US targets $300bn of Chinese goods for new tariff hikes

US President Donald Trump and China's President Xi Jinping arrive for a state dinner at the Great Hall of the People in Beijing, China. (File/Reuters)
Updated 14 May 2019

US targets $300bn of Chinese goods for new tariff hikes

  • Trade talks between the US and China have come to a halt, sources close to the discussions say
  • Trump plans to meet Chinese President Xi Jinping at the end of June at a G20 meeting in Japan,

BEIJING: US officials listed $300 billion more of Chinese goods for possible tariff hikes while Beijing vowed Tuesday to “fight to the finish” in an escalating trade battle that is fueling fears about damage to global economic growth.
The US Trade Representative’s Office issued its target list after Beijing announced tariff hikes Monday on $60 billion of American goods in their spiraling dispute over Chinese technology ambitions and other irritants. Chinese authorities were reacting to President Donald Trump’s surprise decision last week to impose punitive duties on $200 billion of imports from China.
“China will fight to the finish,” said a foreign ministry spokesman, Geng Shuang.
“We have the determination and capacity to safeguard our interests,” Geng said. “China’s countermeasures have shown our determination to safeguard the multilateral trade system.”
The latest US list of 3,805 product categories is a step toward carrying out Trump’s May 5 threat to extend punitive 25% duties to all Chinese imports, the USTR said. It said a June 17 hearing would be held before Washington decides how to proceed.
The list “covers essentially all products” not already affected by punitive tariffs, the USTR said.
It includes laptop computers, saw blades, turbine parts, tuna and garlic. The USTR noted it excludes pharmaceuticals and rare earths minerals used in electronics and batteries.
“The risk of further escalation is far from over,” said Timme Spakman of ING in a report.
Also Tuesday, China’s tightly controlled social media were filled with comments lambasting Washington following weeks of little online discussion of the dispute. That suggested official censors might have blocked earlier comments but started allowing those that favor Beijing to deflect potential criticism of President Xi Jinping’s government.
The United States is “sucking the blood of the Chinese,” said a comment left on the “Strong Country” blog of the ruling Communist Party’s newspaper People’s Daily. Another comment on the site said, “Why are Chinese people bullied? Because our hearts are too soft!“
Trump started raising tariffs last July over complaints China steals or pressures foreign companies to hand over technology and unfairly subsidizes businesses Beijing is trying to build into global leaders in robotics and other fields.
A stumbling block has been US insistence on an enforcement mechanism with penalties to ensure Beijing carries out its commitments.
Odds of a settlement “remain high,” said Mark Zandi of Moody’s Analytics in a report. “But suddenly a number of other scenarios seem possible, even one in which the US, China and the global economy suffer a recession.”
Asian stock markets fell Tuesday as the fight, with no negotiated settlement in sight, fed investor anxiety about the impact on global economic growth. China main market index lost 0.7 percent while Tokyo’s benchmark declined 0.6%. Hong Kong, Australia and Taiwan fell.
But shares in Europe rebounded and the future contracts for the Dow Jones Industrial Average and S&P 500 were up 0.5% and 0.6%, respectively.
On Monday, the Dow Jones Industrial Average fell 2.4% and the tech-heavy Nasdaq lost 3.4% for its biggest drop of the year.
That came after China’s Finance Ministry announced duties of 5% to 25% on about 5,200 American products, including batteries, spinach and coffee. Details of what the duties were before the increases were unclear.
Also Monday, Trump said he still was considering whether to go ahead with penalties on the additional $300 billion of Chinese goods. He told reporters, “I have not made that decision yet.”
Trump warned Xi on Twitter that China “will be hurt very badly” if it doesn’t agree to a trade deal. Trump wrote that Beijing “had a great deal, almost completed, & you backed out!“
The last round of negotiations ended Friday in Washington with no word of progress. Both governments indicated more talks are likely but set no date.
Trump said Monday he would meet Xi during the Group of 20 meeting of major economies six weeks from now on June 28 and 29 in Osaka, Japan.
The time before then will be “highly volatile” for financial markets, said Macquarie Bank analysts in a report.
“Both sides have the incentive to act half-crazy and unpredictable before that in order to cut a better deal,” they said.
The two governments have given themselves a few more days to make peace before their latest tariff hikes hit.
Chinese tariffs announced Monday don’t take effect until June 1, 2½ weeks from now. The US increases apply to Chinese goods shipped starting Friday, which will take about three weeks to cross the Pacific and arrive at US ports.
Tariff increases already in place have disrupted trade in American soybeans and Chinese medical equipment. That has sent shockwaves through other Asian economies that supply Chinese factories.
Beijing is running out of US imports to penalize because of their lopsided trade balance. Chinese regulators have instead targeted American companies in China by slowing down the clearing of shipments through customs and the processing of business licenses.


Saudi energy giant to invest $3bn in Bangladesh’s power sector

Updated 22 October 2019

Saudi energy giant to invest $3bn in Bangladesh’s power sector

  • Experts say deal will usher in more economic and development opportunities for the country

DHAKA: Saudi Arabia’s energy giant, ACWA power, will set up an LNG-based 3,600 MW plant in Bangladesh after an agreement was signed in Dhaka on Thursday.

The MoU was signed by ACWA Chairman Mohammed Abunayyan and officials from the Bangladesh Power Development Board (BPDB), officials told Arab News on Monday.

According to the agreement, ACWA will invest $3 billion in Bangladesh’s energy development sector, of which $2.5 billion will be used to build the power plant while the rest will be spent on an LNG terminal to facilitate fuel supply to the plant. Under the deal, ACWA will also set up a 2 MW solar power plant.

In recent months, both countries have engaged in a series of discussions for investment opportunities in Bangladesh’s industry and energy sectors. 

During the Saudi-Bangladesh investment cooperation meeting in March this year, Dhaka proposed a $35 billion investment plan to a high-powered Saudi delegation led by Majed bin Abdullah Al-Qasabi, the Saudi commerce and investment minister, and Mohammed bin Mezyed Al-Tuwaijri, the Saudi economy and planning minister.

However, officials in Dhaka said that this was the first investment deal to be signed between the two countries.

“We have just inked the MoU for building the LNG-based power plant. Now, ACWA will conduct a feasibility study regarding the location of the plant, which is expected to be completed in the next six months,” Khaled Mahmood, chairman of BPDB, told Arab News.

He added that there are several locations in Moheshkhali, Chottogram and the Mongla port area for the proposed power plant.

“We need to find a suitable location where the drift of the river will be suitable for establishing the LNG plant and we need to also consider the suitability of establishing the transmission lines,” Mahmood said.

“It will be either a JV (Joint Venture) or an IPP (Independent Power Producer) mode of investment, which is yet to be determined. But, we are expecting that in next year the investment will start coming here,” Mahmood said.

BPDB expects to complete the set-up process of the power plant within 36 to 42 months.

“We are in close contact with ACWA and focusing on the successful completion of the project within the shortest possible time,” he said.

Abunayyan said that he was optimistic about the new investment deal.

“Bangladesh has been a model for the Muslim world in economic progress. This is our beginning, and our journey and our relationship will last for a long time,” Abunayyan told a gathering after the MoU signing ceremony.

Economists and experts in Bangladesh also welcomed the ACWA investment in the energy development sector.

“This sort of huge and long-term capital investment will create a lot of employment opportunities. On the other hand, it will facilitate other trade negotiations with the Middle Eastern countries, too,” Dr. Nazneen Ahmed, senior research fellow at the Bangladesh Institute of Development Studies (BIDS), told Arab News.

She added that Bangladesh needs to weigh the pros and cons before finalizing such contracts so that the country can earn the “maximum benefits” from the investment.

“It will also expedite other big investments in Bangladesh from different countries,” she said.

Another energy economist, Dr. Asadujjaman, said that Bangladesh needs to exercise caution while conducting the feasibility study for such a huge investment.

“We need to address the environmental aspects, opportunity costs and other economic perspectives while working with this type of big investment. Considering the present situation, the country also needs to focus on producing more solar energy,” Dr. Asadujjaman told Arab News.