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The Trump administration is making clear that simple tweaks won't be enough to complete a renegotiation of the North American Free Trade Agreement. U.S. trade representative Robert Lighthizer opened new talks between the U.S. Canada and Mexico by setting ambitious goals, the WSJ's William Mauldin and Paul Vieira report, suggesting a long and difficult road ahead for rewriting the 23-year-old accord. The U.S. is focused on trade imbalances, and says it wants to boost rules that protect intellectual property, guard against currency manipulation and change dispute-resolution mechanisms. One way Trump officials want to move the needle on deficits by tightening the "rules of origin" that govern how goods can qualify for tariff-free treatment. That's raising worries among auto makers, who warn about risks to integrated supply chains if new trade rules make it harder to ship parts across borders. The U.S. hasn't put together a concrete proposal, however, because it still must find common ground with lawmakers and business groups.
A global cyberattack is slowing but not stopping Maersk Line's growing financial strength in an improving shipping market. The world's largest container shipping line posted a $339 million profit in a second quarter that including expanding volumes and rapidly rising prices, the WSJ's Costas Paris and Dominic Chopping report. The gains came as Maersk's parent conglomerate A.P. Moller-Maersk A/S swung to a surprise loss in the quarter, as it wrote down the value of tanker and port assets. The ransomware attack at the end of June will end up costing Maersk up to $300 million, a hit that included the equivalent of some 70,000 shipping containers that were diverted to other carriers. But Maersk Chief Executive Soren Skou said the spring was effectively a turning point for a shipping business that now is "clearly out of the financial crisis." Demand growth was nearly double the growth in supply, and average freight rates rose 22%, trends that weren't pushed aside by Maersk's hacking ordeal.
Target Corp. is ringing up more sales and doing it profitably as the retailer's supply chain gets more efficient. The company added to the run of good news from store owners with its report that sales at stores open at least a year rose 1.3% in the second quarter, the WSJ's Khadeeja Safdar reports, and that Target now expects stronger profits this year on improving foot traffic and lower-cost operations. The results, along with strong U.S. consumer spending in July and robust shipping import figures, point to gathering confidence in a sector struggling to adjust to changing shopping patterns. Target has adjusted by reducing its inventory more than 4% from a year ago and linking e-commerce fulfillment more closely to stores. Digital sales jumped 32% from a year ago, and Target says some 40% of its goods sold online were shipped from stores. Target's aim is to "reduce unproductive inventory and speed up our supply chain," and more customer sales can only help.
Zinc is getting more expensive on global metals markets, but that won't help shipping companies much if miners don't start producing more of the commodity. The price of zinc is at a 10-year high, capping a steep climb in the base metal that the WSJ's David Hodari reports follows supply cuts from mining companies. Glencore PLC reduced its zinc mining by 500,000 tons a year nearly two years ago, amounting to 4% of global production, one of the moves that have roiled commodity markets. Glencore recently said it increased zinc production by 13% from the same period last year, but the company isn't going further by opening shuttered mines in Peru and Australia, opting instead to keep a cap on supply. Zinc is the lightweight, rustproof metal used in the car and construction industries, and its rising costs can translate into higher auto and steel prices. Demand remains strong in China, but investors and analysts are betting that mining companies won't ramp up production anytime soon, suggesting ship;ing volumes are unlikely to bulk up.
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IN OTHER NEWS
Two of President Donald Trump's councils of top business leaders are disbanding, following controversial remarks Mr. Trump made. (WSJ)
Norfolk Southern Corp. named Chief Information Officer Cynthia Earhart as the freight railroad's next finance chief. (WSJ)
The unemployment rate in the U.K. fell to a 42-year low in June. (WSJ)
Fiat Chrysler is joining a consortium led by BMW AG and Intel Corp. to develop self-driving car technology. (WSJ)
Home Depot Inc. raised its outlook for the second time this year, projecting a 13% jump in earnings. (WSJ)
Pharmaceutical and chemical giant Bayer AG will join Florida's battered citrus industry in its decadelong fight against a disease ravaging the state's groves. (WSJ)
U.S. semiconductor testing company Cohu Inc. is trying to derail the sale of rival Xcerra Corp. to a Chinese state-backed group, citing national security concerns. (WSJ)
U.S. business inventories rose 0.5% in June, the biggest increase in seven months. (CNBC)
U.S. factory workers are quitting their jobs at the fastest pace in a decade even as the White House stresses the need for manufacturing jobs. (Washington Post)
China's government is backing a $3.3 billion aid package for China Shipbuilding Industry Corp, the country's largest shipbuilding conglomerate. (Lloyd's List)
Texas-based apparel maker Trybus Group is placing a factory in Ethiopia, adding to the growing textile production in the African nation. (Sourcing Journal)
The Baltic Dry Index measuring rates for carrying dry bulk commodities is at its highest level in nearly four months. (MarineLink)
Overall revenue at Port of Hamburg terminal operator HHLA rose 9% in the first half of 2017, boosted by 12% growth in container throughput. (Port Technology)
Pacific International Lines and terminal operator PSA International will work with IBM to test blockchain technology in tracking goods. (Maritime Professional)
Amazon.com Inc. will put a distribution center in Bristol, U.K., that will employ 1,000 people. (The Independent)
Cathay Pacific Airways Ltd. lost $260 million in the first half of the year despite a 13.3% gain in cargo revenue. (South China Morning Post)
United Parcel Service Inc. will start using virtual reality headsets to train delivery drivers. (ZDNet)
Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin , @jensmithWSJ and @EEPhillips_WSJ. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.
Write to Paul Page at firstname.lastname@example.org
(END) Dow Jones Newswires
August 17, 2017 06:52 ET (10:52 GMT)