A mechanic works at factory in Hanoi, Vietnam.
Chau Doan | LightRocket | Getty Images
Vietnam may have appeared to replaced China in selling certain goods to the U.S., but the Southeast Asian country still has a long way to go before it can fully substitute China as a manufacturing hub for the world.
In the first nine months of this year, U.S. imports from Vietnam jumped 34.8% year on year, accelerating from a 5.8% gain in all of 2018, according to a Thursday note by consultancy IHS Markit. In comparison, U.S. imports from mainland China shrank 13.4% year on year in the January-to-September period, the note said.
Tariffs were a major reason behind the decline in U.S. imports from China, said Michael Ryan, IHS Markit’s associate director of comparative industry service, who wrote the note.
He added that Vietnam’s fastest growing export categories to the U.S. are computers, telephone equipment and other machinery.
Those products were among the U.S.’s top imports from mainland China, Mongolia and Taiwan in 2018, according to the United States Trade Representative. That suggests that Vietnamese exports of those goods to the U.S. may have replaced the reduction in flows between China and America.
Challenges for Vietnam
Vietnam is often named as one of the largest beneficiary of the trade war because of an increase in its exports to the U.S. In addition, Southeast Asian country has seen a jump in foreign direct investments from manufacturers looking to circumvent elevated tariffs between the U.S. and China.
But the U.S. has not invested in Vietnam in a big way, noted Ryan. He pointed out that American investments into Vietnam only accounts for 2.7% of total FDI the Southeast Asian country received.
One reason is the U.S. doesn’t have a free trade agreement with Vietnam and the broader Association of Southeast Asian Nations, according to the IHS Markit report. But that’s just “one of many factors tempering the pace and magnitude of supply-chain diversification” into Vietnam, Ryan said.
Vietnam is also faced with a shortage in skilled labor, he said. The country’s talent pool has not been able to support the influx of inquiries, as many multinational companies are looking to relocate parts of their manufacturing supply chain outside of China, he explained.
“Simply, demand is outpacing the current ability to supply,” he said, adding that infrastructure in Vietnam is not yet up to standards for many international firms to establish shops.
Specifically, that means finding local business partners and fulfilling government requirements to obtain permits could be major obstacles for foreign companies, according to Ryan. In addition, Vietnamese roads were poorly built and ports are already congested, which add to the time needed to travel and move goods around, he said.
“Taken in combination, these factors are lengthening the delivery cycle to consumers and point to a drawn-out process of extricating operations from mainland China’s orbit,” said Ryan.
Jared Kushner, Trump’s son-in-law, takes a bigger role in China trade talks
Senior Advisor Jared Kushner listens while US President Donald Trump announces an agreement with Guatemala regarding people seeking asylum in the Oval Office of the White House on July 26, 2019 in Washington, DC.
Brendan Smialowski | AFP | Getty Images
President Donald Trump’s son-in-law Jared Kushner has added another role to his long list of White House duties — U.S.-China trade negotiator — as Washington and Beijing try to reach an initial agreement to avoid new U.S. tariffs on Dec. 15.
People familiar with the talks said Kushner, who helped bring the U.S.-Mexico-Canada trade agreement (USMCA) to fruition, has increased his direct involvement in the negotiations with China over the past two weeks.
While the talks have made some progress, these people said the two sides have not yet agreed on the extent to which the United States will remove existing tariffs on Chinese goods and on specific commitments by China to increase purchases of U.S. agriculture products.
A White House official confirmed Kushner’s involvement but declined to provide specific details on the influence he has had on the negotiations. Speaking on the condition of anonymity, the official said Kushner has recently met with Cui Tiankai, the Chinese ambassador to the United States.
The two have met multiple times since Trump took office, establishing a kind of back-channel relationship, trade experts say.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin have been leading negotiations with Chinese Vice Premier Liu He for the past two years over a range of U.S. complaints about China’s trade and subsidy practices, including the forced transfer of American technology to Chinese firms.
“Jared has been engaged in the process from the beginning in full coordination and in support of Ambassador Lighthizer’s and Secretary Mnuchin’s efforts,” the White House official said.
Kushner played a pivotal role in the later stages of U.S. trade negotiations with Canada and Mexico in 2018 to replace the North American Free Trade Agreement, helping to resolve final differences. Lighthizer said the USMCA deal “would not have happened if it wasn’t for Jared.”
Former Mexican Foreign Minister Luis Videgaray, with whom Kushner met frequently, said Kushner patched up the negotiations more than once after they fell apart.
Kushner, who is married to Trump’s daughter Ivanka, has taken on many challenges during the past three years, including trying to develop a Middle East peace plan, working on changes to U.S. immigration policies and advising Trump on dealing with opioid addiction and problems with Department of Veterans Affairs.
But sealing a deal with China could prove daunting. U.S. Commerce Secretary Wilbur Ross, speaking to Reuters on Tuesday, rejected any deadlines for a deal and launched a fresh attack on Chinese telecom equipment giant Huawei, accusing it of telling suppliers to move operations overseas to skirt U.S. sanctions.
Pelosi directs House Dems to proceed with articles of impeachment against Trump
House Speaker Nancy Pelosi on Thursday asked the House committees investigating President Donald Trump to proceed with articles of impeachment.
“The president’s actions have seriously violated the Constitution,” Pelosi, D-Calif., said in a statement to reporters on Capitol Hill.
He “leaves us no choice but to act,” she said.
Pelosi spoke for about six minutes. She took no questions.
House Democrats are in the midst of an inquiry into whether Trump abused his power by withholding military aid to Ukraine in exchange for that country announcing investigations for his own political benefit and at the expense of U.S. interests.
Pelosi’s comments confirm what was widely expected: that the Democrat-controlled House will vote on whether to impeach the president.
“Sadly, but with confidence and humility, with allegiance to our founders, and our heart full of love for America, today I am asking our chairmen to proceed with the articles of impeachment,” she said.
Minutes after Pelosi concluded her remarks, White House press secretary Stephanie Grisham said in a tweet that “we look forward to a fair trial in the Senate.”
The Judiciary Committee, led by Rep. Jerrold Nadler, D-N.Y., will be responsible for drafting specific articles of impeachment. On Wednesday, Nadler’s committee held a public hearing with four legal scholars who discussed whether Trump’s efforts toward Ukraine met the constitutional bar for impeachment.
Trump bashed that proceeding in a pair of tweets prior to Pelosi’s remarks Thursday morning.
“The Do Nothing Democrats had a historically bad day yesterday in the House. They have no Impeachment case and are demeaning our Country. But nothing matters to them, they have gone crazy,” he tweeted.
Trump added the Republican-led Senate will call Pelosi to testify, along with former Vice President Joe Biden and his son Hunter, whom Trump asked Ukraine President Volodymyr Zelenskiy to “look into” in a July 25 phone call that helped spark the impeachment probe.
The Judiciary Committee will hold a hearing Monday morning on the evidence gathered in the impeachment inquiry, Nadler’s panel announced Thursday.
US Speaker of the House Nancy Pelosi speaks about the impeachment inquiry of US President Donald Trump at the US Capitol in Washington, DC, on December 5, 2019.
Saul Loeb | AFP | Getty Images
Trump and his allies have accused Democrats of ignoring the business of governing by focusing entirely on the impeachment proceedings. “Democrats are too busy hosting a panel of law professors to criticize president Trump on television instead of the things the American people actually need us to address,” Senate Majority Leader Mitch McConnell, R-Ky., said on the Senate floor Thursday.
Pelosi clapped back at a news conference later that day.
“The Grim Reaper says all we’re doing is impeachment,” Pelosi said, referring to a nickname for McConnell, who has refused to take up many House-passed bills, that he and his supporters have championed.
“No. We have 275 bipartisan bills on your desk,” including legislation that would strengthen background checks for gun purchases, Pelosi said.
The president also claimed that House Intelligence Chairman Adam Schiff, D-Calif., who led weeks of private and public impeachment hearings with fact witnesses, will be called to appear in the Senate trial.
A 300-page report published Tuesday, which was compiled by Schiff and Democrats on the Intelligence, Foreign Affairs and Oversight committees, synthesized the evidence gathered from those hearings.
It also contained documentary evidence, including phone records that show the Intelligence panel’s top-ranking Republican, Rep. Devin Nunes, calling key figures in the impeachment probe. Those figures include Trump’s personal attorney Rudy Giuliani, who was deeply involved in the Ukraine efforts, as well as Giuliani associate Lev Parnas, who was arrested in October and charged with conspiracy, lying to the Federal Election Commission and falsifying records.
“The facts are uncontested,” Pelosi said in her remarks. “The president abused his power for his own personal political benefit at the expense of our national security by withholding military aid and crucial oval office meeting in exchange for an announcement of an investigation into his political rival.”
This is breaking news. Please check back for updates.
— CNBC’s Yelena Dzhanova contributed to this report.
Russian malware hackers charged in evil corp $100 million bank scheme
The U.S. Justice and Treasury departments took action Thursday against a Russian hacking group known as “Evil Corp.,” which stole “at least” $100 million from banks using malicious software that swiped banking credentials, according to a joint press release.
“Evil Corp.,” a name reminiscent of the nickname for the key malevolent corporation in the popular television drama “Mr. Robot,” is “run by a group of individuals based in Moscow, Russia, who have years of experience and well-developed, trusted relationships with each other,” according to a Treasury Department press release.
The criminal group used a type of malware known as “Dridex,” which worked to evade common antivirus software and spread through emailed phishing campaigns. Once infected, the malware was able to steal login credentials and empty the accounts of bank employees and bank customers, forwarding the proceeds to offshore accounts held by Evil Corp, according to the press release. The group also stole an estimated $70 million using a similar malware known as “Zeus.”
The federal agencies say Evil Corp.’s criminal proceeds likely are “significantly higher” than the estimated $100 million stolen, making the enterprise one of the biggest hacking groups ever, according to the release.
The Justice Department announced indictments against key ringleaders of the group, while the Treasury Department announced sanctions against Evil Corp. under the department’s Office of Foreign Assets Control (OFAC).
“Treasury is sanctioning Evil Corp as part of a sweeping action against one of the world’s most prolific cybercriminal organizations. This coordinated action is intended to disrupt the massive phishing campaigns orchestrated by this Russian-based hacker group,” said Steven Mnuchin, Secretary of the Treasury, in a statement. “OFAC’s action is part of a multiyear effort with key NATO allies, including the United Kingdom. Our goal is to shut down Evil Corp, deter the distribution of Dridex, target the “money mule” network used to transfer stolen funds, and ultimately to protect our citizens from the group’s criminal activities.”
The group targeted major corporations in addition to bank accounts using a variety of methods. Penneco Oil allegedly lost millions of dollars to Evil Corp., which were then transferred to a bank in Minsk, Belarus. The group also targeted, apparently unsuccessfully, the Sharon City School District in Western Pennsylvania, among other targets outside the financial services sector.
In all, the action targets 17 individuals associated with the organization, including Evil Corp.’s leader, Maksim Yakubets. The State Department has offered a $5 million reward for information on Yakubets.
In addition to his cybercriminal activities, Yakubets, “also provides direct assistance to the Russian government’s malicious cyber efforts, highlighting the Russian government’s enlistment of cybercriminals for its own malicious purposes,” according to the Treasury Department.
OFAC, Treasury and the Justice Department have been focused on taking action to spotlight the Russian government’s persistent use of known criminals in state-sponsored activity, which they have said blurs the lines between whether the activity is the work of strictly a criminal enterprise or Putin’s government itself.
However, it is rare for the U.S. government to successfully extradite criminals it has indicted from Russia, where most of those named in Wednesday’s action currently reside. Two Ukrainian co-conspirators named in the indictments, Yuriy Konovaleko and Yevhen Kulibaba, were extradited from the U.K. and pleaded guilty to conspiracy and racketeering charges in 2015. Both have already completed their sentences.
In addition to Yakubets, the actions name Denis Gusev “a senior member of Evil Corp,” who serves as the director of several other businesses based in Russia, including Biznes-Stolitsa, Optima, Treid-Invest, TSAO, Vertikal and Yunikom, which are involved in several different industries, among them trade, wholesale goods and forestry. The companies are also subject to OFAC sanctions, according to Treasury.
“Evil Corp relies upon a cadre of core individuals to carry out critical logistical, technical, and financial functions such as managing the Dridex malware, supervising the operators seeking to target new victims, and laundering the proceeds derived from the group’s activities.” Some of the other members cited for allegedly “providing material assistance” in this way, according to Treasury, are Dmitriy Smirnov, Artem Yakubets, Ivan Tuchkov, Andrey Plotnitskiy, Dmitriy Slobodskoy, and Kirill Slobodskoy.
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