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Petroecuador, the state oil company of Ecuador, declares force majeure in its operations
The head of Ecuador's state oil company Petroecuador announced on Thursday that all operations, including crude imports, were suspended after two pipelines important to the company's operation stopped pumping. Heavy rains in Napo, a province of the Amazonian region, have accelerated erosion and threatened infrastructure. The SOTE and OCP pipelines owned by the state suspended pumping this week. Leonard Bruns, Petroecuador's chief executive officer, said: "Force majeure was declared to allow (Petroecuador), to act with all of the necessary tools." Due to the suspension of transport operations, the company said that it has also begun closing down oil wells. According to a report released on Thursday by Ecuador's Hydrocarbons Regulating and Control Agency, the country's crude oil production has fallen about 133,000 barrels per daily (bpd). Since 2020, erosion along the Coca River has spread, damaging oil infrastructure, roads, and now the Coca Codo sinclair hydroelectric facility, the largest one in Ecuador. The authorities said that temporary bypasses on both pipelines are being constructed to resume operation, and studies have been approved for permanent rerouting in order to avoid the affected area. (Reporting and writing by Alexandra Valencia, Editing by Brendan O'Boyle & Kylie Madry; Writing by Natalia Siniawski)
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Source: US allows GE to restart jet engine shipments from China's COMAC
According to a source familiar with the situation, the U.S. informed GE Aerospace that it could restart jet engine shipments from China to COMAC on Thursday. This is a sign that U.S. and Sino trade tensions are easing, as Beijing has made concessions over rare earths. This week, the United States also lifted export restrictions to China on chip design software developers as well as ethane manufacturers. This suggests that trade negotiations between China and the United States are progressing. As part of the ongoing global trade war, the two largest economies have issued new licensing requirements and license suspensions on different exports. GE and the Commerce Department did not respond to a request for comment sent via email. The licenses granted to GE Aerospace concern engines sold to China’s state-owned aerospace company COMAC. COMAC wants to compete with dominant plane makers Airbus & Boeing. A spokesperson from the Chinese Embassy in Washington didn't immediately respond to an inquiry for comment. These restrictions were one of many countermeasures taken by the U.S. administration under President Donald Trump in response to China’s April export restrictions on rare Earths and magnets. Beijing's action on rare earths as a retaliation to Trump's tariffs earlier this year has upset supply chains that are important for automakers, aerospace companies, semiconductor companies, and military contractors. This issue threatened to derail a bilateral deal. According to a person familiar with the matter, who declined identification because they weren't authorized to speak in public, the license suspensions lifted by GE concern LEAP-1C engines for COMAC C919 single aisle aircraft and GE's CF34 engines for COMAC C909 regional aircraft. The LEAP 1C engines are a product of GE Aerospace's joint venture with France's Safran. C919 is manufactured in China, but many of the components are imported. According to a person who refused to name the company, at least one other aeronautical company had their license suspensions lifted for China on Thursday. Honeywell Aerospace also supplied COMAC’s C919 with an auxiliary power unit, wheels and brakes as well as a flight control package and navigation package. Honeywell has not responded to a request for a comment. Collins Aerospace is a subsidiary company of RTX that also supplies COMAC with components. Collins Aerospace declined to comment about the license status. The U.S. has also suspended the licenses of nuclear equipment suppliers who sell to China. Westinghouse, Emerson and other U.S. suppliers of nuclear equipment are among them. Reporting by Karen Freifeld, New York; editing by Bill Berkrot Chris Sanders and Daniel Wallis
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US lifts license restrictions on GE jet engines for China's COMAC
According to a source familiar with the situation, the U.S. Department of Commerce notified GE Aerospace that it could once again ship jet engines to China’s COMAC. This lifted license suspensions issued a few weeks ago. GE and the Commerce Department did not reply to a request for comments sent via email. License suspensions are just one of many new restrictions that have been imposed in recent weeks on U.S. imports to China, as the trade conflict between the two largest economies has moved beyond retaliatory duties to disrupting the supply chains. This week, restrictions were also lifted on other sectors including chip design software, ethane and others, as a sign that trade tensions are further easing. The licenses granted to GE Aerospace concern engines developed by China's state owned aerospace manufacturer COMAC. COMAC is competing with Boeing and Airbus in the development of commercial aircraft. According to a person familiar with the matter, who declined identification because they weren't authorized to speak in public, COMAC will receive Leap-1C engine licenses for its C919 single aisle aircraft and GE's CF34 engines for COMAC C909 regional jets. The LEAP 1C engines are a product of GE Aerospace's joint venture with France's Safran. C919 is manufactured in China, but many of the components are imported. It was not possible to determine immediately which other aerospace firms may have been affected. Bill Berkrot, Bill Freifeld and Karen Freifeld reported from New York.
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Netanyahu visits Israeli kibbutzs ravaged by Hamas on his first visit
Benjamin Netanyahu, Israel's Prime Minister, visited the Nir Oz Kibbutz in Israel near the Gaza Strip for the first since Hamas militants crossed the border nearly 21 months ago and killed or abducted nearly one out of four residents. Netanyahu and his wife Sara faced criticism over the government's inability to prevent the attack and massive protests calling for the return of the hostages still being held in Gaza. They were met by loud protests, hugs and deep concern. "I am deeply committed to ensuring the safe return of all our hostages. Netanyahu said that there were still 20 hostages alive, as well as those who had died. We will bring them back all. He promised to rebuild the kibbutz after he toured its devastation. Netanyahu will meet Donald Trump on Monday at the White House. They will discuss a U.S. backed proposal for a ceasefire of 60 days in the Gaza War between Israel and Hamas, which would include the release of hostages. The raid by militant Palestinian gunmen on Israel on October 7, 2023 was the deadliest Jewish attack since the Holocaust of World War Two. The gunmen crossed over the Gaza border and attacked Nir Oz as well as other targets. Hamas fighters took 251 hostages and killed 1,200 people in Gaza that day, according to Israeli statistics. Einav Zangauker's son Matan, who was held hostage in Gaza and believed to still be alive, had accused Netanyahu previously of choosing his political survival above ending the war. She hugged him on Thursday. She wrote on X later that she and X had discussed her concern about her son's worsening dystrophy. "I told him that the people of Israel have given him a mandate to come to a comprehensive agreement on the return of the 50 hostages - both the living and dead. "Now is the time to act," she wrote. Gaza's health ministry reports that Israel's military offensive has killed over 57,000 Palestinians since its inception. It also says the assault has displaced more than 2,000,000 people from the area, caused widespread hunger, and left much of it in ruin. (Writing and editing by David Gregorio; Howard Goller)
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For retailers, US-Vietnam trade deal leaves questions
Industry experts on Thursday said that the U.S.-Vietnam trade agreement raises questions for retailers of sportswear and apparel like Nike and Adidas who source their shoes and clothing from factories in Southeast Asia. Donald Trump announced on Wednesday that the U.S. would impose a tariff of 20% on many imports coming from Vietnam. "Transshipping" goods from other countries via Vietnam will be subject to a 40% tax. The garment and shoe industries in Vietnam are heavily dependent on imported yarns, fabrics like polyester, and trims such as buttons and zippers from China. It wasn't immediately clear if such products made in Vietnam with Chinese inputs were subject to the transshipment tax. Transshipment is a term used to describe a product that was primarily made in China and shipped to Vietnam, before being re-labeled and exported under the Vietnam label. In an interview with CNBC on Thursday, U.S. Treasury secretary Scott Bessent said that "a large amount" of the trade coming from Vietnam was transshipment. Sheng Lu is a professor of fashion and clothing studies at the University of Delaware. Lu said that "strictly speaking, transshipment was illegal. However, using foreign components to comply with the rules of origin is a common practice." "Misconducting these two practices will only increase uncertainty and create further supply chain disruption." Vietnam is a popular destination for brands and retailers looking to reduce their dependence on factories in China. However, it has become the target of Trump’s aggressive trade policies. Vietnam is the largest supplier of Adidas products, with 27%, and a major producer of Nike sports shoes. Nike's spokesperson confirmed that the company was still investigating the details of the agreement. Adidas declined to comment. "This new change, and the possibility of this transshipment tax, will cause many importers to seriously question whether Vietnam is a viable alternative." Lila Landis is a customs compliance specialist based in Fort Worth. Landis said that while details have not been confirmed, it is possible for the 40% tariff to be added on top of the China duty applicable to any particular product. This would make the penalty extremely punitive. According to Footwear Distributors and Retailers of America, which called the tariffs unjustified and said that they would hurt American consumers, the U.S. imported more than 274 million pairs of footwear from Vietnam in the past year. Joe Jurken is the managing director of The ABC Group, a supply chain management firm. He said that there was disappointment with the 20% figure for Vietnam. Jurken stated that the announced tariff on Vietnam will help to close the gap between the U.S. and China. The U.S. tariffs are 55% and this may encourage some brands, rather than switching suppliers, which can be costly and time-consuming, to stay with China. Jurken stated that "there is a shortage of capacity in Vietnam due to the lack of factories and an abundance of capacity in China... So, we believe, the Chinese factories will benefit in the short-term." Raymond James analysts say that the 20 percent tariff is still better than the 25-30% tariff rate that the market had feared. The deal announcement could help retailers who were considering Vietnam place orders. Jim Kennemer is the managing director of Cosmo Sourcing. He said that it would be "nearly impossible" to have a supply chain made up of 100% non-Chinese products.
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United and JetBlue ask US not to accept Spirit Airlines' complaint about partnership
United Airlines and JetBlue Airways, a smaller airline, asked the U.S. Transportation Department on Thursday to reject a Spirit Airlines complaint about their proposed partnership. United and JetBlue called the arguments in the complaint about reduced competition "fiction", adding that "Blue Sky" will ensure JetBlue's competitiveness and independence, and allow JetBlue to continue growing and competing as an independent airline. United and JetBlue announced in May that their "Blue Sky", tie-up, would allow United to access some JetBlue slots at New York John F. Kennedy International Airport beginning in 2027. They also said they would exchange flight times at Newark airport. This plan also combines aspects of loyalty programs with booking. Last month, Spirit, a budget carrier, said that the deal would make JetBlue "a de facto vassal to United." JetBlue's non-stop service between Newark, Las Vegas and Los Angeles as well as its expanded service between Newark, Los Angeles and Las Vegas were cited as direct competitors to United's current services on these routes. Spirit Airlines said in a statement last month that the partnership will put pressure on smaller carriers to form similar agreements with large airlines. It did not immediately respond to Thursday's filing. JetBlue and Spirit cancelled a $3.8billion merger agreement in March 2024 after an American judge blocked it on the grounds of anti-competition. JetBlue is seeking new partnerships since a federal court judge ruled that its Northeast Alliance with American Airlines would be blocked in 2023. JetBlue is struggling to achieve sustained profitability following the COVID-19 epidemic. In just two out of nine quarters, it has posted a profit. (Reporting and Editing by Franklin Paul, Cynthia Osterman, and David Shepardson)
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Virgin Music CEOs at Universal take aim at critics of the Downtown Music deal
The Virgin Music Group, a division of Universal Music Group, reacted to critics on Thursday of the $775 million deal that it made with Downtown Music. They said the deal created a company which would provide a variety of services for independent labels. The European Commission will announce its decision on the 22nd of July whether it approves the deal, with or without concessions, or if there are any concerns. Virgin Music is Virgin's global independent music unit. Universal is the largest music company in the world. Downtown is a music publisher with a large number of businesses that assist musicians in collecting royalties. Impala, a group of independent European labels, has criticised the acquisition. They claim that it will further consolidate Universal's position in European music markets as well as strengthen its control over independent labels. Virgin will enhance Downtown Music's businesses FUGA and Curve Royalties as well as CD Baby, Downtown Music Publishing, Songtrust, and Downtown Music Publishing after the acquisition. The two co-CEOs denied that these services would become restricted or closed. Virgin Music Group co-CEOs Nat Pastor & JT Myers wrote to their staff in a Thursday note. They denied what they called suggestions that Universal’s market share has "skyrocketed", since it acquired EMI in 2012. Pastor and Myers stated that the independent sector has seen a substantial increase in its market share, while UMG has not. Also, they rejected the idea that Virgin would use Downtown's customers to give Universal a competitive advantage. "We are proud to report that we have not received a single complaint about misuse of customer information since we started this business," wrote Pastor and Myers. (Reporting and editing by Peter Graff.)
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Spain adds Wizz air to its probe of low-cost airlines over cabin baggage fees
Wizz Air, a low-cost airline in Europe, confirmed Thursday that the Spanish Ministry of Consumer Affairs was investigating it for practices like charging extra for larger cabin luggage. Five other airlines have already been fined a total of 179 million Euros ($211 million) by the ministry. The Spanish court suspended fines for three airlines, Ryanair, Norwegian Air, and IAG's Vueling. This was done while the case is being reviewed by the courts following legal challenges brought forth by these carriers. EasyJet and Volotea, a privately-owned airline, were also fined. According to the ministry, it could take several months for the latest case to be resolved. Wizz Air's spokesperson confirmed that the airline is the subject of an investigation, but declined to elaborate. Instead, the spokesperson referred to a statement regarding a larger European Parliament initiative to stop airlines from charging for hand baggage. A rule like this would limit the current freedom of business and choice for customers, and make flying more expensive. The Spanish Ministry has stated that the airlines have violated their customers' rights when they charge for larger carry-on luggage, seat selection, and printing of boarding passes. They also claim to have done so by refusing cash payment at check-in, or on board purchases. During the legal proceedings, it was allowed for the five airlines that were already under investigation to continue charging passengers for larger bags and seats. Ryanair and the industry group ALA say the fines are unjustified as these practices are widespread in the European Union. Reporting by Corinn Pons and Sarah Young. Editing by Susan Fenton, Lisa Shumaker.
International trade could climb 3% in 2025 if MidEast conflicts consisted of, WTO says
The World Trade Company on Thursday pushed up its projection for international trade volumes this year and stated a further pick up to 3% development was likely in 2025, assuming Middle East disputes are kept in check.
International trade recuperated this year from a 2023 slump driven by high inflation and rising interest rates, the WTO report said. In April, the global trade guard dog forecast a 2.6% increase in volumes, which it revised up on Thursday to 2.7%.
We are anticipating a gradual healing in worldwide trade for 2024, but we stay alert of possible setbacks, especially the prospective escalation of regional conflicts like those in the Middle East, said WTO Director-General Ngozi Okonjo-Iweala in a. declaration.
The impact could be most serious for the countries straight. involved, however they might likewise indirectly impact international energy. costs and shipping routes.
Israel's blitz against Lebanon's Hezbollah motion in. recent weeks, following a year-long war against Hamas in Gaza,. has actually stoked fears of an inexorable slide towards a pan-Middle. Eastern war.
The WTO also cited diverging financial policies amongst significant. economies as another drawback danger for the projections. This. might result in financial volatility and shifts in capital flows. as reserve banks reduce rates of interest, the report said,. including that this would make financial obligation servicing more tough for. poorer countries.
There is also some minimal advantage potential to the forecast. if interest rate cuts in advanced economies promote more powerful. than anticipated development without reigniting inflation, the WTO. said.
(source: Reuters)