German Industry: US Tariffs Risk Hurting US

German industry groups warned Sunday, ahead of a meeting between European Commission President Jean-Claude Juncker and U.S. President Donald Trump, that tariffs the United States has recently imposed or threatened risk harming the U.S. itself.

The U.S. imposed tariffs on EU steel and aluminum June 1, and Trump is threatening to extend them to EU cars and car parts. Juncker will discuss trade with Trump at a meeting Wednesday.

Dieter Kempf, head of Germany’s BDI industry association, told the Welt am Sonntag newspaper it was wise for the European Union and United States to continue their discussions.

German auto industry

“The tariffs under the guise of national security should be abolished,” Kempf said, adding that Juncker needed to make clear to Trump that the United States would harm itself with tariffs on cars and car parts.

He added that the German auto industry employed more than 118,000 people in the United States and 60 percent of what they produced was exported to other countries from the U.S. 

“Europe should not let itself be blackmailed and should put in a confident appearance in the United States,” he added.

Lowered expectations

EU officials have sought to lower expectations about what Juncker can achieve and downplayed suggestions that he will arrive in Washington with a novel plan to restore good relations.

Eric Schweitzer, president of the DIHK Chambers of Commerce, told Welt am Sonntag he welcomed Juncker’s attempt to persuade the U.S. government not to impose tariffs on cars.

“All arguments in favor of such tariffs are … ultimately far-fetched,” he said.

The German economy had for decades counted on there being open markets and a reliable global trading system, Schweitzer said, but he added of the current situation: “Every day German companies feel the transatlantic rift getting wider.”

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German Industry: US Tariffs Risk Hurting US

German industry groups warned Sunday, ahead of a meeting between European Commission President Jean-Claude Juncker and U.S. President Donald Trump, that tariffs the United States has recently imposed or threatened risk harming the U.S. itself.

The U.S. imposed tariffs on EU steel and aluminum June 1, and Trump is threatening to extend them to EU cars and car parts. Juncker will discuss trade with Trump at a meeting Wednesday.

Dieter Kempf, head of Germany’s BDI industry association, told the Welt am Sonntag newspaper it was wise for the European Union and United States to continue their discussions.

German auto industry

“The tariffs under the guise of national security should be abolished,” Kempf said, adding that Juncker needed to make clear to Trump that the United States would harm itself with tariffs on cars and car parts.

He added that the German auto industry employed more than 118,000 people in the United States and 60 percent of what they produced was exported to other countries from the U.S. 

“Europe should not let itself be blackmailed and should put in a confident appearance in the United States,” he added.

Lowered expectations

EU officials have sought to lower expectations about what Juncker can achieve and downplayed suggestions that he will arrive in Washington with a novel plan to restore good relations.

Eric Schweitzer, president of the DIHK Chambers of Commerce, told Welt am Sonntag he welcomed Juncker’s attempt to persuade the U.S. government not to impose tariffs on cars.

“All arguments in favor of such tariffs are … ultimately far-fetched,” he said.

The German economy had for decades counted on there being open markets and a reliable global trading system, Schweitzer said, but he added of the current situation: “Every day German companies feel the transatlantic rift getting wider.”

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Fiat Chrysler Names Jeep Boss to Replace Stricken CEO

Fiat Chrysler named on Saturday its Jeep division boss, Mike Manley, to take over immediately for Chief Executive Sergio Marchionne, who is seriously ill after suffering major complications following surgery.

The carmaker said British-born Manley, who also takes responsibility for the North America region, will push ahead with the midterm strategy outlined last month by Marchionne, who had been due to step down next April.

Marchionne, 66, was credited with rescuing Fiat and Chrysler from bankruptcy after taking the Italian carmaker’s wheel in 2004. On Saturday, he was also replaced as chairman and CEO of Ferrari and chairman of tractor maker CNH Industrial — both spun off from Fiat Chrysler Automobiles in recent years.

“FCA communicates with profound sorrow that during the course of this week unexpected complications arose while Mr. Marchionne was recovering from surgery and that these have worsened significantly in recent hours,” the statement said.

FCA disclosed earlier this month that Marchionne, a renowned dealmaker and workaholic, was recovering from a shoulder operation. But his condition deteriorated sharply in recent days when he suffered massive complications that were not divulged.

Ferrari named FCA Chairman and Agnelli family scion John Elkann as new chairman, while board member Louis Camilleri becomes chief executive. CNH appointed Suzanna Heywood to replace Marchionne as chairman. All three companies remain controlled by the Agnellis.

Marchionne had previously said he planned to stay on as Ferrari chairman and CEO until 2021.

Deal focus

One of the auto industry’s longest-serving CEOs, Marchionne has advocated tie-ups to share the growing cost burden of developing cleaner, electrified and autonomous vehicles.

He resisted the comparatively easy option of selling off coveted brands such as Jeep, saying that would leave too big a problem with Fiat as “the stump that is left behind.”

But after being rejected by his preferred partner General Motors, he turned back to the task of cutting FCA’s debt — a goal he achieved last month — while maintaining that a merger for FCA was “ultimately inevitable.”

Investor hopes for a transformative deal had largely dwindled and are unlikely to hit the shares on Marchionne’s departure, according to Evercore analyst George Galliers.

“The valuation doesn’t suggest expectations of a buyout are high,” Galliers said.

Even without Marchionne, FCA will remain “culturally more open to dealmaking and savvy to potential capital market opportunities than much of the competition,” he added.

“A lot of that’s now ingrained, so I don’t think you lose everything he’s brought to the company overnight.”

Yet, Manley will have a tough act to follow.

Marchionne resurrected one of Italy’s biggest corporate names and revitalized Chrysler, succeeding where the U.S. company’s two previous owners — Mercedes parent Daimler and private equity group Carberus — both failed.

He has multiplied Fiat’s value 11 times since taking charge, helped by moves such as the spinoffs of CNH Industrial and Ferrari. The planned separation of parts maker Magneti Marelli, due this year, should further increase that value-generation.

He also flattened an inflexible hierarchy, replacing layers of middle management with a meritocratic leadership style. He slashed costs by reducing the number of vehicle architectures and creating joint ventures to pool development and plant costs.

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Fiat Chrysler Names Jeep Boss to Replace Stricken CEO

Fiat Chrysler named on Saturday its Jeep division boss, Mike Manley, to take over immediately for Chief Executive Sergio Marchionne, who is seriously ill after suffering major complications following surgery.

The carmaker said British-born Manley, who also takes responsibility for the North America region, will push ahead with the midterm strategy outlined last month by Marchionne, who had been due to step down next April.

Marchionne, 66, was credited with rescuing Fiat and Chrysler from bankruptcy after taking the Italian carmaker’s wheel in 2004. On Saturday, he was also replaced as chairman and CEO of Ferrari and chairman of tractor maker CNH Industrial — both spun off from Fiat Chrysler Automobiles in recent years.

“FCA communicates with profound sorrow that during the course of this week unexpected complications arose while Mr. Marchionne was recovering from surgery and that these have worsened significantly in recent hours,” the statement said.

FCA disclosed earlier this month that Marchionne, a renowned dealmaker and workaholic, was recovering from a shoulder operation. But his condition deteriorated sharply in recent days when he suffered massive complications that were not divulged.

Ferrari named FCA Chairman and Agnelli family scion John Elkann as new chairman, while board member Louis Camilleri becomes chief executive. CNH appointed Suzanna Heywood to replace Marchionne as chairman. All three companies remain controlled by the Agnellis.

Marchionne had previously said he planned to stay on as Ferrari chairman and CEO until 2021.

Deal focus

One of the auto industry’s longest-serving CEOs, Marchionne has advocated tie-ups to share the growing cost burden of developing cleaner, electrified and autonomous vehicles.

He resisted the comparatively easy option of selling off coveted brands such as Jeep, saying that would leave too big a problem with Fiat as “the stump that is left behind.”

But after being rejected by his preferred partner General Motors, he turned back to the task of cutting FCA’s debt — a goal he achieved last month — while maintaining that a merger for FCA was “ultimately inevitable.”

Investor hopes for a transformative deal had largely dwindled and are unlikely to hit the shares on Marchionne’s departure, according to Evercore analyst George Galliers.

“The valuation doesn’t suggest expectations of a buyout are high,” Galliers said.

Even without Marchionne, FCA will remain “culturally more open to dealmaking and savvy to potential capital market opportunities than much of the competition,” he added.

“A lot of that’s now ingrained, so I don’t think you lose everything he’s brought to the company overnight.”

Yet, Manley will have a tough act to follow.

Marchionne resurrected one of Italy’s biggest corporate names and revitalized Chrysler, succeeding where the U.S. company’s two previous owners — Mercedes parent Daimler and private equity group Carberus — both failed.

He has multiplied Fiat’s value 11 times since taking charge, helped by moves such as the spinoffs of CNH Industrial and Ferrari. The planned separation of parts maker Magneti Marelli, due this year, should further increase that value-generation.

He also flattened an inflexible hierarchy, replacing layers of middle management with a meritocratic leadership style. He slashed costs by reducing the number of vehicle architectures and creating joint ventures to pool development and plant costs.

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Tariffs Will Hurt Economy, IMF Warns, as Trump Threatens More

The International Monetary Fund warned world economic leaders on Saturday that a recent wave of trade tariffs would significantly harm global growth, a day after U.S. President Donald Trump threatened a major escalation in a dispute with China.

IMF Managing Director Christine Lagarde said she would present the G-20 finance ministers and central bank governors meeting in Buenos Aires with a report detailing the impacts of the restrictions already announced on global trade.

“It certainly indicates the impact that it could have on GDP [gross domestic product], which in the worst case scenario under current measures … is in the range of 0.5 percent of GDP on a global basis,” Lagarde said at a joint news conference with Argentine Treasury Minister Nicolas Dujovne.

In the briefing note prepared for G-20 ministers, the IMF said global growth might peak at 3.9 percent in 2018 and 2019, while downside risks have increased because of the growing trade conflict.

Her warning came shortly after the top U.S. economic official, Treasury Secretary Steven Mnuchin, told reporters in the Argentine capital there was no “macro” effect yet on the world’s largest economy.

Long-simmering trade tensions have burst into the open in recent months, with the United States and China — the world’s largest and second-largest economies — slapping tariffs on $34 billion worth of each other’s goods so far.

The weekend meeting in Buenos Aires comes amid a dramatic escalation in rhetoric on both sides. Trump on Friday threatened tariffs on all $500 billion of Chinese exports to the United States.

Mnuchin said that while there were some “micro” effects, such as retaliation against U.S.-produced soybeans, lobsters and bourbon, he did not believe that tariffs would keep the United States from achieving sustained 3 percent growth this year.

“I still think from a macro basis we do not see any impact on what’s very positive growth,” Mnuchin said, adding that he was closely monitoring prices of steel, aluminum, timber and soybeans.

G-7 allies

The U.S. dollar fell the most in three weeks on Friday against a basket of six major currencies after Trump complained again about the greenback’s strength and about Federal Reserve interest rate increases, halting a rally that had driven the dollar to its highest level in a year.

Mnuchin will try to rally G-7 allies over the weekend to join the United States in more aggressive action against China, but they may be reluctant to cooperate because of U.S. tariffs on steel and aluminum imports from the European Union and Canada, which prompted retaliatory measures.

Mnuchin said he would tell G-7 allies that the Trump administration was ready to make a trade deal with them and had placed a high priority on completing the North American Free Trade Agreement (NAFTA) with Mexico and Canada.

“If Europe believes in free trade, we’re ready to sign a free-trade agreement,” he said, adding that a deal would require the elimination of tariffs, nontariff barriers and subsidies.

“It has to be all three issues.”

French Finance Minister Bruno Le Maire, however, said at the G-20 meeting that the European Union could not consider negotiating a free-trade agreement with the United States unless Washington withdrew its steel

and aluminum tariffs first.

Le Maire said there was no disagreement between France and Germany over how and when to start trade talks with the United States. Both agreed Washington needs to take the first step by eliminating tariffs, he said.

Previous session

The last G-20 finance meeting in Buenos Aires in late March ended with no firm agreement by ministers on trade policy, except for a commitment to “further dialog.”

German Finance Minister Olaf Scholz said he would use the meeting to advocate for a rules-based trading system, but that expectations were low.

“I don’t expect tangible progress to be made at this meeting,” Scholz told reporters on the plane to Buenos Aires.

The U.S. tariffs will cost Germany up to 20 billion euros ($23.44 billion) in income this year, according to the head of German think-tank IMK.

Bank of Japan Governor Haruhiko Kuroda said he hoped the debate at the G-20 gathering would lead to an easing of retaliatory trade measures.

“Trade protectionism benefits no one involved,” he said. “I think restraint will eventually take hold.”​

​Protests

Host country Argentina is one of the world’s most closed economies, after a string of populist leaders implemented tariffs and restrictions on foreign capital to protect domestic industry. Market-friendly President Mauricio Macri has removed many of those barriers, generating popular backlash as factory

employment has nosedived.

A currency crisis this year prompted Argentina to seek IMF financing, a political risk for Macri since many Argentines blame Fund-imposed austerity for making its 2001-02 economic collapse worse. Opposition politicians led a protest against Lagarde’s presence on Saturday.

“This deal will mean a tougher, more severe adjustment for working people,” said Nicolas del Cano, a lawmaker for the Socialist Workers’ Party, calling for a national strike to “defeat” the IMF deal.

Lagarde said on Saturday that Argentina was “unequivocally” making progress on its deficit reduction targets agreed to as part of the $50 billion deal.

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Tariffs Will Hurt Economy, IMF Warns, as Trump Threatens More

The International Monetary Fund warned world economic leaders on Saturday that a recent wave of trade tariffs would significantly harm global growth, a day after U.S. President Donald Trump threatened a major escalation in a dispute with China.

IMF Managing Director Christine Lagarde said she would present the G-20 finance ministers and central bank governors meeting in Buenos Aires with a report detailing the impacts of the restrictions already announced on global trade.

“It certainly indicates the impact that it could have on GDP [gross domestic product], which in the worst case scenario under current measures … is in the range of 0.5 percent of GDP on a global basis,” Lagarde said at a joint news conference with Argentine Treasury Minister Nicolas Dujovne.

In the briefing note prepared for G-20 ministers, the IMF said global growth might peak at 3.9 percent in 2018 and 2019, while downside risks have increased because of the growing trade conflict.

Her warning came shortly after the top U.S. economic official, Treasury Secretary Steven Mnuchin, told reporters in the Argentine capital there was no “macro” effect yet on the world’s largest economy.

Long-simmering trade tensions have burst into the open in recent months, with the United States and China — the world’s largest and second-largest economies — slapping tariffs on $34 billion worth of each other’s goods so far.

The weekend meeting in Buenos Aires comes amid a dramatic escalation in rhetoric on both sides. Trump on Friday threatened tariffs on all $500 billion of Chinese exports to the United States.

Mnuchin said that while there were some “micro” effects, such as retaliation against U.S.-produced soybeans, lobsters and bourbon, he did not believe that tariffs would keep the United States from achieving sustained 3 percent growth this year.

“I still think from a macro basis we do not see any impact on what’s very positive growth,” Mnuchin said, adding that he was closely monitoring prices of steel, aluminum, timber and soybeans.

G-7 allies

The U.S. dollar fell the most in three weeks on Friday against a basket of six major currencies after Trump complained again about the greenback’s strength and about Federal Reserve interest rate increases, halting a rally that had driven the dollar to its highest level in a year.

Mnuchin will try to rally G-7 allies over the weekend to join the United States in more aggressive action against China, but they may be reluctant to cooperate because of U.S. tariffs on steel and aluminum imports from the European Union and Canada, which prompted retaliatory measures.

Mnuchin said he would tell G-7 allies that the Trump administration was ready to make a trade deal with them and had placed a high priority on completing the North American Free Trade Agreement (NAFTA) with Mexico and Canada.

“If Europe believes in free trade, we’re ready to sign a free-trade agreement,” he said, adding that a deal would require the elimination of tariffs, nontariff barriers and subsidies.

“It has to be all three issues.”

French Finance Minister Bruno Le Maire, however, said at the G-20 meeting that the European Union could not consider negotiating a free-trade agreement with the United States unless Washington withdrew its steel

and aluminum tariffs first.

Le Maire said there was no disagreement between France and Germany over how and when to start trade talks with the United States. Both agreed Washington needs to take the first step by eliminating tariffs, he said.

Previous session

The last G-20 finance meeting in Buenos Aires in late March ended with no firm agreement by ministers on trade policy, except for a commitment to “further dialog.”

German Finance Minister Olaf Scholz said he would use the meeting to advocate for a rules-based trading system, but that expectations were low.

“I don’t expect tangible progress to be made at this meeting,” Scholz told reporters on the plane to Buenos Aires.

The U.S. tariffs will cost Germany up to 20 billion euros ($23.44 billion) in income this year, according to the head of German think-tank IMK.

Bank of Japan Governor Haruhiko Kuroda said he hoped the debate at the G-20 gathering would lead to an easing of retaliatory trade measures.

“Trade protectionism benefits no one involved,” he said. “I think restraint will eventually take hold.”​

​Protests

Host country Argentina is one of the world’s most closed economies, after a string of populist leaders implemented tariffs and restrictions on foreign capital to protect domestic industry. Market-friendly President Mauricio Macri has removed many of those barriers, generating popular backlash as factory

employment has nosedived.

A currency crisis this year prompted Argentina to seek IMF financing, a political risk for Macri since many Argentines blame Fund-imposed austerity for making its 2001-02 economic collapse worse. Opposition politicians led a protest against Lagarde’s presence on Saturday.

“This deal will mean a tougher, more severe adjustment for working people,” said Nicolas del Cano, a lawmaker for the Socialist Workers’ Party, calling for a national strike to “defeat” the IMF deal.

Lagarde said on Saturday that Argentina was “unequivocally” making progress on its deficit reduction targets agreed to as part of the $50 billion deal.

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Fashion Industry Reinventing Itself by Embracing the Digital Age

For years denim jeans have been finished in foreign factories where workers use manual and automated techniques such as scraping with sandpaper or other abrasives to make the jeans appear worn and more comfortable to wear. But things are changing in the fashion world. As VOA’s Mariama Diallo reports, fashion companies are going digital to speed up the design and manufacturing process.

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