Trump: China deal might have to wait for US election

Containers stacked up at a dock in Qingdao in China’s Shandong province. China reported its slowest growth in 27 years in October as trade tensions with the US hit its manufacturing sector. (AFP)
Updated 04 December 2019

Trump: China deal might have to wait for US election

  • European share prices, American stock futures and yuan fall after president’s comments

LONDON: President Donald Trump said that a trade agreement with China might have to wait until after the US presidential election in November 2020, denting hopes of a resolution soon to a dispute that has weighed on the world economy.

“I have no deadline, no,” Trump told reporters in London, where he was due to attend a meeting of NATO leaders.

“In some ways, I like the idea of waiting until after the election for the China deal. But they want to make a deal now, and we’ll see whether or not the deal’s going to be right; it’s got to be right.”

European share prices and US stock futures fell, while the Chinese yuan currency sank to a five-week low on the comments by Trump, who has sought to increase trade pressure on other countries in the past 24 hours.

On Monday, he said he would hit Brazil and Argentina with trade tariffs for “massive devaluation of their currencies.”

The US then threatened duties of up to 100 percent on French goods, from champagne to handbags, because of a digital services tax that Washington says harms US tech companies.

Investors have been hoping that the US and China can defuse their trade tensions, which have strained ties between the world’s biggest and second-biggest economies since 2017, the first year of Trump’s presidency.

US officials have previously said that a deal could happen this year, depending on China.

The pan-European STOXX 600 index turned negative as Trump spoke, weighed down by export-heavy mining stocks.

“Each step back and each step forward is just part of a slow trend toward increased barriers to international trade,” said Jonathan Bell, chief investment officer of Stanhope Capital.

Opinion

This section contains relevant reference points, placed in (Opinion field)

“The market has taken an optimistic view so far this year on the likelihood of a successful outcome to trade negotiations. We worry that next year the market may turn back to looking more concerned.”

But Seema Shah, chief strategist at Principal Global Investors, said Trump could not afford a repeat of the stock market’s sharp falls in late 2018, when he raised the temperature of the trade stand-off.

“The Chinese government believes that President Trump is desperate for a deal before the end of the year, when the race for the presidential election will really heat up,” Shah said.

“Trump’s latest comments are a ploy to regain the upper hand in these negotiations.”

Washington and Beijing have yet to ink a so-called “phase one” agreement announced in October, which had raised hopes of a de-escalation.

Trump and Chinese President Xi Jinping had planned to meet and sign the preliminary trade deal at an Asia-Pacific leaders’ summit in Chile in mid-November, but the summit was canceled because of violent anti-government protests in Santiago.

Trump, who had said in September that he did not need a deal before the 2020 election, sought on Tuesday to put pressure on Beijing.

“The China trade deal is dependent on one thing — do I want to make it, because we are doing very well with China right now, and we can do even better with a flick of a pen,” he said. “And China is paying for it, and China is having by far the worst year that they have had in 57 years. So we’ll see what happens.”

China reported its slowest economic growth in 27 years in October as the trade tensions with the US hit its manufacturing sector.

On Monday, before traveling to London, Trump said that US legislation backing protesters in Hong Kong was not making trade negotiations with China easier, but he believed Beijing still wanted a deal with the US.

US Commerce Secretary Wilbur Ross has said that Dec. 15, when a further 15 percent US tariff on about $156 billion worth of Chinese imports is set to take effect, is a natural deadline for an agreement.


Saudi Aramco shares soar at maximum 10% on market debut

Updated 11 December 2019

Saudi Aramco shares soar at maximum 10% on market debut

  • Company is now world’s largest publicly traded company, bigger than Apple

RIYADH: Saudi Aramco shares opened at 35.2 riyals ($9.39) on Wednesday at the Kingdom’s stock exchange, 10 percent above their IPO price of 32 riyals, in their first day of trading following a record $26.5 billion initial public offering.
Aramco has earlier priced its IPO at 32 riyals ($8.53) per share, the high end of the target range, surpassing the $25 billion raised by Chinese retail giant Alibaba in its 2014 Wall Street debut.
Aramco’s earlier indicative debut price was seen at 35.2 riyals, 10 per cent above IPO price, raising the company’s valuation to $1.88 trillion, Refintiv data showed.
At that price, Aramco is world’s most valuable listed company. That’s more than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – combined.
“Today Aramco will become the largest listed company in the world and (Tadawul) among the top ten global financial markets,” Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange, said during a ceremony marking the oil giant’s first day of trading.
“Aramco today is the largest integrated oil and gas company in the world. Before Saudi Arabia was the only shareholder of the company, now there are 5 million shareholders including citizens, residents and investors,” said Yasir Al-Rumayyan, the managing director and chief executive of the Saudi Public Investment Fund.
“Aramco’s IPO will enhance the company’s governance and strengthen its standards.”
Amin Nasser, the president and CEO of Saudi Aramco, meanwhile thanked the new shareholders for their confidence and trust of the oil company.
The sale of 1.5 percent of the firm, or three billion shares, is the bedrock of Crown Prince Mohammed bin Salman’s ambitious strategy to overhaul the oil-reliant economy.
Riyadh’s Tadawul stock exchange earlier said it will hold an opening auction for Aramco shares for an hour from 9:30 a.m. followed by continuous trading, with price changes limited to plus or minus 10 percent.

The company said Friday it could exercise a “greenshoe” option, selling additional shares to bring the total raised up to $29.4 billion.
The market launch puts the oil behemoth’s value at $1.7 trillion, far ahead of other firms in the trillion-dollar club, including Apple and Microsoft.
Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.
The IPO is a crucial part of Prince Mohammed’s plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.
Watch the video marking Aramco’s opening trading: