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US, Mexico launch formal trade talks, haggle over automotive content rules
U.S. negotiators and Mexican negotiators started formal talks on Thursday to revamp the North American Trade Deal. Washington demanded stricter regional origin rules, including a U.S. specific minimum content level for cars?and?trucks?built in Mexico. Two people familiar with U.S. negotiating positions said that the new standard was contained in the proposed text to modify the U.S. Mexico Canada Agreement. Although the exact percentage of U.S. auto content demanded by the U.S. Trade Representative’s office is not yet known, the change from the USMCA’s existing content requirements for preferential North American access to the market is notable. Negotiations over the next few months will determine whether or not this six-year old trade agreement and its predecessor have a future. They have helped to create a North American economy that is highly integrated, generating nearly $1.6 trillion annually in trilateral trade. USMCA requires that 75% of the value of a vehicle be sourced in North America. A separate regional value requirement states that 40% of passenger car content built in North America must come from facilities with higher wages, i.e., either the U.S.A. or Canada. This threshold is 45% in the case of pickup trucks and is based on "core parts", such as engines, transmissions body panels, and chassis components. The U.S. specific automotive content requirement would either replace or stack onto the previous regional value requirement which includes Canada. USTR announced on Wednesday that the U.S., Mexico, and Canada will exclude Canada from the current talks, with three bilateral negotiations planned through late July. The current round of negotiations in Mexico City, which ends Friday, is included. USTR's spokesperson failed to respond to a question about the rules of origin. Mexico's Economy Ministry declined to comment. U.S. trade representative Jamieson Greer stated on Tuesday that he wants to strengthen North American origin rules to boost manufacturing within the United States. Greer stated, "I believe that during the course of these discussions we will be discussing rules of origin that will enhance U.S. contents in these goods." The duty-free zone ends The Trump administration's tariffs on steel, aluminum, and copper and 25% on autos, auto parts, and autos and autoparts, have complicated the discussions over the review. Greer stated that Washington would maintain at least some tariffs against Mexican and Canadian industrial products, but at preferential rates. Dan Ujczo is a lawyer at Canadian oil and natural gas producer Cenovus who specializes in North American Trade. He believes that the U.S., Mexico and Canada can overcome their differences and modify and extend the current trade pact by introducing stronger regional content rules, as well as more trade protections for non-market economies like China. Ujczo stated that the end goal is for Canada and Mexico to have the best access to the United States in the long-term. Steel Protection: More than Ever Barry Zekelman of Zekelman Industries, a steel tube manufacturer, told reporters that USTR negotiators informed steelmakers on Wednesday that they will insist that Mexican and Canadian steel that receives preferential tariff treatment in the U.S. be melted and poured within North America. Zekelman said that there is no requirement for this in the USMCA. Zekelman, USTR's Director of International Trade, said that the USTR wants Mexico to impose tariffs equal to those imposed by the U.S. on steel imports as well as derivative products made out of steel imported from outside North America. He added, "They're going now to start closing all of the existing loopholes." (Reporting and editing by Alexander Smith, Rod Nickel; Additional reporting in Detroit by Kalea hall; Writing by David Lawder)
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HIGHLIGHTS-Tennis-French Open day five
Highlights from the French Open's fifth day on Thursday (times GMT). 1730 GAUFF BREAZES PAST SHERIF Coco Gauff, the defending champion, cruised to victory over Egypt's Mayar?Sherif with a score of 6-3 6-2. The American now moves on to the third round where she will play the winner between Britain's Katie Boulter &?Austria’s Anastasia Potapova. 1540 TIAFOE BEATS HURKACZ Frances Tiafoe, last year's quarter-finalist, defeated Hubert Hurkacz of Poland 6-7(5) 7-6(5) 6-1 6-4 6-7(1) in a four hour and 43 minute battle. The 19th seed from the United States will play Portugal's Jaime Faria for the third round. 1347 CERUNDOLO KNOCKS TOP SEED SINNER The quest of world number one Jannik Sinner to win his first French Open title was ended by Argentina's Juan Manuel Cerundolo in the second round. Juan Manuel Cerundolo defeated the Italian with a score of 3-6 2-6 6-1 6-1 whilst the four-time Grand slam?winner suffered from cramps. 1315 TIEN SETS COBOLLI CLASH Learner Tien, the Australian Open quarterfinalist, won a four-hour match against Facundo?Acosta. He won 7-5 4-6-3-6-7-6(4)-6-3 and will face Flavio?Cobolli in the third round. 1223 SINNER TAKING MEDICAL BREAKS WHILE SERVING FOR MATCH Jannik Sinner, the world number one, has taken a break for medical reasons while preparing to play Juan Manuel Cerundolo. The Italian is leading the second round clash 6-3, 6-2, 5-4. Cerundolo has a 40-0 lead in the match. 1130 COBOLLI THRU TO THIRD RUND The Italian Flavio Cobilli, the 10th seed at the French Open, beat China's Wu Yibing by a score of 6-4 6-4 6-1 6-4. This is the second consecutive year that he has reached the third round. 1115 OSAKA BEATS VEKIC Naomi Osaka, the 16th seed and four-time Grand Slam champion, beat Donna Vekic by a score of 7-6(1) to 6-4. She will now face 17th seed Iva Josic in the third round. Play Under Way 0909 The temperatures in Paris were around 27 degrees Celsius and are expected to peak at 32 degrees. Jannik Sinner, the world's top seed and number one player, will face Juan Manuel Cerundolo on Court Philippe Chatrier in the second round. Aryna Sabalanka is scheduled to play France's Elsa Jacquemot later in the day. FRENCH OPEN ORDER OF PLAY ON THURSDAY (prefix number denotes seeding): COURT?PHILIPPE CHARTRIER (play starts at 1000 GMT). 1-Jannik Sinner (Italy) v Juan Manuel Cerundolo (Argentina) Diane Parry (France), v. 30-Ann Li (U.S.A. 1-Aryna Sabalenka (Belarus) v Elsa Jacquemot (France) 22-Arthur Rinderknech v Matteo Berrettini COURT -SUZANNE LENGLEN (play starts at 9am GMT) Adolfo Daniel ?Vallejo (Paraguay) v Moise Kouame (France) Julia Grabher (Austria), vs 6-Amanda Anisimova (U.S.A. 4-Coco Gauff (U.S.) v Mayar Sherif (Egypt) Raphael Collignon, Belgium v Ben Shelton, United States COURT SIMONNE MATHIE (play starts at 0900 GMT). Donna Vekic, Croatia vs 16-Naomi Osaka, Japan 25-Francisco Cerundolo (Argentina) v Hugo Gaston (France) 4-Felix Auger-Aliassime (Canada) v Roman Andres Burruchaga (Argentina) 9-Victoria Mboko v Katerina Sniakova, (Canada) (Reporting and Editing by Christian Radnedge in Bengaluru)
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China News: Copper prices rise after US-Iran Deal Report
The price of copper rebounded Thursday, following a'report that the U.S.A. and Iran had'reached an agreement to extend their ceasefire. It also followed news about a 'fresh effort by China, a top metals consumer to boost its economy. The report by Axios that President Donald Trump must still approve the deal was not immediately confirmed. The London Metal Exchange's three-month copper gained 1.2% at 1600 GMT to reach $13,696 per metric ton after falling to its lowest price since May 21 (at $13,464). Prices had risen earlier from their intra-day lows after sources reported that the 'China Central Bank' has ordered banks to increase lending in this month. This underscores Beijing's ongoing efforts to support an economy squeezed by high energy costs and persistently weak domestic demand. After the Axios article reported that the U.S. reached a deal with Iran for a 60 day?ceasefire and to begin talks about Iran's nuclear program, oil prices retreated and traded lower. Investors are trying to balance the possibility of lower metals demand as the conflict reduces economic growth with the prospect of copper scarcity due to a lack of sulphuric acids. U.S. Comex Copper Futures increased by 0.9% to $6.43 a lb. This brings the?premium for Comex over LME to 3.5%, or $479 a tonne. Copper has been shipped to the U.S. steadily by traders ahead of the decision expected at the end June on whether or not to impose tariffs. Ewa Manthey is a commodities?strategist with ING. She said, "Copper 'prices' are supported by tariff-driven trade, as material flows into the U.S. in anticipation of possible policy?changes. This has led to a tightening of availability in other areas." LME lead climbed 0.5% to $2.016.50 per ton. This reversed earlier losses, after LME inventories data showed that nearly 30,000 tonnes of metal were deposited into Taiwanese warehouses on Thursday. LME aluminium?gained 0.6%, to $3.658 per ton. Nickel added 0.6%, to $19.065, Zinc rose 1.2%, to $3.553, and Tin advanced 1.6%, to $55,250.
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Talen CEO lands $300 million-plus stock payout
Talen Energy awarded CEO Mark "Mac McFarland" a stock-based compensation of more than $300 million after the Houston company emerged out of bankruptcy and generated an overall return for investors that was 620%. Shares of Talen have soared after its gas-fired plants capitalized on the booming demand for 'electricity by AI-driven data centres in the PJM interconnection, the U.S. largest regional?electric grid. Talen generated $461m in cash flow in the first quarter of 2018, compared with $119m in the same period last year. Talen announced this week that McFarland had received?887.163 shares in restricted and performance stock. According to Talen's stock price on Thursday morning, $382.78 per shares, the?award? is worth approximately $334 million. McFarland’s stock award is linked to Talen’s exit from Chapter 11 bankruptcy in June 2023. Talen's return on investment has risen by 600% since then. This has triggered a payment of extra performance shares to McFarland. Comparatively, the stock of?Talen has outperformed the total return of?S&P 500 Energy Sector Index by 62% over the last three years. According to a company presentation this month, the tight conditions on the PJM power markets are expected to lead to 'higher gross margins for Talen power plants. Talen stated that'more frequent scarcity situations' tied to peak load conditions, and limited system capacity would further improve the economics for running gas-fired generators.
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Gold prices rebound after a report that US and Iran are working together to extend the ceasefire
The gold price reversed its?course on Thursday to increase, recovering from a low of two months earlier in the session. Dollar and oil prices slid?after a report that the United States and Iran are working on extending a ceasefire. Gold spot was up 0.5% to $4,477.59 an ounce at 11:08 am EDT (1508 GMT) after it fell to its lowest levels since late March. U.S. Gold Futures increased 0.6% to $4475.60. Axios reported the U.S. reached a?outline deal to extend their ceasefire pending approval by President Donald Trump. As a result, foreign buyers can now buy greenbacks at a lower price. After the report, oil prices fell. In line with expectations, the personal consumption expenditures price index for the 12 months ending in April rose 3.8%. In line with expectations, the PCE price index rose 3.8% over a 12-month period ending in April. PCE prices rose 0.4% in April, after a 0.7% increase in March. The trading gods?seem to be intervening?in gold today. Tai Wong, an independent metals trader, said that the PCE's weakness and reports of a deal to open Hormuz are giving gold much-needed relief. Gold was on the verge of dropping below the 200-day-moving average early this morning, which many investors and traders consider to be a litmus test in maintaining an upward trend. Bart Melek is global head of commodity strategies at TD Securities. He said that the PCE data indicates that the Federal Reserve could hold rates instead of pursuing further tightening. The minutes of the Fed’s?meeting on April 28-29, published last week, showed that a growing number officials were open to the possibility that they might?need? to raise interest rates. Since the U.S. and Israel conflict with Iran began in late February, the price of gold has been under pressure due to inflation concerns. Bullion, despite its appeal as a safe haven, underperforms when rates increase, as investors tend to gravitate towards yield-bearing investments. The problem with gold is that it is not operating alone. Fawad Rasaqzada is a market analyst for City Index. He said that higher energy prices are again causing inflation concerns, which in turn pushes Treasury yields up and strengthens the dollar. Spot silver rose 0.3% to $74.8, while platinum fell 0.8% to $1.902.64. Palladium fell 1.9% to 1,364.10. Ashitha Shivprasad, Bengaluru (Reporting and Editing by Devika Syamnath & Dita Pujara).
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Oil gains after US-Iran ceasefire report
Oil lost gains on Thursday and traded lower briefly. A report by Axios claimed that U.S. officials and Iranians had reached an agreement to extend the ceasefire for 60 days and begin talks about Tehran's nuclear program. Brent crude futures rose 33 cents or 0.4% to $94.62 per barrel at 11:01 am EDT (1501 GMT). ?U.S. West Texas Intermediate futures rose 56 cents (0.6%), to $89.24. Both benchmarks fell a little after the report, before recovering some of their lost ground. Axios, citing U.S. official?and source involved in mediation, reported that the agreement between the U.S. The oil prices have fluctuated in recent sessions as traders try to sort through conflicting signals about the possible end of the three-month Iran War and the reopening of Strait of Hormuz. The maritime chokepoint is still only a fraction of its pre-war levels. Brent and WTI Futures rose more than 2% in the first session of trading after Iran's Revolutionary Guards claimed they targeted a U.S. airbase as a response to the U.S. attacks on Bandar Abbas, a port city. John Evans, a PVM Oil Associate analyst, said that trading airstrikes appears to be "part of the negotiation language." Shipping data from LSEG &?Kpler revealed that two supertankers, one liquefied 'natural gas' tanker, and one supertanker left the strait this week without their transponders on, heading to India and China. According to data from the American Petroleum Institute, crude oil stocks in the U.S. fell by 2.8 million barrels during the past week. This is the sixth consecutive week that they have declined. The U.S. Energy Information Administration will release its official inventory data one day later than normal due to the Memorial Day holiday. Reporting by Shariq and Nicole Jao from New York, Seher in London, Sam Li and Florence Tan from Singapore, and Hugh Lawson in Beijing; editing by Mark Potter and Paul Simao.
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Gold prices recover after US inflation data
The release of the?U.S. Prices were down for a third straight session despite April's inflation data. As of 9:16 am EDT (1316 GMT), spot gold was down by 0.6%, at $4428,69 per ounce. It had fallen to its lowest price since late March during the previous session. U.S. Gold Futures fell 0.5% to $4426.20. The U.S. Personal Consumption Expenditures Price Index rose 3.8% over the past 12 months, which is in line with what was expected. The PCE index increased 0.4% month-on-month from March to April. Bart Melek is the global head of commodity strategy at TD Securities. He said that data shows gold has a slight respite, and suggests that the Federal Reserve may decide to maintain rates instead of pursuing further tightening. He added that gold could continue to trend lower, and this is because even if war ends now, energy costs could stay higher. The minutes of the Fed meeting of April 28-29, published last week, showed that a growing number officials were open to the idea of raising rates. Investors gravitate towards yield-bearing investments when interest rates increase, despite its appeal as a safe haven. The problem with gold is that it is not operating in isolation anymore. Fawad Rasaqzada is a market analyst for?City Index. He said that higher energy prices have once again fueled inflation fears, which has pushed Treasury yields modestly up and strengthened the dollar at the same time. Iran has targeted an airbase in the United States after Washington struck what it described as a drone operation near the Strait of Hormuz and President Donald Trump rejected the reported compromise with Tehran. Spot silver dropped 1.2% to $73.69 an ounce, while platinum fell 1.6% to $1.887.75. Palladium fell 3.1% to $1347.31. Ashitha Shivprasad, Bengaluru (reporting); Devika Syamnath (editing)
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Operation to recover 11 people believed dead after chemical vat explosion in Washington state
Authorities said that the search for nine people who went missing in Washington State after a chemical storage tank ruptured and imploded has now moved from being a rescue effort to one of recovery. This will likely bring the death toll up to eleven. Two deaths had been confirmed by officials. Eight other people, including some who were critically injured, were also injured. Washington Governor Bob Ferguson told a press conference on Wednesday with local authorities that "we're bracing for the worst industrial disaster in modern Washington State history." Authorities have said that they do not yet know the cause of a 900000 gallon vat imploding at Nippon Dynawave Packaging's facility early Tuesday morning. The container contained "white liquor", a chemical mixture of sodium hydroxide (salt) and sodium sulfide (sulfur), used to make paper pulp. It can cause severe skin burns. Matt Amos, the Longview Fire Department's Battalion Chief, said during the press conference that recovery efforts would be slow in an "extremely dangerous" environment. Cowlitz 2 Fire chief Scott Goldstein stated that it was not clear where the nine missing persons were located in the facility. He added that they had searched all the areas that could be searched. He said, "As from this morning, this incident is transitioning from rescue to recovery." At a press conference, officials confirmed that tests had shown contamination in the Columbia River. Testing of water samples confirmed contamination entering the Columbia River yesterday. Goldstein stated that additional evaluations were underway to better determine the extent and scope of this environmental impact. At this time, there are no known negative health effects on... the air quality in the area or the drinking water system of the city Longview. Goldstein stated that it is fair to estimate approximately 550,000-570,000 gallon left the tank. Some material remains in tank and continues to slowly leak. Officials warned people to avoid certain areas and reported that about a dozen carps had died. Nippon Paper Industries 3863.T is Japan's second largest paper manufacturer by sales. It acquired the Longview Plant from Seattle-based Weyerhaeuser WY.N timber company for $225 millions and created the wholly owned subsidiary Nippon Dynamics Packaging in 2016. Authorities in southern California who were monitoring a tank that was overheating and contained?highly explosive methyl methacrylate announced late Tuesday that GKN Aerospace's facility in Garden Grove, California no longer posed an explosion risk. On 'Thursday, thousands of residents were ordered to evacuate after it was discovered that the chemical inside the tank had overheated. TJ McGovern said, "After an intensive operation, we're pleased to report that residents have begun to return home", TJ McGovern interim chief of Orange County Fire Authority.
EU Ministers: Russia won't choose who speaks on behalf of Europe in possible Ukraine talks
EU foreign ministers warned on Thursday that Russia would not be able to choose who represented Europe in any future talks with Moscow about Ukraine. The bloc's chief of foreign policy also said that Moscow showed no real interest for peace. The?ministers? met informally on Cyprus to discuss their strategy towards Russia, as Kyiv calls for greater European involvement in order to end the conflict while the U.S. is focused on the Iran crisis.
The Kremlin told the RIA News Agency on Wednesday that Russian President Vladimir Putin was open to talks with Europe. Meanwhile, Ukrainian President Volodymyr Zelenskiy has urged Europe in recent weeks to join the process.
Kaja Kallas, the EU's foreign policy chief, told reporters that ministers had agreed that Russia still "shows no real interest in peace" and a ceasefire unconditional is a pre-requisite for negotiations.
Kallas stated that "Europe will not be a neutral intermediary between Russia and Ukraine, because we are on Ukraine’s side and defending our core security interests" after the meeting. He added that Europe should assist in negotiations. In a recent meeting, President Vladimir Putin suggested former German chancellor Gerhard Schroeder who had described the Russian leader to be a close friend could represent Europe. Kallas reiterated that European governments had rejected the proposal. "I find that Russia wants to trap us, that we talk about who speaks to them and that they are already 'picking' who is appropriate or not," Kallas said before the meeting.
"Let's avoid falling into this trap. The negotiation is always a collaborative effort.
DEFINING A COORDINATED APPROACH WITH RUSSIA Kallas said her vision was for Europe to demand Russia cease sabotage activities in Europe and pay for any destruction caused. She also stated that any restrictions on the Ukrainian army should include Russian limitations as well.
Kallas stated that "it is obvious that our efforts must also be complementary to U.S. effort."
"I think it's very important to push Ukraine and Russia into talking to each other because there are many issues that only they can decide." Some ministers, despite a frenzy of speculation, have stated that it is premature to discuss who would represent Europe in future negotiations.
Kestutis Budrys, Lithuanian foreign minister, told journalists in Cyprus: "This isn't the time to discuss?who will have?the negotiation."
As he arrived for the meeting, Italian Foreign Minister Antonio Tajani stated that "Europe will determine the name of negotiator and not Mr Putin".
CARRYING THE EUROPEAN MESSENGER
The meeting on Thursday did not take any decisions.
A senior official of an EU member country said that many questions remain unanswered regarding a possible European involvement in negotiations.
There are a number of things that would need to addressed before deciding on a name. What would the mandate be? Who would be the accountability? What is the 'decision-making process? " The official replied.
Some ministers indicated openness to Europe delegating an envoy at a future date.
Elina Valtonen, the Finnish Minister of Foreign Affairs told reporters: "I'm confident that we can agree on a mandate together and perhaps even on who could fill this role."
(source: Reuters)