Category "News/World"

Federal prosecutors on Thursday unsealed criminal charges against Federal Savings Bank CEO Stephen Calk, accusing him of corruptly approving high-risk loans to U.S. President Donald Trump’s former campaign chair, Paul Manafort, in exchange for trying to secure a top job in the Trump administration.

The indictment against Calk was issued in New York. It doesn’t name Manafort directly, but Calk’s name repeatedly came up during Manafort’s 2018 financial fraud trial in Virginia in which prosecutors said Calk and Manafort engaged in a scheme to exchange the $16 million US in loan approvals for an administration post.

Calk, 54, faces one count of financial institution bribery, which carries a maximum prison term of 30 years.

Federal Savings Bank, based in Chicago, said in a statement it is a victim of bank fraud perpetrated by Manafort. It added that Calk “has been on a complete leave of absence and has no control over or involvement with the bank,” and the bank is “not a party to the federal criminal case.” It described Calk as its “former chairman.”

Calk could not be immediately reached for comment.

Calk provided Manafort with a ranked wish list of government jobs that he wanted, starting with treasury secretary and followed by other top jobs in the Treasury, Commerce and Defence Departments, prosecutors said. Federal Savings Bank is based in Chicago.

Manafort was one of the first people in Trump’s inner circle to face charges brought by special counsel Robert Mueller as part of his now-completed investigation into Russian interference in the 2016 U.S. election and Trump campaign contacts with Moscow.

Manafort was convicted of bank and tax fraud in the Virginia trial, and pleaded guilty to other charges in Washington. He is now serving a 7½-year sentence in a federal prison in Pennsylvania.

Recommended by Manafort to Kushner

Evidence at the trial included a November 2016 email sent by Manafort to Jared Kushner, Trump’s son-in-law, after Trump won the presidential election. In the email, Manafort recommended three candidates for administration posts, including Calk.

Kushner responded within minutes to Manafort’s recommendations by email: “On it!”

Paul Manafort, seen on April 4, 2018, was convicted later in the year of bank fraud and is now in a federal prison in Pennsylvania. (Andrew Harnik/Associated Press)

The prospect of Calk facing charges emerged in a transcript of a bench discussion during the Manafort trial.

“Mr. Calk is a co-conspirator,” Greg Andres, a prosecutor on Mueller’s team, said during a discussion with the judge at the bench, according to a transcript of the discussion. “And he participated in a conspiracy to defraud the bank.”

“There was an agreement between Mr. Manafort and Mr. Calk to have the loans approved,” Andres said. “They were approved and, in turn, Mr. Manafort proposed Mr. Calk for certain positions within the administration.”

Calk appeared on Fox News and Fox Business News several times in 2016, billed as an economic adviser to Trump.

He reportedly did secure an interview during the Trump administration transition for undersecretary of the army, but was not chosen.

The exchanges between Manafort and Calk caught the attention of House Democrats who sat on that body’s financial services committee in April 2018.

“Although Mr. Calk ultimately was not given a position … reports that he was being considered for a high-level and highly sensitive national security position within the Trump administration as part of a quid pro quo with Mr. Manafort raise serious concerns that, completely apart from special counsel Robert Mueller’s investigation, warrant scrutiny by our Committee,” Democrats Stephen Lynch and Maxine Waters wrote at the time.




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The U.S. Department of Homeland Security has warned U.S. firms of the risks to company data from Chinese-made drones, according to a notice reviewed by Reuters on Monday.

The notice, titled Chinese Manufactured Unmanned Aircraft Systems, warned that U.S. officials have “strong concerns about any technology product that takes American data into the territory of an authoritarian state that permits its intelligence services to have unfettered access to that data or otherwise abuses that access.”

A spokesperson for the department’s Cybersecurity and Infrastructure Security Agency confirmed that it “recently released an industry alert providing organizations with information related to the … risks associated with using [unmanned aircraft system] technology manufactured in China and measures to reduce such risk.”

The notice, which did not name any companies, was reported earlier by CNN.

It urged companies to “be aware of whether your [unmanned aircraft system] data is being stored by the vendor or other third parties. If it is being stored, find out how, where, and for how long.”

Consumers have ‘complete control’

This is the latest concern raised by the U.S. government about the threats of Chinese-made devices.

On Wednesday, the U.S. Commerce Department added Huawei Technologies and 68 affiliates to an export blacklist — a move that bans American firms from buying parts from the telecom giant without U.S. government approval — citing the risk to U.S. national security.

China’s SZ DJI Technology, the world’s largest maker of consumer drones, said in a statement on Monday that “the security of our technology has been independently verified by the U.S. government and leading U.S. businesses.”

The company added that it gives “customers full and complete control over how their data is collected, stored, and transmitted.”

It said that for government and critical infrastructure customers, “we provide drones that do not transfer data to DJI or via the internet.”


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By setting up his first physical store in the same building as big names like Coach, Kate Spade and H&M, Brian Berger, the co-founder of online menswear brand Mack Weldon, knew he was facing a major challenge.

“It’s like showing up for your first game and it’s the Super Bowl,” said Berger, as he toured the company’s location inside the Hudson Yards development in New York City. 

The new West Side neighbourhood features office towers, a hotel and a seven-storey shopping mall with more than 100 stores. The feature attraction is the Vessel, a 16-storey, walkable, Instagram-friendly public art structure. 

Inside the mall, Mack Weldon isn’t alone as it makes its first foray into bricks and mortar retail. While the first floor of the mall is dedicated to luxury brands such as Cartier and Fendi, most of the second floor is reserved for digitally native brands making the leap offline.

It’s a targeted and deliberate move by the landlord, Related Companies, to attract shoppers in the midst of what some describe as a “retail apocalypse.”

Mack Weldon CEO and co-founder Brian Berger talks to customers at the company’s first bricks and mortar store. He says as valuable as online sales can be, you can’t replicate the customer experience that comes with seeing and touching a product. (Steven D’Souza/CBC News)

Vice-president Webber Hudson says the idea was to attract new shoppers by bringing online retailers into the mall. The hope is the web traffic those stores generate online will translate to increased foot traffic in the stores.

With malls hollowing out across America and closing signs increasingly popping up in storefronts, they needed to get creative to attract shoppers, he said.

“The whole revolution of what was happening online and how aggressive online buying was becoming, somewhat at the cost of bricks and mortar, was stunning and we couldn’t ignore that.” 

Hudson says retailers that made it big online aren’t as bound by the old conventions of in-store retail and in many cases offer more unique shopping experiences.

Yet, he admits the strategy is a calculated risk — and not every store will make it.

A bleak retail landscape 

Among the brands that have set up shop alongside Mack Weldon are shoe company M. Gemi, men’s clothier Rhone, home and lifestyle shop Batch, and b8ta, a store where shoppers can get a hands-on feel for dozens of tech products typically only found online.

They are swimming against a retail tsunami that’s seen a record number of closures in recent years. Coresight Research, a global research firm, says so far in 2019, U.S. retailers have announced 6,130 store closures. That already exceeds the total of 5,864 for all of 2018.

Last year, it was large chains such as Sears, the U.S. chain of Toys “R” Us and Kmart at the crest of the wave. This year, Payless ShoeSource announced it is closing all 2,100 of its stores.

Meanwhile, other brands that aren’t closing altogether are shrinking their retail footprint. Gap announced it would close about 200 Gap and Banana Republic stores in the next three years.

CoStar Group, which tracks commercial real estate, says 2018 was a record year for announced store closures in the U.S. It found that 155 million square feet of retail space was announced for closure, compared to 102 million square feet in 2017.

Home goods and lifestyle store Batch is one of the new tenants at Hudson Yards. The second floor of the retail section at the new development is devoted to brands like Batch that started online and are opening their first physical space. (Steven D’Souza/CBC News)

Faced with this grim reality, landlords must find new ways to keep shoppers coming out to their stores.

“I think landlords are really looking toward, ‘How do we reverse this trend? How do we get ahead of our competitors and making a more curated and experiential product?'” said Victor Rodriguez, a senior market analyst with CoStar Group.

This has led major landlords such as Related Companies and Brookfield Properties to reach out to digital brands, offering flexible leases in hopes they can translate the success they’ve found online to the storefront.

The money is still in stores

Russ Winer, a marketing professor at New York University, says established online brands such as mattress-maker Casper and eyeglass company Warby Parker were the first to start the trend. Casper announced last year it would open 200 stores, while Warby Parker opened its first store in 2013 and now aims to have close to 100 by the end of the year. 

The latest version of the trend has bigger developers seeking out smaller brands to help rejuvenate their retail offerings.

Winer says the move offline is also beneficial for the digital brands. When it comes to acquiring customers, it can actually be cheaper, he said. The banner ads and discounts used to attract shoppers online can be more expensive than a shopper discovering a storefront.

New York University marketing professor Russ Winer says online brands can take advantage of the data they collect on their websites to create a better retail experience in stores. (Steven D’Souza/CBC )

And despite the hollowing out of malls and the public perception of online shopping’s success, people still buy most of their goods in stores.

“Still 90 per cent of all retail sales take place in a physical store,” Winer said. That number is even higher in Canada, where Statistics Canada says online sales, while rising steadily, still only make up about three per cent of overall retail sales

Saviours of retail?

Rodriguez says what’s happening at Hudson Yards will be closely watched in the industry, especially in New York City, where malls typically struggle because people prefer shopping along streets like 5th Avenue or in fashionable neighbourhoods like SoHo.

“This is going to be the proving ground,” Rodriguez said. “Are those online retailers the way to go in the future and are landlords going to accommodate them?”

Marketing professor Russ Winer says no matter what happens, don’t expect these smaller digital brands to start filling up malls across suburban America. He says these kinds of stores need dense urban areas with lots of residents and tourists to succeed.

Malls still require large anchor tenants, he says, so landlords need those stores to adapt to the new retail environment. That involves everything from downsizing the size of their stores, improving the customer experience, and modernizing the kinds of information they gather about their customers, he said.

“I think physical retail is here to stay. I think the pressure is on J.C. Penney and Macy’s and some of the other physical retailers to become more relevant in today’s world.”

Brian Berger at Mack Weldon says they don’t plan on a massive expansion across the United States, and instead will be opportunistic about where they open any future stores.

New kids, new data

Back at Hudson Yards, the shopping area has been open for almost two months. Across from Mack Weldon sits another born-online brand, Italian footwear company M. Gemi.

The company has done pop-up shops before, so brand director Heather Kaminetsky says they know the benefits of physical retail.

“We actually find that customers that shop online and shop within our physical spaces will spend more over their lifetime.”

M. Gemi’s chief brand officer, Heather Kaminetsky, says they’ve done pop-up shops before and felt the time was right for a permanent physical store. (Steven D’Souza/CBC News)

The key to success, she says, lies in the data they gather both online and in the store. They can use the information to determine everything from what shoes to stock to where to place them in the store.

Rodriguez says that data may be the difference that allows the new kids on the retail block to thrive where legacy retailers are failing.

“I think they just know how to use it better. They were born online. This is their bread and butter.”

Berger says online brands typically see a 20 to 30 per cent uptick in web sales in areas where they’ve set up a physical space.

“[Customers] come in, they have a three-dimensional experience — they’re seeing, feeling, and touching the product. That can’t be replicated and can’t be undervalued.”


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Boeing says it has finished with its updates to the flight-control software implicated in two deadly crashes involving its 737 Max, moving a step closer to getting the plane back in the sky.

Aviation regulators still have more questions about how pilots interact with the plane’s controls under different circumstances, and Boeing says it is providing that information.

The U.S. Federal Aviation Administration, foreign regulators and airlines are reviewing Boeing’s plans for additional pilot training, the company said Thursday.

The next major step is a certification flight with FAA representatives. That flight has not yet been scheduled.

In crashes in Indonesia and Ethiopia, an automated system called MCAS mistakenly turned the noses of the planes down in response to faulty readings from a single sensor. Pilots were unable to regain control; 346 people died.

Boeing has delivered about 370 Max jets around the world, but they have been grounded since mid-March. That is causing airlines to cancel flights heading into the busy summer travel season. Boeing has disclosed an initial financial hit of $1 billion US to fix the plane, and new Max jets are parked at its Seattle-area factory and elsewhere because deliveries have stopped.

The FAA, regulators from around the world, and airlines are still reviewing plans for additional pilot training. (Willy Kurniawan, File/Reuters)

Boeing engineers have been working on the software update for more than six months — far longer than they expected — having started shortly after the Oct. 29 crash of a Max operated by Indonesia’s Lion Air. The changes will link an anti-stall feature in the flight-control system to two sensors instead of one and will push the nose down less often and less powerfully.

Chicago-based Boeing said it has flown 207 test flights with the new software.

“We’re making clear and steady progress and are confident that the 737 Max with updated MCAS software will be one of the safest airplanes ever to fly,” Chairman and CEO Dennis Muilenburg said in a statement.

Boeing developed the Max early this decade to compete with a jet from its European rival Airbus that was winning over airline customers with its better fuel efficiency. Critics say Boeing rushed the design of the Max; the company disputes that.

Southwest Airlines Boeing 737 Max 8 aircraft after being grounded in March. Boeing says it has flown more than 200 test flights with the new software. (Mike Blake/Reuters)

Relatives of passengers killed in the crashes and safety advocates are concerned that the plane could carry passengers again even before investigations into the crashes are completed.

“They are rushing,” said Nadia Milleron, whose daughter, Samya Stumo, was on the Ethiopian Airlines Max that crashed March 10. “That’s the reason that we had this crash. Safety is first; we need to finish the investigations.”

Federal officials say that American Airlines, Southwest Airlines and United Airlines flew tens of thousands of flights with the Max and reported no unusual incidents with MCAS. Boeing has implied that the Lion Air and Ethiopian pilots did not react properly to the plane’s automatic downward pitch of the nose — failing to disconnect MCAS in the first case, flying too fast to control the plane in the second.

The extent of additional pilot training is emerging as a key issue. Boeing believes that computer-based training — the type that could be done on iPads — is sufficient for pilots who know how to fly older versions of the 737, and a panel of FAA pilot experts agrees.

Some foreign regulators and safety experts say pilots should practice responding to the new software in flight simulators — a requirement that would delay the plane’s return by weeks or months.

Paul Hudson, president of the travel-consumer group FlyerRights.org, said Boeing and the FAA seem determined to resist simulator training.

Any FAA plan to let the Max fly without first requiring simulator training for pilots “makes light of the chain of events that caused these two crashes,” he said, “and will illustrate the FAA’s continued priority for commercial expediency over safety.”


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U.S. President Donald Trump has signed a full pardon for former media mogul Conrad Black, who was convicted in 2007 of fraud and obstruction of justice.

Black, 74, spent almost three and a half years in a Florida prison before being released and deported back to Canada. He had originally been sentenced to 78 months in jail, but had his sentence reduced after the U.S. Supreme Court struck down several of his initial convictions.

A statement from the White House on Wednesday said Black has made “tremendous contributions to business, as well as to political and historical thought.”

It also cites several prominent individuals whom it says “have vigorously vouched for [Black’s] exceptional character.” They include former secretary of state Henry Kissinger, Elton John, Rush Limbaugh, and the late William F. Buckley Jr. 

In a statement late Wednesday Black called his legal ordeal “nonsense,” adding, “there was never a word of truth to any of it. And now it is over, after 16 years, including three years and two weeks in U.S, federal prisons.”

Black, a Canadian-born British citizen, once ran an international newspaper empire that included National Post, the Chicago Sun-Times, Britain’s Daily Telegraph and the Jerusalem Post.

He renounced his Canadian citizenship in 2001 so he could become a British Lord. He became a resident of the United Kingdom in 1992, and remained a resident throughout 2002.

In 2018 Black published Donald J. Trump: A President Like No Other.

Thought it was a prank

Black was found guilty in the United States in 2007 of scheming to siphon off millions of dollars from the sale of newspapers owned by Hollinger Inc., where he was chief executive and chairman.

Two of his three fraud convictions were later voided, and his sentence was shortened. 

Black has remained steadfast in declaring his innocence on all of the U.S. charges and in his belief that he was subjected to unfair prosecution in the United States.

In his long statement, which recounts in detail the events of the past decade or so, Black says he has not spoken to Trump since he took office. Black said he thought the call he got Wednesday from the White House might have been a prank, but that he recognized Trump’s voice. 

“He could not have been more gracious and quickly got to his point, that he was granting me a full pardon.”

Black has been living in Toronto since 2012. 


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U.S. President Donald Trump signed an executive order Wednesday declaring a national emergency and barring U.S. companies from using telecommunications equipment made by firms posing a national security risk. The move paves the way for a ban on doing business with China’s Huawei Technologies.

The executive order invokes the International Emergency Economic Powers Act, which gives the president the authority to regulate commerce in response to a national emergency that threatens the United States. The order directs the Commerce Department, working with other government agencies, to draw up a plan for enforcement within 150 days.

The order, which has been under review for more than a year, is aimed at protecting the communications technology and services supply chain from “foreign adversaries,” said U.S. Commerce Secretary Wilbur Ross.

“Under President Trump’s leadership, Americans will be able to trust that our data and infrastructure are secure,” he said.

The order does not specifically name any country or company, but U.S. officials have previously labelled Huawei a “threat.”

Canada reviewing use of Huawei

The executive order comes at a delicate time in relations between China and the U.S. as the world’s two largest economies ratchet up tariffs in a battle over what U.S. officials call China’s unfair trade practices.

Washington believes equipment made by Huawei could be used by the Chinese state to spy. Huawei, which has repeatedly denied such allegations, did not immediately comment on the executive order.

Washington believes equipment made by Huawei could be used by the Chinese state to spy — an allegation the Chinese company has repeatedly denied. (Kin Cheung/Associated Press)

The United States has been actively pushing other countries not to use Huawei’s equipment in next-generation 5G networks that it calls “untrustworthy.” In August, Trump signed a bill that barred the U.S. government itself from using equipment from Huawei and another Chinese provider, ZTE Corp.

Ottawa is currently conducting a review of the security implications of allowing Huawei to help develop the next generation of mobile infrastructure in Canada.

Australia, Japan and Taiwan have moved to limit use of Huawei technology. The governments of Germany and France are among those not heeding U.S. warnings.

Federal Communications Commission chairman Ajit Pai, who has called Huawei a threat to U.S. security, said Wednesday that “given the threats presented by certain foreign companies’ equipment and services, this is a significant step toward securing America’s networks.”

In January, the U.S. Justice Department unsealed criminal charges against Huawei, a top company executive and several subsidiaries, alleging the company stole trade secrets, misled banks about its business and violated U.S. sanctions. The sweeping indictments accuse the company of using extreme efforts to steal trade secrets from American businesses — including trying to take a piece of a robot from a T-Mobile lab.

The executive charged is Huawei’s chief financial officer, Meng Wanzhou, who was arrested in Vancouver last December. She is currently under house arrest and fighting extradition to the U.S.


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Donald Trump’s businesses lost more than $1 billion US from 1985 to 1994, based on tax information acquired by the New York Times.

The Times reported Tuesday it has acquired printouts from the now-U.S. president’s official IRS tax transcripts, including figures from his federal tax form.

The newspaper said Trump reported business losses of $46.1 million US in 1985 and a total of $1.17 billion US in losses for the 10-year period.

After comparing Trump’s information with that of other “high-income earners,” the Times concluded Trump “appears to have lost more money than nearly any other individual American taxpayer.” Because of his business losses, the newspaper reported, Trump did not pay income taxes for eight of the 10 years.

He took to Twitter to explain that as a real estate developer, “you always wanted to show losses for tax purposes.”

Trump said the Times put out “very old information” … that is “highly inaccurate.”

Trump is the first president since Watergate to decline to make his tax returns public.

He has repeatedly said he could not release his tax documents because he is under audit by the Internal Revenue Service (IRS).

The House ways and means committee has asked the IRS to provide Trump’s personal and business returns for 2013 through 2018. Treasury Secretary Steven Mnuchin on Monday refused to do so, saying the panel’s request “lacks a legitimate legislative purpose.”

Mnuchin’s move, which had been expected, is likely to set a legal battle into motion. The chief options available to Democrats are to subpoena the IRS for the returns or to file a lawsuit.

Officials in New York state, where the Trump Organization made most of its debt-fuelled real estate acquisitions, are also taking steps to seek the president’s tax returns, the Times reported.




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China confirmed Tuesday its economy czar will go to Washington for trade talks despite fears he might cancel after U.S. President Donald Trump threatened to escalate a tariff war over Beijing’s technology ambitions.

The announcement suggests President Xi Jinping’s government is putting its desire to end a conflict that has battered Chinese exporters ahead of the political need to look tough in the face of U.S. pressure.

The decision to have Vice-Premier Liu He, Xi’s top economic adviser, take part in talks due to start Thursday might keep alive hopes the two biggest global economies could make peace as early as this week.

The Trump administration is pressing Beijing to roll back plans for government-led development of Chinese global competitors in robotics, electric cars and other technologies. Washington, Europe, Japan and other trading partners say those violate China’s market-opening commitments and are based in part on stolen technology.

Trump’s announcement Sunday that he would increase tariffs on $200 billion US of Chinese imports to 25 per cent from 10 per cent caused global stock markets to plunge. Markets recovered after a Chinese spokesperson said Monday that envoys still were preparing to go to the United States, though there was no word then whether Liu would take part.

The American side is led by Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

A Commerce Ministry statement announcing Liu’s plans gave no indication whether other details such as the size of his delegation might change.

The Chinese government didn’t immediately respond to accusations Monday by American officials that Beijing was trying to backtrack on commitments made in earlier negotiations.

Washington and Beijing have raised tariffs on billions of dollars of each other’s exports, disrupting trade in goods from soybeans to medical equipment. Estimates of lost potential sales so far range as high as $25 billion.

Both governments have said negotiations were making progress, but Trump expressed frustration Sunday at the pace.

U.S. Treasury Secretary Steven Mnuchin, left, and U.S. Trade Representative Robert Lighthizer, are key players in the ongoing trade talks. (Andy Wong/The Associated Press)

Mnuchin said Monday that Chinese officials “were trying to go back on some of the language” that had been negotiated in 10 earlier rounds of talks.

The conflict is testing how far Beijing is willing to go in changing a state-led economic model it sees as the path to prosperity and global influence — and how much power Washington will have to enforce any agreement.

The United States accuses Beijing of pressing companies to hand over technology in exchange for market access, improperly subsidizing Chinese firms and stealing American trade secrets.

No details of the talks have been released. But private sector analysts say Beijing is willing to change details of its plans so long as it preserves the ruling Communist Party’s dominant economic role.

The Trump administration has imposed 10 per cent tariffs on $200 billion in Chinese imports and 25 per cent tariffs on another $50 billion. The Chinese have retaliated by targeting $110 billion in U.S. imports.

Trump said Sunday he also planned to impose 25 per cent tariffs on another $325 billion in Chinese products. That would extend penalties to everything China ships to the United States, its biggest foreign customer.

A stumbling block in the talks is U.S. insistence on an enforcement mechanism with penalties if Beijing fails to keep its promises. The Trump administration wants to keep tariffs on Chinese imports to maintain leverage over Beijing.


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China confirmed Tuesday its economy czar will go to Washington for trade talks despite fears he might cancel after U.S. President Donald Trump threatened to escalate a tariff war over Beijing’s technology ambitions.

The announcement suggests President Xi Jinping’s government is putting its desire to end a conflict that has battered Chinese exporters ahead of the political need to look tough in the face of U.S. pressure.

The decision to have Vice-Premier Liu He, Xi’s top economic adviser, take part in talks due to start Thursday might keep alive hopes the two biggest global economies could make peace as early as this week.

The Trump administration is pressing Beijing to roll back plans for government-led development of Chinese global competitors in robotics, electric cars and other technologies. Washington, Europe, Japan and other trading partners say those violate China’s market-opening commitments and are based in part on stolen technology.

Trump’s announcement Sunday that he would increase tariffs on $200 billion US of Chinese imports to 25 per cent from 10 per cent caused global stock markets to plunge. Markets recovered after a Chinese spokesperson said Monday that envoys still were preparing to go to the United States, though there was no word then whether Liu would take part.

The American side is led by Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

A Commerce Ministry statement announcing Liu’s plans gave no indication whether other details such as the size of his delegation might change.

The Chinese government didn’t immediately respond to accusations Monday by American officials that Beijing was trying to backtrack on commitments made in earlier negotiations.

Washington and Beijing have raised tariffs on billions of dollars of each other’s exports, disrupting trade in goods from soybeans to medical equipment. Estimates of lost potential sales so far range as high as $25 billion.

Both governments have said negotiations were making progress, but Trump expressed frustration Sunday at the pace.

U.S. Treasury Secretary Steven Mnuchin, left, and U.S. Trade Representative Robert Lighthizer, are key players in the ongoing trade talks. (Andy Wong/The Associated Press)

Mnuchin said Monday that Chinese officials “were trying to go back on some of the language” that had been negotiated in 10 earlier rounds of talks.

The conflict is testing how far Beijing is willing to go in changing a state-led economic model it sees as the path to prosperity and global influence — and how much power Washington will have to enforce any agreement.

The United States accuses Beijing of pressing companies to hand over technology in exchange for market access, improperly subsidizing Chinese firms and stealing American trade secrets.

No details of the talks have been released. But private sector analysts say Beijing is willing to change details of its plans so long as it preserves the ruling Communist Party’s dominant economic role.

The Trump administration has imposed 10 per cent tariffs on $200 billion in Chinese imports and 25 per cent tariffs on another $50 billion. The Chinese have retaliated by targeting $110 billion in U.S. imports.

Trump said Sunday he also planned to impose 25 per cent tariffs on another $325 billion in Chinese products. That would extend penalties to everything China ships to the United States, its biggest foreign customer.

A stumbling block in the talks is U.S. insistence on an enforcement mechanism with penalties if Beijing fails to keep its promises. The Trump administration wants to keep tariffs on Chinese imports to maintain leverage over Beijing.


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The U.S. government has begun returning to Malaysia some $200 million US recovered from asset seizures linked to state fund 1MDB, with about a quarter of the amount already repatriated, the two countries said on Tuesday.

Malaysian and U.S. authorities say about $4.5 billion were allegedly siphoned from 1Malaysia Development Berhad (1MDB), a state fund founded in 2009 by then Malaysian prime minister Najib Razak.

Since losing a general election last year, Najib has been charged with more than 40 criminal offences linked to losses at 1MDB and other state entities. He has pleaded not guilty.

Since 2016, the U.S. Department of Justice (DoJ), in the biggest ever case in its anti-kleptocracy program, has filed civil lawsuits seeking to seize about $1.7 billion in assets allegedly bought with stolen 1MDB funds, including a private jet, luxury real estate, artwork, and jewelry.

The United States will return to Malaysia about $196 million in the first installment of funds recovered from the asset seizures, U.S. ambassador to Malaysia, Kamala Shirin Lahkdhir, said in a statement.

“We are extremely pleased that this first tranche of assets from this Justice Department investigation is being transferred back to Malaysia, demonstrating the U.S. commitment to return these assets for the benefit of the people of Malaysia,” she said.

Settlement with Hollywood company

So far, $57 million has been returned to Malaysia following a settlement reached with Hollywood film production company Red Granite Pictures, which is linked to Najib’s stepson Riza Aziz, Malaysia’s Attorney General Tommy Thomas said in a statement.

Red Granite had paid the U.S. government $60 million in September 2017 to settle a civil forfeiture claim over the rights to the 2013 Oscar-nominated film The Wolf of Wall Street, which the DoJ says was financed with 1MDB funds.

Former Malaysian Prime Minister Najib Razak is on trial for corruption amid allegations that huge sums of money from 1MDB landed in his personal account. (Annice Lyn/Associated Press)

A deduction of $3 million from the settlement was made to reimburse costs incurred by U.S. authorities in “investigating, seizing, litigating and securing settlement of the Red Granite funds,” Thomas said.

The DoJ is also in the process of remitting another $139 million, pending the sale of a Manhattan property linked to fugitive Malaysian financier, Low Taek Jho or Jho Low, Thomas said.

Low is facing criminal charges in Malaysia and the United States over his alleged central role in the 1MDB case. He has consistently denied wrongdoing and his whereabouts is unknown.

Several countries investigating

The latest money returned by the United States brings the total amount recovered by Malaysia to $322 million. This includes $126 million from the sale of a 300-ft luxury yacht allegedly bought by Low with 1MDB funds, Thomas said.

Singapore authorities have also ordered a separate return of $36.70 million in 1MDB-linked funds to Malaysia, he added.

At least six countries, including the United States, Singapore and Switzerland, are investigating alleged graft and money laundering at 1MDB.


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