London, Dec 18 (AP/UNB) — The British Cabinet is expected to discuss ramping up preparations for Britain's departure from the European Union without a deal.
The discussions Tuesday are expected to center on how 2 billion pounds ($2.5 billion) in government funding to absorb the potential economic chaos is to be allocated.
Communities Secretary James Brokenshire told the BBC on Tuesday that Prime Minister Theresa May's government has been taking the prospect of no deal seriously for some time, but that it was "right and proper" to prepare for a disorderly Brexit.
With Britain's departure from the bloc just over 100 days away, it remains unclear whether the country will leave with a deal or crash out with no deal — an outcome that risks touching off gridlock at ports and shortages of goods.
Singapore, Dec 18 (AP/UNB) — Asian stocks fell on Tuesday, tracking losses on Wall Street as traders braced for an interest rate hike by Federal Reserve.
KEEPING SCORE: Japan's Nikkei 225 index was 1.2 percent lower at 21,242.66 and the Kospi in South Korea dropped less than 0.1 percent to 2,070.54. Hong Kong's Hang Seng eased 0.3 percent to 26,022.16. The Shanghai Composite index dropped 0.6 percent to 2,583.51. Australia's S&P ASX 200 was down 0.9 percent at 5,609.00. Shares were lower in Taiwan and Southeast Asia.
WALL STREET: On Monday, broad selling knocked U.S. indexes to their lowest levels in over a year. Investors sold almost everything, from technology and retail stocks to steadier high-dividend companies. Less than 40 of the 500 stocks comprising the S&P 500 finished the day higher. The benchmark index gave up 2.1 percent to 2,545.94, its lowest level since Oct. 9, 2017. The Dow Jones Industrial Average skidded 2.1 percent to 23,592.98 and the Nasdaq composite was down 2.3 percent at 6,753.73. The Russell 2000 index of smaller company stocks lost 2.3 percent to 1,378.14.
FED MEETING: The Federal Open Market Committee begins a two-day meeting on Tuesday. It is expected to raise its short-term interest rate by a modest quarter-point, to a range of 2.25 percent to 2.5 percent a day later. The rate is used as a benchmark for many consumer and business loans. Investors fear more monetary tightening would weigh on U.S. growth, and eventually, the global economy, that is already expected to slow in 2019 because of trade tensions. President Donald Trump tweeted that it was "incredible" the Fed was considering another rate hike, with "a very strong dollar and virtually no inflation." The central bank forecasts three more rate hikes in 2019.
ANALYST'S TAKE: "Despite Donald Trump's recent overture, the Fed looks set to hike rates again on Wednesday with market players anxious to see if the economy can handle more policy tightening given expectations for slowing growth," ING economists Nicholas Mapa and Prakash Sakpal said in a commentary.
ENERGY: Oil prices fell on worries about oversupply and softening growth in China, which could hit demand. Benchmark U.S. crude shed 49 cents to $49.39 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $1.32 to $49.88 in New York on Monday. Brent crude, used to price international oils, gave up 59 cents to $59.02 a barrel. It lost 67 cents to settle at $59.61 a barrel in London.
CURRENCIES: The dollar weakened to 112.61 yen from 112.83 yen in late trading Monday. The euro rose to $1.1353 from $1.1349.
Tokyo, Dec 17 (AP/UNB) — Nissan's board is meeting to pick a chairman to replace Carlos Ghosn, arrested last month on charges of violating financial regulations.
Monday's meeting comes amid an unfolding scandal that threatens the Japanese automaker's two-decade alliance with Renault SA of France and its global brand, as well as highlighting shoddy governance at the manufacturer of the Leaf electric car.
Ghosn and another board member Greg Kelly were formally charged last week with falsifying financial reports in underreporting Ghosn's income by about 5 billion yen ($44 million) between 2011 and 2015. They were arrested Nov. 19 by Tokyo prosecutors and remain in detention.
A source close to Ghosn's family says Ghosn is innocent as the alleged income was never decided upon or paid. Aubrey Harwell, the U.S. lawyer for Kelly, an American, says he is innocent, and that Nissan insiders and outside experts had advised him the financial reporting was proper.
The chairman must be selected from among the board members. Whether a decision will come Monday remains unclear. Three outside board members, racecar driver Keiko Ihara, Masakazu Toyoda, an academic, and Jean-Baptiste Duzan, formerly of Renault, are making that decision. There are nine board members, including Ghosn and Kelly.
One candidate for chairman is Chief Executive Hiroto Saikawa. Saikawa was hand-picked by Ghosn to succeed him as chief executive. He has denounced Ghosn and Kelly as the "masterminds" in a scheme to falsify income reports and abuse company money and assets.
Renault has kept Ghosn as chief executive and chairman, saying its investigation has not found wrongdoing in the awarding of Ghosn's compensation.
Nissan Motor Co.'s allegations also include million-dollar homes in several nations, including France, Japan, Brazil, Lebanon and the Netherlands, purchased by Nissan or a subsidiary and used by Ghosn.
Wrangling over a home in Rio de Janeiro has developed into a court battle in Brazil, with Nissan seeking to block Ghosn's family from retrieving items.
Ghosn was born in Brazil of Lebanese ancestry and holds French citizenship. He was sent in by Renault in 1999, to turn around Nissan from the brink of bankruptcy.
It's unclear when Ghosn and Kelly may be released as Tokyo prosecutors say they are a flight risk.
Beijing, Dec 15 (AP/UNB) — China announced a 90-day suspension on Friday of tariff hikes on U.S. cars, trucks and auto parts following its cease-fire in a trade battle with Washington that threatens global economic growth.
The suspension is China's first step in response to President Donald Trump's Dec. 1 agreement to suspend U.S. tariff hikes for a similar 90-day period while the two sides negotiate over American complaints about Beijing's technology policy and trade surplus.
China has indicated it plans to move ahead with the talks despite strains over the arrest of a Chinese technology executive in Canada to face possible U.S. charges related to a violation of trade sanctions on Iran.
Beijing will suspend a 25 percent import charge on cars and trucks and a 5 percent charge on auto parts, effective Jan. 1, the Finance Ministry announced.
The announcement helped give substance to Trump's agreement with his Chinese counterpart, Xi Jinping, after prolonged uncertainty caused jittery global financial markets to swing wildly.
The Finance Ministry said the tariff suspension would apply to imports worth up to a total of $126 billion, but that would be nearly 10 times the $13 billion of vehicles the United States exported to China last year.
China is the world's biggest auto market but most U.S.-branded vehicles sold here are manufactured in Chinese factories. The automaker hit hardest by the Chinese tariff hike was Germany's BMW AG, which ships SUVs made in a South Carolina factory to China.
The penalties were imposed in response to Trump's decision to slap 25 percent tariffs on $50 billion of Chinese goods and a 10 percent charge on another $200 billion. The second tariff was due to rise Jan. 1 until Trump agreed to the postponement.
The United States and other trading partners complain Beijing steals or pressures companies to hand over technology in violation of its market-opening obligations. American officials also worry Chinese industry plans that call for state-led creation of global champions in robotics and other fields threaten U.S. industrial leadership.
A spokesman for China's Commerce Ministry, Gao Feng, said Thursday the two sides were in "close contact" but gave no timetable for possible face-to-face negotiations.
Economists say 90 days probably is too little time to resolve conflicts that have bedeviled U.S.-Chinese relations for years. They say Beijing's goal probably will be to show it is making progress so Trump extends his deadline.
Beijing officials expressed confidence China could withstand U.S. pressure but the fight battered consumer confidence and threatened export industries that support millions of jobs.
Friday's announcement "shows the Chinese government is willing to solve trade disputes through consultation based on equality," said Song Lifang, an economist at Renmin University in Beijing.
The tariff cut lowers the charge for U.S.-made cars and trucks to 15 percent, the same level as imports from other countries.
"If the United States cuts or remove tariffs on Chinese goods, China will surely follow up with further relevant measures," Song said.
Brussels, Dec 14 (AP/UNB) — British Prime Minister Theresa May implored European Union leaders Thursday to help her sell the Brexit divorce deal at home, only to be told that her proposals are not clear enough for the bloc to offer a helping hand now.
Instead, the EU said it would plow ahead with plans for a cliff-edge "no-deal" Brexit on March 29, with a raft of contingency measures to be presented next week.
May came to an EU summit in Brussels seeking support after a week that saw her Brexit deal pilloried in Parliament and her job threatened by lawmakers from her own party. She pleaded with the 27 other EU leaders to "hold nothing in reserve" in helping her sell the Brexit deal to hostile British lawmakers.
"There is a majority in my Parliament who want to leave with a deal, so with the right assurances this deal can be passed," May said, warning her EU counterparts that failure could mean Britain crashing out of the bloc without a deal, "with all the disruption that would bring."
EU officials, however, seemed exasperated at the lack of concrete new ideas from Britain. A proposal for encouraging wording offering to give the U.K. further assurances was left out of the leaders' final summit conclusions on Brexit.
"I do find it uncomfortable that there is an impression perhaps in the U.K. that it is for the EU to propose solutions," European Commission President Jean-Claude Juncker said at a news conference early Friday. "It is the UK leaving the EU. And I would have thought it was rather more up to the British government to tell us exactly what they want."
He said the British must "set out their expectations" within weeks if they want to make progress and avoid tumbling out of the EU without a deal.
May had earlier acknowledged that major progress was unlikely at the two-day summit, even as she tried to get tweaks to the withdrawal package that she could use to win over opponents — particularly pro-Brexit lawmakers whose loathing of the deal triggered a challenge to her leadership this week.
"I don't expect an immediate breakthrough, but what I do hope is that we can start work as quickly as possible on the assurances that are necessary," May said.
Her week from hell began Monday, when she scrapped a planned vote in Parliament on her Brexit divorce deal at the last minute to avoid a heavy defeat.
Anger at the move helped trigger a no-confidence vote among May's own Conservative lawmakers Wednesday. May won, but more than a third of her party's lawmakers voted against her in a sign of the unpopularity of her Brexit plan. To secure victory, she promised she would step down as Conservative leader before Britain's next national election, which is scheduled for 2022.
The 27 other EU nations are adamant there can be no substantive changes to the legally binding agreement on Britain's withdrawal from the bloc and declared that the deal was "not open for renegotiation."
"It is important to avoid any ambiguity," said French President Emmanuel Macron. "We can't renegotiate something which has been negotiated over several months."
The Brexit deal has many critics but one intractable issue — a legal guarantee designed to prevent physical border controls from being imposed between Northern Ireland, which is part of the U.K., and the Republic of Ireland, a member of the EU. Northern Ireland's 1998 peace accord depends on having an open, invisible border with Ireland.
A Brexit provision known as the backstop would keep the U.K. part of the EU customs union if the two sides couldn't agree on another way to avoid a hard border.
Pro-Brexit lawmakers strongly oppose the backstop, because it keeps Britain bound to EU trade rules and unable to leave without the bloc's consent. Pro-EU politicians consider it an unwieldy, inferior alternative to staying in the bloc.
May told EU leaders that to win U.K. backing for the deal, "we have to change the perception that the backstop could be a trap from which the U.K. could not escape."
But while Britain would like a guarantee that the backstop will be temporary, the EU insists there can be no fixed end date.
"If the backstop has an expiry date, if there is a unilateral exit clause, then it is not a backstop," said Irish Prime Minister Leo Varadkar. "That would be to render it inoperable."
The leaders gave May a few crumbs of comfort in their summit conclusions. As a sign of goodwill, the EU said preparations for trade relationships would start as soon as possible after British and EU legislatures approved the deal.
They promised to work for speedy new trade deal with Britain to avoid triggering the backstop, and underscored that the measure was intended to be temporary, saying it "would only be in place for as long as strictly necessary."
But May remains a weakened leader atop a government and a Parliament whose members are deeply and damagingly divided over Brexit.
Juncker said it sometimes was tough to fathom his own state of mind but added: "It is even harder to understand the state of mind of the British MPs.”