. 

The euro cash was also a hit in the coffee shops and red-light district of Amsterdam. 

Irish revelers were, however, less in a hurry to welcome the euro, continuing to pay for Guinness, Ireland’s favorite tipple, in the national currency, leaving the headache of the changeover until the next day. 

As many feared, the euro switch provoked sporadic price hikes across Europe. 

From Spanish bus tickets, which jumped by 33%, to a Finnish bazaar, where “everything for 10 markka (1.68 euros)” was now “everything for two euros,” many price tags were a bit heftier since the single currency became legal tender. 

The European Central Bank president at the time, Wim Duisenberg, who warned merchants not to take advantage of the euro launch to increase prices, said he had not seen signs of widespread abuse. 

“When I bought a Big Mac and a strawberry milkshake this week it cost 4.45 euros, which is exactly the same amount as I paid for the same meal last week,” Duisenberg told reporters. 

Europe surprised itself with the almost glitch-free transition to the single currency, AFP reported. 

The Germans — reputedly skeptical about the single currency and nostalgic for their mark — turned out to be among the most enthusiastic. 

An editorial in the popular German tabloid Bild proclaimed: “Our new money is moving full speed ahead. No problems whatsoever in saying adieu to the mark, no tears to be shed.” 

Initial “europhoria” was, however, tempered as a few hiccups appeared, such as cash shortages and long lines in banks, post offices and at toll booths. 

France urged citizens to not rush all at once to the banks with their savings, often hoarded under mattresses and in jam jars, since they had until June 30 to get rid of their francs at commercial banks and until 2012 at the Bank of France. 

And the European Commission reported minor problems in getting small euro bills and coins distributed in most countries. 

Duisenberg said, however, he was sure that January 1, 2002, would be written into history books as the start of a new European era. 

 
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Holiday travelers continued to experience widespread flight cancellations as the omicron variant causes airline staff to call in sick.

According to FlightAware, which tracks delays and cancellations, there have been 2,395 total flight cancellations around the world Monday with 869 of those impacting flights “within, into, or out of the United States.” 

Some 6,342 flights have been delayed around the world with 1,602 delays impacting U.S flights. 

Over the Christmas weekend, thousands more flights were canceled, leaving travelers stranded. 

“We apologize to our customers for the delay in their holiday travel plans,” Delta said in a statement. “Delta people are working hard to get them to where they need to be as quickly and as safely as possible on the next available flight.” 

The holiday season is the busiest time of year for air travel. The U.S. Transportation Security Administration said 2.19 million passengers were screened on Dec. 23, and the previous day saw more travelers than the same day in 2019. 

When things might return to normal is unclear. 

Delta and JetBlue have reportedly asked the U.S. Centers for Disease Control and Prevention to reduce quarantine times for their vaccinated employees. Some airlines are also reportedly offering bonuses to work more to cover for sick employees. 

Amid the scramble, some are expressing concern. 

“We’ve got to make sure employees don’t feel pressured to come to work when they’ve been exposed to COVID or they think they may have the symptoms,” Captain Dennis Tajer, a spokesperson for the Allied Pilots Association, told ABC News. 
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Investors are closely watching the latest news on the rapidly spreading Omicron variant for signs of how much the virus could impact the U.S. economy and earnings as the market heads into what has historically been a strong time of year for equities.

Overall, the S&P 500 is slightly ahead since Nov. 24, prior to news of the variant hitting markets. It marked a record-high close on Thursday, as encouraging developments gave investors more ease about the economic impact of the variant.

“The market is extremely reactionary now and every little bit of news has a huge impact,” said George Young, a portfolio manager at Villere & Co. Young is planning on taking advantage of any Omicron-induced volatility to add to stocks that rely on tourism and travel such as bank company First Hawaiian Inc . Shares of the company are up 14.4% for the year to date.

The Omicron variant is causing infections to double in 1.5 to 3 days, according to the World Health Organization. The variant now accounts for 73% of all new U.S. cases, up from less than 1% at the beginning of the month.

Still, questions about Omicron’s virulence have made investors less pessimistic than the original reaction. The S&P 500 closed down 2.3% on Nov. 26 after the variant was discovered, on fears of fresh economic lockdowns.

A South African study offered hope about the severity of Omicron and the trend of COVID-19 infections on Wednesday. Shares of vaccine makers slumped in December as investors expect the Omicron variant’s impact to be limited based on recent data.

That bodes well for what is known in the market as a Santa Claus rally. Historically, U.S. stocks have risen during the last five trading days of December and the first two days of January in 56 out of 75 years since 1945, according to data from CFRA Research. This year, the time period starts on Dec. 27. The average Santa Claus rally has boosted the S&P 500 by 1.3% since 1969, according to the Stock Trader’s Almanac.

It is unclear to what extent Wall Street analysts expect Omicron to affect earnings and the economy. Estimated 2022 S&P 500 earnings growth was at 8.3% as of Friday, compared with 8.0% at the start of December, according to Refinitiv data.

Goldman Sachs cut its estimate for U.S. GDP growth to 3.8% from 4.2% due to the uncertainty of the impact of the Omicron wave.

Possible Volatility

While there will likely be some economic impact from Omicron, U.S. consumer spending will likely remain strong, said Cliff Hodge, chief investment officer for Cornerstone Wealth.

He is focused on any signs that Senator Joe Manchin could reach an agreement to support President Joe Biden’s signature $1.75 trillion Build Back Better climate and social spending bill. Manchin, who would provide one of the key votes to pass the bill in a divided Senate, said on Sunday that he could not support the bill in its current form. Senate Majority Leader Chuck Schumer said that the Senate will vote on the bill in early January.

“We need a little bit of good news whether on the Manchin front or Omicron to get a rally going,” Hodge said. “We are fully invested and anticipate a little bit of a relief rally into January.”

The week ahead will be light on economic data, with the release of the S&P Case-Shiller U.S. home price index on Tuesday among the few notable data points.

The lack of new reads of the strength of the economy at a time when coronavirus case counts are rising may leave the stock market more volatile through the end of the year, said Dana D’Auria, co-chief investment officer of Envestnet PMC.

“The market has gotten pretty good at pricing in and leading off from what we are learning about on the health side,” she said.

Should Omicron cases continue to spike or there are signs that economic restrictions could be reimposed, investors will likely rebalance into the shares of giant technology companies such as Apple Inc that have emerged as defensive plays given their large cash positions and revenue growth as a result of remote work, D’Auria said.

“At the end of the day if Omicron really causes problems I would be ready for a more volatile market” well into the new year, she said.
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U.S. airlines called off hundreds of flights for a third day in a row on Sunday as surging COVID-19 infections due to the highly transmissible Omicron variant grounded crews and forced tens of thousands of Christmas weekend travelers to change their plans. 

Commercial airlines canceled 656 flights within, into or out of the United States on Sunday, slightly down from nearly 1,000 from Christmas Day and nearly 700 on Christmas Eve, according to a tally on flight-tracking website FlightAware.com. 

Further cancellations were likely, and more than 920 flights were delayed. 

The Christmas holidays are typically a peak time for air travel, but the rapid spread of the Omicron variant has led to a sharp increase in COVID-19 infections, forcing airlines to cancel flights with pilots and crew needing to be quarantined. 

Delta Air Lines Inc expected more than 300 of its flights to be canceled on Sunday. 

“Winter weather in portions of the U.S. and the Omicron variant continued to impact Delta’s holiday weekend flight schedule,” a Delta spokesperson said in an emailed statement, adding that the company was working to “reroute and substitute aircraft and crews to get customers where they need to be as quickly and safely as possible.” 

When that was not possible, it was coordinating with impacted customers on the next available flight, the spokesperson said. 

Globally, FlightAware data showed that nearly 2,150 flights were called off on Sunday and another 5,798 were delayed, as of 9.40 a.m. EST (1440 GMT). 

Omicron was first detected in November and now accounts for nearly three-quarters of U.S. cases and as many as 90% in some areas, such as the Eastern Seaboard. The average number of new U.S. coronavirus cases has risen 45% to 179,000 per day over the past week, according to a Reuters tally. 

While recent research suggests Omicron produces milder illness and a lower rate of hospitalizations than previous variants of COVID-19, health officials have maintained a cautious note about the outlook.
…

Airlines continued to cancel hundreds of flights Saturday because of staffing issues tied to COVID-19, disrupting holiday celebrations during one of the busiest travel times of the year.

FlightAware, a flight-tracking website, noted nearly 1,000 canceled flights entering, leaving or inside the U.S. Saturday, up from 690 flights scrapped on Friday. Over 250 more flights were already canceled for Sunday. FlightAware does not say why flights are canceled.

Delta, United and JetBlue had all said Friday that the omicron variant was causing staffing problems leading to flight cancellations. United spokesperson Maddie King said staffing shortages were still causing cancellations and it was unclear when normal operations would return. “This was unexpected,” she said of omicron’s impact on staffing. Delta and JetBlue did not respond to questions Saturday.

According to FlightAware, the three airlines canceled more than 10% of their scheduled Saturday flights. American Airlines also canceled more than 90 flights Saturday, about 3% of its schedule, according to FlightAware. American spokesperson Derek Walls said the cancellations stemmed from “COVID-related sick calls.” European and Australian airlines have also canceled holiday-season flights because of staffing problems tied to COVID-19. 

For travelers, that meant time away from loved ones, chaos at the airport and the stress of spending hours standing in line and on the phone trying to rebook flights. Peter Bockman, a retired actor, and his daughter Malaika, a college student, were supposed to be in Senegal on Saturday celebrating with relatives they hadn’t seen in a decade. But their 7:30 p.m. flight Friday from New York to Dakar was canceled, which they found out only when they got to the airport. They were there until 2 a.m. trying to rebook a flight.

“Nobody was organizing, trying to sort things out,” he said, faulting Delta for a lack of customer service. “Nobody explained anything. Not even, ‘Oh we’re so sorry, this is what we can do to help you.'” 

Their new flight, for Monday evening, has a layover in Paris, and they are worried there will be issues with that one as well. They have already missed a big family get-together that was scheduled for Saturday.

FlightAware’s data shows airlines scrapped more than 6,000 flights globally for Friday, Saturday and Sunday combined as of Saturday evening, with almost one-third of affected flights to, from or within the United States. Chinese airlines made up many of the canceled flights, and Chinese airports topped FlightAware’s lists of those with most cancellations. It wasn’t clear why. China has strict pandemic control measures, including frequent lockdowns, and the government set one on Xi’an, a city of 13 million people, earlier this week. 

Air China, China Eastern and Lion Air, an Indonesian airline with many canceled flights, did not respond to emails Saturday. 

Flight delays and cancellations tied to staffing shortages have been a regular problem for the U.S. airline industry this year. Airlines encouraged workers to quit in 2020, when air travel collapsed, and were caught short-staffed this year as travel recovered. 

To ease staffing shortages, countries including Spain and the U.K. have reduced the length of COVID-19 quarantines by letting people return to work sooner after testing positive or being exposed to the virus. 

Delta CEO Ed Bastian was among those who have called on the Biden administration to take similar steps or risk further disruptions in air travel. On Thursday, the U.S. shortened COVID-19 isolation rules for health care workers only.
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Kenya’s government recently said it will pay more than $800 million of the debt owed by the national carrier, Kenya Airways, and give it nearly half-a-billion dollars in budget support over the next two years.  Economists disagree on whether the government is making the right move.  

The government recently said it will support the airways for two years to remain competitive.

The government recently requested $800 million from the International Monetary Fund to fund the bailout.  The state owns 49 percent of the airline.

Samuel Nyandemo is a lecturer at the University of Nairobi, teaching economics. He says the government has no business supporting money-losing companies.

“It’s not the work of the government to subsidize non-profit making entities,” Nyandemo said. “Instead, the government should try to privatize such kinds of bodies that are not able to stand on their own feet. So, it’s defeatist for the government to borrow money and start subsidizing a body like Kenya Airways which has monopoly power in the market and this is just because of mismanagement.”

In September, Kenya Airways Chief Executive Officer Allan Kilavuka said the airline suffered a net loss of $100 million between January and June. The company lost $130 million in the same period in 2020.

The airline has been effected by COVID-19-related travel restrictions and flight cancellations.

James Shikwati, a Nairobi-based economist, says the financial hardship caused by the pandemic means the airline is qualified to receive support from the government.

“I think the flexibility of the challenges caused by COVID we would say it makes sense if you keep it alive using all the instruments available that can ensure it goes back to profitability,” Shikwati said. 

Kenya Airways’ financial challenges began in 2012.  

Nyandemo says the carrier is being mismanaged.  

“Kenya Airways has over-employed staff. They are overpaying pilots,” Nyandemo said. “All this has led to inefficiencies in terms of operational cost and that’s why the Kenya airways is not able to break even.  Besides that, there is gross mismanagement.”

The Kenyan government has been pushing for the nationalization of the airline but parliament has so far blocked the action.

The International Monetary Fund said in a statement the government has canceled a plan to fully nationalize the airline.

Shikwati says the airline can be profitable if managed well.

“Kenya Airways and Ethiopian airlines have always been competing,” Shikwati said. “Kenya, in the 80s, chose the path of privatizing as a way to make the airline competitive. I think Ethiopia at that time picked on being national heavy government-supported. So now you compare with the realities going on, creating a mixed bag in my view is not a problem. It should be something that can make the airline remain competitive.”  

Some economists are calling on the airline to restructure its operations, downsize its staff, negotiate new leases and contracts and use the government’s support and authority. 
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Sino-U.S. trade tensions could flare up again as it appears China will miss its obligations under a nearly expired agreement that emerged from a dispute during the administration of former U.S. President Donald Trump, analysts said. 

The Economic and Trade Agreement signed by the two superpowers in January 2020 is set to end December 31. Trade observers say China has not complied with a clause that obligates it to buy imports of manufactured goods, farm products, energy products and certain services from the U.S. at a total of $200 billion more than the 2017 total. China purchased $186 billion in goods and services in 2017 before the trade war, according to U.S. government figures.

China has had trouble complying because of delays in Chinese aircraft orders from the U.S. and pandemic-related setbacks, said Matthew Goodman, senior vice president for economics with the Washington-based Center for Strategic & International Studies, a research group. 

“I do think that the Biden administration is going to follow through on this agreement and hold China to account,” Goodman told VOA. “I don’t see any reason that they’re going to change tack.”

China had met just 62% of its import purchasing goal as of October, according to an analysis by Chad Bown, senior fellow with the Peterson Institute for International Economics, another research organization in Washington. 

U.S. manufacturers may have lacked capacity as well to meet the demand for China-bound goods, said Bashar Malkawi, a University of Arizona law professor who specializes in trade. China’s pandemic-era border closures further harmed U.S. exports, he said.

The nearly four-year-old trade dispute launched by Trump over the Sino-U.S. trade imbalance has placed tariffs on $550 billion worth of goods, including $350 billion originating in China. The dispute also led to a chill in broader two-way relations that would run through Trump’s term. 

“The environment between these two countries is toxic,” Malkawi said. “Trade war and mistrust have been raging since 2018 and will not ease for the foreseeable future.”

What’s next 

The U.S. trade representative’s office did not reply to a query for this report asking whether China had lived up to the agreement. Its website does not indicate what might happen in 2022. 

U.S. Trade Representative Katherine Tai said in a speech at the Center for Strategic & International Studies in October  that the U.S. government will discuss with China its “performance” and that under the agreement, China had made “commitments that benefit certain American industries, including agriculture, that we must enforce.”

The U.S. side will “work to enforce the terms of phase one,” she added, referring to the terms of the deal.

Tai indicated that the United States had yet to review the agreement. 

China hopes the U.S. government “will create favorable conditions for the two nations to expand trade cooperation,” Ministry of Commerce spokesperson Gao Feng said Thursday, as quoted by the China Daily news website. 

Gao said China had “exerted strenuous efforts to offset negative impact from factors such as the COVID-19 pandemic, the global economic recession and the constraint of supply chain” to carry out the agreement, according to the website.

China is the largest goods trading partner of the United States, with $559.2 billion passing both ways in 2020, according to the trade representative’s office.

U.S. goods and services trade with China totaled about $615.2 billion in 2020, with imports at $450.4 billion.

Expiration of the trade deal potentially gives China an opening to negotiate for buying the U.S. goods that it needs, said Song Seng Wun, an economist in the private banking unit of Malaysian bank CIMB. China traditionally buys U.S. foodstuffs, civilian aircraft and aircraft parts. Its tech firms depended on American supplies before the trade war as well. 

“I suppose it always boils down to what China wants to buy and what the U.S. wants to sell,” Song said. “China can be more selective in buying. Politics matters more at this point.” 

Chinese officials might consider asking to buy the U.S. goods that China needs most, possibly swapping out the ones in today’s agreement, said Stuart Orr, School of Business head at Melbourne Institute of Technology in Australia. 

“I think China is probably going to have to try to renegotiate, and the reason probably motivating that will be the volume of supplies of some of the things that it actually needs,” he said.
…

Under pressure from U.S. auto safety regulators, Tesla has agreed to stop allowing video games to be played on center touch screens while its vehicles are moving. 

The National Highway Traffic Safety Administration says the company will send out a software update over the Internet so the function called “Passenger Play” will be locked and won’t work while vehicles are in motion. 

The move comes one day after the agency announced it would open a formal investigation into distracted driving concerns about Tesla’s video games, some of which could be played while cars are being driven. 

An agency spokeswoman says in a statement Thursday that the change came after regulators discussed concerns about the system with Tesla.

The statement says NHTSA regularly talks about infotainment screens with all automakers. A message was left Thursday seeking comment from Tesla, which has disbanded its media relations department. 

The agency says its investigation of Tesla’s feature will continue even with the update. 

“The Vehicle Safety Act prohibits manufacturers from selling vehicles with defects posing unreasonable risks to safety, including technologies that distract drivers from driving safely,” NHTSA’s statement said. The agency said it assesses how manufacturers identify and guard against distraction hazards through misuse or intended use of screens and other convenience technology. 

The agency announced Wednesday that it would formally investigate Tesla’s screens after an owner from the Portland, Oregon, area filed a complaint when he discovered that a driver could play games while the cars are moving. 

The agency said that the “Passenger Play” feature could distract the driver and increase the risk of a crash. 

The probe covers about 580,000 Tesla Models S, X, Y and 3 from the 2017 through 2022 model years. 
…

U.S. chipmaker Intel is facing criticism in China after it apologized Thursday for a letter the firm sent to suppliers asking them “to ensure that its supply chain does not use any labor or source goods or services from the Xinjiang region.”

On Thursday, Intel posted a Chinese-language message on its WeChat and Weibo accounts apologizing for “trouble caused to our respected Chinese customers, partners and the public. Intel is committed to becoming a trusted technology partner and accelerating joint development with China.”

Intel’s apology came as U.S. President Joe Biden signed the Uyghur Forced Labor Prevention Act, which bans the import of goods produced by Uyghur slave labor. Under the measure, a company is prohibited from importing from China’s Xinjiang region unless it can prove that its supply chains have not used labor from Uyghurs, ethnic Muslims reportedly enslaved in Chinese camps.

Beijing denies complaints of abuses in the mostly Muslim region.

Intel is just the latest multinational firm to be caught up in the struggle over the Uyghurs issue as China prepares to host the Winter Olympics in February. Intel is among the International Olympic Committee sponsors. According to Reuters, 26% of Intel’s 2020 total revenue was earned in China.

Earlier this month, Intel’s letter to suppliers asking them to be sure not to use labor, products or services from Xinjiang cited restrictions imposed by “multiple governments.”

That sparked a backlash in China, with calls for a boycott and criticism of the company in state and social media. Global Times, a Chinese state-run newspaper, called Intel’s request to suppliers “arrogant and vicious,” according to reports.

Wang Junkai, also known as Karry Wang, a singer with the popular boy band TFBOYS, said on Weibo on Wednesday that he would not serve as an Intel brand ambassador. “National interests exceed everything,” he said, according to wire service reports.

Chinese officials acknowledged Intel’s apology.

China’s Foreign Ministry spokesperson said at a daily briefing in Beijing that “we note the statement and hope the relevant company will respect facts and tell right from wrong,” according to Reuters.

The White House also appeared to note the company’s apology.

Without naming Intel, Jen Psaki, the White House press secretary, said at a briefing Thursday that U.S. companies “should never feel the need to apologize for standing up for fundamental human rights or opposing repression,” according to reports.

Some information for this report came from The Associated Press and Reuters. 

 
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The number of Americans applying for unemployment benefits was unchanged last week, remaining at a historically low level that reflects the job market’s strong recovery from the coronavirus recession last year.

Jobless claims remained at 205,000. The four-week average, which smooths out week-to-week ups and downs, rose to just over 206,000. The numbers suggest that the spread of the omicron variant did not immediately trigger a wave of layoffs.

Altogether, 1.9 million Americans were collecting traditional unemployment aid the week that ended Dec. 11.

The weekly claims numbers, a proxy for layoffs, have fallen steadily most of the year. Employers are reluctant to let workers go at a time when it’s so tough to find replacements. The United States had a near-record 11 million job openings in October, and 4.2 million Americans quit their jobs — just off September’s record 4.4 million — because there are so many opportunities.

The job market has bounced back from last year’s brief but intense coronavirus recession. When COVID hit, governments ordered lockdowns, consumers hunkered down at home and many businesses closed or cut back hours.

Employers slashed more than 22 million jobs in March and April 2020, and the unemployment rate rocketed to 14.8%.

But massive government spending — and eventually the rollout of vaccines — brought the economy back. Employers have added 18.5 million jobs since April 2020, still leaving the U.S. still 3.9 million jobs short of what it had before the pandemic. The unemployment rate has fallen to 4.2%, close to what economists consider full employment.
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Cambodia is basing hopes for a post-pandemic economic recovery on free trade agreements with China and South Korea, and membership in the Regional Comprehensive Economic Partnership.

RCEP is a free-trade agreement including the 10 members of the Association of Southeast Asian Nations, as well as China, Japan, South Korea, Australia and New Zealand that will come into effect Jan. 1. RCEP trade pact member countries will have a combined gross domestic product of $26.2 trillion, or about 30% of global GDP.

Analysts said Phnom Penh had aggressively pursued these trade deals amid the crushing economic impact of the COVID-19 pandemic and withdrawal of some trade perks by the European Union prompted by Cambodia’s human rights and democratic record.

Planning Minister Chhay Than has said more than 6 million jobs in the informal economy have been lost or will be lost due to COVID-19, and the United Nations Development Program expects Cambodia’s poverty rate could double to 17.6% of the population this year.

“They’re absolutely vital to Cambodia’s economic future. The markets for Cambodia in the next several years are going to be primarily its neighboring countries,” said Bart Edes, senior associate at the Center for Strategic and International Studies in Washington.

Cambodia’s economy has rapidly evolved since the end of 30 years of war in 1998, with Phnom Penh moving firmly into China’s orbit over the last decade. Two-way trade topped $8 billion in 2020 and is expected to reach $10 billion in 2023 with October’s signing of the FTA.

A similar agreement was also inked with South Korea after two-way trade reached $880 million in 2020. Under that deal Cambodia will lift tariffs on 93.8% of all products traded, and South Korea will remove tariffs on 95.6% of all items.

RCEP will eliminate up to 90% of tariffs on goods traded between signatories over the next 20 years, which analysts said would further underpin regional integration by building upon China’s Belt and Road Initiative infrastructure projects.

Edes said the world’s booming economies are disproportionately located in Asia, where Cambodia is strategically positioned as a regional hub among much bigger neighbors Thailand, Vietnam, and the rest of ASEAN, making it an attractive investment destination.

“It’s not just China, it’s other countries in Asia. But these trade agreements, by having rules to the game are very important to Cambodia, these are positive moves for the country, for the people and for the economy and job opportunities,” he said.

Just 20% of Cambodia’s workforce is employed in the formal economy and the remaining 80%, which includes farmers, work in the informal economy, government sources said.

Thirty percent of Cambodians live on or just above the poverty line of $1.90 a day.

The situation was not helped by the withdrawal of some EU trade benefits under its Everything But Arms policy in August of last year, which tied tariff-free access to European markets to ensuring standards of democracy.

Brendan Lalor, a director with Ernst & Young in Cambodia, said the loss of tariff-free access for some goods, such as garments, to the EU and the pandemic had spurred the government into ratifying FTAs.

“With the FTA coming into effect obviously all your import tariffs, quotas, taxes, export restrictions all fall away so that should stimulate further bilateral trade between the two countries,” he said, referring to the FTAs with China and South Korea.

“So there is every chance that an FTA with Korea and China should offset the effects of the partial removal of the EBA,” he said, referring to the EU policy, adding Cambodia was ideally placed to take advantage of RCEP and cross-border trade.

Prime Minister Hun Sen has also said he wants an FTA with Russia.

Cambodia exports include garments, footwear and other apparel, travel products, beverages, electrical and electronic components, pharmaceuticals and agricultural products ranging from rubber to palm oil, cassava and cashews.

Under RCEP, Commerce Minister Pan Sorasak forecast the Cambodian GDP would grow by 2%, with exports up by 7.3% and investment by 23.4% with the elimination of tariffs on 90% of goods traded among signatories over the next 20 years.

“The RCEP agreement will become the core foundation for trade and investment in the region, further expand regional value chains and create more employment and market opportunities for peoples and businesses in the region,” he told Parliament.

However, Wim Conklin, country program director for the Solidarity Center in Cambodia, sounded a note of caution, warning FTAs and RCEP could result in a flood of cheaper goods coming into this country, including plastics, batteries and small household appliances.

“Overall, there could be some positive benefit but at the same time who benefits is always a question,” he said. “A much bigger country having a free trade agreement with another country is never going to be a real level playing field.”

He said FTAs had to be achieved for the benefit of the whole population, as opposed to specific sectors, such as banks and financial services, but he added that cheaper imports could provide a boost for producers and that in turn could benefit workers.

“Will that mean they might get higher wages because greater profits’ being made or certain costs are going down? We hope that might be the case but I’m not sure,” he said. 

 
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The U.S. Securities and Exchange Commission has declined an effort by Apple Inc. to skip a shareholder proposal asking the iPhone maker to provide greater transparency in its efforts to keep forced labor out of its supply chain. 

A group of shareholders earlier this year asked Apple’s board to prepare a report on how the company protects workers in its supply chain from forced labor. The request for information covered the extent to which Apple has identified suppliers and sub-suppliers that are a risk for forced labor, and how many suppliers Apple has taken action against. 

In a letter from the SEC reviewed by Reuters on Wednesday, regulators denied Apple’s move to block the proposal, saying that “it does not appear that the essential objectives of the proposal have been implemented” so far. 

The letter means that Apple will have to face a vote on the proposal at its annual shareholder meeting next year, barring a deal with the shareholders who made it. 

Apple did not immediately respond to a request for comment. 

American lawmakers last week passed a bill banning imports from China’s Xinjiang region over concerns about forced labor. 

“There’s rightfully growing concern at all levels of government about the concentration camplike conditions for Uyghurs and other Turkic Muslims living under Chinese government rule,” Vicky Wyatt, campaign director for SumOfUs, a group supporting the shareholder proposal, said in a statement on Wednesday. 

Apple routinely asks the SEC to skip shareholder proposals, and the requests are granted about half the time. 

The SEC also denied Apple’s request to skip a shareholder proposal that would give investors more information about the company’s use of nondisclosure agreements.
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As Americans enter the holiday season, the US supply chain is plagued with delays in moving goods from ports to warehouses, and on to stores and consumers.  A shortage of truck drivers is often given as a reason.  As Mike O’Sullivan reports, some experts and drivers see another pervasive problem, a lack of coordination along the supply chain.

Camera: Roy Kim, Po Yu Chen
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Lawmakers in Ghana exchanged blows late Monday evening over a proposed electronic payment tax.The government says the new tax would boost revenue for development, but parliament has been split over the idea and fights broke out when supporters tried to force a vote.

Ghanaians in general, and the opposition in particular, have vehemently opposed the proposed 1.75% tax on electronic transactions, popularly known as e-levy, contained in the 2022 budget.

If passed, the law would include taxes on mobile money payments, which is used by 40% of Ghanaians 15 years and older, according to a 2021 data by the central bank. 

Up against a deadline, the government wanted the bill passed under a certificate of urgency on the last day of sitting. But a brawl broke out on the floor when the first deputy speaker, Joseph Osei-Owusu, pushed for the vote.

The regular speaker was absent from the session. Opposition MP Mahama Ayariga says the deputy was circumventing normal procedure in an attempt to force the bill through parliament.

“The house is governed by rules. And so when you make it right for persons to undermine those rules what do you expect the MPs to do. They won’t just sit aside and watch the person undermine the rules,” he said.

The acting speaker, Osei-Owusu, says he operated within the standing orders of Ghana’s parliament and had the right to vote for the bill under consideration.

“As long as we can change over then that advantage is restored. In my view and I still hold that view strongly that as long as we can change the seat at any time there should not be that disadvantage,” he said. “Otherwise, no proceedings will go on. Why should I come and preside so that I can’t take any decision, what is the point?”

About 50 lawmakers took part in the brawl.Only one was injured, the minister of youth and sports who got a cut in the face. 

The executive director of the African Center for Parliamentary Affairs (ACEPA), Rasheed Draman, told a local radio station that Ghana should brace for more gridlock in the current parliament.

“I have never seen anything like this. And for me I have said this since the beginning of the year that if we’re not careful this is how the eighth parliament is going to be. It will be characterized by a lot of confusion and a lot of gridlock,” he said.

Parliament has now been adjourned until January 18 to give lawmakers more room to consult on the controversial electronic levy.
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