As Trump targets immigrants, U.S. farm sector looks to automate

LOS ANGELES (Reuters) – Convincing big U.S. dairy owners to buy robots to milk their cows – and reduce the farmhands they employ – used to be a tough sell for Steve Fried. Recently, his job has gotten easier, he says, in part because of President Donald Trump.

A crew harvests romaine lettuce by hand near Soledad, California, U.S., May 3, 2017. REUTERS/Michael Fiala

“I get calls on a daily basis and it typically starts with, ‘I don’t want to deal with this labor headache any more’,” said Fried, sales manager for Lely North America, which makes robotic dairy milking and feeding systems.

Trump’s crackdown on illegal immigration through stepped-up arrests and border enforcement has shaken the U.S. agricultural sector, where as many as 7 in 10 farm workers are undocumented, according to the American Farm Bureau Federation.

In addition, Republican lawmakers in Congress have introduced legislation that would require all employers to check social security numbers against federal databases to ensure their workers are in the country legally, something that is now voluntary in all but a handful of states.

The get-tough approach “has created a great deal of anxiety,” said Tom Vilsack, chief executive of the U.S. Dairy Export Council, who was U.S. Agriculture Secretary for eight years under President Barack Obama.  

 

The shift comes as the industry was already struggling to cope with a shrinking, aging workforce. That is ratcheting up pressure on the sector to embrace new technology.

Farmers and food companies increasingly are moving to automate dairy operations, chicken processing, crop production and harvesting. Even delicate crops such as strawberries and peaches are being considered for mechanization.

“You’d be a fool to not have a plan that moves you that way,” said Duff Bevill, who owns a vineyard management company in Sonoma County, California.

Pilgrim’s Pride Corp, (PPC.O) the second largest U.S. chicken producer, this year cited a tightening migrant labor market as key to its decision to invest in robots and X-ray technology for its slaughterhouses. The goal: to swap human hands for machines that can debone the front half of chickens and perform other chores.

“We’re investing heavily in automating our processes, taking labor out and making jobs easier,” Pilgrim’s CEO William Lovette said in an earnings call. He said the company also decided to increases wages.

In Gilroy, California, Christopher Ranch is likewise embracing new machinery. The largest North American producer of fresh garlic, Christopher Ranch will spend about $1 million this year for a new Spanish-made robot in its packing plant that inserts garlic heads into sleeves, according to Ken Christopher, vice president of the family-owned business.

A 2014 report by WinterGreen Research forecast significant growth in the use of robotics in “every aspect of farming, milking, food production” and other agricultural enterprises. The report put the market for agricultural robots at $817 million in 2013 and projected that it would reach $16.3 billion by 2020.

A water jet harvester works rows of romaine lettuce near Soledad, California, U.S., May 3, 2017. REUTERS/Michael Fiala

Sensing opportunity, investors are stepping up to address agriculture’s labor squeeze with new automation, helped by falling electronics costs and advancements in software, robotics and artificial intelligence.

Google Ventures, the venture capital arm of Alphabet Inc (GOOGL.O), this year spearheaded a $10 million investment in Abundant Robotics, which is working on an apple-picking robot. It also participated in a $20 million funding round for Bowery Farming, which uses robotics to grow leafy greens indoors.

Elsewhere, farm machinery maker Deere & Co (DE.N) announced that it spent $305 million to buy precision weed-killing robot maker Blue River Technology. INCENTIVES TO AUTOMATE

While little official data exists to illustrate the impact of Trump’s immigration policies on farm laborers, there is no question that illegal migration is down sharply since he took office in late January.

The number of people caught trying to enter the United States illegally from Mexico dropped almost 60 percent between February and May compared the same period last year, according to government figures. Between late January to early September, the number of individuals arrested in the interior of the country by U.S. Immigration and Customs Enforcement (ICE) rose almost 43 percent over the same period in 2016.

Gary Wishnatzki, a third-generation strawberry farmer in Florida, says scarce labor convinced him to raise $5 million so far to build a robotic strawberry picker that he hopes someday will reduce his industry’s need for field hands.

Bruce Taylor, CEO of Taylor Farms, a Salinas, California producer of salads and chopped vegetables for stores and restaurants, says his company has automated 20 percent of its packing plant.

The company has also teamed with an equipment maker to build a mechanized romaine harvester that is currently in use, and it is exploring automation for iceberg lettuce, broccoli and other field crops, Taylor said.

RISING PAY

In the meantime, farmers are raising wages. Data from the U.S. Department of Agriculture’s most recent farm labor report shows average wages during the week of April 9 to 15 were $13.23 per hour, up 4 percent from the same week a year ago.

“The mantra in agriculture right now is automate what you can and pay well for the labor you absolutely have to have,” said Paul Pittman, CEO of Farmland Partners Inc, (FPI.N) a real estate investment trust that invests in North American farm land.

To win the loyalty of its full-time production workers, garlic grower Christopher Ranch decided to raise pay by 50 percent between 2016 and 2018, getting a four-year jump on California’s mandated $15 minimum wage that will take effect in 2022.

“Companies need to find ways of adapting and adjusting,” Christopher, the executive, said. “We’re going to take a small financial hit, but we’re going to be ready.”

Follow Trump’s impact on energy, environment, healthcare, immigration and the economy at The Trump Effect  www.reuters.com/trump-effect

Reporting by Lisa Baertlein in Los Angeles and P.J. Huffstutter in Chicago; Additional reporting by Ann Saphir in San Francisco; Editing by Sue Horton and Marla Dickerson

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Trump brings tough trade message in vision for Asia

DANANG, Vietnam (Reuters) – U.S. President Donald Trump set out a strong message on trade at a meeting of Asia-Pacific countries in Vietnam on Friday, saying the United States could no longer tolerate chronic trade abuses and would insist on fair and equal policies.

U.S. President Donald Trump speaks on the final day of the APEC CEO Summit, part of the broader Asia-Pacific Economic Cooperation (APEC) leaders’ summit, in Danang, Vietnam, November 10, 2017. REUTERS/Anthony Wallace/Pool

Trump said the United States was ready to make a bilateral deal with any country in the Indo-Pacific region, but only on the basis of “mutual respect and mutual benefit”.

“When the United States enters into a trading relationship with other countries or other peoples, we will from now on expect that our partners will faithfully follow the rules,” he said in the seaside resort of Danang.

“We expect that markets will be open to an equal degree on both sides and that private investment, not government planners, will direct investment,” he said in a speech ahead of a summit of Asia-Pacific Economic Cooperation (APEC) leaders.

Trump arrived in Vietnam from China on the fourth leg of a 12-day trip to Asia. Redressing the balance of trade between Asia and the United States is at the center of Trump’s “America First” policy he says will protect U.S. workers.

The difference between Trump’s and China’s approaches was made more stark by comments in a later speech from Chinese President Xi Jinping, who said globalization was an irreversible trend and voiced support for multilateral trade deals.

While China has by far the biggest trade surplus with the United States, Vietnam is also on the list of those surpluses the Trump administration seeks to reduce.

APEC, which has long championed free trade, has itself been convulsed by the changes under Trump.

Since Trump abandoned the Trans Pacific Partnership (TPP) trade deal early in his presidency, the remaining 11 members have struggled to build momentum to keep it alive.

Leaders of TPP countries are due to meet on Friday after talks among ministers ended in confusion on Thursday with Japan’s economy minister saying that they “agree in principle” and his Canadian counterpart saying that was not true.

Trump broke early with the “Pivot to Asia” of the Obama administration, worrying some traditional allies that he would allow China to extend its increasing dominance.

U.S. President Donald Trump appears on a large video screen as he delivers remarks at the APEC CEO Summit in Danang, Vietnam November 10, 2017. REUTERS/Jonathan ErnstSOUTH CHINA SEA

Danang itself sits on the shore of the South China Sea, one of the region’s biggest security headaches and where China’s neighbors challenge its sweeping claim to most of the waterway as having no basis in law.

Trump said the region’s future depended on upholding “freedom of navigation and overflight, including open shipping lanes”. He also mentioned “territorial expansion” among evils such as drugs, people smuggling and terrorism.

Vietnam has become one of the most vocal critics of China’s claims in the South China Sea and its construction of artificial islands.

In a sign of possible competition with China’s grand Belt and Road plan, Trump said he would push the World Bank and Asian Development Bank to fund infrastructure development and would reform U.S. development finance institutions.

Trump said that would “provide strong alternatives to state directed initiatives that come with many strings attached”.

“Above all, we seek friendship and we don’t dream of domination,” he said.

Although he was addressing a meeting alongside the summit of Asia-Pacific leaders, Trump repeatedly referred to the Indo-Pacific region and mentioned the importance of India in his speech.

Danang has a special place in U.S.-Vietnamese history: it was where the first U.S. ground troops disembarked in 1965 in the escalation of a war that would last another decade before the communist victory.

Danang was close to some of the heaviest fighting and its air base was the route through which many Americans of Trump’s generation were sent to the war.

Trump himself did not serve, receiving five deferments – one for bone spurs in his heel.

Writing by Matthew Tostevin; Editing by Nick Macfie

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Trump's CNN attacks may hobble legal case to block AT&T-Time Warner deal

WASHINGTON/NEW YORK (Reuters) – President Donald Trump’s broadsides against cable network CNN may complicate the U.S. government’s legal case if it decides to block AT&T’s deal to buy media company Time Warner, according to legal experts.

Trump’s repeated claims that CNN produces “fake news” and other criticisms of the network could hurt legitimate legal arguments the Department of Justice may use to show the deal gives the company too much power over media rivals and is bad for consumers.

“His comments have soiled the process,” said John Kwoka, an economics professor at Northeastern University. “If I were AT&T’s lawyers I would certainly introduce them into the evidentiary record as meddling with what is really a law enforcement process.”

The fate of AT&T Inc’s (T.N) $85.4 billion deal to buy Time Warner Inc (TWX.N), hatched in October 2016, looks set to end up in court as the two sides have so far failed to agree on what conditions AT&T needs to meet in order to gain antitrust approval.

Justice Department staff have recommended that AT&T sell either its DirecTV unit or Time Warner Inc’s (TWX.N) Turner Broadcasting unit, which includes news company CNN, a government official told Reuters on Thursday, on the grounds that a combined company would raise costs for rival entertainment distributors and stifle innovation.

AT&T chief executive Randall Stephenson said on Thursday he would not sell CNN to win antitrust approval and would fight the government in court if the two sides could not reach an agreement.

“If we feel like litigation is a better outcome then we will litigate,” Stephenson told the New York Times DealBook conference on Thursday. He said the company had been ready to go to court the day the deal was announced in October 2016.

TRAVEL BAN COULD BE PRECEDENT

The deal took on broader political significance soon after it was announced when Trump attacked it on the campaign trail last year, vowing that as president his Justice Department would block it. He has not commented on the transaction since taking office in January.

The AT&T logo is seen on a store in Golden, Colorado United States July 25, 2017. REUTERS/Rick Wilking

Trump’s aggressive campaign comments have harmed legal arguments of his administration before.

Earlier this year, an appeals court refused to reinstate a ban on travelers from a group of Muslim-majority nations on the grounds that it illegally targeted people of one religion.

Explaining the decision, the chief judge cited a statement on Trump’s campaign website calling for a ”total and complete shutdown of Muslims entering the United States.” The U.S. Supreme Court later partially reinstated the travel ban.

FILE PHOTO: The CNN building (L) in Dubai Media City Park March 17, 2016. REUTERS/Russell Boyce/File PhotoOVER BY APRIL

Stephenson has rejected the Justice Department’s arguments against the deal, saying it was a classic “vertical” merger that removed no competitors from any market and denied the company would be too powerful.

He said a combined AT&T and Time Warner would create a data and advertising company competing against the newest and most disruptive entrants into the media sector: Amazon.com Inc (AMZN.O), Facebook Inc (FB.O), Netflix Inc (NFLX.O) and Alphabet Inc’s (GOOGL.O) Google, not other wireless phone companies.

Stephenson told the conference he has no reason to think Trump would be a factor in the deal’s approval and said he hoped the matter would be settled well before the April 22, 2018 deadline when parties can walk away from a deal.

The head of the Justice Department’s antitrust division, Makan Delrahim, said in a statement late on Thursday that he has “never been instructed by the White House” on the AT&T deal.

AT&T told the Justice Department on Monday that it believed it had complied with all legal requirements for the deal to be cleared, a person briefed on the matter said. That sets a deadline for the government to sue if it wants to block the merger. Officials said that detail could be as early Nov. 27.

Shares of Time Warner closed down 1.6 percent at $87.05. AT&T shares rose 1.6 percent to $34.00.

Reporting by David Shepardson and Jan Wolfe; Additional reporting by Anjali Athavaley, Subrat Patnaik and Aishwarya Venugopal; Writing by Anna Driver; Editing by Bill Rigby and Chris Sanders

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U.S. Air Force could face liability in Texas shooting: legal experts

(Reuters) – The U.S. Air Force’s failure to report the criminal record of Devin Kelley, the man who shot dead 26 people and wounded 20 more at a Texas church, could expose the service to liability, legal experts said.

Lorenzo Flores (L) and Terrie Smith react at a line of crosses in remembrance of those killed in the shooting at the First Baptist Church of Sutherland Springs, Texas, U.S., November 9, 2017. REUTERS/Rick Wilking

Kelley was convicted five years ago of assaulting his then-wife and child while he was in the Air Force, offences that made it illegal for him to possess a firearm.

The Air Force said on Monday it did not enter that information into a federal database used in background checks for firearms purchases, something it was legally required to do.

Government officials and agencies are often immune to civil lawsuits on the grounds that they need to be able to make policy decisions without fear of liability, but several lawyers said that immunity would not apply to the Air Force’s failure to report Kelley.

“We believe we have a viable case against the Air Force,” said Houston attorney Hartley Hampton, who has been approached by the family of one victim of Sunday’s mass shooting. But he added that he was still researching the issue.

A spokeswoman for the Air Force declined to comment.

Suing the Air Force could provide an avenue of redress for victims of the shooting at the First Baptist Church in Sutherland Springs, Texas. Lawsuits arising from mass shootings typically face long odds, because federal law specifically shields makers of guns and ammunitions from liability and it is often hard to show what steps other parties might have taken to prevent the crime.

No lawsuits have yet been filed, though several lawyers said that was not unusual just days after a shooting.

Under the 1993 Brady Bill, the Air Force was required to report Kelley’s 2012 court-martial to the National Criminal Information Center database. That would have caused him to flunk the background checks he passed to legally purchase firearms on two occasions in 2016 and 2017.

Timothy Lytton, a law professor at Georgia State University, said the Air Force would not be able to claim immunity in a lawsuit arising from the Texas shooting because its failure to report Kelley’s criminal record was not an act that fell within the service’s discretion. Instead, the Air Force simply failed to meet a legal requirement.

Lytton said that immunity from lawsuits existed to protect officials and agencies when they uphold statutory obligations or make policy decisions, with many court disputes centering on whether a particular federal action can be treated as a policy choice. But neither situation applied to the Air Force’s failure to report Kelley, he said.

Yale Law School professor Peter Schuck agreed that immunity would not protect the Air Force if victims and their families sued over Kelley’s ability to purchase firearms.

“I think plaintiffs have a strong case that could prevail against potential challenges from the government,” Schuck said.

Injury lawsuits against the federal government are subject to the same damages calculations as those against private parties but they are exclusively resolved through bench trials, where a judge and not a jury decides.

Even without immunity for the Air Force, Gregory Sisk, a law professor at the St. Thomas School of Law in Minnesota, said the plaintiffs would still need to prove both that the Air Force was negligent and that its negligence caused the shooting.

The latter claim might prove difficult, said Sisk, as the defense could claim that, even if Kelley had failed a background check, he could still have committed his crime with illegally obtained instead of legally purchased guns.

But lawyers in Texas, in the meantime, are already looking at ways to hold the United States liable.

“There’s no question that the shooter would not have been able to buy the guns were it not for the negligence of the Air Force,” said Austin plaintiff’s lawyer Laurie Higginbotham.

Reporting by Tina Bellon in New York; editing by Anthony Lin and Grant McCool

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Exclusive: Iran's Revolutionary Guards arrest more dual nationals

LONDON (Reuters) – Iran’s Revolutionary Guards have arrested at least 30 dual nationals during the past two years, mostly on spying charges, according to lawyers, diplomats and relatives, twice as many as earlier reported by local or international media.

Iran’s national flags are seen on a square in Tehran February 10, 2012, a day before the anniversary of the Islamic Revolution. REUTERS/Morteza Nikoubazl/File Photo

The number marks a sharp rise since 2015, when an international nuclear deal raised hopes of detente with the West. In the years before that the number of dual nationals detained at any given time was in single figures.

It also points up a new trend as a majority of those arrested since then, 19 out of the 30, have citizenship in Europe. Previously most of the detainees were Iranian Americans.

Detainees’ relatives and lawyers said the Guards were using them as bargaining chips in international relations and to put off European firms that sought business in Iran after the government agreed the deal with world powers to lift sanctions.

The Islamic Revolutionary Guard Corps has vast business interests as well as being Iran’s most powerful security force and has criticized the government for handing contracts to foreigners.

The Guards did not respond to several requests for comment. The Iranian government referred Reuters to the judiciary, which also did not respond to repeated approaches.

Iranian authorities have previously denied holding detainees for ransom and accuse Western governments of holding Iranians on trumped-up charges.

Relatives of dual nationals detained in Iran, their lawyers and Western diplomats shared information such as name, date of arrest and any charges, on condition neither they nor the detainees were identified, citing fear of repercussions.

Iran does not routinely announce arrests or charges and does not recognize dual nationals, whose rights to consular assistance are enshrined in the U.N. Vienna Convention.

In all cases, the sources said the detainees had not carried out any espionage and were arrested only because of their second citizenship. They explained their willingness to share details by saying they had been kept in the dark by both the Iranian authorities and Western governments.

Several governments argue that maintaining a low profile is in the best interests of the detainees. “This is very much what guides our approach,” a UK government source said. Dutch Foreign Ministry spokeswoman Daphne Kerremans said identifying detainees “could get the prisoners into trouble”.

BREAKING SILENCE

Some relatives only break their silence once their initial hopes have been dashed.

The wife of Ahmadreza Djalali, a Swedish-based Iranian scientist arrested in 2016 after attending a conference in Tehran, decided to speak out in February.

“We were all hopeful that he would be released soon. He was calling us from jail, saying he had not been officially charged. They had told him that he would be released after answering a few questions,” Vida Mehrannia said by telephone from Stockholm.

“I made the case public to media after nine months when he was threatened with a death sentence by a prosecutor and went on a hunger strike,” she added.

Djalali was sentenced to death in October on espionage charges.

Swedish Foreign Minister Margot Wallstrom said at the time: “We will point out that this will affect the relationship with the EU, and this in a time when Iran and the EU need to cooperate, not least with the nuclear deal we have with Iran.”

The deal to lift sanctions in return for curbs on Iran’s nuclear program was international, but significant U.S. restrictions remained in place.

Official confirmation of new arrests sometimes emerges indirectly. Records of a session of the European Parliament in June 2017 showed three Dutch-Iranian nationals were in jail in Iran. Only one case has been reported.

Asked about the two unknown cases, Dutch Foreign Ministry spokeswoman Kerremans told Reuters the individuals were arrested in November 2012 and January 2016 and said government actions were mostly “aimed at ensuring an honest trial, not demanding release”.

“It is very difficult for the Dutch government to lend support since Iran does not recognize the Dutch nationality of the prisoners, and gives little to no information about them,” she said.

In January 2016, then-British Prime Minister David Cameron raised the issue of three dual UK-Iran nationals held in Iranian prisons in a phone call with Iranian President Hassan Rouhani, according to a transcript posted on the Downing Street website. Only two of those cases were known to the public at the time.

Contacted for comment, a UK foreign ministry spokesman declined to specify how many British-Iranian dual nationals had been arrested. London raised all cases with Iran at every available opportunity, he said.

Nazanin Zaghari-Ratcliffe, an Iranian-British aid worker employed by the Thomson Reuters Foundation, was arrested in April 2016 while on holiday in Iran and later charged with plotting to overthrow Iran’s clerical establishment.

The foundation and her family have repeatedly denied the accusations.

“The only thing that as a family we can do is to point out the injustice of this,” said her husband Richard Ratcliffe.

He and others said this week that Foreign Minister Boris Johnson had made inaccurate comments about her to members of parliament that had been seized on by the Iranian judiciary and used to frame her.

Johnson had said, “she was simply teaching people journalism.” He subsequently said “the UK government has no doubt that she was on holiday in Iran” and that his comments “could have been clearer”.

“My point was that I disagreed with the Iranian view that training journalists was a crime, not that I wanted to lend any credence to Iranian allegations that Mrs Zaghari-Ratcliffe had been engaged in such activity,” he said.

PRISONER EXCHANGE

In 2016, Iran released five U.S. citizens in a prisoner exchange as the nuclear deal was implemented.

One remained behind and six American citizens or permanent residents have been arrested since, their lawyers or relatives have told media, of whom one has been freed on bail.

A U.S. State Department official confirmed three cases, did not comment on two others and mentioned another detainee, Nizar Zakka, saying he was unjustly held and calling for his release without clarifying his U.S. status.

Asked for more details about Zakka and other detained US citizens and legal residents, the official said the safety and security of U.S. citizens abroad was a top priority, adding: “Due to privacy considerations, we have no further comment.”

In an October 25 letter to the U.N. Secretary General seen by Reuters, Zakka’s lawyer Jason Poblete said his client was a U.S. permanent resident and “is being held as a hostage, as are other innocent persons, to exact political concessions from the United States and other governments”, including on sanctions.

For its part, Iran says its nationals are detained unjustly in the West. Kazem Gharibabadi, deputy head of Iran’s Council for Human Rights, part of the judiciary, has said more than 56 Iranians are imprisoned in the United States and an unspecified number in other countries.

“Some of those are detained under baseless charges, including bypassing sanctions,” he was quoted as saying by state media on Sunday.

U.S. Department of Justice spokesman Wyn Hornbuckle declined to comment on Gharibabadi’s figure, saying the Justice Department does not track prosecutions by nationality and the U.S. government’s Bureau of Prisons does not track how many inmates have Iranian nationality.

He said inmates in U.S. federal prison “are serving sentences handed down by federal judges after thorough due process of law”.

Additional reporting by Yeganeh Torbati in Washington, Bart Meijer in Amsterdam, Francois Murphy in Vienna, Johan Ahlander in Stockholm and Stine Jacobsen in Copenhagen; editing by Philippa Fletcher

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Trump's limited appeal a warning sign for Republicans ahead of 2018 elections

WASHINGTON (Reuters) – Democratic election victories in Virginia and New Jersey showed Republicans losing more ground in suburban areas, where President Donald Trump’s unpopularity could cost them dearly in next year’s congressional races.

Donald Trump speaks at his election night rally in Manhattan, New York. REUTERS/Carlo Allegri

The results from Tuesday, particularly in Virginia, suggest that Trump’s strategy of playing to a loyal but limited base has not enabled him to broaden support for his presidency or his party.

Democrats were delighted, believing that control of the U.S. House of Representatives, and perhaps even the Senate, now both controlled by Republicans, might be up for grabs in next year’s elections.

Some Republicans shared that view after their party’s candidates did poorly among independent, college-educated, women, and minority voters in suburban areas.

“Unless we get our act together, we are going to lose heavily,” Republican Senator John McCain said on Wednesday.

Democrats would need to pick up 24 seats next year to retake control of the House. Should that happen, Trump’s policy agenda would be effectively dead and the administration would come under greater scrutiny.

The win by Democrat Phil Murphy in New Jersey’s governor’s race came as no surprise because of the unpopularity of outgoing Republican Governor Chris Christie. But Ralph Northam’s 9-point victory over Republican Ed Gillespie for governor in swing-state Virginia was larger than expected.

Trump quickly tried to distance himself from Gillespie’s poor showing, saying on Twitter that the Republican candidate “worked hard but did not embrace me or what I stand for.”

Still, Trump’s leadership record appeared to motivate Democrats to vote in record numbers in Virginia, with exit polls showing that many came out simply to express their displeasure with the president.

“Trump is turning off more voters than he’s bringing in,” said Rodell Mollineau, a Democratic strategist in Washington. “His base is strong, but it isn’t growing.”

During his first year in office, Trump has consistently played to a base of passionate supporters, many of them older white men who live in rural areas declining in population, and has shown little inclination to reach out to the majority of voters who disapprove of him.

Whit Ayres, a Republican pollster based in Virginia, said the party was on a risky track. ”Republicans have traded fast-growing upscale suburban counties for slow-growing or declining rural areas. That is not a formula for long-term success.”

There also may be signs of slippage in Trump’s political base.

Trump supporters celebrate as they watch election returns come in at Donald Trump’s election night rally in Manhattan, New York. REUTERS/Mike Segar

In Virginia, Gillespie campaigned hard on immigration and crime – two hot issues with the president’s supporters – but did worse than expected in some rural and suburban areas that Trump easily won last year.

In rural Dickenson County, considered to be the heart of Trump country in Virginia, Gillespie’s margin over Northam was almost 7 percentage points less than Trump’s margin of victory over Democrat Hillary Clinton last year.

Trump won the city of Virginia Beach in 2016 by 3 points, but Gillespie lost to Northam there by 5, a swing of eight points.

‘SUBURBS OUT IN FULL FORCE’

More critically, Gillespie was blown out by Northam in northern Virginia’s populous suburbs, where Trump also struggled in the presidential race.

Donald Trump greets his running mate Mike Pence during his election night rally in Manhattan, New York. REUTERS/Mike Segar

“The suburbs came out in full force,” said Matt Mackowiak, a Republican strategist. “They appear to be very motivated to try and deliver a message to Trump.”

In growing Loudoun County, outside of Washington, Democrat Barack Obama barely edged out Republican Mitt Romney in the 2012 presidential race. On Tuesday, Northam buried Gillespie there by almost 20 points.

“I’m worried,” Ari Fleischer, a former White House spokesman for Republican President George W. Bush, told Fox News on Wednesday. “Democrats came out in huge numbers yesterday in the races and if they have that kind of enthusiasm going into 2018, it’s going to be very tough sailing for Republicans.”

Gillespie, a longtime Washington insider and lobbyist, tried to keep his distance from Trump personally even as he adopted some of his more combative campaign rhetoric.

It was a strategy that failed and Mackowiak said the result reflected Trump’s historically low approval rating. “I don’t think the White House was worried about that before, but now I think they have to be.”

The five-day Reuters/Ipsos tracking poll has Trump hovering around 35 percent approval nationally, with close to 60 percent of respondents disapproving of his performance in office.

A person familiar with Trump’s political operation dismissed the election results on Tuesday as having anything to do with the president, noting that both New Jersey and Virginia were won by Clinton in 2016.

Andrew Surabian, an adviser to the pro-Trump political group Great America Alliance, said Gillespie lost because he was exactly the kind of establishment Republican that Trump voters have rejected.

“Ed Gillespie’s campaign went down in flames because he failed to fully embrace the president or his agenda,” Surabian said, ”and without a coherent message and an authentic messenger, Republican candidates will not be successful moving forward.”

Additional reporting by Amanda Becker, Ginger Gibson, Jeff Mason and John Whitesides; Editing by Peter Cooney

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Shifting sands: What is changing in Saudi Arabia?

(Reuters) – Saudi Arabia’s Crown Prince Mohammed bin Salman has ordered a crackdown on corruption, the latest in a wave of frenetic changes in the kingdom over the past 2-1/2 years. Prince Mohammed says he is determined to remodel his conservative country into a modern state no longer dependent on oil.

Saudi Crown Prince Mohammed bin Salman presides over a meeting of the Council of Economic and Development Affairs in Riyadh, Saudi Arabia November 7, 2017. Saudi Press Agency/Handout via REUTERS

As his father, King Salman bin Abdulaziz, has handed the 32-year-old Prince Mohammed more and more power over the past three years, the ambitious young leader has taken on everything from economic reforms to waging war in neighboring Yemen. Here is what you need to know.

ROYAL POLITICS

Prince Mohammed capped his rapid rise to power in June this year by replacing his elder cousin Prince Mohammed bin Nayef, widely known as MbN, as crown prince.

A source close to King Salman said MbN’s dismissal was “in the higher interests of the state” because he was incapacitated by morphine and cocaine addiction, a legacy of an assassination attempt that left shrapnel in his body.

Reuters could not independently confirm MbN’s addiction issues.

ANTI-CORRUPTION CAMPAIGN

Prince Mohammed tightened his grip on power with the start of the anti-corruption campaign at the weekend, purging the kingdom’s political and business elite. Among those arrested were 11 princes.

Many Saudis welcomed the moves as an assault on the endemic theft of public funds by the powerful. U.S. President Donald Trump said those arrested had been “‘milking’ their country for years” but some Western officials expressed unease about the possible reaction in Riyadh’s opaque tribal and royal politics.

YEMEN

Prince Mohammed launched a military campaign in neighboring Yemen in March 2015. A Saudi-led coalition, acting on an invitation from the internationally-recognized government, has targeted the Iran-aligned Houthi movement in a war which has killed more than 10,000 people.

The war is closely identified with the prince in his role as defense minister. His image once adorned war propaganda but is rarely associated with the war now, although he has said it must continue in order to quash Iranian influence.

Even before the conflict, Yemen was the poorest country on the Arabian peninsula and now millions of people there are facing famine and a cholera epidemic. The coalition denies it blocks commercial shipments of food, medicine and fuel.

QATAR

Prince Mohammed has helped lead a diplomatic campaign to isolate Qatar, saying Riyadh’s erstwhile ally backs terrorism and cozies up to Iran. Qatar rejects the accusations and says it is being punished for straying from its neighbors’ backing for authoritarian rulers.

The campaign has divided Gulf Arab countries, who Washington regards as essential to its influence in the region. Qatar had incensed Riyadh by cheering Arab Spring uprisings against some autocratic Arab rulers.

CONFRONTATION WITH IRAN

Saudi Arabia’s rivalry with Iran, its competitor for influence in the Middle East, has deepened as King Salman and Prince Mohammed worked to build a Sunni coalition against Tehran and its allies in the Arab world.

In May, as deputy crown prince, Prince Mohammed used unusually provocative language to rule out dialogue with revolutionary Shi‘ite Muslim theocracy Iran, which he said was trying to interfere in Arab lands and dominate the Muslim world.

On Tuesday, state media quoted him as describing Iran’s supply of rockets to militias in Yemen as “direct military aggression” that could be an act of war.

Prince Mohammed has also opened a new front in the proxy war with Iran by threatening Tehran’s ally Hezbollah and its home country Lebanon. The resignation on Saturday of the Saudi-allied Lebanese prime minister, Saad al-Hariri, announced from Riyadh, was widely seen as the first act on this new front.

The crown prince has also sought the help of Shi‘ite leaders in Iraq to try to reverse Iran’s dominant role there and shore up security on the kingdom’s northern border, and has tried to improve ties with the United States under Trump, who shares his and King Salman’s antipathy to Iran’s government.

SAUDI ARAMCO

The planned sale of about 5 percent of national oil company Saudi Aramco [IPO-ARMO.SE] next year is a centerpiece of Vision 2030, Prince Mohammed’s blueprint to move the economy away from what he called its “addiction to oil” toward the private sector.

The IPO is expected to raise as much as $100 billion but investors wonder whether Aramco can be valued anywhere close to the $2 trillion figure announced by the crown prince and there has been market speculation that the IPO could be delayed beyond 2018 or shelved. He recently stated it would happen next year.

Many Saudis have misgivings about the sale, with some fearing Riyadh is selling cheaply at a time of low oil prices.

ECONOMIC REFORMS

Vision 2030 has begun to reduce a big state budget deficit with austerity measures but has not yet created major new sources of non-oil growth or jobs.

The phased removal of subsidies on fuel, water and electricity has started but some austerity moves have been unpopular. Already, some have been reversed or delayed as the economy has slowed because of low oil prices.

The plan includes private investment and privatizations and building the world’s largest sovereign wealth fund. The aim is to create jobs and raise the participation of women in the workforce from 22 percent now to 30 percent by 2030.

SOCIETY AND CULTURE

Saudi Arabia adheres to an austere Wahhabi brand of Sunni Islam, which bans gender mixing, concerts and cinemas.

Prince Mohammed’s ascent represents a social and cultural sea change, with power set to be passed to a much younger generation seemingly more in tune with young Saudis. In moves that reinforce that perception, women will be permitted to drive from next year and allowed to attend sports events.

The crown prince has also said the country will move to a more open and tolerant interpretation of Islam, and reforms have begun in areas once the exclusive domain of the clergy such as education, courts and the law. Saudi authorities have promoted elements of national identity that have no religious component or pre-date Islam.

NEOM

Last month Prince Mohammed announced a $500-billion plan to create a business and industrial zone extending across its borders into Jordan and Egypt, part of his efforts to reduce dependence on oil.

The 26,500 square-km (10,230 square-mile) zone, known as NEOM, will focus on industries including energy and water, biotechnology, food, advanced manufacturing and entertainment, and will power itself solely with wind power and solar energy.

The crown prince says the government, Public Investment Fund and local and international investors are expected to sink billions into the zone in coming years. The crown prince told Reuters NEOM would be floated on financial markets alongside Aramco.

Reporting by Gulf team, Editing by Timothy Heritage

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Qualcomm buy may pit Broadcom against Intel in 'connected car' fight

(Reuters) – If Broadcom Ltd’s unsolicited $103 billion bid for Qualcomm Inc succeeds, it could set up a battle with Intel Corp for dominance in the production of the next generation of communications chips, which will play a vital role in so-called connected cars.

FILE PHOTO: A sign to the campus offices of chip maker Broadcom Ltd, who announced on Monday an unsolicited bid to buy peer Qualcomm Inc for $103 billion, is shown in Irvine, California, U.S., November 6, 2017. REUTERS/Mike Blake/File Photo

Vehicles of every sort already are starting to add wireless chips to download everything from maps to entertainment, and in a few years nearly every new car may be connected. Self-driving cars, still in test mode, will accelerate the move.

“The amount of chips per car is going to grow dramatically,” said Egil Juliussen, a principal analyst for automotive technology at IHSMarkit.

Chip makers are scrambling to create new mobile networks, the so-called fifth generation, which will link phones as well as cars, drones and even industrial devices such as smart street lights, which count pedestrians and send data to city planners.

Qualcomm long was the dominant communications chip maker for mobile phones, although computer chip maker Intel has begun muscling into the space. Each now supplies about half Apple Inc’s iPhone communications chips, for instance.

Now they are jockeying in a mature market to design so-called 5G networks that will be up to 10 times as fast as wireless networks today, which are expected to start rolling out in 2020. Research firm IDC predicts 1.53 billion smart phones will be shipped in 2017 expanding to only 1.77 billion units in 2021.

The market for modem chips for cars, by contrast, is expected to grow sharply. Tristan Gerra, a senior semiconductor analyst for Robert W. Baird & Co, said that this year, only about 12 million of the 90 million cars manufactured per year have internet connectivity. But connectivity will become ubiquitous on self-driving cars.

The Intel logo is shown at the E3 2017 Electronic Entertainment Expo in Los Angeles, California, U.S. June 13, 2017. REUTERS/ Mike Blake

“You basically (will) have 80 million units per year that are going to get a modem,” he said.

Intel and Qualcomm declined to comment.

FILE PHOTO: A Qualcomm sign is pictured at one of its many campus buildings in San Diego, California, U.S. April 18, 2017. REUTERS/Mike Blake/File Photo

Qualcomm itself is trying to buy NXP Semiconductors, a maker of automotive chips from so-called “infotainment” system chips to camera systems, for $38 billion. It is unclear whether that deal will go through and whether Broadcom would take on NXP, but Broadcom has said it is willing to do so.

A tie-up between the three companies could create a formidable competitor in the automotive chip space, said IHSMarkit’s Juliussen. He views Intel and Nvidia Corp, which make both make the main processors used in self-driving vehicles, as leaders in the young market, but a combined Broadcom-Qualcomm-NXP would be a strong third-place.

Intel has bought itself into relationships with autonomous car developers thanks to its acquisition of vision system maker Mobileye. Broadcom would get something similar with NXP, Juliussen said.

If Broadcom pulls off both deals, its market position in some areas could be dominant, said Cowen and Co analyst Karl Ackerman.

“[Broadcom] would basically own the majority of the high-end components in the smart phone market and they would have a very significant influence on 5G standards, which are paramount as you think about autonomous vehicles” and connected factories, he said.

Reporting by Stephen Nellis, editing by Peter Henderson and Tom Brown

Our Standards:The Thomson Reuters Trust Principles.

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Senator seeks explanation for career U.S. prosecutor's abrupt resignation

WASHINGTON (Reuters) – A Democratic Senator said on Tuesday he wants answers from top Justice Department officials about why a career prosecutor was asked to resign days before a special counsel unveiled the first criminal charges in an investigation into Russia’s role in the 2016 U.S. election.

FILE PHOTO – Dana Boente, U.S. Attorney for the Eastern District of Virginia, is pictured in this undated handout photo. The United States Attorney’s Office, Eastern District of Virginia/Handout via REUTERS/File Photo

Dana Boente was asked to quit in late October as the U.S. Attorney for the Eastern District of Virginia, whose district has played an important role in the investigation.

Just days later, Special Counsel Robert Mueller’s investigators charged President Donald Trump’s former campaign manager Paul Manafort and another aide, Rick Gates, with conspiring to launder money and other charges.

It was also announced on Oct. 30 that a third former Trump adviser, George Papadopoulos, had pleaded guilty earlier in the month to a charge of lying to the FBI.

U.S. Senator Chris Coons, a member of the Senate Judiciary Committee, said he was writing to U.S. Attorney General Jeff Sessions and Deputy Attorney General Rod Rosenstein to ask if Boente’s departure was “normal or justified.”

“I‘m concerned about the abrupt departure of Dana Boente after a career as a federal prosecutor … There’s a lot of circumstances that connect the ongoing Mueller investigation to the Eastern District,” Coons said in an interview.

A Department of Justice spokesman said the agency does not comment on personnel matters.

Boente could not immediately be reached for comment.

Investigations into whether Republican Trump’s campaign associates colluded with Russia last year to help him defeat Democratic nominee Hillary Clinton for the presidency arose after U.S. intelligence agencies concluded Russia carried out a campaign of hacking and propaganda to interfere in the election.

Russia has repeatedly denied meddling allegations and Trump has denied any collusion.

A Justice Department veteran, Boente has stepped in to help stabilize the law enforcement agency in frequent periods of turmoil during the first year of the Trump administration.

Boente has also been temporarily serving as the acting assistant attorney general for the department’s National Security Division. He previously was acting attorney general after Trump fired the prosecutor in that post, Sally Yates. After that, Boente also briefly was acting deputy attorney general.

A person familiar with the matter confirmed that Sessions, a former Alabama Republican senator and close Trump ally, asked Boente to tender his resignation in late October.

Boente will step down as head of the National Security Division once Trump’s nominee John Demers is confirmed by the Senate. After that, Boente will continue as head of the Eastern District in Alexandria, Virginia, until he is replaced.

Trump has not yet nominated anyone for that post.

The Eastern District post is the fourth most powerful position in the department’s line of succession.

A judge in the district approved the search warrant for the Alexandria, Virginia home of former Trump campaign manager Manafort in July.

A grand jury in the district earlier this year became part of Mueller’s probe of former national security adviser Michael Flynn, who is under scrutiny for his work as a lobbyist for a Turkish businessman.

Reporting by Sarah N. Lynch, editing by Kevin Drawbaugh and Grant McCool

Our Standards:The Thomson Reuters Trust Principles.

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Exclusive: FBI agents raid headquarters of major U.S. body broker

PORTLAND, Oregon (Reuters) – Federal agents have seized records from a national company that solicits thousands of Americans to donate their bodies to science each year, then profits by dissecting the parts and distributing them for use by researchers and educators.

The headquarters of MedCure, one of the nation’s largest body brokers, raided by FBI agents last week conducting a search warrant, is shown outside Portland, Oregon, November 6, 2017. REUTERS/John Shiffman

The search warrant executed by the Federal Bureau of Investigation at MedCure Inc headquarters here on November 1 is sealed, and the bureau and the company declined to comment on the nature of the FBI investigation. But people familiar with the matter said the inquiry concerns the manner in which MedCure distributes body parts acquired from its donors.

MedCure is among the largest brokers of cadavers and body parts in the United States. From 2011 through 2015, documents obtained under public-record laws show, the company received more than 11,000 donated bodies and distributed more than 51,000 body parts to medical industry customers nationally. In a current brochure, the company says that 80,000 additional people have pledged to donate their bodies to MedCure when they die.

FBI spokeswoman Beth Anne Steele confirmed the day-long search of the 25,000-square-foot facility, but declined to comment further because the matter is under seal. A person familiar with the matter said that FBI agents took records from MedCure but did not remove human remains.

The search warrant, though sealed, signals that an FBI investigation of MedCure has reached an advanced stage. To obtain a search warrant to seize records, rather than demand them via subpoena, FBI agents must provide a detailed affidavit to a U.S. magistrate with evidence to support probable cause that crimes have been committed and that related records may be on the premises.

“MedCure is fully cooperating with the FBI, and looks forward to resolving whatever questions the government may have about their business,” said Jeffrey Edelson, a Portland attorney who represents the company. “Out of respect for the integrity of the process, we do not believe that further comment is appropriate at this time.”

It is illegal to profit from the sale of organs destined for transplant, such as hearts and kidneys. But as a Reuters series detailed last month, it is legal in most U.S. states to sell donated whole bodies or their dissected parts, such as arms and heads, for medical research, training and education.

Commonly known as body brokers, these businesses often profit by targeting people too poor to afford a burial or cremation. Reuters documented how people who donate their bodies to science may be unwittingly contributing to commerce. Few states regulate the body donation industry, and those that do so have different rules, enforced with varying degrees of thoroughness. Body parts can be bought with ease in the United States. A Reuters reporter bought two heads and a spine from a Tennessee broker with just a few emails.

MedCure, founded in 2005, is based outside Portland, Oregon, and has offices in Nevada, Florida, Rhode Island and Missouri, as well as Amsterdam, the Netherlands. At some locations, including the one near Portland, MedCure provides training labs for doctors and health professionals to practice surgical techniques. MedCure also sends body parts and technicians to assist with medical conferences across the country.

MedCure is accredited by the American Association of Tissue Banks, a national organization that primarily works with transplant tissue banks. The broker is also licensed by the state health departments in Oregon and New York, among the few states that conduct inspections. According to Oregon state health records, officials renewed MedCure’s license in January, following a routine on-site review.

The Reuters series, “The Body Trade,” can be read here

Edited by Michael Williams

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