Portugal’s Economy Rebounds, Though Problems Persist

The Portuguese economy is resisting the prevailing gloom in Europe.

Activity remained strong, with GDP rising by 0.5% in the first quarter, or 1.8% at an annual rate, compared with 1.2% in the euro zone, forecasts Brussels.

Following the trend of 2018, Portugal’s good economic health comes mainly from private consumption fueled by rising wages and employment dynamics. The preliminary data, says the national statistics institute, “reflect a significant acceleration in investment.”

The government deficit has fallen from 7.2% of GDP to 0.5% of GDP since 2014, and the unemployment rate from a peak of 17.9% in early 2013, to about 6% currently.

“The tourism sector has been the largest driver of the export recovery in Portugal,” Ben Westmore, the head of the Portugal desk in the Economics Department of the OECD, confirmed to VOA.

These numbers make Portugal the darling of international financial institutions. The head of the International Monetary Fund, Christine Lagarde, praised Portugal’s economic recovery recently in Lisbon. “Portugal and the Portuguese people deserve huge credit for their efforts, for which they should be proud,” Lagarde said.

Low wages

Despite the spectacular recovery and the fall of unemployment, a sense of precariousness and low wages are everywhere in Portugal. The minimum wage is only $669 (€600) per month — a number that has not prompted the return of many young adults, who left during the crisis. Between 2008 and 2014, 120,000 people left Portugal per year. Twenty percent were highly skilled workers, according to professor Joao Miguel Trancoso Lopes.

This sociologist undertook a study and interviewed many of them to understand their motivations to stay abroad or come back in their country.

“They do not feel Portugal is full of opportunities. The low wages are a real hurdle for them. They look for better jobs, outside of the country. Unlike the previous generations, the young Portuguese leaving abroad do not dream of returning home,” he explained to VOA.

This professor used to be paid $3,345 (€3,000) per month before the crisis. Today, he earns $2,901.99 (€2,600) per month. The health care system is another sector that was heavily targeted for budget cuts during the crisis.

Bruno Maia is a neurologist in Lisbon. He acknowledges the current government took some measures to lift the burden, such as hiring of doctors and nurses.

“The damages made to our health care system are so pronounced that these new jobs do not compensate what was lost during the crisis. It is not enough. Problems are accumulating and we are struggling,” he underscores to VOA. For example, Maia says non-emergency procedures, like an MRI, could take up a year to be performed in Portugal.

Besides these issues, Antonio Costa, the Socialist prime minister who vowed in 2015 to overturn austerity, remains popular in Portugal. His party and its allies likely will win the coming European elections on May 26.

“Euroskepticism, which grew a lot during the crisis, it is not as important today. We do not expect a defeat as the Socialist Party is popular in Portugal,” Andre Freire, a political science professor at Lisbon University Institute, told VOA.

Portugal has 21 seats at the European Parliament.



US Shoe Industry Protests Possible Tariffs on Chinese Imports

More than 170 American shoe manufacturers and retailers, including such well-known athletic shoe brands as Nike, Under Armour and Adidas, urged President Donald Trump on Tuesday to exempt footwear from any further tariffs he imposes on imported goods from China.

The lobby for the shoe industry, the Footwear Distributors and Retailers of America, told Trump in a letter that his proposed 25 percent tariff on shoes imported from China “would be catastrophic for our consumers, our companies and the American economy as a whole.” The industry imported $11.4 billion worth of shoes from China last year, although some manufacturers have been shifting production elsewhere, especially to Vietnam and Cambodia.

It said the proposed tariffs on shoes made in China could cost U.S. consumers more than $7 billion annually on top of existing levies.

“There should be no misunderstanding that U.S. consumers pay for tariffs on products that are imported,” the 173 companies said, rejecting Trump’s frequent erroneous statement that China pays the tariffs and that the money goes directly to the U.S. Treasury.

Trump has been engaged in a string of reciprocal tariff increases with China on imported goods arriving in each other’s ports as the world’s two biggest economies have tried for months — unsuccessfully so far — to negotiate a new trade pact.

After Trump imposed new 25 percent taxes on $200 billion worth of Chinese products earlier this month, he also set in motion plans to impose a new round of levies on virtually all Chinese imports, another $300 billion worth of goods, including shoe imports, clothing and electronics.

The U.S. leader said that if American companies did not like the tariffs on Chinese imports, they could move their production inside the United States or to another country whose manufactured products are not taxed when they are sent to the U.S. But the footwear lobby rejected Trump’s suggestion.

“Footwear is a very capital-intensive industry, with years of planning required to make sourcing decisions, and companies cannot simply move factories to adjust to these changes,” the industry told Trump.

The U.S. Trade Representative’s office has published a list of products that would be covered by the expanded tariffs and set a hearing for June 17.



Україна вводить заборонні мита на імпорт цементу з Росії, Білорусі та Молдови

Міжвідомча комісія з міжнародної торгівлі 21 травня ухвалила рішення про введення антидемпінгових мит на імпорт в Україну цементних клінкерів та портландцементу з Росії, Білорусі та Молдови.

«МКМТ встановила наявність демпінгового імпорту з цих країн протягом 2015-2018 років. Водночас, частки імпорту цементних клінкерів та портландцементу з РФ, Білорусі та Молдова у загальному обсязі імпорту цих товарів в Україну протягом усього періоду дослідження постійно зростали, що свідчить про намір подальшого збільшення обсягів демпінгового імпорту з цих країн», – мовиться у повідомленні міністерства економічного розвитку.

МКМТ водить мито у розмірі 114,95% з товару походженням з Росії; 57,03% – з Білорусі; 94,46% – з Молдови.

Мито стягуватиметься протягом п’яти років.

Раніше Кабінет міністрів України повідомив про запровадження ембарго на російський цемент та фанеру.

15 травня уряд доповнив перелік російських товарів, які заборонені до ввезення в Україну. Серед заборонених є кілька груп промислових товарів, мінеральних добрив, сільськогосподарської продукції, транспортних засобів. Загальна вартість цієї продукції становить 510 мільйонів доларів на рік.



Sources: Turkey to Reduce US Import Tariffs This Week

Turkey’s Trade Ministry will implement a reciprocal reduction in tariffs on U.S. imports after the United States halved tariffs on Turkish steel imports last week, two Turkish sources said on Tuesday.

The White House last week terminated Turkey’s eligibility for the Generalized System of Preferences (GTS) program, in a move Turkey said contradicted trade goals, but also halved some of the tariffs it had raised last August amid a diplomatic row between the NATO allies.

The sources said the reciprocal reduction will halve tariffs on some U.S. imports, including passenger cars, alcoholic drinks, tobacco, cosmetics and PVC. The lowered tariffs will take effect with a presidential decree this week, the sources said.




В Україні дозволять зводити будівлі висотою до 150 метрів

Міністерство регіонального розвитку, будівництва та ЖКГ затвердило нові будівельні норми, піднявши обмеження по висоті громадських будівель до 150 метрів. Про це повідомив заступник міністра регіонального розвитку Лев Парцхаладзе.

«Зараз у чинних нормах максимальна висота, за якою дозволяється проектувати висотні житлові та громадські будівлі, складає 100 метрів. Для громадських будівель ми пропонуємо підвищити її до 150 метрів для можливості реалізації сучасних та цікавих рішень у висотному будівництві», – повідомив Парцхаладзе.

Йдеться про офісні будівлі, торгівельні центри та інші нежитлові споруди громадського використання.

За словами Парцхаладзе, зміна міститься у проекті нових державних будівельних норм «Висотні будинки і комплекси», який вже затверджений і буде опублікований найближчим часом.



Гривня вдруге за місяць штурмує річний максимум щодо долара

На українському міжбанківському валютному ринку вдруге за травень посилення гривні щодо долара наблизило пару до річного максимуму – 26 гривень 11 копійок за одиницю американської валюти. Станом на 11:00 котирування становили 26 гривень 9,5-11,5 копійки за долар, повідомляє профільний сайт «Мінфін», який відстежує перебіг торгів.

«Торги по долару активні з самого ранку. Укладаються угоди по лотах до 1 мільйона доларів за явного переважання пропозиції», – ідеться в повідомленні.

Серед чинників, що впливають на валютну пару – чергове розміщення облігацій внутрішньої державної позики (ОВДП), зниження гривневої ліквідності в банківській системі та безпроблемне завершення передачі повноважень від п’ятого до шостого президента України.

За даними сайту «Мінфін», НБУ 20 травня викупив близько 40 мільйонів доларів переважно у нерезидентів, які продавали валюту для участі в аукціоні з розміщення ОВДП.

Курс, встановлений Нацбанком за результатом торгів 13 травня (26 гривень 11 копійок), став повторенням річного максимуму. Востаннє на рівні 26,11 щодо долара гривня перебувала 21 травня 2018 року. На 21 травня курс НБУ становить 26 гривень 20 копійок за долар.



AP Explains: US Sanctions on Huawei Bite, But Who Gets Hurt?

Trump administration sanctions against Huawei have begun to bite even though their dimensions remain unclear. U.S. companies that supply the Chinese tech powerhouse with computer chips saw their stock prices slump Monday, and Huawei faces decimated smartphone sales with the anticipated loss of Google’s popular software and services. 

The U.S. move escalates trade-war tensions with Beijing, but also risks making China more self-sufficient over time.

Here’s a look at what’s behind the dispute and what it means.

What’s this about?

Last week, the U.S. Commerce Department said it would place Huawei on the so-called Entity List, effectively barring U.S. firms from selling it technology without government approval. 

Google said it would continue to support existing Huawei smartphones but future devices will not have its flagship apps and services, including maps, Gmail and search. Only basic services would be available, making Huawei phones less desirable. Separately, Huawei is the world’s leading provider of networking equipment, but it relies on U.S. components including computer chips. About a third of Huawei’s suppliers are American. 

Why punish Huawei?

The U.S. defense and intelligence communities have long accused Huawei of being an untrustworthy agent of Beijing’s repressive rulers — though without providing evidence. The U.S. government’s sanctions are widely seen as a means of pressuring reluctant allies in Europe to exclude Huawei equipment from their next-generation wireless networks. Washington says it’s a question of national security and punishment of Huawei for skirting sanctions against Iran, but the backdrop is a struggle for economic and technological dominance. 

The politics of President Donald Trump’s escalating tit-for-tat trade war have co-opted a longstanding policy goal of stemming state-backed Chinese cyber theft of trade and military secrets. Commerce Secretary Wilbur Ross said last week that the sanctions on Huawei have nothing to do with the trade war and could be revoked if Huawei’s behavior were to change.

​The sanctions’ bite

Analysts predict consumers will abandon Huawei for other smartphone makers if Huawei can only use a stripped-down version of Android. Huawei, now the No. 2 smartphone supplier, could fall behind Apple to third place. Google could seek exemptions, but would not comment on whether it planned to do so.

Who uses Huawei anyway?

While most consumers in the U.S. don’t even know how to pronounce Huawei (it’s “HWA-way”), its brand is well known in most of the rest of the world, where people have been buying its smartphones in droves.

Huawei stealthily became an industry star by plowing into new markets, developing a lineup of phones that offer affordable options for low-income households and luxury models that are siphoning upper-crust sales from Apple and Samsung in China and Europe. About 13 percent of its phones are now sold in Europe, estimates Gartner analyst Annette Zimmermann.

That formula helped Huawei establish itself as the world’s second-largest seller of smartphones during the first three months of this year, according to the research firm IDC. Huawei shipped 59 million smartphones in the January-March period, nearly 23 million more than Apple.

Ripple effects

The U.S. ban could have unwelcome ripple effects in the U.S., given how much technology Huawei buys from U.S. companies, especially from makers of the microprocessors that go into smartphones, computers, internet networking gear and other gadgetry.

The list of chip companies expected to be hit hardest includes Micron Technologies, Qualcomm, Qorvo and Skyworks Solutions, which all have listed Huawei as a major customer in their annual reports. Others likely to suffer are Xilinx, Broadcom and Texas Instruments, according to industry analysts.

Being cut off from Huawei will also compound the pain the chip sector is already experiencing from the Trump administration’s rising China tariffs.

The Commerce Department on Monday announced an expected grace period of 90 days or more, easing the immediate hit on U.S. suppliers. It can extend that stay, and also has the option of issuing exemptions for especially hard-hit companies.

Much could depend on whether countries including France, Germany, the U.K. and the Netherlands continue to refuse to completely exclude Huawei equipment from their wireless networks.

The grace period allows U.S. providers to alert Huawei to security vulnerabilities and engage the Chinese company in research on standards for next-generation 5G wireless networks.

It also gives operators of U.S. rural broadband networks that use Huawei routers time to switch them out.

​Could this backfire?

Huawei is already the biggest global supplier of networking equipment, and is now likely to move toward making all components domestically. China already has a policy seeking technological independence by 2025.

U.S. tech companies, facing a drop in sales, could respond with layoffs. More than 52,000 technology jobs in the U.S. are directly tied to China exports, according to the Computing Technology Industry Association, a trade group also known as CompTIA.

What about harm to Google?

Google may lose some licensing fees and opportunities to show ads on Huawei phones, but it still will probably be a financial hiccup for Google and its corporate parent, Alphabet Inc., which is expected to generate $160 billion in revenue this year. 

The Apple effect

In theory, Huawei’s losses could translate into gains for both Samsung and Apple at a time both of those companies are trying to reverse a sharp decline in smartphone sales.

But Apple also stands to be hurt if China decides to target it in retaliation. Apple is particularly vulnerable because most iPhones are assembled in China. The Chinese government, for example could block crucial shipments to the factories assembling iPhones or take other measures that disrupt the supply chain.

Any retaliatory move from China could come on top of a looming increase on tariffs by the U.S. that would hit the iPhone, forcing Apple to raise prices or reduce profits.

What’s more, the escalating trade war may trigger a backlash among Chinese consumers against U.S. products, including the iPhone. 

“Beijing could stoke nationalist sentiment over the treatment of Huawei, which could result in protests against major U.S.technology brands,” CompTIA warned.