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Trump’s EPA Aims to Replace Obama-era Climate, Water Regulations in 2018

The U.S. Environmental Protection Agency will replace Obama-era carbon and clean water regulations and open up a national debate on climate change in 2018, part of a list of priorities for the year that also includes fighting lead contamination in public drinking water.

The agenda, laid out by EPA Administrator Scott Pruitt in an exclusive interview with Reuters on Tuesday, marks an extension of the agency’s efforts under President Donald Trump to weaken or kill regulations the administration believes are too broad and harm economic growth, but which environmentalists say are critical to human health.

“The climate is changing. That’s not the debate. The debate is how do we know what the ideal surface temperature is in 2100? … I think the American people deserve an open honest transparent discussion about those things,” said Pruitt, who has frequently cast doubt on the causes and implications of global warming.

Pruitt reaffirmed plans for the EPA to host a public debate on climate science sometime this year that would pit climate change doubters against other climate scientists, but he provided no further details on timing or which scientists would be involved.

Pruitt said among the EPA’s top priorities for 2018 will be to replace the Clean Power Plan, former President Barack Obama’s centerpiece climate change regulation which would have slashed carbon emissions from power plants. The EPA began the process of rescinding the regulation last year and is taking input on what should replace it.

“A proposed rule will come out this year and then a final rule will come out sometime this year,” he said. He did not give any details on what the rule could look like, saying the agency was still soliciting comments from stakeholders.

He said the agency was also planning to rewrite the Waters of the United States rule, another Obama-era regulation, this one defining which U.S. waterways are protected under federal law. Pruitt and Trump have said the rule marked an overreach by including streams that are shallow, narrow, or sometimes completely dry — and was choking off energy development.

Pruitt said that in both cases, former President Barack Obama had made the rules by executive order, and without Congress. “We only have the authority that Congress gives us,” Pruitt said.

Pruitt’s plans to replace the Clean Power Plan have raised concerns by attorneys general of states like California and New York, who said in comments submitted to the EPA on Tuesday that the administrator should recuse himself because as Oklahoma attorney general he led legal challenges against it.

Biofuels and staff cuts

Pruitt said he hoped for legislative reform of the U.S. biofuels policy this year, calling “substantially needed and importantly” because of the costs the regulation imposes on oil refiners.

The Renewable Fuel Standard, ushered in by former President George W. Bush as a way to help U.S. farmers, requires refiners to blend increasing amounts of biofuels like corn-based ethanol into the nation’s fuel supply every year.

Refining companies say the EPA-administered policy costs them hundreds of millions of dollars annually and threatens to put some plants out of business. But their proposals to change the program have so far been rejected by the Trump administration under pressure from the corn lobby.

The EPA in November slightly raised biofuels volumes mandates for 2018, after previously opening the door to cuts.

The White House is now mediating talks on the issue between representatives of both sides, with input from EPA, and some Republican senators from states representing refineries are working on possible legislation to overhaul the program.

Pruitt said he also hoped Congress could produce an infrastructure package this year that would include replacing municipal water pipes, as a way of combating high lead levels in certain parts of the United States.

“That to me is something very tangible very important that we can achieve for the American people,” he said.

Pruitt added that EPA also is continuing its review of automobile fuel efficiency rules, and would be headed to California soon for more meetings with the California Air Resources Board to discuss them.

California in 2011 agreed to adopt the federal vehicle emission rules through 2025, but has signaled it would opt out of the standards if they are weakened, a move that would complicate matters for automakers serving the huge California market.

In the meantime, Pruitt said EPA is continuing to reduce the size of its staff, which fell to 14,162 employees as of Jan. 3, the lowest it has been since 1988, under Ronald Reagan when the employment level was 14,400. The EPA employed about 15,000 when Obama left office.

Nearly 50 percent of the EPA will be eligible to retire within the next five years, according to the agency.

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Walmart Hikes Minimum Wage, Announces Layoffs on Same Day

Walmart will raise entry-level wages for U.S. hourly employees to $11 an hour in February as it benefits from last month’s major overhaul of the U.S. tax code and competes for low-wage workers in a tight labor market.

But on the same day, the world’s largest retailer and private employer, officially called Wal-Mart Stores Inc, announced layoffs as it shuttered many of its Sam’s Club discount warehouse stores.

A senior company official who declined to be named said about 62 stores would be affected, about one-tenth of the chain overall.

About 50 stores will be shut permanently after a review of store profitability and up to 12 more stores will be shut and reopened as e-commerce warehouses, the person said.

Every Sam’s Club store employs about 150 workers, bringing the total number of affected jobs to about 7,500, the person said. Many of them will be accommodated in new jobs at the newly opened warehouses and other stores, the official said.

Earlier Thursday, Walmart announced the wage hike saying it would also offer a one-time cash bonus, based on length of service, of up to $1,000, and expand maternity and parental leave benefits.

Reactions

The layoffs went unaddressed but the wage increase attracted praise from the White House.

“Walmart is the largest employer in the country and to see them make that kind of effort to over a million workers is a big deal … and I think further evidence that the tax reform and tax cut package are having the impact that we had hoped,” White House press secretary Sarah Huckabee Sanders told reporters Thursday.

U.S. Treasury secretary Steven Mnuchin also praised Walmart’s decision to raise wages.

The timing of the store closure announcement hours after the wage hike drew some criticism.

“While pay raises are usually a good thing, this is nothing but another public relations stunt from Walmart to distract from the reality that they are laying off thousands of workers and the ones who remain will continue to receive low wages,” said activist Randy Parraz, director of Making Change at Walmart, a United Food and Commercial Workers Union (UFCW) affiliate.

Wage hikes

The pay increase, Walmart’s third minimum wage increase since 2015, and bonus will benefit more than 1 million U.S. hourly workers, the company said.

The Walmart wage hike, taking minimum pay up from the current $10 an hour after in-house training, is aimed at helping the company attract workers at a time when the U.S. unemployment rate is at 4.1 percent, a 17-year low, making it harder to attract and retain minimum wage employees.

Walmart is likely to save billions of dollars from the new tax law, which slashed the corporate tax rate to 21 percent from 35 percent, and the wage hikes will cost the retailer only a fraction of those gains, analysts said.

“Given how low unemployment is, they would have had to hike wages anyway, the tax bill just made that move easier,” said Edward Jones analyst Brian Yarborough.

Rival retailer Target Corp raised its minimum wage to $11 in September, and said it would raise its minimum wage to $15 by 2020.

Walmart and Target’s new minimum wage levels exceed the state minimum wage, in all but three states, according to a research note from financial services firm BTIG. Eighteen U.S. states increased their minimum wage on Jan.1 but the federal minimum wage has been $7.25 since 2009.

Walmart’s announcement follows companies like AT&T Inc, Wells Fargo & Co and Boeing Co, which have all promised more pay for workers since the Republican-controlled U.S. Congress passed the biggest overhaul to the U.S. tax code in 30 years.

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London Mayor: ‘No Deal’ Brexit Could Cost Britain about 500,000 Jobs

Britain could lose almost 500,000 jobs and 50 billion pounds ($67.41 billion) investment over the next 12 years if it fails to agree a trade deal with the European Union, according a report commissioned by London Mayor Sadiq Khan.

Cambridge Econometrics, an economics consultancy, looked at five different Brexit scenarios, from the hardest to the softest form of Brexit, and broke down the economic impact on nine industries, from construction to finance.

The study said that in a no-deal scenario, the industry that fares the worst will be financial and professional services, with as many as 119,000 fewer jobs nationwide.

“If the Government continue to mishandle the negotiations we could be heading for a lost decade of lower growth and lower employment,” Khan said. “Ministers are fast running out of time to turn the negotiations around.”

Britain and the EU will soon begin the much harder task of defining their future trading relationship, after settling the broad terms of their divorce settlement last month.

A stand-off between Britain and the EU over the future access to single market for London’s vast financial services industry is shaping up to be one of the key Brexit battlegrounds before Britain is due to leave the bloc in March 2019.

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China Denies It May Slow Purchases of US Government Bonds

China is denying a published report that it may slow or even stop purchasing U.S. Treasury bonds.

Sources told U.S.-based financial news outlet Bloomberg Wednesday that senior government officials recommended the action as the market for U.S. government bonds is becoming less attractive, along with rising trade tensions with the United States. The Bloomberg report triggered a decline on bond markets and a selloff of the U.S. dollar during the day.

In a statement posted on its website Thursday, China’s State Administration of Foreign Exchange said the Bloomberg story was either misinformation or “fake news.” The agency says the country’s huge reserves of foreign currencies are professionally managed on the basis of market conditions and investment needs.

China has the world’s largest foreign-exchange reserves at $3.1 trillion.

The U.S. Treasury Department says China holds about $1.2 trillion in Treasuries, making it the largest foreign holder of U.S. government debt.

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South Korea: Move to Ban Cryptocurrency Trading Not Finalized

The South Korean government Thursday said it plans to ban cryptocurrency trading, sending bitcoin prices plummeting and throwing the virtual coin market into turmoil as the nation’s police and tax authorities raided local exchanges on alleged tax evasion.

But later Thursday, South Korea’s presidential office said the ban on the country’s virtual coin exchanges had not yet been finalized.

“Justice Minister Park’s comments related to shutdown of cryptocurrency exchanges is one of the measures prepared by the Ministry of Justice, but it’s not a measure that has been finalized,” a spokesman told reporters in a text message.

Earlier on Thursday, the minister, Park Sang-ki, said the government was preparing a bill to ban trading of the virtual currency on domestic exchanges.

“There are great concerns regarding virtual currencies, and justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges,” said Park at a press conference, according to the ministry’s press office.

The clampdown in South Korea, a crucial source of global demand for cryptocurrency, came as policymakers around the world struggled to regulate an asset whose value has skyrocketed over the last year.

​Cryptocurrency selloff

The government’s tough stance triggered a selloff of the cryptocurrency on both local and offshore exchanges.

The local price of bitcoin plunged as much as 21 percent in midday trade to 18.3 million won ($17,064.53) after the minister’s comments. It still trades around a 30 percent premium compared to other countries.

Bitcoin was down more than 10 percent on the Luxembourg-based Bitstamp at $13,199, after earlier dropping as low as $13,120, its weakest since Jan. 2.

South Korea’s cryptocurrency-related shares were also hammered. Vidente and Omnitel, which are stakeholders of Bithumb, skidded by the daily trading limit of 30 percent each.

Herd behavior a concern

Park Nok-sun, a cryptocurrency analyst at NH Investment & Securities, said the herd behavior in South Korea’s virtual coin market has raised concerns.

Indeed, bitcoin’s 1,500 percent surge last year has stoked huge demand for cryptocurency in South Korea, drawing college students to housewives and sparking worries of a gambling addiction.

“Virtual coins trade at a hefty premium in South Korea, and that is herd behavior showing how strong demand is here,” Park said. “Some officials are pushing for stronger and stronger regulations because they only see more (investors) jumping in, not out.”

Police raids

There are more than a dozen cryptocurrency exchanges in South Korea, according to Korea Blockchain Industry Association.

The proliferation of the virtual currency and the accompanying trading frenzy have raised eyebrows among regulators globally, though many central banks have refrained from supervising cryptocurrencies themselves.

The news on South Korea’s proposed ban came as authorities tightened their grip on some of the cryptocurrency exchanges.

The nation’s largest cryptocurrency exchanges like Coinone and Bithumb were raided by police and tax agencies this week for alleged tax evasion. The raids follow moves by the finance ministry to identify ways to tax the market that has become as big as the nation’s small-cap Kosdaq index in terms of daily trading volume.

Cashing out

Some investors appeared to have taken preemptive action.

“I have already cashed most of mine (virtual coins) as I was aware that something was coming up in a couple of days,” said Eoh Kyung-hoon, a 23-year old investor.

Bitcoin sank on Monday after website CoinMarketCap removed prices from South Korean exchanges, because coins were trading at a premium of about 30 percent in Asia’s fourth largest economy. That created confusion and triggered a broad selloff among investors.

An official at Coinone told Reuters that a few officials from the National Tax Service raided the company’s office this week.

“Local police also have been investigating our company since last year, they think what we do is gambling,” the official, who spoke on condition of anonymity, said and added that Coinone was cooperating with the investigation.

Bithumb, the second largest virtual currency operator in South Korea, was also raided by the tax authorities on Wednesday.

“We were asked by the tax officials to disclose paperwork and things yesterday,” an official at Bithumb said, requesting anonymity due to the sensitivity of the issue.

The nation’s tax office and police declined to confirm whether they raided the local exchanges.

South Korean financial authorities had previously said they are inspecting six local banks that offer virtual currency accounts to institutions, amid concerns the increasing use of such assets could lead to a surge in crime.

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Disregarding Geography, Britain Hopes to Join Pacific Trade Deal

Britain is making known its hopes to one day join the Trans-Pacific Partnership or TPP, a free trade agreement currently being negotiated by eleven countries bordering the Pacific and the South China Sea.

The British government hopes trade with fast-growing economies will make up for losses that may occur after it leaves the European Union as scheduled in 2019.

On a recent trip to China, Britain Trade Minister Liam Fox tentatively suggested his country could one day join the TPP.

“We don’t know what the success of the TPP is going to yet look like, because it isn’t yet negotiated. So, it would be a little bit premature for us to be wanting to sign up to something that we’re not sure what the final details will look like. However, we have said that we want to be an open, outward-looking country, and therefore it would be foolish for us to rule out any particular outcomes for the future,” Fox told reporters during the trip last week.

London sits some 7,000 kilometers from any Pacific coastline. So, does geography no longer matter in 21st century trade? Not so, said Jonathan Portes, an economist and professor at Kings College London.

“There has been an argument put forward that particularly as trade in services expands, and as a result of technology, it will matter considerably less in the future, and that seems to make a lot of sense. However, unfortunately, so far at least, the actual data and evidence don’t really support this contention. For whatever reason, geography at the moment seems to matter as much as it ever did,” he said.

By leaving the European Union’s Single Market and Customs Union on its doorstep, Britain will abandon a free trade agreement that accounts for about half of its global trade. In contrast, all eleven countries currently negotiating the TPP combined accounted for less than 8 percent of British goods exported last year.

Portes said it will take decades for other trade deals to make up ground.

“Our companies are in many cases very closely integrated with the European Union, meaning that there will be substantial disruption as a result of the likely implications of Brexit.”

The countries negotiating the TPP include Chile, Australia, Brunei, Canada, Japan, Mexico, New Zealand, Malaysia, Peru, Singapore and Vietnam.

During his tenure, U.S. President Barack Obama was a driving force behind TPP, but his successor, Donald Trump, pulled the United States out of the deal, claiming it would be bad for America. Negotiations between the eleven remaining countries are progressing slowly.

“The TPP, already as a consequence of the U.S. withdrawal, has its own internal problems. And they’re going to have to work out how to get that back on track,” said Portes.

But Britain’s interest in the TPP has been welcomed by some of the parties involved, particularly Australia.

Meanwhile, British Prime Minister Theresa May is expected to visit Asia later this year in an attempt to boost ties ahead of Brexit.

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Trump Administration Bars Oil Drilling Off Florida

Interior Secretary Ryan Zinke has caved in to pressure from the governor and is banning oil and gas drilling off the Florida coast.

“I support the governor’s position that Florida is unique and its coasts are heavily reliant on tourism as an economic driver,” Zinke said in a statement late Tuesday.

He outright admitted that Florida’s Republican Governor Rick Scott pressured him to put the state’s waters off limits.

Last week, the Trump administration proposed opening nearly all U.S. offshore waters to oil and gas drilling, reversing former Obama administration policies.

The White House has said it wants to make the U.S. more energy independent.

But environmental groups and Republican and Democratic governors from coastal states loudly object. They say oil and gas drilling puts marine life, beaches, and lucrative tourism at risk.

The Pentagon has also expressed misgivings about drilling in the eastern Gulf of Mexico, where naval exercises are held.

The 2010 BP Deepwater Horizon oil spill in the Gulf was the largest such disaster in U.S. history, causing billions of dollars in damage to the Gulf Coast, from Louisiana to Florida, killing more than 100,000 different marine mammals, birds, and reptiles.

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Poverty for Syrian Refugees in Lebanon Could Push Children to Marry and Work

Nearly seven years into Syria’s civil war, Syrian refugees in neighboring Lebanon are becoming poorer, leaving children at risk of child labor and early marriage, aid organizations said on Tuesday.

A recent survey by the United Nations children’s agency UNICEF, U.N.’s World Food Program, and refugee agency, UNHCR showed that Syrian refugees in Lebanon are more vulnerable now than they have been since the beginning of the crisis.

Struggling to survive, more than three quarters of the refugees in Lebanon now live on less than $4 per day, according to the survey which was based on data collected last year.

“The situation for Syrian refugees in Lebanon is actually getting worse – they are getting poorer. They are barely staying afloat,” Scott Craig, UNHCR spokesman in Lebanon, told the Thomson Reuters Foundation.

Around 1.5 million refugees who fled Syria’s violence account for a quarter of Lebanon’s population.

The Lebanese government has long avoided setting up official refugee camps. So, many Syrians live in tented settlements, languishing in poverty and facing restrictions on legal residence or work.

“Child labor and early marriage are direct consequences of poverty,” Tanya Chapuisat, UNICEF spokeswoman in Lebanon said in a statement to the Thomson Reuters Foundation.

“We fear this (poverty) will lead to more children being married away or becoming breadwinners instead of attending school,” she said.

According to UNICEF, 5 percent of Syrian refugee children between 5-17 are working, and one in five Syrian girls and women aged between 15 and 25 is married.

Mike Bruce, a spokesman for the Norwegian Refugee Council, said without sufficient humanitarian aid and proper work Syrian families would increasingly fall into debt and more could turn to “negative coping mechanisms” like child labor and marriage.

Cold winter temperatures in Lebanon would also hurt refugees, he said.

“Refugees are less and less able to deal with each shock that they face and severe weather could be one of those shocks,” said Bruce.

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Oil Prices Rise to Three-Year High

Oil prices surged to a three-year high Tuesday on rising expectations that OPEC member countries will comply with oil production cuts to the end of 2018.

Brent Crude prices are headed toward $70 a barrel, West Texas Crude settled at $62.96 bbl, the highest since December 2014. But other factors could derail OPEC member agreement on production quotas, including continued expansion of U.S. shale production and the likelihood of stronger global demand. 

Analysts say rapid changes in supply and demand could trigger an early exit or prompt member countries to cheat on production quotas, especially when prices start to rise.

Meanwhile, the United States is increasingly less dependent on foreign oil, thanks in part to the shale boom and the influx of cheap natural gas. U.S. Energy Information Administration forecasts U.S. crude oil production will climb to more than 10 million barrels per day by the first quarter of 2018, exceeding 11 million bpd in 2019.  

The American Petroleum Institute, the U.S. trade group that represents the oil and natural gas industry, boasted Tuesday about helping to create “U.S. energy abundance” but said the industry was focused on minimizing the harmful effects of greenhouse gases associated with fossil fuels.

In his 2018 State of American Energy address, API president and CEO Jack Girard said it was time to move beyond the debate over climate change.

“I think we’re at the point where we need to get over the conversation of who believes and who doesn’t, and move to a conversation about solutions,” he said.

The U.S. is now the world’s biggest natural gas producer. Despite a 30 percent increase in domestic natural gas production since 2008, Girard says CO2 emissions in the U.S. are near 25-year lows, and key air pollutants have declined 73 percent since 1970.

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Mexico Records 6.77 Percent Inflation Rate in 2017, a 17-year High

Mexico recorded 6.77 percent annual inflation in 2017, the country said Tuesday, more than double its 3 percent target and a 17-year high. 

The government’s National Institute of Statistics and Geography published the widely expected figure, also saying that consumer prices rose 0.59 percent in December. 

“The inflation rebound is the direct consequence of unleashed lagged prices and the expansionary effects of prolonged fiscal and monetary policies in the previous few years,” said Alfredo Coutino, Latin America director at Moody’s Analytics. 

He added in a report that inflation was “not out of control” in Mexico but nevertheless “imposes a serious challenge to monetary policymaking for the year.” 

Coutino predicted that consumer price increases would “adjust down” in 2018, a presidential election year, largely because of the high base of comparison established in 2017. 

“In a political-electoral year, if monetary liquidity is not restricted to levels consistent with the economy’s limited performance or if the peso depreciates more significantly, then inflation will stay well above target for a more prolonged time,” he wrote. 

Mexico’s central bank raised its benchmark interest rate five times last year to try to rein in inflation, most recently on December 14 by a quarter-point to bring the rate to 7.25 percent.