Trump threatens to hike tariffs on $200B of Chinese imports

Trump threatens to hike tariffs on $200B of Chinese imports
U.S. President Donald Trump talks to reporters during a meeting with Slovakia's Prime Minister Peter Pellegrini in the Oval Office at the White House in Washington, U.S., May 3, 2019. (REUTERS)
Updated 06 May 2019

Trump threatens to hike tariffs on $200B of Chinese imports

Trump threatens to hike tariffs on $200B of Chinese imports
  • Last July, the Trump administration gradually began slapping import taxes on Chinese goods to pressure Beijing into changing its policies

WASHINGTON: President Donald Trump turned up the pressure on China on Sunday, threatening to hike tariffs on $200 billion worth of Chinese goods.
Trump’s comments, delivered on Twitter, came as a Chinese delegation was scheduled to resume talks in Washington on Wednesday aimed at resolving a trade war that has shaken financial markets and cast gloom over the world economy.
Trump turned up the heat by saying he would raise import taxes on $200 billion in Chinese products to 25% from 10% on Friday.
The Wall Street Journal, citing unidentified sources, said China’s government was considering canceling this week’s talks. Beijing has responded to previous US threats by saying it wouldn’t negotiate under pressure.
Stock markets fell on the news. The future for the Dow Jones Industrial Average lost 1.5 percent while Tokyo’s Nikkei 225 retreated 0.2 percent.
Trump had twice pushed back deadlines — in January and March — to raise the tariffs in a bid to buy more time for a negotiated settlement. But on Sunday, Trump, who has called himself a “tariff man,” said he’s losing patience. “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” Trump tweeted.
In his tweets, Trump also threatened to slap tariffs on another $325 billion in Chinese imports, covering everything China ships annually to the United States.
The two countries are locked in a high-stakes dispute over China’s push to establish itself as a technological super power. The US charges that China is resorting to predatory tactics — including cybertheft and forcing foreign companies to hand over technology — in a drive to establish Chinese companies as world leaders in advanced industries such as robotics and electric vehicles.
The administration has repeatedly suggested that the negotiators are making progress. A month ago, Trump said that the two countries were “rounding the turn” and predicted that “something monumental” would be achieved in the next few weeks.
But last week, Treasury Secretary Steven Mnuchin seemed to temper expectations, suggesting that Washington was willing to “move on” if it can’t get the deal it wants.
A substantive deal would require China to rethink the way it pursues its economic ambitions, abandoning or scaling back subsidies to its companies, easing up on the pressure for foreign companies to share trade secrets, and giving them more access to the Chinese market.
Philip Levy, senior fellow at the Chicago Council on Global Affairs and a White House economist under President George W. Bush, said the talks are too complicated for Trump’s high-pressure tactics to work. “The president treats this like we’re haggling over the price of a used car,” Levy said.
Trump has made a priority of shaking up American trade policy.
As a candidate for the presidency, Trump raged repeatedly about alleged Chinese perfidy — so much so that a video mashup of him spitting out the word “China” went viral and collected more than 15 million views on Youtube.com.
Trump charged that previous administrations, gullible and weak, had let China get away with abusive trade practices, accepting empty promises from Beijing and allowing the US-China economic relationship to grow ever more lopsided. As evidence, he pointed to America’s vast US trade deficit with China — $379 billion last year, by far the biggest with any country in the world.
Once he took office, Trump’s relationship with his Chinese counterpart, Xi Jinping, seemed to get off to a good start. The two men shared chocolate cake and amiable conversation at Trump’s resort in Mar-a-Lago, Florida, in April 2017. A few weeks later, China agreed to open its market US beef, cooked chicken, and natural gas in what Commerce Secretary Wilbur Ross called a “herculean accomplishment.”
The romance faded. In March 2018, the Office of the US Trade Representative issued a report accusing China of using predatory tactics to strengthen its tech companies.
Last July, the Trump administration gradually began slapping import taxes on Chinese goods to pressure Beijing into changing its policies. It now has imposed 10% tariffs on $200 billion in Chinese imports and 25% tariffs on another $50 billion. The Chinese have retaliated by targeting $110 billion in US imports.
The fight between the world’s two biggest economies is raising worries about global economic growth. The International Monetary Fund, the World Bank, and others have downgraded their forecasts for the world economy, saying the US-China standoff is reducing world trade and creating uncertainty for companies trying to decide where to buy supplies, build factories, and make investments.
Trump has portrayed his tariffs as a moneymaker for the United States and a benefit to the US economy.
But a March study by economists from the Federal Reserve Bank of New York, Columbia University, and Princeton University found that the burden of Trump’s tariffs — including taxes on steel, aluminum, solar panels, and Chinese imports — falls entirely on US consumers and businesses who buy imported products. By the end of last year, the study found, they were paying $3 billion a month in higher taxes and absorbing $1.4 billion a month in lost efficiency.
Nonetheless, the overall US economy has remained healthy. On Friday, the government reported that the US unemployment rate had fallen to the lowest level in half a century.
The prospect of higher tariffs and heightened tensions could alarm investors when markets open Monday. “When the president puts his foot down, it makes the market go down,” Chris Rupkey, chief financial economist at MUFG Union Bank, wrote in a research note Sunday. “Tariff man is back just in time to make the stock market dive, dive, dive.”


Saudi CITC pushes for more tech listings on Tadawul

Saudi CITC pushes for more tech listings on Tadawul
Updated 02 August 2021

Saudi CITC pushes for more tech listings on Tadawul

Saudi CITC pushes for more tech listings on Tadawul
  • The CITC is aiming to enhance the investment environment in the telecoms and IT sectors

RIYADH: Saudi Arabia’s Communications and Information Technology Commission (CITC) signed an initial agreement with the Saudi Stock Exchange pushing for more listing of technology operators in the Kingdom on the Saudi stock market.

The CITC is aiming to enhance the investment environment in the telecommunications and information technology sector, the postal sector and delivery applications, SPA reported.

Financial market listings provide greater investment opportunities and helps companies to expand and enter new markets, and develop products, CITC said.

It also contributes to strengthening corporate governance with a regulatory framework of high quality and institutional value.

This agreement comes in line with the Vision 2030 objectives aimed at making the Kingdom a leading global logistics platform and a connecting hub for the three continents.


Saudi mortgage lending surges 27 percent in first half of 2021 — SAMA

Saudi mortgage lending surges 27 percent in first half of 2021 — SAMA
Updated 02 August 2021

Saudi mortgage lending surges 27 percent in first half of 2021 — SAMA

Saudi mortgage lending surges 27 percent in first half of 2021 — SAMA
  • Saudi banks and financial institutions lent SR79 billion for residential mortgages H1 2021

RIYADH: Residential mortgage financing in Saudi Arabia jumped by more than a quarter in the first half of the year even as new lending slowed in the second quarter, central bank data showed.

Saudi banks and financial institutions lent SR79 billion for residential mortgages in the first six months of 2021, up from SR62.1 billion in the same period last year, SAMA said in its monthly bulletin. The number of transactions increased 14.2 percent to 153,054 in the period.

The value of mortgages provided in the second quarter slid to SR31.1 billion riyals from SR49 billion in the first quarter as the supply of new properties fell amid changes to the building code.

“The number of contracts increased in the first half, but temporarily decreased in the past three months, but due to the reorganization of property evaluation by the Real Estate Fund, and the application of the new Saudi building code with the temporary ambiguity until it is well understood, and the lack of supply of ready housing units,” Mohamed AlKhars, a member of the housing program advisory board and the chairman of Innovest Property Co. told Arab News.

“I expect the volume of financing and the number of contracts to gradually increase in the fourth quarter of 2021,” he said.

Financing for villas accounted for 80 percent of residential real estate loans in the first half of the year, with 15.9 percent for apartments and the remainder for land, the SAMA data showed.

“Villas are still more desired by citizens and more available in the market, and apartment supply is still low now, as the developers are still focusing on building villas due to low interest in apartments which might continue for a while,” AlKhars said.

The mortgage market has seen stratospheric growth since SAMA began collecting the data in 2016 when a total of 22,259 real estate loans were issued. In 2019, that number jumped to 179,220 from 50,496 the previous year, before reaching 295,590 in 2020.


Brent crude falls below $75 amid Chinese economy concerns, OPEC output

Brent crude falls below $75 amid Chinese economy concerns, OPEC output
Updated 02 August 2021

Brent crude falls below $75 amid Chinese economy concerns, OPEC output

Brent crude falls below $75 amid Chinese economy concerns, OPEC output
  • Chinese factory activity posts slowest growth since before pandemic
  • OPEC output reached 15-month high in July - Reuters survey

LONDON: Oil prices dropped, sending Brent crude back below $75 a barrel after a report showed Chinese factory activity declined as the world’s second largest oil consumer battles a resurgence in coronavirus infections.

Brent crude dropped 2 percent to $74.81 a barrel at 2:15 p.m. in London, after ending July at the highest level in more than two weeks.

The international oil benchmark climbed 2.5 percent last week after a rollercoaster month that saw it swoon from a two-year high of $77.16 on July 5 to $68.62 on July 19 before recovering to end the month at $76.33.

Concerns over the effect a resurgence in coronavirus cases might have on demand for crude were allayed on Wednesday when a report showed a bigger-than-expected drawdown of crude stockpiles the previous week.

US West Texas Intermediate (WTI) crude futures dropped 0.8 percent today to $73.24.

Chinese factory activity slowed in July to its lowest level since the start of the pandemic, data showed Saturday, as manufacturing was impacted by slowing demand, weak exports and extreme weather.

The Purchasing Managers’ Index (PMI), a key gauge of manufacturing activity in the world’s second-largest economy, dropped to 50.4 in July from June’s 50.9, the National Bureau of Statistics said. A reading above 50 indicates growth.

“China has been leading economic recovery in Asia and if the pullback deepens, concerns will grow that the global outlook will see a significant decline,” Edward Moya, a senior analyst at OANDA, told Reuters.

Oil prices were also damped by a Reuters survey that showed oil output from the Organization of the Petroleum Exporting Countries (OPEC) rose in July to its highest level since April 2020.

An exchange of words over an attack on an Israeli-managed oil products tanker off the coast of Oman on Thursday appeared to provide little support to the crude market.

Iran will respond promptly to any threat against its security, a foreign ministry spokesman said on Monday, after the US, Israel and the UK blamed Tehran for the attack..


The robot apocalypse is hard to find in America’s small and mid-sized factories

The robot apocalypse is hard to find in America’s small and mid-sized factories
Updated 02 August 2021

The robot apocalypse is hard to find in America’s small and mid-sized factories

The robot apocalypse is hard to find in America’s small and mid-sized factories
  • Only one of 34 companies visited by MIT researchers had spent heavily on robotics
  • Bulk of machines were from before the 1990s

CLEVELAND: When researchers from the Massachusetts Institute of Technology visited Rich Gent’s machine shop here to see how automation was spreading to America’s small and medium-sized factories, they expected to find robots.
They did not.
“In big factories — when you’re making the same thing over and over, day after day, robots make total sense,” said Gent, who with his brother runs Gent Machine Co, a 55-employee company founded by his great-grandfather, “but not for us.”
Even as some analysts warn that robots are about to displace millions of blue-collar jobs in the US industrial heartland, the reality at smaller operations like Gent is far different.
Among the 34 companies with 500 employees or fewer in Ohio, Massachusetts and Arizona that the MIT researchers visited in their project, only one had bought robots in large numbers in the last five years — and that was an Ohio company that had been acquired by a Japanese multinational which pumped in money for the new automation.
In all the other Ohio plants they studied, they found only a single robot purchased in the last five years. In Massachusetts they found a company that had bought two, while in Arizona they found three companies that had added a handful.
Anna Waldman-Brown, a PhD student who worked on the report with MIT Professor Suzanne Berger, said she was “surprised” by the lack of the machines.
“We had a roboticist on our research team, because we expected to find robots,” she said. Instead, at one company, she said managers showed them a computer they had recently installed in a corner of the factory — which allowed workers to note their daily production figures on a spreadsheet, rather than jot down that information in paper notebooks.
“The bulk of the machines we saw were from before the 1990s,” she said, adding that many had installed new computer controllers to upgrade the older machines — a common practice in these tight-fisted operations. Most had also bought other types of advanced machinery — such as computer-guided cutting machines and inspection systems. But not robots.
Robots are just one type of factory automation, which encompasses a wide range of machines used to move and manufacture goods — including conveyor belts and labeling machines.
Nick Pinkston, CEO of Volition, a San Francisco company that makes software used by robotics engineers to automate factories, said smaller firms lack the cash to take risks on new robots. “They think of capital payback periods of as little as three months, or six — and it all depends on the contract” with the consumer who is ordering parts to be made by the machine.
This is bad news for the US economy. Automation is a key to boosting productivity, which keeps US operations competitive. Since 2005, US labor productivity has grown at an average annual rate of only 1.3 percent — below the post-World War 2 trend of well over 2 percent — and the average has dipped even more since 2010.
Researchers have found that larger firms are more productive on average and pay higher wages than their smaller counterparts, a divergence attributed at least in part to the ability of industry giants to invest heavily in cutting-edge technologies.
Yet small and medium-sized manufacturers remain a backbone of US industry, often churning out parts needed to keep assembly lines rolling at big manufacturers. If they fall behind on technology, it could weigh on the entire sector. These small and medium-sized manufacturers are also a key source of relatively good jobs — accounting for 43 percent of all manufacturing workers.

LIMITATIONS OF ROBOTS
One barrier for smaller companies is finding the skilled workers needed to run robots. “There’s a lot of amazing software that’s making robots easier to program and repurpose — but not nearly enough people to do that work,” said Ryan Kelly, who heads a group that promotes new technology to manufacturers inside the Association for Manufacturing Technology.
To be sure, robots are spreading to more corners of the industrial economy, just not as quickly as the MIT researchers and many others expected. Last year, for the first time, most of the robots ordered by companies in North America were not destined for automotive factories — a shift partly attributed to the development of cheaper and more flexible machines. Those are the type of machines especially needed in smaller operations.
And it seems certain robots will take over more jobs as they become more capable and affordable. One example: their rapid spread in e-commerce warehouses in recent years.
Carmakers and other big companies still buy most robots, said Jeff Burnstein, president of the Association for Advancing Automation, a trade group in Ann Arbor, Michigan. “But there’s a lot more in small and medium-size companies than ever before.”
Michael Tamasi, owner of AccuRounds in Avon, Massachusetts, is a small manufacturer who recently bought a robot attached to a computer-controlled cutting machine.
“We’re getting another machine delivered in September — and hope to attach a robot arm to that one to load and unload it,” he said. But there are some tasks where the technology remains too rigid or simply not capable of getting the job done.
For instance, Tamasi recently looked at buying a robot to polish metal parts. But the complexity of the shape made it impossible. “And it was kind of slow,” he said. “When you think of robots, you think better, faster, cheaper — but this was kind of the opposite.” And he still needed a worker to load and unload the machine.
For a company like Cleveland’s Gent, which makes parts for things like refrigerators, auto airbags and hydraulic pumps, the main barrier to getting robots is the cost and uncertainty over whether the investment will pay off, which in turn hinges on the plans and attitudes of customers.
And big customers can be fickle. Eight years ago, Gent landed a contract to supply fasteners used to put together battery packs for Tesla Inc. — and the electric-car maker soon became its largest customer. But Gent never got assurances from Tesla that the business would continue for long enough to justify buying the robots it could have used to make the fasteners.
“If we’d known Tesla would go on that long, we definitely would have automated our assembly process,” said Gent, who said they looked at automating the line twice over the years.
But he does not regret his caution. Earlier this year, Tesla notified Gent that it was pulling the business. “We’re not bitter,” said Gent. “It’s just how it works.”
Gent does spend heavily on new equipment, relative to its small size — about $500,000 a year from 2011 to 2019. One purchase was a $1.6 million computer-controlled cutting machine that cut the cycle time to make the Tesla parts down from 38 seconds to 7 seconds — a major gain in productivity that flowed straight to Gent’s bottom line.
“We found another part to make on the machine,” said Gent.


HSBC profit more than doubles as economies rebound, loan-loss fears ebb

HSBC profit more than doubles as economies rebound, loan-loss fears ebb
Updated 02 August 2021

HSBC profit more than doubles as economies rebound, loan-loss fears ebb

HSBC profit more than doubles as economies rebound, loan-loss fears ebb
  • HSBC reinstated dividend and released $700 million set aside for bad loans
  • Pretax profit was $10.8 billion versus $4.32 billion a year earlier

HONG KONG/LONDON: HSBC Holdings on Monday reported forecast-beating first-half pretax profit that more than doubled from a weak performance last year when it made huge provisions for pandemic-related bad loans.
Encouraged by an economic rebound in Hong Kong and Britain, its two biggest markets, HSBC reinstated dividend payments and released $700 million that had been set aside to cover potential bad loans. That compares with $6.9 billion in loan-loss provisions made in the same period a year ago.
Pretax profit for Europe’s biggest bank by assets came in at $10.8 billion versus $4.32 billion in the same period a year earlier and was higher than the $9.45 billion average of 15 analysts’ estimates compiled by the bank.
Revenue, however, fell 4 percent due to the low interest rate environment.
HSBC said given the brighter outlook globally as economies recover better than expected from the pandemic, it expects credit losses to be below its medium-term forecast of 0.3 percent-0.4 percent of its loans.
The bank also said that for the year, it could even make a net release of funds from earlier provisions rather than add to them, but it was hard to say definitely due to the unknown impact of government support programs, vaccine rollouts and new strains of the virus.
It plans to pay an interim dividend of seven cents a share after the Bank of England scrapped payout curbs last month.
Reflecting its better than expected loan performance, HSBC will move to within its target payout range of 40-55 percent of reported earnings per share within 2021, it added.