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Official: BYD's factory in Brazil will be "fully functional" by the end of 2026.
In a video posted on Monday, Augusto Vasconcelos, Bahia's state labor secretary, said that the new factory of Chinese electric car manufacturer BYD in Brazil would be "fully operational" by December 2026. Its operations had been delayed due to an investigation into possible labor abuses. He added that the factory would start manufacturing cars by the end of the year from semi-finished kitted. Vasconcelos said in a video posted on social media that a new schedule was being created so the factory would be fully operational by December 2026, with an expectation of 10,000 jobs. Vasconcelos stated that the news came as Bahia governor Jeronimo Rodriguez traveled to China, along with President Luiz inacio Lula Da Silva, to discuss plans for BYD, and the auto industry. The company did not respond immediately to a comment request. BYD is investing in Brazil, its largest market outside China. The goal of the investment is to convert a former Ford plant into a complex capable of producing 150,000 electric vehicles per year. In December, allegations of abuses on the site tarnished the project. The Chinese company has bet heavily on Brazil, including the purchase of mining rights in areas that are rich in lithium. Lithium is a mineral used for batteries commonly found in electric vehicles. According to Julio Bonfim of the Metalworkers Union of Camacari in Bahia, the plant was supposed to start making cars at the beginning this year. However, delays caused by the labor investigation and heavy rains impacted the timeline. Bonfim reported that BYD will hire only 1,000 workers to assemble vehicles using kits imported from China this year. This is far less than the 10,000 promised by the Chinese company. Bonfim, despite the delay, said that the new timeline was good news. He also predicted that hirings would increase next year as the company prepares to manufacture vehicles exclusively in the country. (Reporting and editing by Brad Haynes, Aurora Ellis and Fabio Teixeira)
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EU analyzes U.S. UK trade deal and its impact on EU, global Trade
Valdis Dombrovskis, European Economic Commissar Valdis Dombrovskis stated on Monday that the European Commission will be analysing the implications of the United States-Britain trade agreement struck last week for the European Union's 27 member nations and for global trade. Last Thursday, the United States and Britain announced an agreement to lower tariffs for some goods. The United States will reduce its levies against cars and steel and both sides will gain better access to agricultural markets. Dombrovskis stated that "we are closely analysing the contents...to assess its...potential effects, particularly in regards to any effects on EU interest or the global broader trade environment". The EU is currently in talks with Washington about its own trade agreement that would replace the 20% tariffs across-the-board on most EU products and the 25% tariffs for steel, aluminium, and cars and parts. The U.S. set a 90 day window for negotiations that ends on July 8, 2018. Tariffs are set at 10% until then on the majority of EU goods, with the exception of steel, aluminum and cars, which have higher rates. Dombrovskis stated that "negotiations are underway between the EU and the U.S. and we intend to use this 90-day period... in order to reach a negotiated resolution, which we have indicated is our preferred solution." He said that the EU was also preparing for the possibility of a no deal outcome. Last Thursday, the European Commission proposed countermeasures against imports from the United States worth up to 95 billion euro ($107 billion). This is if negotiations between Washington and Brussels fail to resolve the tariffs that President Donald Trump has imposed. (Reporting and editing by Toby Chopra; Jan Strupczewski)
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France announces that the European Commission is working to tighten sanctions against Russia after leaders' requests
France announced on Monday that leaders who met on Ukraine at the weekend asked the European Commission for new "massive sanctions" against Russia's financial and oil sectors if Russia did not agree to a ceasefire. Jean-Noel Barrot, speaking to Normandy reporters, said that work has already begun on additional measures that go beyond the 17th package of sanctions that is expected to be adopted by the next meeting of foreign ministers on May 20. "We are preparing additional sanctions that target the financial and energy sectors." "We asked the European Commission this weekend to prepare new, more significant sanctions to force Russian president Vladimir Putin to a peace logic," Barrot stated after a phone call with European counterparts as well as U.S. secretary of state Marco Rubio. On Saturday, leaders from France, Germany and Britain were in Ukraine and had a video conference with other leaders including Ursula von der Leyen, the President of the European Commission. Donald Trump, the U.S. president, offered to attend a potential Ukraine-Russia meeting in Turkey on Thursday. This was after Ukrainian President Volodymyr Zelenskiy announced that he planned to travel to Istanbul to wait for his Russian counterpart Vladimir Putin. Russia has not yet confirmed its attendance. Diplomats say that European nations have been calling for a ceasefire in advance of any such meeting, warning about impending coordinated U.S. - Europe sanctions. However, it now appears to depend on the outcome of Thursday's talks and whether they happen. "We support a direct contact between President Zelenskiy, and President Putin." Putin suggested a direct contact between Zelenskiy, and Zelenskiy agreed. So Putin must follow through on his contract and travel to Istanbul Thursday," Barrot stated. He said that a ceasefire was necessary for serious talks to take place, as it is impossible to negotiate with drones and air strikes. Barrot stated that "we are preparing massive and powerful sanctions if he does not accept a truce." He said that potential European sanctions are being coordinated with the U.S. sanction bill that is being put together. The bill would impose tariffs on countries that import Russian oil of 500%. (Reporting and editing by Toby Chopra; Reporting by John Irish)
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What is in the Republican health and tax plan and what's not?
Republicans in Congress released the first drafts of a sweeping package to reduce taxes and spend less, which would satisfy President Donald Trump’s call to do so. However, many details need to be worked out. Here's a summary on what they've proposed so far and what has been left out. Budget estimates for the next ten years are provided by both the Joint Committee on Taxation (JCT) and the Congressional Budget Office. What's in the Bottle? Permanently extends the lower tax rates that Trump's Tax Cuts and Jobs Act of 2017 will expire in 2025. Increases the standard deduction from $1,000 to $1500 by 2029. Increased alternative minimum tax, and enhanced deductions for "pass-through businesses" such as sole proprietorships. The Child Tax Credit will be increased to $2,500, from $1,000, until 2029. It will then remain at $2,000, indexes to inflation. Raising the exemption amount for estate taxes from $14 to $15 Million Tax breaks extended to multinational corporations Total cost: $4.9 trillion What's not included? Not all aspects of the plan have been finalized, but the initial proposals don't include Trump's proposal to increase the top rate for income taxes on Americans with the highest earnings, or deductions for local and state taxes, nor do they address Trump's promises made during his campaign to eliminate taxes on tipping, overtime, and Social Security benefits. MEDICAID What's in the Bottle? Adults who are able to work or volunteer, but do not have dependents must spend at least 80 hours per month in school or on the job. Verification efforts are boosted to ensure that participants and providers of healthcare services are eligible for Medicaid. Blocks regulations which make it easier for people to enroll. The program excludes non-citizens and penalizes the states who use their own money to cover illegal immigrants. The regulations that require minimum staffing in nursing homes and long-term care facilities have been blocked. Funding for gender-transition therapies for minors is prohibited. Prohibit payments to large providers such as Planned Parenthood who specialize in birth control and reproductive health services. Limit state taxes on providers used to raise federal contribution. What's not included Reductions in payments to states who expanded eligibility under Affordable Care Act. Changes in the way that the federal government assists states to pay for the program. Total savings: $715 billion CBO estimates that the changes will reduce Medicaid enrollment by at least 8,6 million people in 10 years. Medicaid covers approximately 71 million individuals. ENERGY & ENVIRONMENT COMMUNICATIONS Cancels funding of green-energy grant programmes in the 2022 Inflation Reduction Act. This includes vehicle manufacturing, home energy upgrades, electricity transmission and wind power. Encourages pipelines, exports of natural gas and exploration. Rejecting grant programs for electric heavy-duty vehicle purchases Rejecting grants for reducing air pollution and greenhouse gas emissions. Rejecting fuel efficiency standards for cars and pickup trucks More electromagnetic spectrum bands available for communication. The law prohibits the states from regulating artificial Intelligence. Total Savings: $197 Billion (Reporting and Editing by Andy Sullivan, Scott Malone, Bill Berkrot).
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Source: Blackstone is in negotiations to purchase utility TXNM
A person familiar with this matter told me on Monday that the infrastructure investing arm of asset management Blackstone has been in discussions to purchase TXNM Energy which is a utility focused on New Mexico and Texas. Sources say that discussions between Blackstone Infrastructure Partners (BIP) and TXNM are currently underway about the structure of an agreement. However, they cautioned that the situation is fluid and a deal was not guaranteed. Source spoke under anonymity in order to discuss confidential discussions. Bloomberg News reported earlier Monday that the two parties are in negotiations for an agreement which could be reached within the next few weeks. This was based on the testimony of people who were familiar with the situation. TXNM declined to comment on a request for comments. Blackstone declined comment. TXNM Energy, based in Albuquerque in New Mexico, provides electricity to more than 800,000 homes in New Mexico and Texas. Avangrid and the company at that time, PNM Resources had agreed to sell their assets in 2020. The two parties walked away from their agreement more than three year after it was first made due to regulatory opposition. (Reporting from David French in New York, Editing by Nia William)
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Germany proposes a grid fee reform to better suit renewables
The German network regulator started Monday a formal procedure to rethink electricity grid fees, with the goal of a system that is better suited for renewable energy. The use of the electricity network accounts for around 20% in Germany's consumer bills. This contributes to the high energy prices in Europe that hurt the economy and industry. Reform is needed to increase revenue and include more stakeholders in the costs of network expansion. Industry experts claim that the current system lacks incentives to encourage flexible users to reduce peak demands and does not guide energy infrastructure planning through clear price signals. In a paper released by the regulator Monday, it outlined a number of proposals. One was to make renewable energy producers pay for the cost of grid maintenance, which is currently borne solely by consumers through their electricity bills. The German association of local utilities (VKU) said that the proposed changes could result in a better cost distribution and reduce expensive grid expansion. However, it criticised the proposals to create a uniform grid tariff for distribution system operators across the country and warned against the overcomplicated design of the dynamic fee system. In a press release, VKU's Managing Director Ingbert Liebeing stated that it was important for the reform proposals to be technologically open and practical. They should also be further developed in order to ensure supply security, affordability and sustainability. A flat rate or surcharge could be charged based on the size and type of connection of a customer, rather than how much electricity they use. The new system uses so-called "dynamic pricing" to determine grid fees based on how busy the network actually is. It hopes to encourage consumers to use their energy more efficiently. The network agency may establish special rules for better integrating batteries and storage into the system. It gave the public and other stakeholders until June 30 to provide comments on the paper. The new German government also plans to cut the power tax to Europe's minimum, and to halve the transmission network fees with the goal of capping the prices permanently.
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US House Budget Bill seeks to spend more than $1.5 Billion for Strategic Petroleum Reserve
The U.S. House Committee released a proposed budget that included more than $1.5billion to replenish and maintain Strategic Petroleum Reserve. It also cancelled a sale mandated by Congress, after huge sales in 2022. The House Energy and Commerce Committee's proposal, released late Sunday, includes $1.32 billion for oil purchases to replenish the SPR - the world's biggest emergency crude stockpile - and $218 millions for the maintenance of the facility. In March, U.S. Energy Sec. Chris Wright estimated that it would require $20 billion over years to achieve President Donald Trump's aim of filling up the SPR. This would benefit domestic energy producers in spite of relatively low oil price. The SPR has a capacity of 727 million barrels, and it currently stores about 399 millions barrels. The House Committee is controlled by Trump and his fellow Republicans. This move is part a larger proposal to cut grant and loan funding in the landmark climate law of former president Joe Biden, the Inflation Reduction Act. Biden, a Democrat from New York, sold a record number of barrels in 2022, after Russia invaded Ukraine. This brought the SPR to its lowest point in 40 years. The House measure is up for a vote in a committee on Tuesday. It also repeals the sale mandated by Congress of 7 million barrels out of SPR until fiscal year 2027. The Biden administration worked with Congress in order to cancel the congressionally mandated sale to keep SPR levels from dropping. The Department of Energy published a proposal on Monday in the Federal Register that would allow government to purchase oil for SPR at a market-based index price instead of a set price. This means the price of oil can fluctuate with the market. The Biden administration adopted a rule of fixed prices, arguing it was helpful in arranging fast purchases for the Reserve. In its new proposed rule, the DOE stated that fixed-price agreements have "only served as a means to create unnecessary confusion in the industry." The new rule is set to take effect within 60 days, unless "significant negative comments" are received. (Reporting and editing by Mark Porter; Timothy Gardner)
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Codelco, Rio Tinto and other copper mining companies are stepping up their efforts to develop a copper "mining district" in Chile
Codelco, a Chilean copper miner, and Rio Tinto, a global mining company will work together to create a "mining district" for copper around their Nuevo Cobre joint project in northern Chile's Atacama Region. Codelco released a statement stating that the new agreement creates a joint comittee and shares funding for initial studies. The 12-month period can be extended. This comes after both companies established in 2023 the Nuevo Cobre Project to conduct exploration in the region, a joint-venture in which Codelco holds about 43% and Rio Tinto around 58%. Codelco, world's largest copper producer, pointed out that Nuevo Cobre sits next to its San Antonio property. Codelco stated that "the geological potential in the Atacama region as a whole and the proximity of both mining projects presents an opportunity to create an entire mining district." The two companies are aiming to "maximize" the value of the area through various infrastructures, it said. In a statement from Codelco, Rio Tinto CEO Jakob Stausholm stated that the partnership would "make the most of our complementary expertise and capabilities" to drive exploration in a manner that benefits the Atacama Region. (Reporting and editing by Kylie Madry, Daina Beth Solon and Fabian Cambero)
Trump's trade tariffs and threats
On Monday, the United States and China will meet
The two sides have agreed to reduce reciprocal tariffs temporarily
As the two largest economies in the world try to end their damaging trade war that has increased fears of a possible recession, and caused a U.S. economy contraction during the first quarter.
The U.S. is reducing the extra tariffs that it imposed in April of this year on Chinese imports to 30%, from 145%. Chinese duties on U.S. imported goods will also fall to 10%, from 125%. The new measures will be in effect for 90 days following a meeting held between the two countries in Geneva.
After a series of meetings between U.S. officials and trading partners, after Trump's April 2 tariffs of 10% on most countries were suspended for 90 days as well as the suspension of higher tariffs on many other trading partners.
On July 8, the duties will now be imposed.
The U.S. China deal comes just days after Donald Trump and Keir starmer, the British Prime Minister, announced a limited trade agreement. This leaves Trump's 10% tariffs for British exports in place.
As part of the agreement, Britain agreed to reduce its tariffs from 5.1% to 1.8% and to provide greater access to U.S. products.
In recent months, Trump has imposed tariffs of 25% on steel, aluminium and autos. He also levied 25% on imports coming from Canada and Mexico.
Trump's second move was to impose a tariff of 100% on films produced outside the United States that are sent into the country.
Here's a summary of Trump’s trade-related actions and threats to date.
BROAD TARIFFS
Trump's vision is based on a gradual roll-out of tariffs that will apply to all U.S. imported goods.
Trump's economic team was tasked with developing plans to impose reciprocal tariffs against every country that taxes U.S. Imports. They also had to address non-tariff barriers, such as vehicle safety regulations that exclude U.S. automobiles as well as value added taxes that raise their price.
Specific COUNTRIES
Trump's tariff proposal targets several key trading partners.
MEXICO AND CANADA : Mexico and Canada were the two largest trading partners of the U.S. from 2024 to November. Trump's new tariffs of 25% on imports from Mexico, Canada and the European Union took effect on 4 March as a response to migration and fentanyl.
Tariffs were imposed on energy imports from Canada and Mexico, as well as on the majority of goods imported. Canada exports mainly crude oil, other energy products and cars and auto components within the North American automotive manufacturing chain. Mexico exports a variety of goods to the U.S., including industrial and automotive products.
Canada retaliated with 25% tariffs against US imports worth C$30 billion (21,13 billion dollars), including orange juice and peanut butter. Other products include beer, coffee, motorcycles, appliances, and motorbikes.
The Canadian government said that it will impose additional duties on C$125billion of U.S. products if Trump's Tariffs are still in effect in 21 days. This could include vehicles, steel and aircraft, as well as beef and pork.
U.S. commerce secretary Howard Lutnick stated that U.S. officials could still work out a partial solution with the two neighboring countries, and added that they need to do more in the fentanyl arena.
In response to Trump's tariffs on steel and aluminum, Canada announced that it would impose retaliatory duties of C$29.8 Billion ($20 Billion) on U.S. imports.
The two countries are exempted from the "Liberation Day", announced on April 2 tariffs, but they face a separate 25% tariff on auto imports.
Canada has asked the WTO to consult with the U.S. about its import duties on steel and aluminum products as well as levies placed on Canadian cars and parts.
CHINA: Trump imposed 10% tariffs on all Chinese imports to the U.S. effective February 4, after repeatedly warning Beijing that it was not doing enough to stop the flow of illegal drugs into the U.S.
On March 4, he imposed another 10% tariff on Chinese products.
China announced additional tariffs between 10% and 15% on some U.S. exports starting March 10, as well as a number of new restrictions on exports for certain U.S. entities. It then complained to the WTO about the U.S. Tariffs.
Trump increased the tariffs on China by 34% in April, making the total to 54%. China responded with a 34% duty on all U.S. products.
Trump replied that the U.S. will impose an extra 50% tariff on China, if Beijing doesn't withdraw its retaliatory duties on the U.S. and said "all discussions with China regarding their requested meetings with the us will be terminated."
Washington's new round of tariffs raised duties on China to 145%. Beijing then increased levies against U.S. products by 125% as a result.
In Geneva, both countries agreed on Monday to temporarily reduce reciprocal tariffs. The U.S. is lowering tariffs placed on China in April from 145% to 30% and Chinese duties will drop from 125% to 10%. The new measures will be in effect for 90 days.
Trump has said that the EU, and other countries, have alarming trade surpluses against the U.S. He said that the products of the other countries will be subject to tariffs, or he would demand they purchase more oil and natural gas from the U.S.
Steel, aluminum, and cars will be subject to import tariffs of 25%, while other goods will face tariffs of up to 20%, starting April 9. Pharmaceuticals are among the most vulnerable industries, since U.S. companies such as Johnson & Johnson, Pfizer, and others have large facilities in Ireland. Ireland is also a leading exporter of medical equipment.
The European Union announced on April 7 that it had offered to offer a "zero for zero" tariff deal in order to avoid a trade conflict. EU ministers agreed to prioritise negotiations and to strike back with targeted countermeasures the following week.
In response to Trump's metals duties, the EU announced on March 12 that it would begin imposing counter-tariffs next month on goods worth 26 billion euros (28 billion dollars) from the United States. As a result of the U.S. auto and wider tariffs, the EU is expected to release a more comprehensive package of countermeasures at the end of April.
Trump announced on March 13 that he would impose a tariff of 200% on European wines and spirits as a response to EU plans to levy tariffs on American whisky and other products in the next month.
BRITAIN: In May, Trump and British Prime Minster Starmer announced a limited trade agreement. The agreement leaves the 10% tariffs Trump imposed on British exports in place and expands access to agricultural products for both countries. It also lowers U.S. import duties that were prohibitive on British auto exports.
Trump imposed reciprocal tariffs of up to 50% in April on goods from 57 trading partner countries, including the European Union. He then paused them a few days later to give time for negotiations to July 9.
The UK and U.S. have said that this agreement lowers the average British tariff on U.S. products to 1.8%, from 5.1%. However, it keeps the 10% tariff in place on British goods.
An official from the UK noted that Washington's demands for a restructuring of Britain's Digital Services Tax, which is levied as 2% of UK revenues for online marketplaces, were not included in the deal.
PRODUCTS
AUTOS: Trump announced a 25% tariff for imported cars and light truck on March 26. The 25% tax would be added to previous duties on imported finished vehicles beginning on April 3.
On April 29, he issued a couple of orders that aimed to reduce the impact of his auto tariffs by combining credits with relief from other materials levies.
The Republican President has given automakers two years to increase the percentage of domestic components used in U.S.-built vehicles.
Metals: On March 12th, Trump raised tariffs for all imports of steel and aluminum to 25% and extended duties to hundreds downstream products, ranging from nuts and bolts, to bulldozers blades, to soda cans.
More than half of the U.S.'s aluminum and steel imports come from Canada, Mexico, and Brazil.
Trump ordered on February 25, a new investigation into the possibility of new tariffs on imports of copper to rebuild U.S. manufacturing of this metal, which is critical for electric vehicles, military equipment, semiconductors, and a variety of consumer goods.
Just over half of the refined copper that is consumed in the U.S. each year is produced domestically.
SEMICONDUCTORS : Trump stated that tariffs would start at "25% or higher" and would increase substantially over a period of one year. He did not, however, specify the date when they would be implemented.
Taiwan Semiconductor Manufacturing Co., the largest contract chipmaker in the world, produces semiconductors for Nvidia and Apple, among other U.S. customers. In 2024, it will generate 70% of its revenues from North American clients.
LUMBER: On March 1, Trump ordered a new investigation into trade that could add more tariffs to imported lumber. This would be in addition to the existing duties on Canadian Softwood Lumber and 25% tariffs for all Canadian and Mexican products.
ALCOHOL: Trump threatened on March 13 to slap 200% tariffs on wine, cognac, and other alcohol imported from Europe in response to an EU plan to impose tariffs American whiskey and other products. This is itself a retaliation for Trump's 25% tariffs which took effect on steel and aluminium imports the day before.
PHARMACEUTICALS - While Trump's "Liberation Day' announcement spared the pharmaceutical sector from reciprocal duties, the president said that duties were "under review." He warned that the tariffs could be "at a new level you haven't seen before."
ELECTRONICS - Trump exempted smartphones, computers, and other electronics, mostly from China, from the steep tariffs. This was a relief to major technology companies such as Apple, Dell Technologies, and other importers.
This move exempts certain electronics from Trump's baseline 10% tariffs on most goods imported from countries other than China.
(source: Reuters)