Tag Archives: United States

China to build on disputed shoal in South China Sea

Boats at Scarborough Shoal in the South China Sea are shown in this handout photo provided by Planet Labs, and captured on March 12, 2016. REUTERS/Planet Labs/Handout via Reuters

BEIJING (Reuters) – China will begin preparatory work this year for an environmental monitoring station on Scarborough Shoal in the South China Sea, an official said, as two U.S. senators introduced a bill to impose sanctions on its activities in the disputed waterway.

Last month, a Philippine minister said Chinese President Xi Jinping had promised his Philippine counterpart China would not build structures on the rocky outcrop both countries claim, but China called the comments “baffling and regrettable”.

China seized the shoal, which is northeast of the Spratly islands, in 2012 and denied access to Philippine fishermen. But after President Rodrigo Duterte visited China last year, it allowed them to return to the traditional fishing area.

This week, Xiao Jie, the mayor of what China calls Sansha City, said China planned to begin preparatory work this year to build environmental monitoring stations on a number of islands, including Scarborough Shoal.

Sansha City is the name China has given to an administrative base for the South China Sea islands and reefs it controls.

The monitoring stations, along with docks and other infrastructure, form part of island restoration and erosion prevention efforts planned for 2017, Xiao told the official Hainan Daily in an interview.

A spokesman for the Philippine foreign ministry, Charles Jose, declined to comment, saying it was trying to verify the reports.

U.S. Secretary of State Rex Tillerson arrives in Beijing on Saturday for a two-day visit, where the South China Sea, almost all of which is claimed by China, is likely to figure.

Brunei, Malaysia, the Philippines, Taiwan and Vietnam also claim parts of the waters, which have rich fishing grounds, along with oil and gas deposits. About $5 trillion worth of trade passes through the waterway each year.

The United States has criticized China’s construction of manmade islands and its build-up of military facilities there, expressing concern they could be used to restrict free movement.

This week, U.S. Senators Marco Rubio and Ben Cardin introduced the South China Sea and East China Sea Sanctions Act that would ban visas for Chinese people contributing to building development projects in the South and East China Seas.

It would also put sanctions on foreign financial bodies that “knowingly conduct or facilitate a significant financial transaction for sanctioned individuals and entities” if China steps up activity at Scarborough Shoal, among other actions.

The senators’ proposal was “extremely grating,” Chinese Foreign Ministry spokeswoman Hua Chunying said on Friday.

“I think the proposal put forward by individual senators shows their arrogance and ignorance,” Hua told a daily news briefing in Beijing.

China resolutely opposes the proposal, which infringes international law and international relations norms, she added.

Tension over the South China Sea reached a flashpoint after the Philippines filed an arbitration case against China in the Hague and as China started militarizing artificial islands it built up on reefs in the region.

China is also involved in a separate dispute with Japan over a group of uninhabited islands in the East China Sea.

(Reporting by Ben Blanchard and Christian Shepherd; Additional reporting by Manuel Mogato in MANILA; Editing by Clarence Fernandez)

Trump vows to appeal against travel ban ruling to Supreme Court

U.S. President Donald Trump delivers remarks at the American Center for Mobility for American Manufactured Vehicles in Ypsilanti Township, Michigan, U.S. March 15, 2017. REUTERS/Jonathan Ernst

By Dan Levine and Mica Rosenberg

HONOLULU/NEW YORK (Reuters) – A defiant Donald Trump has pledged to appeal against a federal judge’s order placing an immediate halt on his revised travel ban, describing the ruling as judicial overreach that made the United States look weak.

In granting the temporary restraining order in response to a lawsuit by the state of Hawaii, U.S. District Judge Derrick Watson found on Wednesday that “a reasonable, objective observer … would conclude that the executive order was issued with a purpose to disfavor a particular religion.”

Early on Thursday, U.S. District Judge Theodore Chuang issued a nationwide preliminary injunction in a similar case in Maryland brought by refugee resettlement agencies represented by the American Civil Liberties Union and the National Immigration Law Center.

Chuang ruled that the agencies were likely to succeed in proving that the travel ban portion of the executive order was intended to be a ban on Muslims and, as a result, violates the U.S. Constitution’s religious freedom protection.

“To avoid sowing seeds of division in our nation, upholding this fundamental constitutional principle at the core of our nation’s identity plainly serves a significant public interest,” Chuang wrote in his ruling.

The actions were the latest legal blow to the administration’s efforts to temporarily ban refugees as well as travelers from six predominantly Muslim countries. The president has said the ban is needed for national security.

However, the orders, while a victory for the plaintiffs, are only a first step and the government could ultimately win its underlying case. Watson and Chuang were appointed to the bench by former Democratic President Barack Obama.

Trump, speaking after the Hawaii ruling at a rally in Nashville, called his revised executive order a “watered-down version” of his first.

The president said he would take the case “as far as it needs to go,” including to the Supreme Court, in order to get a ruling that the ban is legal.

The likely next stop if the administration decides to contest the Hawaii judge’s ruling would be the United States Court of Appeals for the Ninth Circuit.

Three judges on the Ninth Circuit upheld a restraining order on the first travel ban issued by a Washington state judge.

At that point, the government’s legal options were to ask for a hearing by a larger panel of judges or petition the Supreme Court to hear the case. Instead, the administration withdrew the ban, promising to retool it in ways that would address the legal issues.

If the Ninth Circuit were to uphold the Hawaii court’s ruling, an appeal to the Supreme Court would be complicated by its current makeup of four conservative and four liberal judges, with no ninth justice since the death of Antonin Scalia more than a year ago.

The travel ban has deeply divided the country on liberal and conservative lines, and it is unlikely that a ninth Supreme Court justice would be seated in time to hear an appeal in this case.

Trump signed the new ban on March 6 in a bid to overcome legal problems with his January executive order, which caused chaos at airports and sparked mass protests before a Washington judge stopped its enforcement in February.

Watson’s order is only temporary until the broader arguments in the case can be heard. He set an expedited hearing schedule to determine if his ruling should be extended.

Trump’s first travel order was more sweeping than the second revised order. Like the current one, it barred citizens of Iran, Libya, Syria, Somalia, Sudan and Yemen from entering the United States for 90 days, but it also included Iraq, which was subsequently taken off the list.

The revised ban also excluded legal permanent residents and existing visa holders and provided waivers for various categories of immigrants with ties to the United States.

Hawaii and other opponents of the ban claimed that the motivation behind it was Trump’s campaign promise of “a total and complete shutdown of Muslims entering the United States.”

In Washington state, a group of plaintiffs applying for immigrant visas asked U.S. District Judge James Robart in Seattle – who suspended the first ban – to stop the new order. Robart was appointed to the bench by Republican former President George W. Bush.

Judge Robart said he would issue a written ruling, but did not specify a time line.

(Reporting by Dan Levine in Honolulu, Mica Rosenberg in New York and Brendan O’Brien in Milwaukee; Writing by Dan Whitcomb in Los Angeles; Editing by Toby Chopra)

North Korea says Malaysia ‘incident’ political scheme by U.S., South Korea

North Korean diplomat Pak Myong Ho attends a news conference in Beijing, China, March 16, 2017. REUTERS/Jason Lee

BEIJING (Reuters) – The recent “incident” that occurred in Malaysia was a political scheme by the United States and South Korea that will only benefit enemy countries, a North Korean diplomat based in the Chinese capital said on Thursday.

The estranged half-brother of North Korean leader Kim Jong Un was murdered on Feb. 13, when Malaysian police say two women – an Indonesian and a Vietnamese – smeared super toxic VX nerve agent on his face at Kuala Lumpur International Airport.

“The recent incident that occurred in Malaysia was clearly a political scheme by the U.S. and South Korea aimed at hurting the DPRK’s reputation and overthrowing the DPRK regime,” diplomat Pak Myong Ho told a news conference, using the country’s formal name, the Democratic People’s Republic of Korea.

“The only parties that will benefit from this incident are the enemy countries.”

(Reporting by Christian Shepherd; Writing by Ben Blanchard and Christine Kim; Editing by Clarence Fernandez)

Late-season snowstorm weakens in the Northeast

Residents clear their cars and street of snow in Weehawken, New Jersey, as the One World Trade Center and lower Manhattan are seen after a snowstorm in New York, U.S. March 14, 2017. REUTERS/Eduardo Munoz

(Reuters) – A late-season snowstorm that swept the mid-Atlantic and northeastern United States began to weaken on Wednesday after killing six people, grounding thousands of flights and closing schools.

Still, millions of people on the East Coast faced temperatures 10 to 25 degrees below average, wind gusts of 30 mph (50 kph) and slick roads and sidewalks as they returned to work and classes on Wednesday.

“Residual snow and slush will refreeze early this morning, resulting in hazardous conditions,” the National Weather Service said in an advisory, urging those who ventured out early to use extra caution.

The rare mid-March “nor’easter” was tapering off over upstate New York and northern New England after dumping as much as a foot (30 cm) of snow with gale-force winds throughout the region on Tuesday, the weather service said.

As life returns to normal for many, students in Boston Public Schools will have the day off while the city and surrounding area continue to dig out from heavy snowfall.

Amtrak said its trains would operate on a modified schedule between New York City and Boston and between New York City and Albany on Wednesday.

On Tuesday, snow fell from the lower Great Lakes and central Appalachians to the Eastern Seaboard and as far south as North Carolina.

Some cities, such as Washington, D.C., and New York, got just a few inches of snow, far less than the anticipated amounts that forced public officials to close schools, stop commuter trains and warn people to stay indoors on Tuesday.

Governors in New York, New Jersey, Pennsylvania and Virginia declared states of emergency before the storm.

“Mother Nature is an unpredictable lady sometimes,” New York Governor Andrew Cuomo told a news conference on Tuesday. “She was unpredictable today.” More than 6,000 commercial airline flights across the United States were canceled for the day, said tracking service FlightAware.com. Utility companies said more than 220,000 homes and businesses were without power at the storm’s peak.

Six weather-related fatalities included the death of a 16-year-old girl in a single-car crash in Gilford, New Hampshire, according to the city police department.

A snowplow driver was killed in Longmeadow, Massachusetts, local police said, and four older people died clearing snow in Milwaukee County, Wisconsin, the local medical examiner said.

The storm capped an unusually mild winter, with otherwise below-normal snowfall on much of the Atlantic coast.

(Reporting by Brendan O’Brien in Milwaukee and Barbara Goldberg in New York; Editing by Lisa Von Ahn)

Courts to hear arguments challenging Trump’s new travel ban

FILE PHOTO: U.S. President Donald Trump attends a meeting with U.S. House Deputy Whip team at the East room of the White House in Washington, U.S. March 7, 2017. REUTERS/Carlos Barria/File Photo

By Mica Rosenberg

(Reuters) – Court hearings in Hawaii and Maryland on Wednesday could decide the immediate fate of President Donald Trump’s revised travel ban, which is set to take effect at 12:01 a.m. EDT (0401 GMT) on Thursday.

The courts have been asked in lawsuits challenging the ban to issue restraining orders that would prevent it from taking effect pending resolution of the litigation.

The new order, which temporarily bars the entry of most refugees as well as travelers from six Muslim-majority countries, was signed by the president on March 6, with a 10-day lag before it took effect.

It replaced an earlier, broader order that was signed amid much fanfare a week after Trump’s Jan. 20 inauguration. The first order temporarily banned travelers from seven countries in addition to most refugees and took effect immediately, causing chaos and protests at airports across the country and around the globe.

States and civil rights groups filed more than two dozen lawsuits against the first order, arguing it discriminated against Muslims and violated the U.S. Constitution.

In response to a lawsuit by Washington state, a federal judge in Seattle last month issued a nationwide halt to the first order. That decision was upheld by a U.S. appeals court.

The Trump administration made changes in an attempt to address the judges’ concerns. But the states and civil rights groups went back to court arguing the new ban did not solve the problems and should be stopped.

‘WHO WOULD BE HARMED?’

One central question likely to be raised at the hearings is who would be harmed by the new ban. The administration in its new order explicitly exempts legal permanent residents and existing visa holders and provides a series of waivers for various categories of immigrants with ties to the United States.

While the new order still bars citizens of Iran, Libya, Syria, Somalia, Sudan and Yemen from entering the country for 90 days, Iraq is no longer on the list. Refugees are still barred for 120 days, but an indefinite ban on all refugees from Syria was deleted.

To succeed, the plaintiffs must show they have “standing” to challenge the ban, which means they must have been harmed by the policy.

If they get past that hurdle, the plaintiffs will argue that both the new ban and the old discriminate on the basis of religion and are unconstitutional.

The Trump administration disputes that allegation, citing as evidence that many Muslim-majority countries are not included in the ban.

In the Hawaii case, the island state says its universities and tourist economy would be harmed by the restrictions on travel.

Hawaii also sued in conjunction with a plaintiff named Ismail Elshikh, an American citizen from Egypt who is an imam at the Muslim Association of Hawaii. Elshikh says his family will be harmed if his mother-in-law, who lives in Syria, is prevented from visiting because of the restrictions.

The government in its response to Hawaii said Elshikh had not been harmed because the ban allows for waivers, and his mother-in-law could apply for one.

In the Maryland case, the American Civil Liberties Union is representing refugee resettlement agencies it says will be hurt by the ban because it affects their operations. The ACLU adds that some of the agencies’ clients are in conflict zones and face imminent danger even if they are only temporarily barred from the United States.

“All of those exemptions and waivers were an effort to shore up this discriminatory order after the fact,” said Cecillia Wang, ACLU deputy legal director told reporters on a conference call with reporters.

(Reporting by Mica Rosenberg in New York and Dan Levine in Honolulu; Additional reporting by Ian Simpson in Greenbelt, Md.; Editing by Sue Horton and Peter Cooney)

U.S. retail sales weakest in six months; inflation firming

Shoppers ride escalators at the Beverly Center mall in Los Angeles, California November 8, 2013. REUTERS/David McNew

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. retail sales recorded their smallest increase in six months in February as households cut back on motor vehicle purchases and discretionary spending, the latest indication that the economy lost further momentum in the first quarter.

Other data on Wednesday showed a steady increase in inflation, with the consumer price index posting its biggest year-on-year increase in nearly five years in February. Firming inflation could allow the Federal Reserve to raise interest rates on Wednesday despite signs of slowing domestic demand.

“Nothing here to suggest the Fed shouldn’t raise interest rates at the policy meeting that concludes later today,” said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.

The Commerce Department said retail sales edged up 0.1 percent last month, the weakest reading since August. January’s retail sales were revised up to show a 0.6 percent rise instead of the previously reported 0.4 percent advance.

Sales were likely held back by delays in issuing tax refunds this year as part of efforts by the government to combat fraud. Compared to February last year retail sales were up 5.7 percent.

February’s retail sales gain was in line with economists’ expectations. Excluding automobiles, gasoline, building materials and food services, retail sales rose 0.1 percent after an upwardly revised 0.8 percent jump in January.

These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have increased 0.4 percent in January.

In a separate report, the Labor Department said its Consumer Price Index ticked up 0.1 percent last month as a drop in gasoline prices offset increases in the cost of food and rental accommodation. That was the weakest reading in the CPI since July and followed a 0.6 percent jump in January.

In the 12 months through February, the CPI accelerated 2.7 percent, the biggest year-on-year gain since March 2012. The CPI rose 2.5 percent in the year to January. Inflation is firming in part as the 2015 drop, which was driven by lower oil prices, fades from the calculation.

The so-called core CPI, which strips out food and energy

costs, increased 0.2 percent last month as new motor vehicle prices fell and apparel prices moderated after spiking in January. The core CPI increased 0.3 percent in January.

In the 12 months through February, the core CPI increased

2.2 percent after advancing 2.3 percent in January. It was the 15th straight month the year-on-year core CPI remained in the 2.1 percent to 2.3 percent range.

The Fed has a 2 percent inflation target and tracks an inflation measure which is currently at 1.7 percent.

ECONOMY SLOWING

The U.S. central bank is expected to raise its overnight benchmark interest rate by 25 basis points to a range of 0.75 percent to 1.00 percent on Wednesday. It increased borrowing costs last December and has forecast three rate hikes in 2017.

U.S. financial markets were little moved by the data as traders awaited the outcome of the Fed’s meeting. The Fed will announce its decision on interest rates at 2 p.m. (1800 GMT)

February’s retail sales added to January’s weak reports on trade, construction and business spending that have pointed to sluggish economic growth in the first quarter.

The Atlanta Fed is forecasting GDP rising at a 1.2 percent annualized rate in the first quarter. With the labor market near full employment, slowing growth probably understates the health of the economy. In addition, GDP growth tends to be weaker in the first quarter because of calculation issues that the government has acknowledged and is working to resolve.

Tightening labor market conditions, which are steadily lifting wages, continue to underpin consumer spending.

In February, motor vehicle sales fell 0.2 percent after declining 1.3 percent the prior month. Receipts at service stations slipped 0.6 percent, reflecting lower gasoline prices.

Sales at electronics and appliances stores fell 2.8 percent, the biggest decline since December 2011, after climbing 1.1 percent in January. Receipts at building material stores increased 1.8 percent.

Sales at clothing stores fell 0.5 percent. Retailers including J.C. Penney Co Inc <JCP.N>, Abercrombie & Fitch <ANF.N> and Macy’s Inc <M.N> are scaling back on brick-and-mortar operations amid increased competition from online retailers, led by Amazon.com <AMZN.O>.

Sales at online retailers jumped 1.2 percent last month after increasing 0.5 percent in January. Receipts at restaurants and bars dipped 0.1 percent, while sales at sporting goods and hobby stores fell 0.4 percent.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Several states jointly sue to block Trump’s revised travel ban

DAY 46 / MARCH 6: President Donald Trump signed a revised executive order banning citizens from six Muslim-majority nations from traveling to the United States but removing Iraq from the list, after his controversial first attempt was blocked in the courts.

By Mica Rosenberg

(Reuters) – A group of states renewed their effort on Monday to block President Donald Trump’s revised temporary ban on refugees and travelers from several Muslim-majority countries, arguing that his executive order is the same as the first one that was halted by federal courts.

Court papers filed by the state of Washington and joined by California, Maryland, Massachusetts, New York and Oregon asked a judge to stop the March 6 order from taking effect on Thursday.

An amended complaint said the order was similar to the original Jan. 27 directive because it “will cause severe and immediate harms to the States, including our residents, our colleges and universities, our healthcare providers, and our businesses.”

A Department of Justice spokeswoman said it was reviewing the complaint and would respond to the court.

A more sweeping ban implemented hastily in January caused chaos and protests at airports. The March order by contrast gave 10 days’ notice to travelers and immigration officials.

Last month, U.S. District Judge James Robart in Seattle halted the first travel ban after Washington state sued, claiming the order was discriminatory and violated the U.S. Constitution. Robart’s order was upheld by the 9th U.S. Circuit Court of Appeals.

Trump revised his order to overcome some of the legal hurdles by including exemptions for legal permanent residents and existing visa holders and taking Iraq off the list of countries covered. The new order still halts citizens of Iran, Libya, Syria, Somalia, Sudan and Yemen from entering the United States for 90 days but has explicit waivers for various categories of immigrants with ties to the country.

Refugees are still barred for 120 days, but the new order removed an indefinite ban on all refugees from Syria.

Washington state has now gone back to Robart to ask him to apply his emergency halt to the new ban.

Robart said in a court order Monday that the government has until Tuesday to respond to the states’ motions. He said he would not hold a hearing before Wednesday and did not commit to a specific date to hear arguments from both sides.

PROVING HARM

Separately, Hawaii has also sued over the new ban. The island state, which is heavily dependent on tourism, said the executive order has had a “chilling effect” on travel revenues.

In response to Hawaii’s lawsuit, the Department of Justice in court papers filed on Monday said the president has broad authority to “restrict or suspend entry of any class of aliens when in the national interest.” The department said the temporary suspensions will allow a review of the current screening process in an effort to protect against terrorist attacks.

There is a hearing in the Hawaii case set for Wednesday, the day before the new ban is set to go into effect.

The first hurdle for the lawsuits will be proving “standing,” which means finding someone who has been harmed by the policy. With so many exemptions, legal experts have said it might be hard to find individuals who would have a right to sue, in the eyes of a court.

To overcome this challenge, the states filed more than 70 declarations of people affected by the order including tech businesses Amazon and Expedia, which said that restricting travel hurts their revenues and their ability to recruit employees.

Universities and medical centers that rely on foreign doctors also weighed in, as did religious organizations and individual residents, including U.S. citizens, with stories about separated families.

But the Trump administration in its filings in the Hawaii case on Monday said the carve-outs in the new order undercut the state’s standing claims.

“The Order applies only to individuals outside the country who do not have a current visa, and even as to them, it sets forth robust waiver provisions,” the Department of Justice’s motion said.

The government cited Supreme Court precedent in arguing that people outside the United States and seeking admission for the first time have “no constitutional rights” regarding their applications.

If the courts do end up ruling the states have standing to sue, the next step will be to argue that both versions of the executive order discriminate against Muslims.

“The Trump Administration may have changed the text of the now-discredited Muslim travel ban, but they didn’t change its unconstitutional intent and effect,” California Attorney General Xavier Becerra said in a statement on Monday.

While the text of the order does not mention Islam, the states claim that the motivation behind the policy is Trump’s campaign promise of “a total and complete shutdown of Muslims entering the United States.” He later toned down that language and said he would implement a policy of “extreme vetting” of foreigners coming to the United States.

The government said the courts should only look at the text of the order and not at outside comments by Trump or his aides.

(Reporting by Mica Rosenberg in New York; Editing by Jonathan Oatis and Grant McCool)

U.S. carrier joins South Korea drills, North Korea warns of ‘merciless’ strikes

A U.S. F18 fighter jet lands on the deck of U.S. aircraft carrier USS Carl Vinson during an annual joint military exercise called "Foal Eagle" between South Korea and U.S., in the East Sea, South Korea, March 14, 2017. REUTERS/Kim Hong-Ji

By Hongji Kim and Sang-gyu Lim

ABOARD THE USS CARL VINSON (Reuters) – As the USS Carl Vinson plowed through seas off South Korea on Tuesday, rival North Korea warned the United States of “merciless” attacks if the carrier infringes on its sovereignty or dignity during U.S.-South Korean drills.

F-18 fighter jets took off from the flight deck of the nuclear-powered carrier in a dramatic display of U.S. firepower amid rising tension with the North, which has alarmed its neighbors with two nuclear tests and a series of missile launches since last year.

“While this is a routine deployment for the Carl Vinson strike group, really the centerpiece for us … is this exercise we’re doing with the ROK navy called ‘Foal Eagle’,” Rear Admiral James W. Kilby, commander of the Carrier Strike Group 1, told reporters, referring to South Korea as the Republic of Korea.

North Korea said the arrival of the U.S. strike group in the seas off the east of the Korean peninsula was part of a “reckless scheme” to attack it.

“If they infringe on the DPRK’s sovereignty and dignity even a bit, its army will launch merciless ultra-precision strikes from ground, air, sea and underwater,” the North’s state news agency KCNA said.

North Korea’s official name is the Democratic People’s Republic of Korea.

“On March 11 alone, many enemy carrier-based aircraft flew along a course near territorial air and waters of the DPRK to stage drills of dropping bombs and making surprise attacks on the ground targets of its army,” KCNA said.

Last week, North Korea fired four ballistic missiles into the sea off Japan in response to annual U.S.-South Korea military drills, which the North sees as preparation for war.

The murder in Malaysia last month of North Korean leader Kim Jong Un’s estranged half-brother has added to a sense of urgency to efforts to handle North Korea.

U.S. Secretary of State Rex Tillerson is due to make his first visit to South Korea on Friday.

Last week, the U.S. ambassador to the United Nations said President Donald Trump’s administration was re-evaluating its North Korea strategy and “all options are on the table”.

CHINESE OPPOSITION

Compounding regional tension, China is vehemently opposed to the deployment in South Korea of an advanced U.S. anti-missile system.

The United States and South Korea say the Terminal High Altitude Area Defense anti-missile system is for defense against North Korea, but China fears its powerful radar can probe deep into its territory and compromise its security.

The United States began to deploy the system a week ago, a day after North Korea launched its latest four missile tests.

South Korean and U.S. troops began the large-scale joint drills, which are billed as defensive in nature, on March 1.

The exercise last year involved about 17,000 American troops and more than 300,000 South Koreans. South Korea has said this year’s exercise would be of a similar scale.

The United States has also started to deploy “Gray Eagle” attack drones to South Korea, a U.S. military spokesman said on Monday.

China says the exercises do nothing to ease tension.

Last week, it called on North Korea to stop its weapons tests and for South Korea and the United States to stop their drills.

“We hope the relevant side can respect the security concerns of countries in the region, can take a responsible attitude and do more to benefit the easing of tension, rather than irritating each other,” Chinese foreign ministry spokeswoman Hua Chunying told a daily news briefing, referring to the United States.

(Additional reporting by Hyunyoung Yi, Ben Blanchrd in BEIJING; Writing by James Pearson; Editing by Robert Birsel and Clarence Fernandez)

Oil touches three-month lows as U.S. supply swells

FILE PHOTO: An oil pump jack pumps oil in a field near Calgary, Alberta, Canada

By Jessica Resnick-Ault

NEW YORK (Reuters) – Oil hovered around three-month lows on Monday, as rising inventories and drilling activity in the United States, the world’s top energy consumer, offset optimism over OPEC’s efforts to restrict crude output and reduce a global glut.

After more than two months of reduced production from the Organization of the Petroleum Exporting Countries, the market is facing evidence that U.S. production remains high and global markets remain oversupplied.

“There is growing skepticism that the production cut has been enacted long enough to take care of the overhang,” said Gene McGillian, director of market research at Tradition Energy. “The longs who piled in last year are turning on the market because there seems to be a realization that a six-month agreement isn’t long enough to rebalance the market.

Brent crude futures fell 7 cents to $51.30 a barrel by 11:33 a.m. Eastern (1633 GMT), having earlier hit a session low of $50.85, its lowest level since Nov. 30.

U.S. West Texas Intermediate crude (WTI)  fell 20 cents to $48.29 a barrel, a 0.4 percent loss.

Prices have fallen by more than 8 percent since last Monday, its biggest week-on-week drop in four months, and analysts said the slide may not have much further to run.

Goldman Sachs said in a note it remained “very confident” about commodity prices and maintained its price forecast of $57.50 for WTI in the second quarter.

The slide could be the result of traders unwinding bullish long positions, and could slow as those positions are unwound, Tradition Energy’s McGillian said.

U.S. drillers added oil rigs for an eighth consecutive week, Baker Hughes data showed on Friday, and they have announced ambitious production growth plans as they rebound from a two-year price war with OPEC. [RIG/U]

OPEC and other major oil producers, including Russia, reached an agreement at the end of November to rein in production by almost 1.8 million barrels per day (bpd) in the first half of 2017.

Russia’s top oil major Rosneft warned that a recovery in U.S. oil output may deter OPEC and non-OPEC producers from extending production cuts beyond June and might lead to a new price war.

Although OPEC states have been complying with supply curbs, led by Saudi Arabia, it has not been enough to overshadow a rise in U.S. inventories to a new high. [EIA/S]

“It will be interesting to see how OPEC rhetoric will evolve with this price correction. Is price the only consideration when it comes to the decision of extending cuts?” BNP Paribas global head of commodity strategy Harry Tchilinguirian told the Reuters Global Oil Forum.

He added that OPEC’s task was more difficult as it aimed to cut inventory levels rather than simply target a specific price.

Money managers cut their net long positions in U.S. crude futures and options in the week to March 7.

(Additional reporting by Jane Chung in Seoul, Keith Wallis in Singapore and Amanda Cooper in London; Editing by Marguerita Choy and Greg Mahlich)

Captains of German industry to accompany Merkel on Trump trip

Germany's Chancellor Angela Merkel briefs the media during a European Union leaders summit in Brussels, Belgium March 9, 2017.

By Georgina Prodhan

FRANKFURT (Reuters) – Bosses of German companies including engineering group Siemens and car maker BMW  will travel with Chancellor Angela Merkel to meet U.S. President Donald Trump this week, sources familiar with the matter told Reuters.

Faced with Trump’s “America First” policy and threats to impose tariffs on imported goods, the captains of industry will stress how many U.S. jobs are tied to “Deutschland AG”.

Trains-to-turbines group Siemens employs more than 50,000 people in the United States, its single biggest market, where it makes 21 percent of its total revenue, while BMW’s South Carolina plant is its largest factory anywhere in the world.

Trump will meet Merkel, Europe’s longest-serving leader, for the first time on Tuesday in Washington.

Merkel told business leaders in Munich on Monday that free trade was important for both countries, while a German government spokesman confirmed at a press conference that the two leaders would also meet with German business executives.

German chancellors have a long tradition of taking groups of business leaders along with them on trips to important countries. The other business leader accompanying Merkel will be the chief executive of ball-bearings maker Schaeffler.

The three chief executives will cross the Atlantic for a single scheduled meeting of less than an hour with Trump. They will brief the president on the German practice of training workers on the job while also sending them to classes at a vocational school to obtain formal qualifications.

Such training is traditionally offered by large German companies both at home and in their foreign operations, and is particularly prized in emerging economies, where it helps German corporations win business.

Sources of tension between Berlin and the new U.S. administration include an accusation by a senior Trump adviser that Germany profits unfairly from a weak euro, and Trump’s threat to impose 35 percent tariffs on imported vehicles.

The United States is Germany’s biggest trading partner, buying German goods and services worth 107 billion euros ($114 billion) last year while exporting just 58 billion euros’ worth in return.

“The accusations of President Donald Trump and his advisers are plucked out of thin air,” the president of Germany’s VDMA engineering industry association, Carl Martin Welcker, said in a statement on Monday.

He said 81,000 people were employed in German-owned engineering firms in the United States with almost 30 billion euros in total revenue, while German export successes were linked to the high quality of goods, not foreign-exchange effects.

As part of a bid to bring jobs to America, Trump has urged carmakers to build more cars in the United States and discouraged them from investing in Mexico, where German and other carmakers have big plants.

Trump’s order banning citizens of some majority-Muslim countries from entering the United States, and a threat to tear up the NAFTA free trade deal between the United States, Mexico and Canada, have also unnerved business leaders.

Siemens chief executive Joe Kaeser expressed concern last month about developments in the United States since Trump took office, saying: “The new American president has a style that’s different from what we’re accustomed to. It worries us, what we see.”

BMW’s Chief Executive Harald Krueger said last week that introducing protectionist measures and tariffs would not be good for the United States.

The carmaker is expanding its plant in Spartanburg, South Carolina, to have a capacity of 450,000 vehicles, with 70 percent for export.

It is also building a new plant in Mexico, where it plans to invest $2.2 billion by 2019. Mexico’s lower labor costs and unique free trade position mean it now accounts for a fifth of all vehicle production in North America.

“America profits from free trade. We are supporters of free trade and not of protectionism,” Krueger told reporters at the Geneva auto show.

(Additional reporting by Irene Preisinger in Munich, Erik Kirschbaum, Andreas Cremer and Andreas Rinke in Berlin, and Edward Taylor in Frankfurt; Editing by Catherine Evans and Susan Fenton)