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Economy

US to announce tariff on Chinese goods!

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WASHINGTON: US President Trump could announce tariffs on Chinese goods this week, a move that could inflame tension between the world’s top economies as the United States also face prospects of trade war with its closest allies, including the EU.

The US has accused China of forcefully transferring technology owned by the US companies to boost its own technological and economic development to justify its decision of tariffs on about 1,300 goods.

Last month, President Trump ordered to finalize this list of targeted goods that would be hit with a 25 percent tariff. One of Trump’s trade advisers said on Tuesday that the President was planning to impose tariffs on ‘subset’ of Chinese products that the administration had included in the original list of targeted products worth $50 billion announced in April, a news report said.

Quoting two unnamed sources, a news report said that it could be as soon as this week. The comments were seen as an indication that the Trump administration will go ahead with the plan to impose tariffs on Chinese goods in spite of improving ties between the US and China in the wake of cooperation Beijing extended to bring the North Korean leader to the negotiating table.

Following his successful summit with Korean Leader Kim Jong Un in Singapore this week, President Trump spoke about his personal friendship with Chinese President Xi Jinping, but said that China has not done enough to closing its border to trade with North Korea in recent months, an issue that has contributed to strain trade ties between the two countries.

The report said that while the original list of products that was identified by the Trump administration for tariff was likely to remain intact, the duties may be imposed on a smaller group of products from the list. According to the report, the administration is now considering a separate list of additional items that would be subject to more public input and on which tariffs could be imposed at a later date and would likely focus on items that China could promote for exports in future years as part of its Made in China 2025 plan. 

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Asia

Tokyo stocks close lower

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Tokyo stocks close down

TOKYO: Shares here closed lower today as uncertainty caused by factors including Brexit and trade tensions weighed on the market, wiping out early gains.
The benchmark Nikkei 225 index fell 0.34 percent or 71.48 points to 21,148.02 while the broader Topix index was down 0.91 percent or 14.50 points at 1,575.31. Tokyo shares opened higher, rebounding from sharp drops the previous day, with investors apparently relieved that Wall Street eked out gains after a volatile session.
“But sentiment worsened as investors remained cautious amid uncertain elements such as the postponement of Britain’s Brexit vote and the US-China trade war,” Daiwa Securities senior technical analyst Hikaru Sato told AFP. European stock markets and the pound slid Monday after British Prime Minister Theresa May said she was delaying a parliamentary vote on her deal to leave the EU after conceding it would not win sufficient support.
“The market is concerned that the postponement uses up valuable time before the 29th March exit date, and the risk of a no-deal scenario is growing,” David de Garis, director of economics and markets at National Australia Bank said in a commentary. The dollar slipped to 113.10 yen in late Asian trade from 113.35 yen in New York Monday afternoon. In individual stocks trade, SoftBank Group jumped 2.44 percent to 8,827 yen after announcing Monday it aims to raise over $23 billion by listing its Japanese mobile unit next week.
Nissan kept falling, down 3.10 percent at 915.7 yen after tumbling 2.90 percent on Monday as ousted chairman Carlos Ghosn was charged and faced new allegations of alleged financial misconduct. Prosecutors also charged Nissan for filing documents that allegedly understated Ghosn’s earnings. The Nikkei daily reported Tuesday that Nissan plans to book years of under-reported compensation paid to Ghosn as expenses in the year to March 2019 all at once, a move that could worsen the automaker’s balance sheet. Toyota lost 1.09 percent to 6,745 yen but Sony rose 0.72 percent to 5,735 yen.

 

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Business

Pound stuck a 20-month low

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Pound stuck a 20-month low

HONG KONG: Asian equities were mixed Tuesday as investor attempts to track gains in New York are weighed by a perfect storm of issues that have hammered global markets, while the pound remained stuck around 20-month lows on Brexit uncertainty.
Bargain-buyers tried to step in after the latest sell-off but were unable to gain traction, with fears about the outlook for the global economy keeping sentiment beaten down. The China-US trade row, signs of softness in both countries’ economies, the Huawei arrest, Brexit, demonstrations in France and tanking oil prices are among the problems facing investors, and analysts warned of more volatility to come.
Adding to those problems is upheaval in India – another crucial economy – where the head of the central Reserve Bank of India has resigned following a row with Prime Minister Narendra Modi’s administration over alleged government interference. Monday’s development sent the rupee, which was already Asia’s worst-performing currency,  tumbling more than one percent Tuesday, with speculation the RBI had intervened to pare the losses. The  Mumbai stock market initially fell a similar amount before bouncing back.
Global risk sentiment “is facing a towering wall of worry as virtually every major economy in the world is slowing, suggesting the synchronized global slowdown is accelerating at a much faster pace than thought,” said Stephen Innes, head of Asia-Pacific trade at OANDA. In Asian trade, Hong Kong rose 0.2 percent and Shanghai gained 0.4 percent but Tokyo shed 0.3 percent. Singapore slipped 0.3 percent, Seoul was marginally lower and Sydney rose 0.4  percent. Bangkok and Jakarta slipped, while Wellington, Manila, and Taipei were up.

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Economy

Pound sinks below $1.26

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Pound stuck a 20-month low

LONDON: Sterling fell under $1.26 today to hit a 20-month low after Prime Minister Theresa May delayed a critical vote on her Brexit deal one day before it was due.

Just after 1600 GMT, sterling sank by more than 1.5 percent to strike $1.2507 – which was the lowest level since April 2017. That compared with $1.2640 before May made her official announcement in the House of Commons. At the same time, the euro was propelled to 90.87 pence, reaching a peak last seen at the end of August. “During Prime Minister May’s speech to the House, sterling fell through $1.26 to trade (at) levels not seen in 20 months, bringing the 2017 lows at $1.19 into focus,” ETX Capital analyst Michael Baker told. He added: “With the UK due to leave the European Union on March 29, the prospect of no deal and further instability is weighing on the pound.” May said she had listened to the concerns of critics and in the face of a likely rejection.

The premier explained she would seek “assurances” from other European leaders ahead of an EU summit later this week in a bid to try to win back support for her maligned plan in Britain. “If we went ahead and held the vote tomorrow the deal would be rejected by a significant margin,” May told parliament. “We will therefore defer the vote scheduled for tomorrow and not proceed to divide the house (of Commons) at this time.” The British pound had already been languishing in the doldrums in the face of heightened Brexit uncertainty. “Political uncertainly continues to gnaw away at the nerves of investors,” added Rabobank analyst Jane Foley. “Anxiety may have being triggered by Brexit – but the future and functioning of the government is now also a threat for the pound.”

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