Rupture in Arab media; Furor over India’s sanitary pad tax; Brexit means Britons drink less wine


Profitable Moment
 

A time and place for everything

NATO leaders were treated to another lecture by Donald Trump today on how they must stump up more cash to pay for their security umbrella. The guidelines say countries should pay 2% of GDP, but less than a handful actually meet that criteria. 
 
Of course, it’s more complicated. Some countries say they make it up by paying more in other forms of aid and support. Others say, they just can’t afford it. 
 
Whatever the situation, today was not the day to remind people of unpaid bills. This was a ceremony dedicated to NATO’s resolve to fight global terror in the wake of the 9/11 attacks. And to dedicate the new NATO headquarters.
 
Donald Trump is right: NATO members should pay the required 2% and they should be reminded of their duty…just not today! 
 
The president left his audience bemused, applauding politely. He missed an opportunity to remind everybody why this is the greatest security alliance ever created. 
 
Instead, to quote Oscar Wilde, he left everyone with the impression he’s a man who knows the price of everything, and the value of nothing.

Richard.Quest@cnn.com 

What’s new… what’s next
 

By Matt Egan, Patrick Gillespie, Julia Horowitz and Paul R. La Monica of CNNMoney

1. China is facing a huge debt problem

Back in focus: China’s massive debt burden. Credit rating agency Moody’s downgraded China this week, warning rising debt and slowing economic growth is hurting the country’s financial health. It’s the first time the agency has cut China’s rating in almost three decades. Just how bad is the situation? Keep in mind, it’s been years in the making, and the Chinese government is well aware the debt is an issue — even if it’s only chipping away at it slowly.

2. India’s tax on sanitary pads spurs protests

Indians are protesting a government plan to tax products that millions of women can’t go without. Sanitary pads are set to be taxed at 12% under a new set of national rates established by the government, which is overhauling the tax code. Other essential products, such as condoms and contraceptives, won’t be taxed as part of the plan. So why sanitary napkins? That’s the question lawmaker Sushmita Dev asks in her petition, which has gathered more than 300,000 signatures. 

3. Qatar ‘fake news’ spat divides Arab media

Middle East media is having a fake news moment. At least four Arab states have blocked access to Qatari media, including international news channel Al Jazeera, in response to a disputed report about Iran. The spat started over a report by Qatar News Agency quoting the Emir of Qatar making favorable comments about Iran, a major foe of Saudi Arabia. But the Qatar News Agency says it was actually hacked, and that the story quoting the Emir is “fake news.”

Editor’s note: An item on Thursday about media in Saudi Arabia incorrectly reported the ownership of Saudi TV station Al-Arabiya. It is not state-run.

4. No Barolo after Brexit? Brits to drink less wine

Talk about sour grapes. Brits may drink 28% less wine over the next few years because of Brexit. Why? Slower economic growth is one concern. A weaker pound and import tariffs will likely lead to a 22% spike in wine prices too. That could mean billions of dollars in lost sales for wine producers from France and Italy — and non-EU countries like Chile and South Africa that have free trade deals with the EU. Hmm. How about another pint of warm Guinness please?

5. OPEC extends cut. Crude plunges anyway

As was widely telegraphed, OPEC and other producers like Russia reached a deal in Vienna to extend their curbs on oil output by nine months. The extension is being billed as a way to fix the oversupplied crude market. Yet crude oil prices plunged 5%, breaking below $49 a barrel. The wave of selling shows that investors had been hoping OPEC would either make deeper cuts or extend them for longer. Either way, the market was not impressed.

6. Quick Takes:

NATO hasn’t solved its spending problem. Here’s a look at who pays what

Arabs give billions to charity, but the money might be better spent

More EU citizens are leaving the UK in the wake of Brexit

BMW plans for a future where nobody buys cars anymore

Does anyone go to Sears? Sales plunge again. But Best Buy is back!

US citrus farmers in sour mood after Trump lifts ban on Argentine lemons

Dieselgate isn’t over yet. GM is latest to be accused of emissions cheating

7. What’s next:

Upgrade for the US economy? The American economy grew at just 0.7% during the first quarter, the most anemic pace in three years. But first-quarter GDP often gets revised higher. Look to see if that trend continues when the second look at GDP is released at 8:30 a.m. ET on Friday. A timelier look at the US economy could come from the April durable goods report due at the same time.

Trump turmoil denting confidence? May was a turbulent month in Washington, with the Trump-Russia scandal heating up dramatically. But it’s not clear any of that matters to consumers, whose spending powers the American economy. The University of Michigan’s consumer sentiment survey for May, set to be released at 10 a.m. ET on Friday, could shed light on that question.

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