Beijing, May 15 (AP/UNB) — Asian stocks followed Wall Street higher Wednesday after President Donald Trump downplayed his escalating tariff war with Beijing and said a settlement is possible.
Benchmarks in Shanghai, Tokyo, Hong Kong and Sydney advanced as investors mulled the likely costs of U.S. and Chinese tariff hikes on hundreds of billions of dollars of each other's goods.
Trump said on Twitter the conflict over Beijing's technology ambitions and trade surplus was a "little squabble" between friends. He said, "When the time is right we will make a deal with China."
Global equities rallied on that "positive tone," said Edward Moya of OANDA in a report.
Despite no sign of a deal or even a date for more talks, "no escalation in tensions was good enough of a reason for investors to return to buying stocks," said Moya.
The Shanghai Composite Index rose 1.1% to 2,915.28 and Tokyo's Nikkei 225 added 0.2% to 21,118.72.
Hong Kong's Hang Seng advanced 0.7% to 28,326.32 and Seoul's Kospi rose 0.6% to 2,094.09. Sydney's S&P-ASX 200 was 0.8% higher at 6,289.00 while India's Sensex gained 0.6% to 37,522.72.
Markets in Taiwan, New Zealand and Thailand also advanced. Singapore and Indonesia retreated.
Trump threw financial markets into turmoil with his surprise May 5 announcement of plans to raise tariffs on $200 billion of Chinese imports to 25% from 10%. When that went ahead Friday, Beijing retaliated by raising duties on $60 billion of American goods.
Investors worry that in addition to depressing trade, the fight sparked by U.S. complaints about China's technology ambitions might hurt consumer and business confidence, depressing spending and investment.
On Wall Street, tech stocks led the way higher Tuesday after suffering a beating the previous day. Qualcomm and Cisco both rose, along with Oracle, Adobe and others. Banks also rose. JPMorgan Chase, Bank of America and others moved higher.
The benchmark Standard & Poor's 500 index rose 0.8% to 2,834.41. It recovered nearly a third of Monday's loss and would now need to rise 3.9% to regain the record it set a couple weeks ago.
The Dow Jones Industrial Average rose 0.8% to 25,532.05 and the Nasdaq composite index jumped 1.1% to 7,734.49.
CHINA ECONOMY: China's April factory output and consumer spending weakened as a tariff war with Washington intensified. The data prompted suggestions Beijing will need to prop up economic growth with more government spending. Growth in factory output decelerated to 5.4% over a year earlier from March's 8.5% growth. Growth in retail sales declined to 7.2% over a year ago from the previous month's 8.7%.
ENERGY: Benchmark U.S. crude lost 47 cents to $61.31 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 74 cents on Tuesday to close at $61.78. Brent crude, used to price international oils, shed 30 cents per barrel in London to $70.94. It jumped $1.01 the previous session to $71.24.
CURRENCY: The dollar edged up to 109.63 yen from Tuesday's 109.61 yen. The euro rose to $1.1209 from $1.1208.
Beijing, May 14 (AP/UNB) — U.S. 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 U.S. 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 U.S. 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 U.S. 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 U.S., 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 U.S. increases apply to Chinese goods shipped starting Friday, which will take about three weeks to cross the Pacific and arrive at U.S. 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 U.S. 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.
Beijing, May 14 (AP/UNB) — Sending Wall Street into a slide, China announced higher tariffs Monday on $60 billion worth of American goods in retaliation for President Donald Trump's latest penalties on Chinese products.
Duties of 5% to 25% will take effect on June 1 on about 5,200 American products, including batteries, spinach and coffee, China's Finance Ministry said.
With investors worried about the potential economic damage on all sides from the escalating trade war, the Dow Jones Industrial Average fell 617 points, or 2.4%, and the technology-heavy Nasdaq plunged 270 points, or 3.4%, its biggest drop of the year. Earlier, stocks fell in Europe and Asia.
"We appear to be in a slow-motion train wreck, with both sides sticking to their positions," said William Reinsch, a trade analyst at the Center for Strategic and International Studies and a former U.S. trade official. "As is often the case, however, the losers will not be the negotiators or presidents, but the people."
Beijing's move came after the U.S. raised duties Friday on $200 billion of Chinese imports to 25%, up from 10%. In doing so, American officials accused China of backtracking on commitments it made in earlier negotiations. The same day, trade talks between the two countries broke up without an agreement.
On Twitter, Trump warned Xi that China "will be hurt very badly" if it doesn't agree to a trade deal. Trump tweeted that Beijing "had a great deal, almost completed, & you backed out!"
The rising trade hostilities could damage the economies of both countries. The tariff increases already in place have disrupted trade in such American products as soybeans and medical equipment and sent shockwaves through other Asian economies that supply Chinese factories.
Still, the two countries have given themselves something of an escape hatch: The higher Chinese tariffs don't kick in for 2½ weeks. The U.S. increases apply to Chinese goods shipped since Friday, and those shipments will take about three weeks to arrive at U.S. seaports and become subject to the higher charges.
Also, both countries have indicated more talks are likely. Top White House economic adviser Larry Kudlow said Sunday that China has invited U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing. But nothing has been scheduled. And Trump said Monday that he expects to meet Chinese President Xi Jinping in late June at the G-20 summit in Osaka, Japan.
The president has repeatedly insisted that increased tariffs on Chinese goods don't hurt American consumers. But Kudlow, head of the president's National Economic Council, acknowledged over the weekend that U.S. consumers and businesses will bear some of the costs.
"Both sides will pay," he told Fox News.
In the U.S., prices of soybeans, targeted by Chinese tariffs last year, fell Monday to a 10-year low on fears of a protracted trade war.
In a statement, American Soybean Association President Davie Stevens, a soybean farmer from Clinton, Kentucky, expressed frustration that "the U.S. has been at the table with China 11 times now and still has not closed the deal. What that means for soybean growers is that we're losing. Losing a valuable market, losing stable pricing, losing an opportunity to support our families and our communities."
Trump told reporters Monday that a new program to relieve U.S. farmers' pain is "being devised right now" and predicted that they will be "very happy." The administration last year handed farmers aid worth $11 billion to offset losses from trade conflicts.
Trump seemed to suggest that the aid will make up for or partially cover the $15 billion that he said represented "the biggest purchase that China has ever made with our farmers." In fact, U.S. farm exports to China approached $26 billion in both 2012 and 2013 and came in at $19.5 billion in 2017 before his trade war began taking a toll on agricultural sales to China.
The president's allies in Congress scrambled to limit the damage to farm country.
Republican Sen. Chuck Grassley of Iowa said it is time for U.S. allies to "get in the game" to push China to the negotiating table. "China needs to get with it," he said. "You can't move these goalposts like they're moving them and expect to be respected."
The highest tariffs announced by China will apply to industrial chemicals, electronic equipment, precision machinery and hundreds of food products.
Beijing is running out of U.S. imports to penalize because of the lopsided trade balance between the world's two largest economies. Chinese regulators have instead targeted American companies in China by slowing down the clearing of shipments through customs and the processing of business licenses.
Oxford Economics calculated that the higher tariffs will reduce the U.S. economy by 0.3% in 2020, a loss of $490 per American household.
Similarly, forecasters have warned that the U.S. tariff increases could set back a Chinese recovery that had appeared to be gaining traction. Growth in the world's second-largest economy during the January-through-March period held steady at 6.4% compared with a year earlier, supported by higher government spending and bank lending.
The tensions "raise fresh doubts about this recovery path," Morgan Stanley economists said.
The latest U.S. duties could knock 0.5 percentage points off annual Chinese economic growth, and that could widen to 1 percentage point if both sides extend penalties to all of each other's exports, economists say. That would pull annual growth below 6%, raising the risk of politically dangerous job losses.
China's state media tried to reassure businesses and consumers that the ruling Communist Party has the means to respond.
"There is nothing to be afraid of," said the party newspaper People's Daily. "The U.S.-instigated trade war against China is just a hurdle in China's development process. It is no big deal."
Trump has threatened to extend tariffs to the remaining $300 billion or so in Chinese tariffs that haven't been targeted yet, but told reporters Monday: "I have not made that decision yet."
The president started raising tariffs last July over complaints China steals or pressures foreign companies to hand over technology and unfairly subsidizes Chinese businesses that are striving to become global leaders in robotics and other technology.
A stumbling block has been U.S. insistence on an enforcement mechanism with penalties to ensure Beijing carries out its commitments.
Islamabad, May 13 (Xinhua/UNB) -- The Pakistani government and the International Monetary Fund (IMF) have reached an agreement on a bailout package for Pakistan, Adviser to the Pakistani prime minister on Finance, Revenue and Economic Affairs Abdul Hafeez Shaikh announced on Sunday.
Talking to the Pakistan Television Network (PTV), Shaikh said that the technical teams of Pakistan and the IMF have agreed on a bailout package for a period of three years under which Pakistan would receive 6 billion U.S. dollar assistance.
The advisor said "after months of discussions and negotiations, a staff-level agreement has been reached between Pakistan and the IMF," which still needs approval from the IMF board of directors in Washington, but it shows that effective reforms are underway in Pakistan.
A press release from IMF Mission Chief for Pakistan Ernesto Ramirez Rigo also confirmed the announcement by the Pakistani side as saying that Pakistan's economic policies could be supported by a 39-month Extended Fund Arrangement (EFF) for about 6 billion U.S. dollars.
The IMF official added that the facility aims to support Pakistan's "strategy for stronger and more inclusive growth by reducing domestic and external imbalances, removing impediments to growth, increasing transparency, and strengthening social spending."
Washington, May 11 (AP/UNB) — Trade talks between the U.S. and China broke up Friday with no agreement, hours after President Donald Trump more than doubled tariffs on $200 billion in Chinese imports.
Trump asserted on Twitter that there was "no need to rush" to get a deal between the world's two biggest economies and later added that the tariffs "may or may not be removed depending on what happens with respect to future negotiations."
A White House official, speaking on condition of anonymity because they were not authorized to speak publicly on the matter, confirmed that the talks had concluded for the day but could not say when they would resume.
Hours earlier, the Trump administration hiked tariffs on $200 billion worth of Chinese imports to 25% from 10%, escalating tensions between Beijing and Washington. China's Commerce Ministry vowed to impose "necessary countermeasures" but gave no details.
The tariff increase went ahead even after American and Chinese negotiators briefly met in Washington on Thursday and again on Friday, seeking to end a dispute that has disrupted billions of dollars in trade and shaken global financial markets. After a short session on Friday, the lead Chinese negotiator, Vice Premier Liu He, left the Office of the U.S. Trade Representative about midday. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin shook hands with Liu as he left.
In the afternoon, a motorcade of sport-utility vehicles and a police escort, both with lights flashing, carried the Chinese delegation away from their lodgings at the Willard InterContinental Hotel .
Hu Xijin, editor-in-chief of the Chinese newspaper Global Times, citing "an authoritative source," tweeted that "talks didn't break down. Both sides think that the talks are constructive and will continue consultations. The two sides agree to meet again in Beijing in the future."
Still, the Trump administration escalated the confrontation again after the Chinese delegation left town. Lighthizer announced Friday evening that he was preparing to impose tariffs on the $300 billion in Chinese imports that haven't already been targeted. The government will have to get public comment before it can target more Chinese goods.
On Wall Street, stocks fell initially Friday but turned positive on optimism over future talks.
Earlier, Trump asserted in a tweet that his tariffs "will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind. Also, much easier & quicker to do."
In fact, tariffs are taxes paid by U.S. importers and often passed along to consumers and companies that rely on imported components.
American officials accuse Beijing of backtracking on commitments made in earlier rounds of negotiations. "China deeply regrets that it will have to take necessary countermeasures," a Commerce Ministry statement said.
U.S. business groups appealed for a settlement that will resolve chronic complaints about Chinese market barriers, subsidies to state companies and a regulatory system they say is rigged against foreign companies.
The latest increase extends 25% duties to a total of $250 billion of Chinese imports, including $50 billion worth that were already being taxed at 25%. Trump has said he is planning to expand penalties to all Chinese goods shipped to the United States.
Beijing retaliated for previous tariff hikes by raising duties on $110 billion of American imports. But regulators are running out of U.S. goods for penalties due to the lopsided trade balance.
Ford spokeswoman Rachel McCleery said the carmaker is most concerned about any retaliatory tariffs China might impose.
The Dearborn, Michigan-based company says 80% of the vehicles it assembles in the U.S. are sold domestically, but it does export some vehicles to China.
"While most of the vehicles we sell in China are built in China, Ford does export a number of vehicles to China from the U.S.," McCleery said. "Our biggest concerns are impacts retaliatory tariffs would have on our exports and our expanding customer base in China."
Chinese officials have targeted operations of American companies in China by slowing customs clearance for them and stepping up regulatory scrutiny that can hamper operations.
The latest U.S. increase might hit American consumers harder, said Jake Parker, vice president of the U.S.-China Business Council, an industry group. He said the earlier 10% increase was absorbed by companies and offset by a weakening of the Chinese currency's exchange rate.
A 25% hike "needs to be passed on to the consumer," Parker said. "It is just too big to dilute with those other factors."
Despite the public acrimony, local Chinese officials who want to attract American investment have tried to reassure companies there is "minimal retaliation," he said. "We've actually seen an increased sensitivity to U.S. companies at the local level," he added.
The higher U.S. import taxes don't apply to Chinese goods shipped before Friday. Shipments take about three weeks to cross the Pacific Ocean by sea, giving negotiators more time to reach a settlement before importers may have to pay the increased charges.
Liu, speaking to Chinese state TV upon his arrival Thursday in Washington, said he "came with sincerity." He appealed to Washington to avoid more tariff hikes, saying they are "not a solution" and would harm the world.
"We should not hurt innocent people," Liu told CCTV.
Also Thursday, Trump said he received "a beautiful letter" from Chinese President Xi Jinping and would "probably speak to him by phone."
The two countries are sparring over U.S. allegations Beijing steals technology and pressures companies to hand over trade secrets in a campaign to turn Chinese companies into world leaders in robotics, electric cars and other advanced industries.
This week's setback was unexpected. Through late last week, Trump administration officials were suggesting that negotiators were making steady progress.
U.S. officials say they got an inkling of China's second thoughts about prior commitments in talks last week in Beijing but the backsliding became more apparent in exchanges over the weekend. They wouldn't identify the specific issues involved.
A sticking point is U.S. insistence on an enforcement mechanism with penalties to ensure Beijing lives up to its commitments. American officials say China has repeatedly broken past promises.
China wants tariffs lifted as soon as an agreement is reached, while U.S. officials want to keep them as leverage to ensure compliance.
"A real enforcement mechanism is critical," the American Chamber of Commerce in Shanghai said in a statement.