2024-12-06 21:30

Three partners in trade tussle after Trump tariff threats Mexico wants to 'come to the table' to negotiate Trump has accused Mexico of being a backdoor to Chinese goods and investment MEXICO CITY, Dec 6 (Reuters) - Mexico is doing everything it can to protect a regional trade agreement with the U.S. and Canada, the Latin American nation's deputy economy minister said in an interview published on Friday. The three neighboring nations, and major partners in commerce, have entered a trade tussle after U.S. President-elect Donald Trump threatened to slap tariffs on the countries to the north and the south if they did not clamp down on drugs and migrants coming into the U.S. Mexico is working on both issues in order to "come to the table" to negotiate without obstacles, Luis Rosendo Gutierrez told outlet Inside U.S. Trade. , opens new tab Since Trump's tariff threat, Mexico has launched an offense on contraband goods from Asia coming into the country, and officials seized a record amount of fentanyl. They have also detained thousands of migrants, vowing to prevent them from making it north. In a statement issued late Friday, U.S. President Joe Biden thanked Mexican President Claudia Sheinbaum and the country's military and law enforcement officials for seizing over twenty million doses of illicit fentanyl. Mexican officials have been in touch with Trump allies, Gutierrez added, though they have not met with incoming administration officials. The exception is Jamieson Greer, Trump's tapped trade representative, with whom Gutierrez met before his nomination. Trump, as well as some U.S. industry leaders, have accused Mexico of being a "backdoor" to Chinese goods and investment, which Mexico has denied. SCREENING INVESTMENTS Mexico is looking to take a cue from the U.S., however, in screening investments coming into the country, Gutierrez said. Mexico is looking to develop a process similar to the U.S.' Committee on Foreign Investment, he explained. When asked if that would affect Chinese automaker BYD's plans to build a factory in the Latin American country, Gutierrez responded that Mexico wants "to play with the same rules" as its trade allies. Trump had threatened to put a 100% tariff "on every single car coming across the Mexican border" in response to BYD's plans, though the carmaker has repeatedly said its plant would serve the local market and not the United States. Mexico is considering doling out incentives to draw manufacturing investments, Gutierrez said, suggesting Mexico could produce batteries that the U.S. wants to be made regionally. CORN COMPLICATIONS Mexico is also awaiting the result of a dispute panel under the USMCA trade deal regarding Mexico's restrictions on imports of genetically-modified corn. Mexico will comply with the panel's ruling even if unfavorable toward the nation, Gutierrez said. And depending on the outcome, Mexico will weigh whether it must make changes to a proposed constitutional reform that would bar the use of GM corn for human consumption, the official added. Sign up here. https://www.reuters.com/world/americas/mexico-doing-all-it-can-protect-trade-agreement-with-us-canada-official-says-2024-12-06/

2024-12-06 20:27

Dec 6 (Reuters) - A U.S. judge on Friday said Southwest Airlines (LUV.N) , opens new tab must face a lawsuit by a prominent affirmative action opponent claiming a now-defunct program that awarded free flights to Hispanic college students was racially discriminatory. U.S. District Judge Sidney Fitzwater in Dallas said Southwest's elimination of the 20-year-old program and offer to pay Edward Blum's American Alliance for Equal Rights one cent - the amount of damages sought in the lawsuit - did not make moot claims that the airline discriminated against two students, one white and the other Asian. Since 2004, Southwest's "¡Lánzate!" program helped 1,500 Hispanic undergraduate and graduate students who lived at least 200 miles (322 km) from their school. The Dallas-based airline, which did not immediately respond to a request for comment on Friday, ended the program after the lawsuit was filed in May. Southwest had argued that its offer to provide all relief sought by Blum's group made the entire lawsuit moot. But Fitzwater disagreed, allowing the group to move ahead with claims Southwest violated a Civil War-era law barring racial bias in contracting. Such a ruling could be cited in future cases over diversity and inclusion programs, which are facing increased scrutiny and a growing number of legal challenges. "This decision is a powerful tool to prevent case-mooting tactics from discriminators nationwide," Blum said in a statement after the ruling. The lawsuit is among the latest in a series of cases Blum has filed challenging corporate diversity programs after another group he founded last year convinced the conservative-majority U.S. Supreme Court to bar the consideration of race as a factor in college admissions. Sign up here. https://www.reuters.com/legal/us-judge-says-southwest-must-face-bias-claims-over-free-flights-hispanic-2024-12-06/

2024-12-06 20:14

Chevron supports U.S. policy on Venezuela, aims for better future for Venezuelans Wirth suggests setting limits on use of strategic petroleum reserve HOUSTON, Dec 6 (Reuters) - Chevron (CVX.N) , opens new tab, the only U.S. oil producer now working in Venezuela's oilfields, has not held any discussions with President-elect Donald Trump's team over the company's operations in the country, CEO Michael Wirth said on Friday. Since 2019, Venezuela's oil industry has been under U.S. sanctions designed to curb its oil income and force out President Nicolas Maduro in response to electoral fraud following his re-election in 2018 and a disputed election in 2024. Chevron has been allowed since 2022 to export oil to recoup unpaid dividends from joint venture partners. It aims to support U.S. policy on Venezuela while providing a better future to Venezuelans, Wirth said in remarks to think tank Atlantic Council. "We are trying to hang in there, work with our government," Wirth said. "As other companies have left Venezuela, they've been replaced, by and large, with companies from two countries, Russia and China and if we were to leave, that, no doubt, is where the operations that we're involved with would likely end up as well," he added. The easing of restrictions on Chevron and other oil firms came under the administration of U.S. President Joe Biden and it is unclear what the incoming Trump administration's policy will be. Oil shipments last month to the U.S. from Venezuela by Chevron under a 2022 authorization from the Biden administration were 238,000 barrels per day. Wirth also talked about the U.S. Strategic Petroleum Reserve, which the government is working to replenish after its biggest sale ever in 2022 left levels at their lowest in 40 years. "If (the SPR) is no longer needed, we ought to come to that conclusion. If it is needed, I think there ought to be some guardrails around its use that are a little bit stronger than the ones that exist today," Wirth said. And on Iran, Wirth noted that current U.S. sanctions have not really kept Iranian barrels out of the market, but rather redirected them. "And that is true for a lot of the sanctions that are in place right now. They haven't really crimped supply. They've just redirected supply," Wirth said. Sign up here. https://www.reuters.com/business/energy/chevron-ceo-says-no-discussions-with-president-elect-trump-venezuela-2024-12-06/

2024-12-06 19:34

MEXICO CITY, Dec 6 (Reuters) - Shares in Mexican retailer Grupo Elektra (ELEKTRA.MX) , opens new tab rose by nearly 20% on Friday, erasing a part of the losses it has accumulated during the week. The company registered its worst-ever day of trading on Monday, after the country's market regulator lifted a trading suspension on the shares. Despite the latest gains, its weekly losses stand at around 70%. Sign up here. https://www.reuters.com/business/retail-consumer/shares-mexicos-elektra-regain-ground-erasing-fraction-earlier-losses-2024-12-06/

2024-12-06 19:11

Wednesday data expected to show 2.7% annual rise in CPI S&P 500 up more than 27% so far in 2024 Fed rate cut expected at meeting in wake of jobs report NEW YORK, Dec 6 (Reuters) - An inflation report in the coming week will test the strength of the record-setting U.S. stocks rally and provide a crucial piece of data that could factor into the Federal Reserve's plans for rate cuts. The S&P 500 on Friday was on pace for its third-straight weekly gain, pushing its year-to-date advance to over 27%. The rosy backdrop for stocks is underscored by expectations of further Fed interest rate cuts at the same time the economy remains resilient. That scenario historically has produced strong equity gains, and it was supported by Friday's employment report that monthly job growth was stronger than expected. Yet the data was not likely to signal a material shift in labor market conditions that would cause the Fed to rethink its rate trajectory at its Dec 17-18 meeting. However, data on consumer prices due on Wednesday could threaten the upbeat narrative if inflation rates are above expectations, posing a challenge for high-flying stocks. "If you come in hot, I do think that's going to be tough for the stock market to digest," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. "It is going to bring in a little bit of uncertainty ahead of the Fed meeting." Bets that the Fed would cut rates at its next meeting firmed after the November payrolls report. Data showed an increase of 227,000 jobs, but the unemployment rate ticked up to 4.2%. Fed fund futures trading as of mid-day Friday indicated a nearly 90% chance the central bank would cut by 25 basis points, according to CME FedWatch. Following the jobs data, there is a "higher bar" for the upcoming consumer price report to pause any planned rate cut at the Fed's next meeting, said Molly McGown, U.S. rates strategist at TD Securities. The consumer price index is expected to have climbed 2.7% for the 12 months through November, according to Reuters data. Rather than pause rate cuts, if CPI comes in hotter than estimates, the central bank could implement a "hawkish cut" by tempering expectations for reductions in 2025, Miskin said. The potential for a revival in inflation is also in greater focus because of President-elect Donald Trump's plans to raise tariffs on imports. Tariffs are expected to be inflationary. TD Securities expects the Fed to pause rate cuts at the start of the year, as policy makers assess Trump's fiscal policies after he takes office in January, McGown said. "We heard from (Fed Chair Jerome) Powell that once they know what the actual policies are, that's when they'll start to put that into their framework of figuring out what they're going to do with monetary policy," McGown said. Meanwhile, stocks continue to charge higher, raising concerns about sentiment becoming worrisomely optimistic. The S&P 500 was trading at 22.6 times expected earnings for the next 12 months, its highest P/E ratio in more than three years, according to LSEG Datastream. Yardeni Research cited concerns with several measures, such as bullish sentiment among investment advisors and foreign private purchases of U.S. stocks. "Contrarian indicators are turning bearish," Yardeni said in a note on Thursday. Yet some investors say the prospects for stocks look solid into year end, which is a seasonally strong period for equities. "The bear arguments from earlier in the year -- such as the job market pressures, interest rate fluctuations, Fed uncertainty, and geopolitical tensions -- have significantly eased," Mark Hackett, chief of investment research at Nationwide, said in emailed comments. "It is difficult to see how this trend reverses by year end." Sign up here. https://www.reuters.com/markets/us/wall-st-week-ahead-inflation-report-poses-test-stocks-rally-fed-meeting-looms-2024-12-06/

2024-12-06 18:39

Iran's uranium enrichment already alarms Western powers They see no civilian justification for Iran's production Grossi says lack of process on de-escalation regrettable E3 gets tougher on Iran amid military support to Russia MANAMA/VIENNA, Dec 6 (Reuters) - Iran is "dramatically" accelerating its enrichment of uranium to up to 60% purity, close to the roughly 90% level that is weapons grade, U.N. nuclear watchdog chief Rafael Grossi told Reuters on Friday. The International Atomic Energy Agency later confirmed in a confidential report to member states that Iran was speeding up uranium enrichment, a process that refines the raw material so that it can be used as fuel in civil nuclear power generation or, potentially, nuclear weapons. The IAEA findings will deepen alarm in Western countries that say there is no justification for enriching uranium to such a high level under any civilian programme and that no other country has done so without producing nuclear bombs. Iran denies pursuing nuclear weapons. Tehran already has enough material enriched to up to 60% purity to be able to make four nuclear weapons if it enriches it further, according to an IAEA yardstick. "Today the agency is announcing that the production capacity is increasing dramatically of the 60% inventory," IAEA chief Grossi said on the sidelines of the Manama Dialogue security conference in Bahrain. He said Iran's production capacity was set to rise to "seven, eight times more, maybe, or even more" than the current level of 5-7 kg of uranium enriched to up to 60% purity a month. In the report to member states, which was seen by Reuters, the IAEA said Iran had increased the enrichment rate of the material being fed into two interconnected cascades of advanced IR-6 centrifuges at its Fordow plant. The plant had already been enriching uranium to up to 60% purity with material enriched to up to 5% purity. The material being fed in now has been enriched to up to 20% purity, accelerating the process of reaching 60%. That change means Iran will "significantly" increase the amount of uranium it enriches to 60% purity, reaching more than 34 kg a month at Fordow alone, the report said. Iran is also enriching uranium to up to 60% at another site, Natanz. The report said Iran must as a matter of urgency facilitate tougher safeguards measures, such as inspections, to ensure Fordow is not being "misused to produce uranium of an enrichment level higher than that declared by Iran, and that there is no diversion of declared nuclear material." European and Iranian officials last week made little progress in meetings on whether they could enter serious talks on the nuclear programme before Donald Trump returns to the White House in January. 'DANGEROUS AND RECKLESS' Tehran was angered by a resolution last month put forward by Britain, Germany and France, known as the E3, and the United States that faulted Iran's cooperation with the IAEA. "This is a serious escalatory step by Iran, which we strongly condemn," a German foreign ministry source said of Iran accelerating uranium enrichment to 60% purity. "It is obvious that such measures significantly worsen the framework for diplomatic efforts." Kelsey Davenport, director of non-proliferation policy at the Arms Control Association advocacy group in Washington, said Iran's acceleration at Fordow was "a dangerous and reckless escalation that risks derailing the prospects for negotiations with the United States." "Increasing the capacity to move more quickly to multiple bombs' worth of weapons-grade uranium increases the risk of miscalculation and military action," she said. After pulling the United States out of the 2015 nuclear deal between Tehran and world powers, Trump pursued a "maximum pressure" policy that sought to wreck Iran's economy. He is staffing his planned administration with hawks on Iran. Grossi said last month Tehran had accepted a "request" to cap its stock of uranium enriched to up to 60% to ease diplomatic tensions. Diplomats said at the time that Tehran's step was conditional on the IAEA's 35-nation Board of Governors not passing a resolution against Iran over insufficient cooperation with the agency, which the Board then did. "We do not have any diplomatic process ongoing which could lead to a de-escalation, or a more stable equation when it comes to Iran," Grossi said. "This is regrettable." The E3 have said they want revive talks before the 2015 deal expires in October 2025. The deal lifted sanctions against Iran in return for restrictions on Iran's atomic activities. Since Trump left the deal, Iran has abandoned those restrictions. Sign up here. https://www.reuters.com/world/middle-east/iran-dramatically-increasing-enrichment-near-bomb-grade-iaea-chief-2024-12-06/