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GENEVA — The World Trade Organisation (WTO) agreed Monday to establish an expert panel to examine US subsidies for electric vehicles after Beijing accused Washington of unfair competition.

The United States slammed China's complaint, insisting the country was seeking "to distract from its own non-market policies and practices that undermine a fair, competitive and mutually beneficial trading system".

The world's second-largest economy initially brought the case to the WTO in March, charging that the US Inflation Reduction Act (IRA) "formulates discriminatory subsidy policies for new energy vehicles", referencing a classification that includes electric cars and hybrids.

In 2022, the United States announced a massive aid programme to support companies in the energy transition sector and electric cars manufactured on American soil.

The United States has insisted that the act was a tool to address the climate crisis and "invest in US economic competitiveness".

It was also meant to counter Beijing's subsidies for electric vehicles and the wider green industry within China, which has poured vast state funds into domestic firms as well as research and development.

Washington blocked an initial request for a WTO panel in the case in July, but a second request was granted Monday during a meeting of the organisation's Dispute Settlement Board, according to a Geneva-based trade official.

Under WTO regulations, parties in a dispute can block a first request for an arbitration panel, but if the parties make a second request, it is all but guaranteed to go through.

"If China chooses to go forward with a panel proceeding, the United States will vigorously defend the Inflation Reduction Act clean energy tax credits as fully consistent with WTO rules and necessary to address our global climate crisis," the representative said, according to a transcript provided by the US mission.

"Existing WTO rules cannot be understood to prevent WTO Members from taking action to address the most urgent global issues of our time."

The WTO dispute comes at a time when Beijing and Washington are locking horns over a series of trade issues, including customs duties, cutting-edge technologies and a possible ban on social media site TikTok.

The United States had already announced in May that it was quadrupling customs duties on imported Chinese electric vehicles, with economic competition with Beijing at the heart of the US presidential campaign.

WASHINGTON — Central banks face a "difficult balancing act" as they start lowering interest rates around the world in the face of falling inflation, the head of the IMF said recently.

Central banks on both sides of the Atlantic have cut rates this year, with the US Federal Reserve reducing its key lending rate by half a percentage point earlier this week in a bid to boost demand, following in the footsteps of the European Central Bank (ECB).

But as they do so they must tread carefully, International Monetary Fund Managing Director Kristalina Georgieva said at an event with ECB President Christine Lagarde in Washington.

"Central banks face a difficult balancing act," Georgieva said. "They must ensure that inflation sustainably returns to target and remains there, while avoiding the risk of excessively tight policies."

"While clearly weaker than we would have wanted, economic activity has been remarkably resilient," she added. "While inflation is retreating, rates are going down. Recession appears to be unlikely."

The ECB has cut rates twice this year, while the Bank of England voted on Thursday to leave rates unchanged after just one cut, as UK inflation remained above-target.

Lagarde said Friday that the ECB's "determined policy actions have successfully kept inflation expectations anchored," adding that inflation remains on track to hit its two percent target in the middle of next year.

"But is the uncertainty gone? No, there is still plenty of that around," she said.

FRANKFURT, Germany — Germany wants to support Volkswagen and help it avoid factory closures but the ailing car giant will have to fix most of its problems itself, Economy Minister Robert Habeck said recently.

Volkswagen said earlier this month it needed significant restructuring to stay competitive, and was considering shutting sites in Germany for the first time in its 87-year history.

The announcement stunned employees and added to concerns about Germany's flagship car industry as it grapples with high costs, increased competition from China and weak demand for electric vehicles (EVs(.

"The majority of the tasks will have to be solved by Volkswagen itself," Habeck said during a visit to a VW plant in Emden in northwestern Germany.

He refused to comment on media reports that thousands of jobs could be threatened at Volkswagen, saying he "cannot interfere" in company policy.

But politicians could help the car sector by looking at ways to send the right "market signals", Habeck said, stopping short of mentioning any possible state aid for Volkswagen.

He pointed in particular to efforts to boost demand for EVs, insisting that electric driving "is the future".

Sales of battery cars have plummeted in Germany this year after the government phased out subsidies, dealing a blow to carmakers who have invested heavily in the transition away from fossil fuels.

Berlin recently laid out plans for new tax breaks for electric company cars to help turn the tide, Habeck noted.

The minister will on Monday host a high-level meeting with representatives from the car industry and unions to discuss the sector's woes.

Underlining the current challenges for carmakers, Mercedes-Benz on Thursday lowered its outlook for 2024 on the back of weak sales in the key Chinese market.

German rival BMW likewise trimmed its profit guidance earlier this month, also citing muted demand in China.

WASHINGTON — Sales of previously owned US homes fell in August, according to industry data released Thursday, but lower mortgage rates and growing supply are likely to boost the industry.

Existing home sales dropped 2.5 per cent last month from July to an annual rate of 3.86 million, seasonally adjusted, said the National Association of Realtors (NAR).

This was largely in line with the 3.90 million consensus that analysts expected.

"Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months," said NAR chief economist Lawrence Yun.

He added in a statement that more inventory means homebuyers will be in a better position to find properties at favorable prices.

Homebuyers in the United States have been grappling with a sharp rise in mortgage rates after the US central bank rapidly lifted the benchmark lending rate in 2022 to tackle inflation.

But with growing expectations that the Federal Reserve was going to pivot to rate cuts after holding rates at a decades-high level for months, mortgage rates have also shifted lower.

The popular 30-year fixed-rate mortgage averaged 6.2 per cent as of September 12 according to Freddie Mac — reaching the lowest level since February 2023.

A year ago, the rate was around 7.2 per cent.

On Wednesday, the Fed kicked off a process of easing monetary policy with a bold half-percentage-point rate reduction, adding to expectations that mortgages rates would fall further.

Compared with a year ago, NAR data showed that existing home sales were 4.2 per cent down in August.

The median price increased 3.1 per cent from August 2023 to $416,700, with all four US regions seeing price jumps.

Yun told a press call on Thursday that although home sales are struggling, home prices remained high.

BRUSSELS — An EU court on Wednesday scrapped a 1.49-billion euro ($1.65 billion) fine imposed by Brussels against Google for an abuse of dominance over online advertising.

"The General Court annuls the [European] Commission's decision in its entirety," the Luxembourg-based court said in a statement, adding that the "institution committed errors in its assessment".

Brussels "failed to take into consideration all the relevant circumstances in its assessment of the duration of the contract clauses that the commission had deemed abusive", the court said.

The commission, the EU's influential competition regulator, said it "takes note" and would "carefully study the judgment and reflect on possible next steps" — which could include an appeal.

The ruling will be a relief for Google after the EU's highest court last week upheld a 2017 fine worth 2.42 billion euros for abusing its dominance by favouring its own comparison shopping service.

As part of a major push to target big tech abuses, the EU slapped Google with fines worth a total of 8.2 billion euros between 2017 and 2019 over antitrust violations.

The 1.49-billion euro fine is the third of those penalties, focused on Google's AdSense service.

But the long-running legal battles between Google and the EU do not end there.

EU's greater powers 

Google is also challenging a 4.3-billion-euro penalty Brussels levied on it for putting restrictions on Android smartphones to boost its internet search business.

The 2018 fine remains the EU's largest-ever antitrust penalty.

The General Court in 2022 slightly reduced the fine to 4.1 billion euros, but mainly supported the commission's argument that Google had imposed illegal restrictions.

The legal saga continues in that case after Google appealed the latest decision before the higher European Court of Justice.

The EU has since armed itself with a more powerful legal weapon known as the Digital Markets Act (DMA), to rein in tech giants including Google.

Rather than regulators discovering egregious antitrust violations after probes lasting many years, the DMA gives businesses a list of what they can and cannot do online.

The aim is that tech titans change their ways before the need for deterrent fines.

Google is already the subject of one investigation under the DMA alongside Facebook owner Meta and Apple.

Google is in the US regulators' crosshairs as well.

Last week, the tech titan faced its second major antitrust trial in less than a year with the US government accusing Google of a monopoly in ad technology — the complex system determining which online ads people see and their cost.

It comes after a US judge in August found Google's search business to be an illegal monopoly, a ruling which threatens a possible break-up for the tech behemoth.

Ad tech is at the centre of multiple probes by regulators around the world.

British regulators earlier this month said in provisional findings that Google abused its dominance in the market.

The EU similarly concluded last year that Google is distorting competition in the market and recommended that the company be forced to divest its ad tech business.

Google has the right to respond in the British and EU cases before the regulators reach final conclusions.

Parent company Alphabet in July said revenue from online ad searches climbed to $48.5 billion in the second quarter of this year.

FRANKFURT, Germany — Chancellor Olaf Scholz voiced disappointment Tuesday after US semiconductor giant Intel delayed plans to build a mega chip-making plant in Germany which had been championed by Berlin.

The news also stoked fresh tensions in Scholz's uneasy ruling coalition, with a row breaking out over what should be done with around 10 billion euros ($11 billion) in subsidies earmarked for the project.

The government "takes note of the announcement about the delay with disappointment and continues to believe the project is worthwhile and deserves support", said Scholz.

The chancellor welcomed the fact that Intel had indicated it wants to "stick with" the project in the long term.

Intel announced Monday that it was postponing the project in the eastern German city of Magdeburg, along with another one in Poland, by around two years due to lower expected demand.

The chip-making giant announced plans for the German plant in 2022, in what was seen as a major boost for EU efforts to ramp up semiconductor production in the bloc.

Construction work on the Intel project was due to begin in 2023 but it stalled after the Ukraine war sent inflation soaring.

German officials and the company were then locked in talks on financing for months, but the two sides finally signed a deal in June 2023, which included higher government subsidies for the 30-billion-euro project.

Since, Intel has reported disappointing results and announced major job cuts as it faces fierce competition, particularly from Nvidia, in the race to make cutting-edge chips for artificial intelligence.

Despite the setback for Germany, Scholz stressed there were still over 30 semiconductor projects underway in Germany. Other chip giants, including Taiwan's TSMC, have announced major investments in Germany.

"For the sake of our sovereignty, and for our technological leadership, we will continue to insist that semiconductor production takes place in Europe and especially in Germany," he said during a visit to Kazakh capital Astana.

He refused to be drawn on what should be done with the public funds that had been set aside for the Intel plant.

But shortly after Intel's announcement, Finance Minister Christian Linder from the pro-business FDP party said the money should be used to plug holes in the budget.

"Anything else would not be responsible policy," he wrote on X.

But sources from the economy ministry, which is headed by the Green party, the third member of the coalition led by Social Democrat Scholz, said the money should remain in a special "climate and transformation fund", and could not be used in the main budget.

FRANKFURT, Germany — UniCredit CEO Andrea Orcel openly acknowledged Monday that he was in favour of a merger with Commerzbank, days after the Italian lender unexpectedly acquired a nine - per cent stake in Germany's second-biggest bank.

"It has been no secret for many years that we see potential in a merger," Orcel said in an interview with financial daily Handelsblatt.

"For the moment, we are only a shareholder. But a merger of the two banks could lead to considerable added value for all stakeholders," Orcel said.

UniCredit caught markets by surprise last week when it disclosed it had built up a nine – per cent stake in Commerzbank, half of which it acquired from the German state.

UniCredit paid around 1.4 billion euros ($1.5 billion) for the acquisition.

The announcement renewed speculation that the Milan-based bank was mulling a takeover of Commerzbank. UniCredit already owns German lender HypoVereinsbank.

"Europe, and Germany too, needs stronger banks. Banks are needed to finance growth and the enormous transformation that lies ahead," Orcel told Handelsblatt.

A tie-up between UniCredit and Commerzbank would "create a much stronger competitor in the German banking market", he said.

"Retail banking customers could be better supported, and the German Mittelstand (small- and medium-sized companies) could be strengthened with financing and more comprehensively supported internationally."

The German government is still Commerzbank's largest shareholder, with a remaining 12 - per cent stake. It recently said it aimed to sell down its stake, citing the bank's improved economic situation.

Berlin had bailed out Commerzbank with billions of euros in 2009 after the global financial crisis pushed it to the brink of collapse.

Commerzbank has bounced back strongly since then, posting its best annual net profit for 15 years in 2023. It is aiming for even better results in 2024 despite expectations of lower interest rates.

German opposition politicians and the Verdi labour union have in recent days voiced strong objections to a potential takeover by UniCredit.

Asked about the next steps, Orcel said: "When the time is right, we will engage in a constructive dialogue."

If both sides "come to the conclusion that a merger is the best thing for both of us, that would be great".

There was no immediate comment from Commerzbank.

FRANKFURT, Germany — Troubled German rail operator Deutsche Bahn announced recently the sale of its logistics unit Schenker to Danish group DSV for 14.3 billion euros ($15.8 billion) to create a freight-forwarding giant.

The state-owned German group, which has faced mounting criticism due to creaking infrastructure and poor punctuality, said the deal would provide fresh investments into Europe's biggest economy and help pay down its monster debts.

"With the acquisition we bring together two strong companies, creating a world-leading transport and logistics powerhouse that will benefit our employees, customers and shareholders," DSV Chief Executive Jens Lund said in a statement.

The new entity will aim to compete with other heavyweights in the sector, like DHL, UPS and Fedex.

DSV, founded in 1976, said the deal was its biggest transaction to date.

The combined companies will have 147,000 employees in more than 90 countries and generate revenue of 39.3 billion euros. The transaction is expected to close in 2025.

Despite fears about job cuts following the sale, DSV insisted Germany will remain a "key market" for the company and it will retain Schenker's offices in Essen, western Germany.

Deutsche Bahn launched the sale of Schenker, its most profitable subsidiary, at the end of 2023, seeking funds to pay down a 30 billion-euro debt and plough desperately needed investments into Germany's creaking rail infrastructure.

Deutsche Bahn CEO Richard Lutz said that the sale was the largest transaction in the operator's history and "provides our logistics subsidiary with clear growth prospects".

The Danish group plans to invest 1 billion euros in Germany over the next three to five years, Deutsche Bahn said.

The German rail group said the sale will enable it to focus on its top priority — improving rail infrastructure and operations, which are also seen as key to helping Germany reach climate goals.

Deutsche Bahn, once a symbol of German efficiency, has been blighted by problems in recent years, with critics blaming chronic underinvestment.

Breakdowns and delayed arrivals are now commonplace on the German railways. Last year 36 per cent of long-distance trains arrived six minutes or more past their scheduled arrival time, well above the European average.

The problems on the network were on display when Germany hosted the Euro 2024 football tournament in June and July, with fans complaining frequently about problems on the network.

Its net losses soared 16-fold year-on-year in the first half of 2024, with the operator blaming extreme weather, strikes and upgrades to its network.

By reducing its vast debts, the sale of Schenker "will make a substantial contribution to the group's financial sustainability", Deutsche Bahn chief Lutz said.

The sale of Schenker has left its employees in Germany fearing for their jobs, with staff protesting against the move outside the subsidiary's office this week.

DSV has promised to maintain, and even increase, staffing numbers in Germany in the long-term but there concerns are about an initial phase of cuts.

The Handelsblatt financial daily reported that DSV initially wants to cut about 1,600 to 1,900 jobs at Schenker in Essen and Frankfurt, up to 15 per cent of the unit's staff in Germany.