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San Francisco Community Rallies To Save Historic Comedy Club

Punch Line, the oldest comedy club San Francisco, may be the next casualty in the city’s steady march from bohemian enclave to tech office park. Politicians and comedians are fighting to save it.



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Comedian Dave Chappelle calls it one of the most important rooms for American culture. And now this room is at risk of being lost forever to the accelerating forces of big tech. Punch Line Comedy Club, the oldest in San Francisco’s once-vibrant standup scene, cannot renew its lease. And it’s not because Punch Line doesn’t have the money. NPR’s Aarti Shahani has this story.

AARTI SHAHANI, BYLINE: Punch Line opened its doors in 1978. Household names have stood on this stage – Robin Williams, Dana Carvey, Ali Wong, Nato Green. All right, that last one is only household in the local scene.

NATE GREEN: I need to talk to you about politics. Some people don’t want to talk about politics. They’re, like, Nato, why do you got to talk about politics? What do politics have to do with me? I’m not an immigrant or a black person or a Muslim or gay, lesbian, bisexual, transgender, or a Jew or a woman or an old person or a young person.

SHAHANI: You get it. By day, Green is a labor organizer fighting for nurses at the hospital renamed after Mark Zuckerberg’s family. By night, he’s grappling with becoming the entertainment help for the Facebook, Google, Apple, Salesforce engineers looking to unwind after their hard day’s work. Green tells himself to smile more when he’s about to singe his audience, like now.

GREEN: And if you’re a tech person, I want you to know I don’t hate you. I don’t have anything against you personally, just everything that you represent.

SHAHANI: Punch Line may be the next casualty in San Francisco’s march from bohemian enclave to tech office park. At least six comedy clubs have closed in the last decade. Punch Line was supposed to be invincible. It’s owned by Live Nation, a multi-billion-dollar company. But bigger billionaires have declined to renew the club’s lease. Green and other comedians speculate that property owner Morgan Stanley has a different vision for a space – tech workers to replace culture workers.

GREEN: People programming computer programs so that other people somewhere else can look up what it is like to be in person at a comedy club – that’s instead of having an actual human experience.

SHAHANI: Tech has created opportunities for comedy – the endless stream of curated standup on Netflix and Hulu. But Green says that’s no substitute for the messy, creative chaos of the physical world. He and his friends got paid to try out new material, fail and fail fast or rise in this intimate venue.

CHRIS GARCIA: It looks exactly the same. I mean…

SHAHANI: Comedian Chris Garcia, this night’s headliner, at the bar in the back.

Yeah, the rug definitely doesn’t look new.

GARCIA: Yeah, that rug is old. Yeah, you look at this brass. This is – like, that’s from the cocaine days (laughter).

SHAHANI: Comedian-organizer Green turned this fight to save the Punch Line into an all-out campaign. He sent up the smoke signal. In response, one of the biggest names in comedy came and stood beside him on the steps of San Francisco City Hall.

(SOUNDBITE OF ARCHIVED RECORDING)

DAVE CHAPPELLE: When I quit my show, that room became like a home to me.

SHAHANI: Dave Chappelle, who came to town to perform at the Punch Line.

(SOUNDBITE OF ARCHIVED RECORDING)

CHAPPELLE: It was the last place I saw Robin Williams alive. It was the place I was at when I found out I was having my first kid.

SHAHANI: Now, the skeptics may say, just move the club to a new space. What’s the big deal?

(SOUNDBITE OF ARCHIVED RECORDING)

CHAPPELLE: It’d be like burning down the Louvre or selling the Louvre to somebody. And there’s beautiful art that’s going up in this city, and you can’t just put it in another room. That room is special.

SHAHANI: This past week, the government stepped in. City supervisors unanimously passed an emergency ordinance that says whatever the owner wants to do with the room, it’s got to be used for entertainment. The move was unusual and also temporary. Morgan Stanley declined to comment, but one of its other tenants, Google, said in a statement they want to keep the Punch Line as their neighbors. Aarti Shahani, NPR News, San Francisco.

Copyright © 2019 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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Trump: U.S., Mexico Reach Deal To Avoid New Tariffs

Trucks pass along a border wall as they get into position to cross into the United States at the border in Tijuana, Mexico, on Friday. Companies have been rushing to ship as many goods as possible out of Mexico to get ahead of possible tariffs threatened by President Donald Trump, hurriedly sending cars, appliances and construction materials across the border to beat Monday’s deadline.

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Updated at 10:25 p.m. ET

The U.S. and Mexico have “reached a signed agreement” that would avert the tariffs that were scheduled to begin on Monday, President Trump said on Friday evening.

As part of the deal, Mexican officials “agreed to take strong measures to stem the tide of Migration,” Trump tweeted.

Mexican President Andres Manuel Lopez Obrador also praised the deal, thanking “all Mexicans who made it possible to avoid the imposition of tariffs on Mexico products exported to the United States.” He called for celebrations in Mexico on Saturday.

Under a joint agreement released by State Department officials, Mexico will assist the United States in curbing migration across the border by deploying its national guard troops through the country, especially its southern border. The agreement also says Mexican authorities will work to dismantle human smuggling operations.

Mexico agrees to accept more migrants seeking asylum in the United States, according to the deal.

For its part, the U.S. promises that those asylum applicants will be “rapidly returned” to Mexico as they await the result of their claims. Mexico agrees to accept them and offer jobs, health care and education.

“The United States looks forward to working alongside Mexico to fulfill these commitments so that we can stem the tide of illegal migration across our southern border and to make our border strong and secure,” said Secretary of State Mike Pompeo.

Mexico’s ambassador to the U.S., Martha Bárcena, tweeted, “Cooperation for the development and prosperity of southern Mexico and Central America will be strengthened.” The joint statement said the countries recognize the importance of economic development in southern Mexico and Central America.

Mexican Foreign Minister Marcelo Ebrard said the National Guard deployment would start on Monday. “I think it’s a fair balance,” Ebrard said.

The agreement did not include a demand from the U.S. that Mexico agree to a “safe third country” designation, requiring the country to permanently accept most asylum seekers from Central America.

Trump announced on May 30 that he would impose a 5% tariff on all goods imported from Mexico beginning June 10, if Mexico did not take action to stop the flow of migrants from Central America into the U.S. After that, he said the tariffs would go up an additional 5% each month until reaching 25% in October, unless the administration were satisfied with the Mexican government’s efforts on immigration.

“If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the Tariffs will be removed,” the president’s statement said.

U.S. and Mexican officials continued the talks, as Mexico tried to reach an agreement to stop the tariffs from going into effect.

Officials meeting at the State Department focused on possible changes to asylum rules and whether Mexico could keep asylum seekers in their country while their cases in the U.S. were adjudicated.

Mexico’s foreign minister announced on Thursday that 6,000 national guard troops would be sent to the country’s southern border with Guatemala. Though, that force was recently established and has not gotten up and running, with estimates of full operations to be underway by 2021.

Earlier Friday, the president said “there is a good chance” the U.S. and Mexico could make a deal.

Border crossings have surged in recent months as Central American families have traveled to the U.S. seeking asylum.

More than 144,000 migrants were taken into custody after crossing the Southern border in May, according to data released by U.S. Customs and Border Protection on Wednesday.

Trump is facing rare pressure from congressional Republicans over his decision to link immigration policy to trade.

“There is not much support in my conference for tariffs,” Senate Majority Leader Mitch McConnell, R-Ky., told reporters after White House lawyers met with GOP senators at their weekly luncheon on Tuesday.

Lawmakers have warned the tariffs could hurt U.S. businesses and force U.S. consumers to pay more for products imported from Mexico.

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As Google Advances Its Interests, It Serves As Huawei Emissary To U.S.

Huawei employees wait for a shuttle bus at the company’s campus on April 12, 2019, in Shenzhen, China. A senior Huawei official says Google is talking with the U.S. government on behalf of the Chinese telecom giant.

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Google is quietly assuming the role of Huawei emissary, according to a senior Huawei official, in effect negotiating with the Commerce Department on behalf of the Chinese telecom giant that has been blacklisted in the U.S.

The fates of Huawei and Google are intertwined. Huawei is a leader in creating next-generation wireless networks, and it’s the world’s No. 2 maker of smartphones. Google provides support for Android, the popular mobile operating system. The U.S. government ban against Huawei also blocks Google from giving security updates to millions of existing Huawei phones and from issuing Android licenses in the future.

In an interview this week with Huawei Chairman Liang Hua, NPR asked him how his company would resolve the problem of losing access to Google software.

“Google is a very responsible company. We have maintained very good cooperation with each other,” Liang said through a translator at Huawei headquarters in Shenzhen, China. “We really look forward to productive results from the communication that Google is currently having with the Commerce Department.”

When the Huawei ban first went into effect, and Google announced it would cut ties, there was an outcry. Days later, the Trump administration said it would postpone parts of the ban until August.

The outsize power of American tech giants is well-understood the world over. Huawei’s Liang is now leaning on Google to influence the Commerce Department on his company’s behalf.

“We really hope that there are possible remedies coming out of the communication between Google and the Commerce Department,” he said. “We think that it is in the benefit of the consumers if they could work out a solution.”

Last month, citing national security concerns, the Trump administration added Huawei to a list of banned entities. American companies — from mobile providers to chipmakers like Intel and Qualcomm — will not be allowed to do business with Huawei. That’s because, according to U.S. officials, the company’s technology could be used for surveillance. If a resolution isn’t reached, Liang says, Huawei will have to build its own software, which would be “difficult.”

Liang says he does not know the details of the talks. In an email, a Google spokesperson says the company is engaging with the Commerce Department to ensure Google is in “full compliance” with the new rules. The company declined to say if its talks with the government have included directly or indirectly advocating for the ability to support future Huawei devices.

NPR interviewed several former senior officials at Commerce and the White House who are concerned that a private company, governed by its own self-interests, is advocating for a foreign partner that has been officially blacklisted for security concerns.

Eric Hirschhorn says turning Huawei into a bargaining chip in the U.S.-China trade war was a strategic mistake. “I spent a lot of time [trying] to make sure that national security and trade were kept separate,” he said. Mixing the two “would have been unheard of.”

Hirschhorn served in the Commerce Department during the Obama administration as an undersecretary for industry and security.

According to former Commerce officials, it’s standard for companies to reach out to the department about their ability to do business abroad. But the foreign partner is often at the table too, able to talk and be questioned.

Hirschhorn says the process changes once the U.S. government decides to take enforcement action – as it did last month when the U.S. banned Huawei. He says company financials should not be considered alongside national security decisions. And, he says, if Huawei gets what it wants, through Google’s efforts, that sends a “very, very bad message” to people who break American rules.

“If I know that my government or my powerful business partner can basically fix a ticket if I get one, I won’t worry about speeding,” Hirschhorn says.

The Commerce Department says it routinely responds to inquiries from companies about regulatory requirements. It says this is not new to this administration, and these discussions don’t influence law enforcement actions.

NPR’s Pallavi Gogoi contributed to this report.

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Ohio To Juárez And Back Again: Why Tariffs On Mexico Alarm The Auto Industry

An employee works at a wiring harness and cable assembly manufacturing company in Ciudad Juárez, Mexico, that exports to the U.S. in 2017. The auto industry says threatened tariffs would play havoc with supply chains.

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President Trump has threatened to impose tariffs on goods imported from Mexico, starting next week, if Mexico doesn’t take action to reduce the flood of Central American migrants across the Southern border of the U.S.

The proposed tariffs — which would start at 5% on goods crossing the border and could ramp up to 25% over time — would play havoc with supply chains in the auto industry.

To understand why, consider a vehicle’s wiring harness — the car’s nervous system, consisting of a complex network of wires that connect electronic components throughout the car body.

“It’s a huge, heavy bundle of wires and it’s gotten dramatically more complicated as cars become more electronic,” says Sue Helper, an economist at Case Western Reserve University. “If they’re done wrong, you can get electrical problems that you’ll never solve.”

All those wires are carefully laid out in the proper configuration (different for different car models) and bundled together before they’re installed in a vehicle. And for cars made in the U.S., that bundling almost always happens in Mexico — specifically, in Juárez. It’s time-intensive work, and labor is cheaper in Mexico.

But that’s just part of the picture.

The terminals on the ends of those wires might be built at an Aptiv factory in Warren, Ohio, shipped to Juárez for assembly into the wiring harness, and then shipped back to the U.S. to be installed in a car.

Smaller, stand-alone parts have their own wiring harnesses. For instance, a breakaway kit designed to stop a runaway trailer starts as a plastic box made by Hopkins Manufacturing Corp., in Emporia, Kan. Then it gets shipped to Juárez, where other components are combined and a wiring harness installed. Finally, the finished good comes back to the U.S. to go inside a trailer or to get sold to a consumer.

These goods start and finish in the U.S. but would be subject to tariffs under the new policy.

And it’s not clear just how hard those tariffs would hit.

Hopkins, the company manufacturing breakaway kits and other auto parts and accessories, currently has to pay duties only on the value that was added to the part while it was in Mexico. But CEO Brad Kraft says he is concerned that the tariffs proposed by the White House could be imposed on the total value of the good — which can be 10 times higher than the added value — every time it crosses the border.

If that’s how the tariffs are imposed, then when Hopkins Manufacturing brings a breakaway kit back into the U.S., the company would effectively be paying a tariff on the plastic box that it manufactured in Kansas.

The auto supply chain didn’t always involve so many parts crossing borders so many times. But over the past few decades, the system has dispersed geographically. That included wire bundling jobs once done in the U.S. being shifted to Mexico.

The supply chain could shift again in the future. But experts say these particular tariffs aren’t likely to bring any jobs back to the U.S. Instead, experts worry they could push assembly work from Mexico to other countries with low labor costs, which could actually lead to the loss of more American jobs.

“The wire that goes into those wire harnesses, the fabric that is coated around those wires, as well as all of the connectors are oftentimes made in the United States,” says Ann Wilson, the senior vice president of government affairs at the Motor & Equipment Manufacturers Association. “So if we make it more expensive to make wire harnesses in Mexico … and they move that offshore someplace else, we are going to lose those jobs in the United States.”

That might be a concern in the long term. For now, businesses aren’t ready to make drastic decisions like moving factories, given the profound uncertainty surrounding these tariffs.

In addition to the fluctuating amount — 5%, gradually rising to 25% — it’s not clear how long the tariffs might be in place; they’re pegged to progress on immigration, as defined by the administration’s “sole discretion and judgment.”

“What do we have to achieve in the immigration issue before suddenly the tariffs are now taken away?” asks Aaron Lowe, senior vice president for regulatory and government affairs for the Auto Care Association, which represents companies that provide aftermarket auto parts and services. “It’s very, very vague.”

Frontera Radiators and Parts, based in El Paso, Texas, right on the border, operates multiple manufacturing facilities in Mexico. It makes truck radiators that are no longer produced in the United States. CEO Arnoldo Ventura is considering buying products from competitors in India or Dubai, if the tariffs do make it up to 25%. But planning is difficult.

“Instead of looking forward a year or two years of planning, we’re just planning on every week,” Ventura says.

And Kraft of Hopkins Manufacturing says in this atmosphere of uncertainty, he can’t just pick up and move his factory from Juárez.

“There’s very little that we can do,” he says.

There’s only one thing, really. Prepare to pay the tariff — and pass the higher costs along to consumers.

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Lawmakers Turn To Look At The Economics, Equity And Fairness Of Silicon Valley

Lawmakers and regulators are both looking into antitrust violations, getting tougher on a quest to strengthen oversight of Big Tech. But antitrust laws were written with other industries in mind.



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The House plans to hold a series of hearings on Big Tech and the threat of monopoly power. Meanwhile, regulators plan to probe four tech giants in particular. The drumbeat to crack down on Facebook, Amazon, Google and Apple is growing louder here in the U.S.

NPR’s Aarti Shahani has been following the latest developments. And Aarti, to begin, it’s been a long time – right? – where the American political establishment has been criticized for basically giving tech giants a pass. That doesn’t seem to be the case now. What’s going on?

AARTI SHAHANI, BYLINE: Yeah, that’s right. The House Judiciary Committee announced yesterday they’re going to hold multiple hearings on antitrust issues. So much like we saw lots of investigation and testimony on Russian interference in U.S. elections and the role of Facebook in that, lawmakers are turning to look at the economics of Silicon Valley and equity fairness.

I’d say this shift got a real jump-start with the presidential candidates earlier this year, especially Elizabeth Warren, calling for the breakup of the largest companies. What’s interesting with the House move is that it is bipartisan. In a statement, Congressman Doug Collins, a Republican from Georgia – he said lawmakers have got to take a look at whether the market remains competitive. I don’t think that means he’s going to echo Warren’s call any time soon, though.

And it’s not just Congress. According to multiple news reports, the Justice Department and Federal Trade Commission are going to probe specific companies, and they struck a deal to divide up the work. Justice may take Apple and Alphabet – that’s the parent company of Google – and the FTC, Facebook and Amazon.

CORNISH: What’s the thinking behind that division of labor?

SHAHANI: So antitrust is a quick label for a long list of concerns. One concern is mergers that make a company way too big. The FTC formed a task force a few months back to look at that. Think Facebook acquiring WhatsApp and Instagram, Amazon buying Whole Foods and Audible. So that could be why the FTC is focusing on those two companies.

Meanwhile, critics have raised questions about what’s happening inside the big app stores. Are developers of apps getting a fair deal? Are consumers? So it could be that’s why Justice would take Google and Apple.

CORNISH: Aarti, how does this compare to the developments in the European Union? They’ve been at the forefront of the so-called techlash.

SHAHANI: Yeah. It is absolutely the case that Europe has acted quicker. They’ve drafted and passed laws on hate speech. They’ve leveled multibillion-dollar fines against Google and Apple. But whether or not they’re a model of action – well, you know, that depends on who you ask.

I spoke with two lawyers, both antitrust experts – one from Paris, the other Chicago. The Paris lawyer says, listen; you Americans fell asleep at the wheel back in the 1980s. You let your antitrust approach focus way too narrowly on one issue. If consumers are getting a bum deal, because Facebook is free, according to the American approach, it can’t be bad. But he said European regulators understand the real problem is competition. When companies get way too big, there’s no space for startups.

Now, Randy Picker – he’s at the University of Chicago Law School. He thinks the U.S. needs to take a hard look at Big Tech. But he does not want Americans following the European approach, even if they’ve been far more aggressive.

RANDY PICKER: I do not think they’ve accomplished very much. I do not. They’ve extracted a bunch of money, but have they actually changed competition on the ground in these areas? I don’t think so.

SHAHANI: He says what might really matter is looking at specific, well-defined ways companies have gotten too much power – say, over data, over industries – and then make them share.

CORNISH: So what can we expect to see in the coming months?

SHAHANI: Well, I’d say years, not months. Tech CEOs are going to be sitting in hearings, answering hours of questions, much like we saw Mark Zuckerberg do last year. Investors are going to keep an eye on this. So stocks will go up and down a lot. And this question of whether tech companies are too big – the outsized role they play in everything we do, the fact that one platform can reach, you know, more than two billion people – that’s becoming a mainstream political issue.

CORNISH: That’s NPR’s Aarti Shahani. Aarti, thanks.

SHAHANI: Thank you.

Copyright © 2019 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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Mexican Government Privately Warns Trump Administration Of Countertariffs

Mexican Foreign Minister Marcelo Ebrard attends a news conference with the Mexican delegation negotiating tariffs with U.S. officials on Monday in Washington, D.C.

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The Mexican government has employed a tone of friendship that’s averse to conflict, but Mexican officials behind the scenes are warning the Trump administration that they’re prepared to announce targeted countertariffs if the United States carries out threats of new tariffs on Mexican imports.

Mexican Foreign Secretary Marcelo Ebrard met with State Department officials in Washington over the past 48 hours in an effort to find a solution to a tariff fight, which he later described as “counterproductive” and that would not decrease immigration.

Publicly, officials are saying they do not want to disrupt crucial supply chains, but those familiar with the talks say they are privately looking at imports that have political significance and are sent directly to Mexico for consumption.

The behind-the-scenes talks are part of a more public push led by Ebrard and other top Mexican officials who are warning their counterparts of disastrous consequences if President Trump carries out threats to impose 5% tariffs on June 10 as punishment for not curbing migration flows, according to two sources familiar with the talks.

“They’re going to have to delicately balance inflaming tensions even further, as this could be horrific for both countries, but particularly the Mexican economy,” said a former White House official familiar with the conversations. “But you can’t just roll over and play dead if you’re verbally attacked like this by a foreign government’s president. That doesn’t play well, domestically.”

Mexican President Andrés Manuel López Obrador sent Ebrard as well as Mexican Economy Minister Graciela Márquez and Agriculture Minister Victor Villalobos to Washington in search of a solution to avert the tariff battle.

On Monday, Mexican officials said Márquez was expected to meet with Commerce Secretary Wilbur Ross, and Villalobos met with Agriculture Secretary Sonny Perdue. There were also meetings planned with acting head of the Department of Homeland Security Kevin McAleenan and U.S. Trade Representative Robert Lighthizer. Ebrard is expected to meet with Secretary of State Mike Pompeo on Wednesday.

Some Republicans in key states that rely on a trade relationship with Mexico are warning Trump that he risks hurting U.S. interests.

“It’s important to remember that any actions that we take to secure our Southern border must also keep in mind the important role that Mexico plays in the economy of the United States,” said Sen. John Cornyn, R-Texas. “My state enjoys a strong relationship economically with Mexico because of that 1,200-mile common border.”

The Mexican team argues the best way to combat immigration is to invest in Central America, but the Trump administration wants Mexico to take stronger steps along its southern border, dismantle human smuggling chains and improve coordination on asylum.

The relationship between the United States and Mexico goes well beyond immigration.

Mexico is the U.S.’s third-largest trading partner. The two countries collaborate on everything from drug trafficking to human trafficking. The United States has invested more than $2 billion through the Mérida security initiative, and the Mexican government, after decades of hostility, is now allowing U.S. investment in its oil industry.

During a news conference Monday, Márquez expressed confidence in finding a diplomatic solution but said officials are evaluating the proper response if Trump carries out the tariffs.

“I cannot say that we’re are going to do the same [tariffs], because we have to make a strategic plan to take into account aspects of the commercial relationship,” Márquez said in Spanish. “We do not want to use tariffs to damage supply chains, job creation or investment.”

But Jorge Guajardo, a former Mexican ambassador to China, said what Mexico can do that China did not is implement more strategic countermeasures as opposed to blanket tariffs.

As an example, he said Mexico could consider targeting Kentucky bourbon because of its political importance and ties to Senate Majority Leader Mitch McConnell, R-Ky. It is also shipped to Mexico for consumption but is not part of a supply chain like production of various auto parts that make several trips back and forth over the border as a car is built.

“Very simply,” Guajardo said, “Sen. Lindsey Graham [R-S.C.] said he supported President Trump’s tariffs. You can be first certain that Mexico is thinking [about what] South Carolina [is] exporting to Mexico. And that will be targeted as long as it’s not in a supply chain.”

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FAA Warns Some Boeing 737s May Have Faulty Wing Parts

A Boeing 737 Max operated by Air Canada comes in for a landing on March 27, 2019 at Boeing Field in Seattle. In addition to problems detected with the 737 Max, the FAA says there is a new issue with some 737s: they may have faulty parts on their wings.

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The Federal Aviation Administration says there’s a new problem with some of Boeing’s 737 commercial jets. More than 300 of the planes, including some of the grounded Max versions of the jets, may have faulty parts on their wings.

Though the problem is not considered something that could lead to a crash, Boeing is contacting airlines that own the 737’s in question, and the FAA has issued an air worthiness order directing airlines to immediately inspect the aircraft.

Boeing and the FAA say some slats on the leading edge of the wing on some 737’s may have been manufactured improperly by a Boeing supplier and could develop premature cracks.

The FAA says none of the parts have failed yet, and even a complete failure would not result in the loss of an aircraft — but it could damage a plane in flight and the agency is therefore issuing the air worthiness directive.

In a statement, Boeing says it has identified 21 Next Generation 737’s and 20 737 Max jets that appear to have the faulty part, but the company wants another 271 planes checked out.

The manufacturing defect is unrelated to a flight control system on the 737 Max that has been linked to two recent crashes that killed 346 people and led to all Max planes being grounded worldwide.

Such advisories about potentially faulty parts are not uncommon but this one comes at a time Boeing and the FAA are under increased scrutiny because of the Max problems.

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Laredo, Texas, Now No. 1 U.S. Trade Hub, Braces For Trump’s Mexico Tariffs

Traffic backs up along the route to the border crossing from Mexico to the U.S. in Laredo, Texas in 2015. Mexico recently surpassed China and Canada as America’s top trading partner, which helped catapult Laredo past Los Angeles to become the number one port in the country.

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Residents, business owners and political leaders in Laredo, Texas are bracing for President Trump’s implementation of a 5% tariff on all goods coming from Mexico that would begin June 10th.

The president said the tariff will gradually increase to 25% if Mexico doesn’t do more to stop the flow of illegal immigration into the U.S.

Ernesto Gaytan Jr. is the general manager of Super Transport International in Laredo, a company founded by his father almost 30 years ago in Mexico.

“Laredo exists because of its location and the closeness we have with Mexico,” he said.

Gaytan, wearing a black fitted suit in 90 degree Texas heat, toured his company’s operations field.

“This is where a lot of the transloads happen,” said Gaytan. “We move materials from a trailer coming in from the United States into Mexico. We transfer freight from a U.S. carrier to a Mexico carrier, or from a Mexican carrier to a U.S carrier.”

Mexico recently surpassed China and Canada as America’s top trading partner, which helped catapult Laredo past Los Angeles to become the number one port in the country. About $20 billion worth of goods flowed through during the month of March — mostly automotive parts.

Gaytan said the tariff could impact his trucking company and jobs across the country.

“There are some companies that 5% is what their margin is going to be, so you’re talking about companies that are not going to be able to ship anymore,” said Gaytan. “It’s going to shrink the capacity, it’s going to shrink the market.”

Gaytan and other business owners are concerned there will be even longer lines at the ports of entry because many companies might try to double their average of shipments before the June 10 deadline.

Laredo has already been experiencing record wait times that can be hours long. This was recently exacerbated when the Trump administration reassigned 300 Customs and Border Protection officers from the ports of entry to help process asylum claims. Adding to the fear of the business community has been President Trump’s threats to close the border entirely.

“For us, I did the numbers and we would lose about $270,000 a day if the border shuts down,” said Gaytan.

At a town hall Friday, Gaytan and other local businesses brought their concerns to CBP. Eduardo Lozano, CEO of EELCO Supply Chain Solutions and a local broker, was in attendance.

Lozano said he’s begun receiving phone calls from importers who said they plan on sending double their shipments before the June 10 deadline.

“Is CBP prepared to receive all the additional influx of shipments?” Lozano asked. “Are we prepared?”

Brenda Smith, the executive assistant commissioner with the Office of Trade at CBP took Lozano’s question.

“I would tell you not today, but tomorrow,” said Smith. “You have got to have your eyes open and your powder dry at all times because the situation changes so quickly.”

And that’s a problem, said Gerry Schwebel, executive vice president of IBC Bank headquartered in Laredo.

Schwebel worked on NAFTA and the US-Mexico-Canada agreement. He said the tariff further strains the U.S. relationship with Mexico, especially when trying to pass the USMCA, also known as NAFTA 2.0.

“This is not in the spirit of open relationships with our largest trading partner, which is Mexico,” said Schwebel. “They will always be our neighbor, we can’t be in any way threatening or try to coerce our partners to do certain things.”

Schwebel said border communities like Laredo will be hard-hit if the tariff takes effect, but the consumer will ultimately pay the price.

David MacPherson, the chair of Trinity University’s Department of Economics, agrees.

“It’s a textbook example of how to do self-harm. When we put a tariff on Mexican goods or Chinese goods or anybody else, we pay the tariff. The consumer pays it. Not the other country,” said MacPherson. “Everything that we consume that’s manufactured in Mexico is going to get more expensive and jobs are going to be lost.”

Laredo mayor Pete Saenz said he is proud that his city of about 260,000 people is now the nation’s busiest trade hub and wants to keep it that way, but for that to continue, he wants to see the president separate the issues of trade and immigration.

“It creates uncertainty,” said Saenz. “People wanting to invest, hold back. It jolts the system in a negative way.”

Texas Public Radio fellow Sierra Juarez contributed to this story.

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What Trump’s Latest Aid Package Means For U.S. Farmers

President Trump announced an aid package for farmers last week worth $16 billion. It’s meant to offset losses from the trade war. The Indicator podcast talked to one U.S. farmer about how helpful it will be.



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Last week, President Donald Trump announced a huge aid package for farmers affected by the trade war with China. Sixteen billion dollars will go toward farmers who have lost money as a result of fewer Chinese imports. Stacey Vanek Smith, co-host of The Indicator From Planet Money, spoke to one Ohio farmer about the impact of the trade war on his farm and how he feels about the president’s latest aid package.

STACEY VANEK SMITH, BYLINE: Brian Watkins is a sixth-generation farmer in northwest Ohio. He raises corn, soybeans, wheat and pigs. So Brian, when the trade war with China went into effect, what did that mean for you?

BRIAN WATKINS: We saw, you know, immediate market reaction and lowered prices. On the hog side, I would say you’re looking at probably a 5 to 10% obvious market reaction. On the soybean side, it was more like 20%.

SMITH: Whoa.

WATKINS: The price of soybeans just tanked.

SMITH: What did that mean for your business? I know that farming typically doesn’t have giant profit margins.

WATKINS: No, we don’t have a 20% profit margin. I mean, if the price goes down 20%, that’s the difference between profit and loss. The administration brought out their first aid package last fall. Most of that money went to soybean farmers.

SMITH: Did you see any of it?

WATKINS: We did see a payment on our farm; my farm got a payment. They paid $1.65 per bushel, for every bushel of soybeans you grew in 2018.

SMITH: Said you think you lost money because of the tariffs and the effect that they had.

WATKINS: Right.

SMITH: I mean, did this make up for it, entirely? Or…

WATKINS: For soybeans, for most of it, it did. Yes, quite frankly, it did. So this is where we get into the interesting thing. So now – what? – two weeks ago, they broke off the talks with China.

SMITH: Yeah.

WATKINS: And it looks like both sides are entrenching.

SMITH: I know.

WATKINS: And they’re both talking about changing supply chains and all this stuff. So now we’re in a mode of China, as a market, is gone. Well, from a farmer standpoint, that’s – you know, that’s really not good because they’ve been such a big market for us. And so I think because of that, the administration has – they’re scrambling, right? And there’s farmers who are a very important constituency to them. So this latest package has been put together very quickly.

But here’s the rub, Stacey. I’ve got to decide, OK, am I going to plant corn? Am I going to plant soybeans? Well, this subsidy package, if they say, well, we’re going to pay whatever – let’s say they’re going to pay another $1.65 for soybeans, that suddenly becomes this big incentive for me to try to plant soybeans to get more of the payment.

SMITH: So I mean, how do you feel about all this? Are you – how do you feel about the farm aid?

WATKINS: (Laughter) Well, I’m not really sure what I think. I think many farmers understand that there are legitimate issues in the – this trade battle between the U.S. and China. But in the long run, I don’t want subsidies to be a part of my income. I want to have a market, and I want to be able to react to it. I would like for them to work it out (laughter), you know, to the point where we can still sell things to China – so yeah.

SMITH: If China goes away as a market for at least, let’s say, the foreseeable future, how big of a deal is that?

WATKINS: It’s a big, big deal. It shrinks our business. I mean, it means that prices will be lowered. Something like 40% of our soybeans were going to China. This is not just business as usual. I mean, the loss of China – that’s a big deal; that’s a big, big deal.

SMITH: Stacey Vanek Smith, NPR News.

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Trump Announces New Tariffs On Mexico To Force Cooperation On Illegal Immigration

President Trump has announced plans to impose escalating tariffs on goods imported from Mexico in an attempt to stop migrants from entering the U.S. over the southern border. U.S. Customs and Border Protection released this photo, taken on Wednesday at El Paso, Texas.

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Updated at 10 p.m. ET

President Trump announced that he will begin imposing tariffs on all goods imported from Mexico beginning June 10 unless that country does more to help reduce illegal immigration from Central America.

In a statement issued late Thursday, the president cited his authority under the International Emergency Economic Powers Act, and said the crisis at the southern border requires action.

“Accordingly, starting on June 10, 2019, the United States will impose a 5 percent Tariff on all goods imported from Mexico. If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the Tariffs will be removed. If the crisis persists, however, the Tariffs will be raised to 10 percent on July 1, 2019.”

Trump added that unless the Mexican government takes steps to “dramatically reduce or eliminate” the flow of Central American migrants moving through its country, tariffs will go to 15% on August 1, to 20% on Sept. 1, and to 25% on Oct. 1. “Tariffs will permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory,” he wrote.

Mexico’s deputy foreign minister for North America, Jesus Seade, said that it would be disastrous if Trump imposed the new tariffs.

Trump’s surprise announcement comes as the administration is urging Congress to approve the pending U.S.-Mexico-Canada Agreement which is designed to replace the North American Trade Agreement reached in 1994. It is not immediately clear what impact the tariff threat will have on the draft agreement.

Acting White House Chief of Staff Mick Mulvaney, in a conference call with reporters, said the trade agreement and tariff threat “are not linked.”

“These are not tariffs as part of a trade dispute,” Mulvaney said. “These are tariffs as part of an immigration problem. USMCA is a trade mattter and completely separate.”

When asked which Mexican imports the administration means to target, Mulvaney replied “all of them.”

Acting Secretary for Homeland Security Kevin McAleenan, in the same conference call, said the border crisis has become “a national emergency.”

“U.S. immigration authorities now have over 80,000 people in custody, a record level that is beyond sustainable capacity with current resources,” he said.

The president’s statement called for action by Mexico:

“Mexico’s passive cooperation in allowing this mass incursion constitutes an emergency and extraordinary threat to the national security and economy of the United States. Mexico has very strong immigration laws and could easily halt the illegal flow of migrants, including by returning them to their home countries. Additionally, Mexico could quickly and easily stop illegal aliens from coming through its southern border with Guatemala.”

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