BBC News - Trump to hit Mexico with tariffs in anti-immigration measure

US President Donald Trump has announced tariffs on all goods coming from Mexico, demanding the country curb illegal immigration into the US.

In a tweet, Mr Trump said that from 10 June a 5% tariff would be imposed and would slowly rise "until the illegal immigration problem is remedied".

Jesús Seade, Mexico's top diplomat for North America, said the proposed tariffs would be "disastrous".

Mr Trump declared a national emergency at the US-Mexico border in February.

He said it was necessary in order to tackle what he claimed was a crisis at the US southern border.

Border agents say they are overwhelmed, but critics say they are mishandling and mistreating migrants.

The US president has long accused Mexico of not doing enough to stem the flow of people, and this is his latest attempt to put pressure on the neighbouring state.

Mr Seade said Mexico "must respond vigorously" if the tariffs - a tax on products made abroad - were brought in.

However, Mexican President Andrés Manuel López Obrador responded by saying he did not want "confrontation".

"I propose deepening our dialogue, to look for other alternatives to the migration problem," he wrote in a letter on Thursday.

During his election campaign and throughout his time in office, President Trump has sought funds to build a wall on the US-Mexico border.

He declared the national emergency at the border in an attempt to divert federal funds for a barrier wall, but a judge blocked his efforts in May.

The White House said on Thursday that the president would use the International Emergency Economic Powers Act to implement the new tariffs on Mexico.

The announcement came the same day that the White House told Congress it planned to pursue a new trade deal with Mexico and Canada.

What did Donald Trump announce?

In a White House statement, Mr Trump said the tariffs would rise by five percentage points each month until 1 October, when the rate would reach 25%.

The tariffs would stay at that level "unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory", he said.

"For years, Mexico has not treated us fairly - but we are now asserting our rights as a sovereign nation," the statement said.

The president also took aim at his Democratic opponents, accusing them of a "total dereliction of duty" over border security.

The Democratic-controlled House of Representatives is taking legal action to halt the Trump administration's efforts to build a border wall, saying it would be a waste of funds and would not stop illegal immigration.

Amid record numbers of migrants crossing the border, the deaths of six sick children in US custody since September have raised questions about the level of care provided by US authorities.

The ramifications of Trump's latest trade war

Andrew Walker, BBC economics correspondent

President Trump's latest tariff proposal is driven by a political issue - which is not to say that previous tariff moves did not have any politics behind them. But it is sure to have financial and economic consequences.

Stock markets in many countries have already registered significant falls. Japanese car makers were among those hit - they have operations in Mexico which will be affected if President Trump does go ahead.

• What is a trade war and why should I worry?

Perhaps he hoped that a welcome side effect would be improved competitiveness for American industry.

Well, half the potential impact for the first stage in the proposed tariffs hikes was wiped immediately by a decline in the value of the Mexican peso, which has the effect of making Mexico a little more competitive, at least until the tariffs come into effect.

There could also be ramifications for the new trade deal between the US, Mexico and Canada. It will probably make the Mexican Congress a lot more wary about approving the accord.

What has Mexico done to tackle migration?

Migrants, most of whom say they are fleeing violence in Central American countries, travel through Mexico on their way to the US, where they hope to claim asylum.

Mr Trump believes they should be stopped long before they reach the border, however.

• The agony over an American dream
• In pictures: : A river of people moving north

Police do appear to have been cracking down, with 400 migrants detained in the southern state of Chiapas in April.

President López Obrador used the arrests to emphasise the country was not giving migrants "free passage".

However, he added that it was out of concern for the migrants' safety over anything else.

What will the tariffs affect?

Mexico was the second largest supplier of goods to the US last year, with imports totalling $352bn (£275bn), according to Goldman Sachs.

It is known for agricultural products like avocados and tequila, but the country is also a major manufacturing hub and home to many US companies.

The country produces hundreds of thousands of cars every month, and is also home to technology and aerospace companies. It is one of the G20 economies.

US firms Ford, General Motors, John Deere, IBM and Coca-Cola all operate in Mexico, as well as thousands of other multinationals.

The president's statement comes amid a trade war with China.

After complaining for years about the US trade deficit with China, Mr Trump imposed tariffs on hundreds of billions of dollars worth of goods coming from the country.

BBC News - Are rare earth minerals China's trump card in its trade war with US?

Image copyrightGETTY IMAGES

Image captionChina carries out most of the mining and production of rare earth minerals

China has been signalling that it may restrict the export of rare earth minerals to the United States as the trade conflict between the two countries escalates.

It is by far the largest producer of these raw materials, vital for many American industries including high-growth sectors such as electric car and wind turbine production.

Last year, the US Geological Survey designated these minerals critical to the economy and national defence.

"China is seriously considering restricting rare earth exports to the US," tweeted the editor of Chinese state-run Global Times this week.

Image copyrightGETTY IMAGES

What are rare earths?

Rare earths are a group of 17 elements used in production in a huge number of sectors, including renewable energy technology, oil refinery, electronics, and the glass industry.

Although called "rare", they are actually found relatively abundantly in the Earth's crust, according to the US Geological Survey.

However, there are relatively few places in the world that mine or produce them.

Extraction is both difficult and potentially damaging to the environment.

Chinese mines account for around 70% of global output.

Myanmar, Australia, and the United States plus a few other countries which mine only small amounts, account for the rest.

China's dominance of rare earth mining

Yearly mine production (tonnes)

Source: US Geological Survey

In the refining of rare earth ores, China is even more dominant.

Last year, almost 90% of all the processing into usable oxides was done in China.

An Australian company operating in Malaysia produces almost all the rest.

Over the past five years, China's exports of rare earth oxides have almost doubled, according to official Chinese statistics.

How reliant on China is the US?

Around 80% of the rare earths imported by the United States comes from China, according to US government data.

Estonia, France and Japan also supply processed rare earths to the US, but the original ore comes from China.

The one rare earth mine operating in the United States sends its ore to China for processing - and already faces a 25% import tariff imposed by China.

There is an option for the US to import from Malaysia, but not in the quantities required.

Also, the Malaysian government has threatened to discontinue production because of environmental concerns.

Image copyrightGETTY IMAGES

Image captionRare earths mine in China

Could the US start its own refining industry for rare earths?

It's certainly possible, but this would take time and the sources of ore could be limited if China were ruled out.

Until the 1980s, the US was in fact the largest producer of rare earths.

China has restricted exports of rare earths before.

In 2010, they did it against Japan, over a territorial dispute.

The restriction of exports to the United States, if enforced, could have a major impact on major US industries worth trillions of dollars that rely on rare earth minerals.

Reuters News - Huawei challenges U.S. defense bill as sanctions fight ramps up

HONG KONG (Reuters) - China’s Huawei Technologies Co Ltd has filed a legal motion seeking to declare a U.S. defense law unconstitutional, in the telecom equipment maker’s latest bid to fight sanctions from Washington that threaten to push it out of global markets.

The motion for summary judgment in its lawsuit against the U.S. government, filed late on Tuesday in the U.S. District Court for the Eastern District of Texas, asks a judge to declare the 2019 National Defense Authorization Act (NDAA) unconstitutional. Huawei filed its lawsuit in March.

The NDAA bill, passed by the U.S. Congress last summer, places a broad ban on federal agencies and their contractors from using Huawei equipment on national security grounds, citing the company’s ties with the Chinese government.

Huawei, the world’s largest telecoms network gear maker, has repeatedly denied it is controlled by the Chinese government, military or intelligence services.

U.S. Secretary of State Mike Pompeo kept up the pressure on Huawei on Wednesday.

“Huawei is an instrument of the Chinese government,” Pompeo said in an interview with Fox Business Network. “They’re deeply connected. It’s something that’s hard for Americans to understand.”

Glen Nager, a partner at law firm Jones Day and lead counsel for Huawei, told Reuters the U.S. court had agreed on a schedule to hold hearings in September on motions by opposing sides.

Some legal experts said Huawei’s lawsuit was likely to be dismissed because U.S. courts are reluctant to second-guess national security determinations by other branches of government.

The lawsuit “will be an uphill battle because Congress has broad authority to protect us from perceived national security threats,” said Franklin Turner, a government contracts lawyer at McCarter & English.

In November 2018, a federal appeals court rejected a similar lawsuit filed by Russian cybersecurity firm Kaspersky Lab, which was challenging a ban on the use of the company’s software in U.S. government networks.

‘DANGEROUS PRECEDENT’

Earlier this month, the U.S. Commerce Department put Huawei on a trade blacklist that bans companies from doing business with the Chinese firm, a move which immediately disrupted the global tech sector.

Huawei’s chief legal officer, Song Liuping, on Wednesday said the company was reviewing ways to fight the U.S. ban, which he said was affecting its more than 1,200 suppliers and threatened to affect its 3 billion customers in 170 countries.

Song said Washington’s use of administrative orders and laws to punish a single company “sets a very dangerous precedent.”

“Today it is telecom and Huawei, tomorrow it could be your company, your industry, your customers,” he told reporters at Huawei’s headquarters in Shenzhen.

The ban, along with separate accusations of bank fraud and corporate theft that the United States has made against Huawei and its chief financial officer, has exacerbated the trade war between Beijing and Washington.

Huawei, which has been given a 90-day reprieve from the ban, has denied its products pose a security threat and protested Washington’s attempts to limit its business.

Vincent Pang, Huawei’s senior vice president and head of corporate communications, said the executive order and blacklist had transcended the boundaries of normal market competition.

“This could lead to the start of the fragmentation of the global tech ecosystem and standards,” Pang said on Wednesday at Huawei’s headquarters.

Pang also said he did not expect the “political” situation to delay the introduction in China of fifth-generation (5G) network technology.

Reporting by Sijia Jiang; Additional reporting by Rishika Chatterjee and Jan Wolfe; Editing by Christopher Cushing, Jeffrey Benkoe and Paul Simao

Our Standards:The Thomson Reuters Trust Principles.

BBC News - What's gone wrong with Brazil's economy?

Image copyrightAFP

Image captionJair Bolsonaro boasted during the election that he did not understand anything about economics

On 1 January, when Brazil's far-right president Jair Bolsonaro took office, many in the country were concerned that the divisive politician would not be able to bring the country together.

But one sector was almost unanimous in praising Mr Bolsonaro's rise to power: business people.

Brazil's president boasted during the election that he did not understand anything about economics.

Once in power, he delegated all decisions on the subject to businessman Paulo Guedes, who became a "super-minister" of the economy.

The task of rescuing Brazil's economy from the brink of yet another recession was urgent. The economy is still at the same level it was back in 2014.

Markets were excited at the prospects of liberal reforms to come.

But expectations soon started to fall apart. A series of government blunders - political infighting inside the administration, a clumsy attempt at state intervention in Brazil's fuel policy and the lack of leadership in Congress - hampered growth expectations.

Most analysts have halved their growth expectations for Brazil and now believe significant growth will not start until 2020.

Here is a look at some of the key figures that suggest Brazil's economy is not moving forward.

1. There's no economic recovery in sight

In the previous decade, Brazil was lauded (along with Russia, India, China and South Africa) as one of the Brics powers - emerging economies with superfast rates of economic growth that would surpass developed economies by 2050.

The economic performance of this decade, however, suggests Brazil does not belong in that league.

A crippling two-year recession in 2015 and 2016 saw the country's economy contract by almost 7%.

Economic recovery has been sluggish. In 2017 and 2018, the economy grew at a meagre pace of 1.1% a year.

And there is still more bad news: since the beginning of the year, economists have more than halved their expectations of economic growth for 2019 to a rate not very different from that seen in the past two years.

2. The unemployment problem isn't being solved

Brazilian workers are the ones paying the price.

The number of unemployed people has increased from 7.6 million in 2012 to 13.4 million this year.

Mr Bolsonaro thinks these numbers actually underestimate the real picture. He believes the situation is worse.

The official unemployment survey shows that 28.3 million people are under-utilised - which means they are either not working or working less than they could.

There are fewer people with formal jobs, while wages are barely keeping up with inflation - which has been brutal. Since the beginning of Brazil's recession four years ago, prices have gone up by 25%.

3. The currency and stock market have dashed post-election hopes

During much of the election, the Brazil's currency - the real - rallied strongly as it became clear that Mr Bolsonaro would win the election.

It was a clear sign of confidence from investors abroad.

A poll by Bloomberg late last year among chief international strategists saw Brazil top the list of best bets in three categories: foreign exchange, bonds and stocks.

After almost five months, prospects are now bleak.

Both the stock exchange and the currency - which usually anticipate the pace in the real economy - are close to the same level they were at the beginning of this year.

Brazil's stock exchange hit an all-time high in March this year, but has returned most of its gains following disappointing corporate results.

4. Still mired in debt

So why is Brazil in such a mess in the first place?

The main consensus among market analysts - and also people in Mr Bolsonaro's government - is that the country started spending too much money around 2013, during the leftist government of Dilma Rousseff.

Since then, one of the main thermometers of Brazil's economy has been the fiscal deficit - the amount of money spent beyond the country's revenues.

Ms Rousseff was impeached amid allegations that she masked Brazil's fiscal deficit to hide how much her government was overspending.

Since her downfall, all efforts from the government have gone into lowering this fiscal deficit.

Some economists say the main culprit is the pension system, with Brazilians retiring too early (some in their early 50s) and with too many benefits (especially amongst civil servants).

Mr Bolsonaro is proposing pension cuts and a minimal retirement age of 65 for men and 62 for women.

During the boom years, Brazil had a debt which was 51% the size of its economy.

The growing fiscal deficit raised the debt level to 77.1%.

The government says that if nothing is done, the country's debt will be the size of its entire economy by 2023