Business

By Katanga Johnson

WASHINGTON (Reuters) – The U.S. public company accounting regulator will not accept any restrictions on its access to the audit papers of Chinese companies listed in New York, including where firms have been delisted, two people with knowledge of the U.S. agency’s thinking told Reuters.

Washington and Beijing are in talks to settle a long-running dispute over the auditing compliance of U.S.-listed Chinese firms which, if unresolved, could see more than 270 Chinese firms kicked off New York bourses.

Authorities in China have long been reluctant to let overseas regulators inspect local accounting firms, citing national security concerns.

A person familiar with the thinking of the Public Company Accounting Oversight Board (PCAOB), which oversees audits of U.S.-listed companies, said delisting Chinese companies would not bring Beijing in line with the U.S. rules.

The PCAOB must be able to pick who it wishes to inspect, based on risk, said the person. “If the Chinese regulators are going to restrict us to any degree, that would not allow us to achieve the mandate and we would not accept it.”

The Financial Times reported on Sunday, citing sources, that China is preparing to categorize U.S.-listed Chinese companies into groups based on the sensitivity of their data, in a potential concession to try to comply with the U.S. rules.

The China Securities Regulatory Commission (CSRC) denied the report on Monday.

The sources declined to be identified because the discussions are private.

A PCAOB spokesman Kent Bonham said the “PCAOB must have complete access to audit work papers of any firm it chooses to inspect or investigate – no loopholes and no exceptions.”

“Time is of the essence as we continue working with (Chinese) authorities to reach an agreement that meets our mandate under U.S. law,” he added.

CSRC did not immediately respond to Reuters request for comment on Tuesday.

China has previously said that both sides are committed to reaching a deal, although the United States has been more cautious on the outlook.

Gary Gensler, chair of the U.S. Securities and Exchange Commission, which oversees the PCAOB, said this month that he was “not particularly confident” that a deal could be made.

The first source said the main sticking point relates to the level of access the PCAOB has to achieve its mandate.

“Chinese counterparts want various degrees of access, which we cannot accept. We need complete access.”

PCAOB inspections and investigations are retrospective, meaning audited financial statements are still subject to scrutiny even after delisting — which could take more than a year, said a second person familiar with the PCAOB’s thinking.

“A company may still have SEC filing requirements even after delisting – including audited financial statements that are subject to PCAOB inspection,” this person said.

Companies may still be required to file audited financial statements with the SEC, even if they are not listed on a U.S. exchange, if for example they have more than 300 U.S. shareholders or if the company trades securities in the U.S. above a certain threshold off exchange, the second source added.

The oversight spat, which has been simmering for more than a decade, came to a head in December when the SEC finalized rules to delist Chinese companies under the Holding Foreign Companies Accountable Act. It said there were 273 companies at risk.

In May, a PCAOB official warned that the agency would need to be able to complete inspections by early November 2022 to meet a deadline that could land as early as 2023.

(Additional reporting by Xie Yu)

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By Susan Mathew

(Reuters) -European stocks were flat on Tuesday as a slide in retailers and Swiss bank UBS offset a rally in oil stocks and Unilever, which rose after an upbeat sales forecast.

Retail stocks lost 2.1%, set for their biggest drop in six-weeks, hit by a profit warning from top U.S. retailer Walmart Inc, which cited surging prices for food and fuel affecting discretionary demand.

Europe’s luxury stocks fell, with LVMH down 0.3%. However, French liquor maker Remy Cointreau rose 0.4% after an earnings beat.

Swiss bank UBS lost 6.3% on posting a smaller-than-expected rise in second-quarter net profit as its investment banking and wealth management businesses struggled.

The pan-European STOXX 600 index was flat with broader sentiment remaining fragile on recession worries.

European Union countries are set to approve a weakened emergency proposal to curb their gas demand on Tuesday after Russia said it will further cut gas supplies to Europe from Wednesday.

“We think the EU might be able to avoid gas rationing … but the risks have risen significantly,” Credit Suisse European economist Veronika Roharova said.

“Even if rationing is avoided – the surge in gas prices driven by supply uncertainty will depress activity further.”

Data on Monday showed Europe’s biggest economy, Germany, maybe on the cusp of a recession. Last week, a survey showed euro zone business activity unexpectedly contracted in July.

Credit Suisse cut its real GDP forecast for the euro area to 2.3% from 2.4% in 2022, expecting the sharpest contractions in Germany and Italy.

Investors also braced for a likely 75-basis-point interest rate hike by the U.S. Federal Reserve on Wednesday.

Worries about monetary policy tightening to control surging inflation and fears of an energy supply crunch have sent the STOXX 600 down about 13% for the year.

London’s FTSE 100 outperformed, up 0.6%, as commodity prices jumped, with oil up for a second day. The biggest boost came from a 2.5% jump in consumer company Unilever after its sales beat and upbeat forecast. [.L]

About 30% of the companies that are part of the STOXX 600 have reported results this earnings season, with 56% of them beating estimates, according to Refinitiv.

Swiss chocolate maker Lindt & Spruengli jumped 4.2% on raising its sales outlook and unveiling a 1 billion Swiss franc ($1.04 billion) share buyback programme.

(Reporting by Susan Mathew in Bengaluru; Editing by Shounak Dasgupta)

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MOSCOW (Reuters) -Russia tightened its gas squeeze on Europe on Monday as Gazprom said supplies through the Nord Stream 1 pipeline to Germany would drop to just 20% of capacity.

Gazprom said flows would fall to 33 million cubic metres per day from 0400 GMT on Wednesday – a halving of the current, already reduced level – because it needed to halt the operation of a Siemens gas turbine at a compressor station on instructions from an industry watchdog.

Germany said it saw no technical reason for the latest reduction, which comes as Russia and the West exchange economic blows in response to what Moscow calls its special military operation in Ukraine.

The Dutch front-month gas contract, the European benchmark, closed 9.95% higher on news of the latest blow to Nord Stream 1. The pipeline, which has a capacity of 55 billion cubic metres a year, is the single biggest Russian gas link to Europe.

The European Union has repeatedly accused Russia of resorting to energy blackmail, while the Kremlin says the shortfalls have been caused by maintenance issues and the effect of Western sanctions.

Politicians in Europe have said Russia could cut off gas flows this winter, which would thrust Germany into recession and lead to soaring prices for consumers already grappling with higher prices for food and energy.

Germany was forced last week to announce a $15 billion bailout of Uniper, its biggest company importing gas from Russia.

PUTIN WARNING

President Vladimir Putin had foreshadowed the latest cut, warning the West this month that continued sanctions risked triggering catastrophic energy price rises for consumers around the world.

Russia had already cut flows through Nord Stream 1 to 40% of capacity in June, citing the delayed return of a turbine that was being serviced by Siemens Energy in Canada – an explanation that Germany rejected as spurious.

It then shut Nord Stream 1 altogether for 10 days of annual maintenance this month, restarting it last Thursday still at 40% of normal levels.

The servicing of that first turbine is still a matter of dispute as it makes its way back to Russia through a tangle of paperwork and conflicting statements.

Gazprom said on Monday it had received documents from Siemens Energy and Canada but “they do not remove the previously identified risks and raise additional questions”.

It said there were also still questions over EU and UK sanctions, “the resolution of which is important for the delivery of the engine to Russia and the urgent overhaul of other gas turbine engines for the Portovaya compressor station.”

Siemens Energy said the transport of the serviced turbine to Russia could start immediately, and the ball was in Gazprom’s court.

“The German authorities provided Siemens Energy with all the necessary documents for the export of the turbine to Russia at the beginning of last week. Gazprom is aware of this,” it said.

“What is missing, however, are the customs documents for import to Russia. Gazprom, as the customer, is required to provide those.”

The German company said it saw no link between the turbine issue and the gas cuts implemented or announced by Gazprom. Gazprom did not immediately reply to a request for comment.

The Kremlin said earlier that Moscow was not interested in a complete stoppage of Russian gas supplies to Europe, which is straining to fill its underground storage before the peak demand winter season.

The disruption has raised the risk of gas rationing on the continent, with the European Union proposing to member states last week that they cut gas use by 15% between August and March compared with the same period of previous years.

Russia is the world’s second largest oil exporter after Saudi Arabia and the world’s largest exporter of natural gas. Europe imports about 40% of its gas and 30% of its oil from Russia.

(Reporting by Reuters in Moscow; additional reporting by Nina Chestney, Marwa Awad and Christoph Steitz; writing by Mark Trevelyan, editing by Guy Faulconbridge, Barbara Lewis and Tomasz Janowski)

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By Jessica DiNapoli

NEW YORK (Reuters) – The makers of everyday staples such as Colgate toothpaste and Charmin toilet paper are readying new strategies to keep cash-strapped consumers buying pricier products as the threat of recession looms, executives have told investors.

Manufacturers of household staples are also now spending more on discounts and promotions on goods including sodas and paper towels to keep shoppers in higher-end stores and buying brand name products, according to data prepared for Reuters from research firm IRI.

The moves come as U.S. consumers – who so far have continued to buy higher-priced goods, from diapers to shampoo – show signs of buckling under new rounds of price increases.

Some hikes are hitting shelves this month, including from cleaning company Clorox Co and Church & Dwight Co Inc, the maker of Arm & Hammer products.

Church & Dwight increased prices for the second time on laundry detergents and cat litters July 1, while Clorox said its “broadest and deepest” hikes went into effect this month.

The growing risk of consumer cutbacks is forcing manufacturers to reconsider their pricing playbooks by targeting shoppers during certain periods and offering more discounts.

Oral care company Colgate-Palmolive Co will work with retailers to see if shoppers spend more when paychecks clear, generally in the first and third weeks of the month, head of investor relations John Faucher said.

That suggests consumers face more financial stress and living paycheck to paycheck.

“You want to make sure that your merchandising strategy is aligned (with) those weeks when consumers are a little more strapped,” Faucher told a retail conference last month.

Colgate would prioritize premium products, such as its $10 Optic White Pro Series toothpaste, in the beginning of the month when paychecks clear, and then focus on budget items later in the month as shoppers’ cash runs low, he said.

Colgate may also increase prices on a few but not all of its cheapest products so that some remain within reach for consumers who are “struggling a little bit more,” which prevents those buyers from seeking budget options elsewhere, Faucher said.

Consumer products companies are strategizing as foot traffic at U.S. dollar stores, which sell off-brand home and grocery items, outpaces competitors. Dollar Tree Inc’s Family Dollar saw foot traffic climb 16% in the second quarter, according to Placer.ai, which provides data on consumer movements.

“Manufacturers are beginning to promote more at the request of retailers,” said Krishnakumar Davey, president of client engagement at market research firm IRI.

“They don’t want to lose business to value channels,” such as dollar stores or other discounters, he said.

According to IRI data, 47% of breakfast meats like bacon were bought using a coupon or other discount in the four weeks ended July 10, the highest in six months. Half of crackers were bought with promotions, according to IRI data.

In the four weeks ended July 10, 39% of toilet paper and paper towels were bought with discounts, the highest since the beginning of the year. Toilet paper and paper towels face steep competition from store brands.

PREMIUM FOCUS

Household goods and food producers are also looking at pricing tactics used during the 2008-2009 financial crisis.

Some beer brewers then increased prices more on economy brands than they did mainstream offerings, according to a research note from Evercore ISI, to prevent consumers from trading out a more costly Budweiser for Natural Ice.

Makers of household staples, including in packaged food and candy, have also reduced portion sizes, keeping prices the same or higher. [L5N2XG2B4]

“It’s more likely that we and others will resort to pack size changes,” said Church & Dwight chief executive Matthew Farrell at Deutsche Bank dbAccess Global Consumer Conference last month.

The Xtra detergent maker has already slimmed down its laundry detergent by 10% by removing water, said Michael Read, an executive vice president with the company, at the conference. The dosing for wash loads is the same, he said.

National brands are for now trying to convince shoppers they are getting more bang for their buck with premium products like Dawn dish soap and Clorox wipes – rather than cheaper store brand alternatives.

Procter & Gamble Co executives said last month in a conference they anticipate more price hikes as the Tide manufacturer doubles down on its “superiority” strategy – offering detergents, diapers and razors that promise to work better in higher-quality packaging.

The maker of Bounty paper towels has also built out a price tier for customers who care about “cash outlay” alone over the last five to six years, its chief executive Jon Moeller said in the conference. Only about 15% of P&G’s customers are lower income, finance chief Andre Schulten said.

(Reporting by Jessica DiNapoli in New York; Editing by Sam Holmes)

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By Victoria Waldersee and Ilona Wissenbach

BERLIN/FRANKFURT (Reuters) -Volkswagen investors believe incoming CEO Oliver Blume will struggle to lead both the Volkswagen Group and Porsche – and to pull off a planned listing of the sports car maker while wearing both hats.

Friday’s announcement that group CEO Herbert Diess would be replaced by Porsche boss Blume has rekindled investor concerns about corporate governance problems at Europe’s top carmaker, which some shareholders have said weigh on the stock’s performance.

“Blume can’t take care of everything … this underscores the bad corporate management at Wolfsburg,” said Ingo Speich, head of sustainability and corporate governance at top-20 Volkswagen investor Deka Investment, referring to the German carmaking group’s headquarters.

“It is poison for the Porsche IPO,” Speich added. Volkswagen plans to list the luxury cars division in the fourth quarter.

Porsche AG may already have to go public at a steep discount if it decides to go ahead with the listing as economic obstacles mount, Reuters reported last week.

Those concerns have been exacerbated by questions over how Blume can manage his dual role.

“Mr Blume will maintain his role as CEO (of Porsche AG) including after a possible IPO,” Volkswagen said on Monday in response to Reuters’ questions.

Diess, meantime, will fulfil his contract that runs until October 2025 but in an advisory capacity, a person familiar with the matter said.

Just days before his appointment was announced, Blume and other Porsche AG executives speaking at its capital markets day sold a possible listing of the sports car brand as a means to give it more independence and entrepreneurial freedom while raising funds for the group.

His dual role calls that independence into question, analysts at Stifel and UBS said.

“Such a double mandate can only exist temporarily in an emergency situation – it won’t work in the long term,” said Ulrich Hocker of the German Association for the Protection of Securities (DSW), which represents retail investors.

Still, most do not at this stage expect a delay to the listing. Some, including car industry veteran Ferdinand Dudenhoeffer speculated Porsche finance chief Lutz Meschke may eventually take over from Blume at the sports car brand.

COMPLEX WEB

A person familiar with the matter said it would take a couple more weeks to see what the management changes really meant for the IPO, adding Blume would fill both roles for the foreseeable future.

“We trust Blume with the management of the Group, but it is hard to imagine that he will be able to fulfil the dual role of managing the interests as CEO of Porsche AG and the Volkswagen Group in the long term,” said Hendrik Schmidt, corporate governance expert at asset manager DWS.

Schmidt said that one reason for what he described as problematic decisions was the lack of independent members on Volkswagen’s supervisory board. According to Eikon, DWS owns around 2% of Volkswagen’s preference stock.

In its statement on Friday, Volkswagen did not outline any succession planning for Blume at Porsche.

Volkswagen’s share price has nearly halved since March 2021, underperforming a 17% drop in the STOXX Europe 600 Automobiles & Parts Index over the same period.

The carmaker answers to a complex web of investors – its supervisory board controlled by workers’ representatives and regional government, and a holding company owned by the Porsche and Piech families, staffed in part with Volkswagen executives.

Porsche AG’s Meschke is on the board of Porsche Automobil Holding SE, Volkswagen’s top shareholder and owner of more than half its voting rights, while Volkswagen’s chairman Hans Dieter Poetsch is its CEO.

Tensions over who pulls the strings in Wolfsburg have spelled the end of the road for several Volkswagen executives before Diess, with former CEO Bernd Pischetsrieder and former VW brand chief Wolfgang Bernhard forced out of their jobs in the late 2000s after repeated clashes with the works council.

While Diess is largely given credit for Volkswagen’s pivot to electrification – lifting the carmaker from the reputational ruin of the Dieselgate scandal to leading Europe’s electric car market – the governance issues caused by his confrontational approach to leadership ultimately weighed on the investment case, analysts at Stifel Europe Equity Research said.

“Poor corporate governance makes many investors shy away,” Janne Werning, who heads ESG Capital Markets & Stewardship at Union Investment, a top-10 shareholder in Volkswagen, said at the carmaker’s annual general meeting (AGM) last year.

Union Investment, which repeated its criticism of Volkswagen’s governance at the most recent AGM in May, declined to comment for this article.

(Reporting by Victoria Waldersee and Ilona WissenbachAdditional reporting by Emma-Victoria FarrEditing by Christoph Steitz, Matt Scuffham and Mark Potter)

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By Leika Kihara

TOKYO (Reuters) – The Bank of Japan has reshuffled its board and brought in a new member seen as more keen to end ultra-low interest rates than his dovish predecessor, potentially tilting the board away from Governor Haruhiko Kuroda’s aggressive monetary easing policy.

Former private economist Hajime Takata, and another newcomer Naoki Tamura who joins from a commercial bank, will hold a joint inaugural news conference at 5 p.m. (0800 GMT) on Monday, following their official appointment by the government the day before.

They replace Goushi Kataoka, a former economist who was a vocal advocate of aggressive monetary easing, and former commercial banker Hitoshi Suzuki, whose five-year terms ended on July 23.

The reshuffle precedes a change in the BOJ leadership when Kuroda’s second, five-year term ends in April next year. The terms of his two deputies will also expire in March.

Takata, a bond market expert, is considered by markets to be more open to dialing back Kuroda’s prolonged and massive stimulus programme, which has been hailed for reviving growth but criticised for causing market distortions.

He once wrote in a research note that the BOJ could come under pressure to consider exiting its ultra-loose policy if the European Central Bank (ECB) follows in the footsteps of the U.S. Federal Reserve in withdrawing monetary stimulus.

That view contrasts with his predecessor Kataoka, who consistently proposed ramping up stimulus by strengthening the BOJ’s commitment to ultra-low rates.

The ECB last week hiked rates for the first time in 11 years, joining a wave of central banks tightening monetary policy to combat surging inflation.

That left the BOJ among the few remaining central banks keeping its money tap wide open. Kuroda last week reiterated his resolve to keep interest rates ultra-low, after the BOJ’s widely expected decision to maintain an extremely loose monetary policy.

(Reporting by Leika Kihara; Editing by Christopher Cushing and Edmund Klamann)

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BANGKOK (AP) — Asian shares opened mostly lower on Monday after a retreat on Wall Street spurred by disappointing economic data and corporate earnings. Oil prices also slipped.

Investors are awaiting the next move by the U.S. Federal Reserve, which is expected to raise its key interest rate again on Wednesday as it strives to beat back inflation.

The Fed will likely announce its second 0.75% point increase in its short-term rate in a row, a hefty increase that it hasn’t otherwise implemented since 1994. That will put the Fed’s benchmark rate in a range of 2.25% to 2.5%, the highest level since 2018.

The U.S. economy is slowing but healthy hiring shows it is not yet in recession, Treasury Secretary Janet Yellen said Sunday on NBC’s “Meet the Press.” She spoke ahead of the release this week of a slew of economic reports that will shed light on an economy currently besieged by rampant inflation as interest rates rise.

The highest-profile report will likely be Thursday, when the Commerce Department will release its first estimate of the economy’s output in the April-June quarter.

Some economists forecast it may show a contraction for the second quarter in a row. The economy shrank 1.6% in the January-March quarter. Two straight negative readings is considered an informal definition of a recession, though in this case economists think that’s misleading.

Similar data from Europe have underscored the weakness of the global economy as central banks jack up interest rates. Higher rates make economic conditions more difficult, and too-aggressive hikes could cause a recession.

“While rising jobless claims, softer home sales, and a buildup in gasoline inventory show the Fed front-loading rate hikes are causing a slowdown and bringing inflation under control, the issue is at what cost,” Stephen Innes of SPI Asset Management said in a commentary.

On Monday in Asia, Tokyo’s Nikkei 225 gained 0.8% to 27,678.94 and the Kospi in Seoul added 0.3% to 2,400.38.

Hong Kong’s Hang Seng declined 0.7% to 20,465.69, while the Shanghai Composite index gave up 0.3% to 3,260.74.

In Australia, the S&P/ASX 200 edged 0.1% lower to 6,784.00.

On Wall Street on Friday, the benchmark S&P 500 lost 0.9% to 3,961.63, breaking a three-day rally that had carried it to its highest level in six weeks.

The Dow Jones Industrial Average declined 0.4% to 31,899.29. It held up better largely because constituent American Express gave an encouraging earnings report and said its cardholders were spending more.

The Nasdaq sank 1.9% to 11,834.11 following worse-than-expected profit reports from Snap, Seagate Technology and other tech-oriented companies.

The company behind the Snapchat app tumbled 39.1% after it reported a worse loss and lower revenue for the spring than Wall Street had forecast.

On Friday the two-year Treasury yield tumbled again, to 2.98% from 3.09% late Thursday and from 3.14% a week ago, on worries about the economy. A report Friday morning indicated U.S. business activity may be shrinking for the first time in nearly two years, with service industries particularly weak.

Despite Friday’s declines on Wall Street, the S&P 500 still rose 2.5% for the week.

Besides the easing of Treasury yields through the week, dropping prices for crude oil and other commodities also provided some relief on the inflation front, raising hopes that inflation may be peaking.

Early Monday, U.S. benchmark crude oil lost 64 cents to $94.06 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the pricing basis for international trading, shed 97 cents to $97.41 per barrel.

The dollar slipped to 136.13 Japanese yen from 136.27 yen on Friday. The euro weakened to $1.0210 from $1.0214.

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AUSTIN, Texas (AP) — Jury selection is set for Monday in a trial that will determine for the first time how much Infowars host Alex Jones must pay Sandy Hook Elementary School parents for falsely telling his audience that the deadliest classroom shooting in U.S. history was a hoax.

The trial in Austin, Texas — where the conspiracy theorist lives and broadcasts his show — follows months of delays. Jones has racked up fines for ignoring court orders and he put Infowars into bankruptcy protection just before the trial was originally set to start in April.

At stake for Jones is another potentially major financial blow that could put his constellation of conspiracy peddling businesses into deeper jeopardy. He has already been banned from YouTube, Facebook and Spotify over violating hate-speech policies.

The trial involving the parents of two Sandy Hook families is only the start for Jones; damages have yet to be awarded in separate defamation cases for other families of the 2012 massacre in Newtown, Connecticut.

The lawsuits do not ask jurors to award a specific dollar amount against Jones.

Courts in Texas and Connecticut have already found Jones liable for defamation for his portrayal of the Sandy Hook massacre as a hoax involving actors aimed at increasing gun control. In both states, judges have issued default judgements against Jones without trials because he failed to respond to court orders and turn over documents.

The 2012 shooting killed 20 first graders and six educators. Families of eight of the victims and an FBI agent who responded to the school are suing Jones and his company, Free Speech Systems.

Jones has since acknowledged that the shooting took place. During a deposition in April, Jones insisted he wasn’t responsible for the suffering that Sandy Hook parents say they have endured because of the hoax conspiracy, including death threats and harassment by Jones’ followers.

“No, I don’t (accept) responsibility because I wasn’t trying to cause pain and suffering,” Jones said, according to the transcripts made public this month. He continued: “They are being used and their children who can’t be brought back (are) being used to destroy the First Amendment.”

Jones claimed in court records last year that he had a negative net worth of $20 million, but attorneys for Sandy Hook families have painted a different financial picture.

Court records show that Jones’ Infowars store, which sells nutritional supplements and survival gear, made more than $165 million between 2015 and 2018. Jones has also urged listeners on his Infowars program to donate money.

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Associated Press reporter Paul J. Weber contributed to this report.

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SHANGHAI (Reuters) – China’s homegrown C919 narrow-body jet, designed to challenge the Airbus-Boeing duopoly, is nearing certification as its test planes completed all of the test flight tasks, the company said on Saturday.

The state-owned manufacturer Commercial Aircraft Corp of China (COMAC) said on its official social media account that the six test planes have finished the testing tasks as the programme enters the final stage of receiving a certificate from the Civil Aviation Administration of China which is required for commercial operations.

That would mark a milestone in China’s ambitions to climb up the manufacturing supply chain.

Designed to compete directly with the Boeing 737 MAX and Airbus 320neo families, the C919 aircraft programme has faced a range of technical issues and tougher U.S. export controls, after being launched in 2008, Reuters has reported.

The launch customer is the state-owned China Eastern Airlines, which has placed an order for five C919 jets in March last year. Changjiang Daily, a newspaper owned by the local government of Wuhan, said in a report on July 8 the airline is scheduled to take the first delivery in August.

Assembled in China, the plane relies heavily on Western components, including engines and avionics.

(This story corrects to remove incorrect reference in paragraph 3 to Boeing taking over Embraer)

(Reporting by Winni Zhou, Stella Qiu and Brenda Goh, Editing by Louise Heavens and William Mallard)

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By RachnaManojkumar Dhanrajani and Lisa Baertlein

(Reuters) – Independent truckers who have been protesting at California’s busy Oakland seaport over the past week against a new state law known as the “gig-worker” law took a break on Saturday, when the port business slowed to a crawl.

But some truckers said protests may resume on Monday when normal port traffic is scheduled.

“Protests are scheduled for Monday to Friday, as the port also does not have any major operations scheduled through the weekend,” Bill Aboudi, owner of a trucking company and supporter of the protests, told Reuters.

The Port of Oakland’s four marine terminals do not have scheduled operating hours on Saturday and the truck gates, too remain shut, Oakland Port’s spokesperson confirmed to Reuters.

However, Oakland Port spokesperson also said operation of the terminals is leased out to companies that schedule their operations and may have been carrying out some shipping operations on Saturday morning.

Oakland International Container Terminal (OICT) is the largest, handling about 70% of the port’s cargo. It is operated by SSA Marine, who did not immediately respond to Reuters request for a comment, outside of business hours.

“If the protests will resume or not on Monday, that shall be determined on Monday only as the truckers are in active talks with the concerned authorities,” Aboudi said.

Operations at the Northern California port ground to a near standstill last week after protesters used pickets and tractor-trailers to block terminal gates. Work on ships and docks slowed after cargo flows stopped and hundreds of International Longshore and Warehouse Union (ILWU) members declined to cross blockade lines for safety reasons.

The Port of Oakland is a key hub for California’s $20 billion-plus agriculture exports, which include almonds, dairy products and wine. The eighth-busiest U.S. container seaport, which also handles imports like coffee, electronics and manhole covers, was already working to clear a pandemic-fueled cargo backup before the trucker protests began.

Independent truck drivers are opposed to California’s labor law formally known as AB5. It would make it harder for companies to classify workers as independent contractors.

Truckers say the law will require them to spend thousands of dollars on insurance and equipment rentals like chassis to remain independent.

“AB5 is everything that obstructs a small truck business owner’s ambition to live the ‘American Dream,’” Aboudi said.

(Reporting by Rachna Dhanrajani in Bengaluru and Lisa Baertlein in Los Angeles; editing by Diane Craft)

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