Asian stocks mixed as investors await US tariff hike

BEIJING — Asian stocks were mixed Tuesday after Wall Street's gains as investors waited for a new U.S. tariff hike in a trade battle with China.

KEEPING SCORE: The Shanghai Composite Index lost 0.3 percent to 2,661.33, while Tokyo's Nikkei 225 added 1 percent to 22,595.52. Hong Kong's Hang Seng retreated 0.3 percent to 26,538.58 and Sydney's S&P-ASX 200 advanced 0.5 percent to 6,171.00. Seoul's Kospi shed 0.3 percent to 2,281.90, while New Zealand. Benchmarks in Taiwan and Southeast Asia declined.

WALL STREET: U.S. stocks broke a four-day losing streak as industrial companies and retailers rose. Technology companies recovered some of last week's losses. Nike, Home Depot and Walmart all climbed. Microsoft and other technology companies rose, but Apple fell after saying more U.S. tariff hikes could push it to raise prices. The Standard & Poor's 500 index gained 0.2 percent to 2,877.13. The Dow Jones Industrial Average lost 0.2 percent to 25,857.07. The Nasdaq composite rose 0.3 percent to 7,924.16.



TRADE TENSIONS: The Trump administration is due to announce a decision shortly on whether to go ahead with 25 percent tariffs on $200 billion of Chinese imports in a dispute over Beijing's technology policy. The two sides already have raised duties on $50 billion of each other's goods. Trump said Friday that he was considering extending penalties to extending penalties to nearly all Chinese imports to the United States by raising duties on an additional $267 billion of goods.

ANALYST'S TAKE: "Wall Street balanced the tech gloom against the fresh focus on tax cuts on Monday yielding mixed returns," Jinyi Pan of IG said in a report. "The protracted expectation for more bad news to set in with the looming tariffs remains the most important factor weighing on markets currently."

ENERGY: Benchmark U.S. crude gained 4 cents to $67.58 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 21 cents on Monday to close at $67.54. Brent crude, used to price international oils, advanced 11 cents to $77.48 in London. It rose 54 cents the previous session to $77.37.

CURRENCY: The dollar gained to 111.36 yen from Monday's 111.12 yen. The euro edged down to $1.1590 from $1.1595.

source: philstar.com

US-Mexico trade talks progressing but no breakthrough with China

WASHINGTON — Negotiations between the United States and Mexico to revise the nearly 25-year-old North American Free Trade agreement are making progress but will not wrap up this week, Mexico's Economy Minister Ildefonso Guajardo said Thursday.

But a Chinese delegation, in Washington for talks aimed at defusing the spiraling US trade war with Beijing, left without any breakthrough.

NAFTA and China have been two key targets of US President Donald Trump's aggressive trade strategy and he has largely brushed off concerns from the business community about the harm done to the US economy.

With NAFTA at least, there has apparently been progress.

The negotiations "are well advanced," Guajardo told reporters, but "we are not there yet."


Canada needs to re-engage in the talks before the NAFTA rewrite can be completed and "the only way that can happen is if we continue through the weekend and into next week," he added.

Guajardo and Mexico's Foreign Minister Luis Videgaray have been shuttling back and forth to Washington for more than a month for meetings with US Trade Representative Robert Lighthizer to try to iron out the bilateral issues, such as rules for the auto market, before the end of August.

Officials last week indicated they expected a breakthrough this week but "negotiations are highly complex," Guajardo said on his way into yet another meeting.

He has cautioned that some of the hardest issues were still on the table, including the US demand for a five-year "sunset clause," which would oblige the three countries to renew the pact regularly.

"There's been no indication of flexibility from the US on this issue," a senior Canadian official told AFP.

Nevertheless, Canadian Prime Minister Justin Trudeau said Thursday that he was "encouraged by the optimism expressed by the US and Mexico."

"We're ready to sit down and continue the hard work of modernizing and negotiating a better deal for all of us," he said, but stressed Canada would "only sign a good deal for Canadians."

Canada's top diplomat and chief NAFTA negotiator, Chrystia Freeland, said Wednesday she would rejoin the talks once Washington and Mexico City finish their bilateral discussions.

The three countries have been negotiating for a year to salvage the trade pact Trump says has been a "disaster" for the United States.

No breakthrough with China

As part of Trump's aggressive trade stance, Washington hit China with 25 percent punitive duties on another $16 billion in goods starting Thursday, triggering a swift tit-for-tat retaliation from Beijing.

China filed a complaint against the latest tariffs at the World Trade Organization the same day, the commerce ministry said.

Adding to the $34 billion targeted in July, that brings the total two-way trade weighed down by the steep tariffs to $100 billion, and the United States currently is considering hitting another $200 billion -- a move Trump indicated could come very soon.

"We've put a $50 billion number out there. Now, the total number is $250 billion," Trump said at the White House on Thursday. "And there's a 25-percent tax on that, now, coming in.... Some of it starts in a week."

Washington is accepting public comments on the $200 billion tariff tranche until September 6 -- but they could take effect soon after.

That is on top of US tariffs on Chinese appliances and solar panels, as well as steel and aluminum from around the world -- a total of 10,000 products.

China's Vice Commerce Minister Wang Shouwen and Vice Finance Minister Liao Min concluded two days of talks with a US team lead by David Malpass, US Treasury under secretary for international affairs -- their first trade discussions since June.

White House Deputy Press Secretary Lindsay Walters said the talks concluded after officials "exchanged views on how to achieve fairness, balance and reciprocity in the economic relationship."

Economic damage

US businesses have become increasingly concerned about the exchange of tariffs, which are raising prices for manufacturers and hurting US consumers and farmers.

But Trump has been unapologetic, insisting that his tough tactics will work.

Federal Reserve officials warn escalating trade disputes are "a potentially consequential downside risk" for the economy, possibly fueling inflation and impeding investment.

S&P Global Ratings on Thursday downgraded motorcycle maker Harley Davidson's debt rating, citing retaliatory tariffs among other "headwinds" facing the company.

And National Retail Federation Vice President Jonathan Gold said the tariffs "threaten to increase costs for American families and destroy the livelihoods of US workers."

China's commerce ministry said Thursday the country "firmly opposes the tariffs and has no choice but to continue to make the necessary counter-attacks."

US Commerce Secretary Wilbur Ross said Beijing would not be able to continue to retaliate at the same pace as Washington, noting: "We have many more bullets than they do."

However, Beijing also could target the local operations of US corporations with inspections and boycotts, as it has done in past disputes with South Korea and Japan.

source: philstar.com

Backing off auto tariffs, US and EU agree to more talks

WASHINGTON — President Donald Trump and European leaders pulled back from the brink of a trade war over autos Wednesday and agreed to open talks to tear down trade barriers between the United States and the European Union.

But while politicians and businesses welcomed the deal Thursday, the agreement was vague, the negotiations are sure to be contentious and the United States remains embroiled in major trade disputes with China and other countries.

In a hastily called Rose Garden appearance with Trump, European Commission President Jean-Claude Juncker said the U.S. and the EU had agreed to hold off on new tariffs, suggesting that the United States will suspend plans to start taxing European auto imports — a move that would have marked a major escalation in trade tensions between the allies.


Trump also said the EU had agreed to buy "a lot of soybeans" and increase its imports of liquefied natural gas from the U.S. And the two agreed to resolve a dispute over U.S. tariffs on steel and aluminum.

"It's encouraging that they're talking about freer trade rather than trade barriers and an escalating tariff war," said Rufus Yerxa, president of the National Foreign Trade Council and a former U.S. trade official. But he said reaching a detailed trade agreement with the EU would likely prove difficult.


The tone was friendlier than it has been. During a recent European trip, Trump referred to the EU as a "foe, what they do to us in trade." Juncker, after Trump imposed tariffs on steel and aluminum imports, said in March that "this is basically a stupid process, the fact that we have to do this. But we have to do it. We can also do stupid."

On Wednesday, Trump and Juncker said they have agreed to work toward "zero tariffs" and "zero subsidies" on non-automotive goods.

Trump told reporters it was a "very big day for free and fair trade" and later tweeted a photo of himself and Juncker in an embrace, with Juncker kissing his cheek.

"Obviously the European Union, as represented by @JunckerEU and the United States, as represented by yours truly, love each other!" he wrote.

The agreement was welcomed by political and business leaders in Germany, the EU's biggest economy, though their relief was tempered with caution that details have to be firmed up.

"Very demanding and intensive negotiations lie ahead of us," German Economy Minister Peter Altmaier said, vowing that "we will represent and defend our European interests just as emphatically as the U.S. does with its interests." He said the Trump-Juncker accord was "a good start — it takes away many people's worries that the global economy could suffer serious damage in the coming months from a trade war."

Trump campaigned on a vow to get tough on trading partners he accuses of taking advantage of bad trade deals to run up huge trade surpluses with the U.S.

He has slapped taxes on imported steel and aluminum, saying they pose a threat to U.S. national security. The U.S. and EU are now working to resolve their differences over steel and aluminum — but the tariffs are still in place. And they would continue to hit U.S. trading partners like Canada, Mexico and Japan even if the U.S. and the EU cut a deal.

Whatever progress was achieved Wednesday could provide some relief for U.S. automakers. The escalating trade war and tariffs on steel and aluminum had put pressure on auto companies' earnings. General Motors slashed its outlook, and shares of Ford Motor Co. and auto parts companies have fallen.

"Our biggest exposure, our biggest unmitigated exposure, is really steel and aluminum when you look at all of the commodities," GM CEO Mary Barra said Wednesday.

Trump has also imposed tariffs on $34 billion of Chinese imports — a figure he has threatened to raise to $500 billion — in a dispute over Beijing's aggressive drive to supplant U.S. technological dominance.

China has counterpunched with tariffs on American products, including soybeans and pork — a shot at Trump supporters in the U.S. heartland.

The EU is stepping in to ease some of U.S. farmers' pain. Juncker said the EU "can import more soybeans from the U.S., and it will be done." The EU later said it would not buy more than its market needs but divert some of purchases from other countries in favor of U.S. soybeans, which are now cheaper due to China's tariffs on them.

Mary Lovely, a Syracuse University economist who studies trade, said, "The Chinese are not going to be buying our soybeans, so almost by musical chairs our soybeans are going to Europe." The trouble is, China last year imported $12.3 billion in U.S. soybeans, the EU just $1.6 billion.

Trump's announcement stunned lawmakers who arrived at the White House ready to unload concerns over the administration's trade policies only to be quickly ushered into Rose Garden for what the chairman of the Senate Agriculture Committee called "quite a startling" development.

"I think everybody sort of changed what they were going to say," said Sen. Pat Roberts, R-Kan.

Lawmakers said they still needed to see details of the agreement with the EU as well as progress on the other deals. But they said the breakthrough announcement was a step in the right direction.

"We have more confidence in him now than we did before," said Rep. Mike Conaway, R-Texas, the chairman of the House Agriculture Committee.

The White House announcement came as the Trump administration announced a final rule aimed at speeding up approval of applications for small-scale exports of liquefied natural gas. The Trump administration has made LNG exports a priority, arguing that they help the economy and enhance geopolitical stability in countries that purchase U.S. gas.

Juncker said the two sides also agreed to work together to reform the World Trade Organization, which Trump has vehemently criticized as being unfair to the U.S.

The auto tariffs would have significantly raised the stakes in the dispute. Taxes on EU cars, trucks and auto parts could have hit goods that were worth $335 billion last year. The European Union had warned it would retaliate with tariffs on products worth $20 billion.

Daniel Ikenson, director of trade studies at the libertarian Cato Institute, warned that the fight could flare up again if Trump grows impatient with Europe.

"Auto tariffs are looming unless the EU buys more U.S. stuff and does other things Trump demands," he said.

source: philstar.com

US proposes tariffs on $200 billion more in Chinese imports

WASHINGTON — The Trump administration is readying tariffs on another $200 billion in Chinese imports, ranging from burglar alarms to mackerel, escalating a trade war between the world's two biggest economies.

The Office of the U.S. Trade Representative proposed 10 percent tariffs Tuesday on a list of 6,031 Chinese product lines.

The office will accept public comments and hold hearings on the plan Aug. 20-23 before reaching a decision after Aug. 31, according to a senior administration official who briefed reporters on condition of anonymity.

Last Friday, the U.S. imposed 25 percent tariffs on $34 billion in Chinese products, and Beijing responded by hitting the same amount of U.S. imports.


The administration said the new levies are a response to China's decision to retaliate against the first round of U.S. tariffs.

President Donald Trump has threatened to tax as much as $550 billion in Chinese products — an amount that exceeds America's total imports from China last year.

The United States complains that China uses predatory practices in a push to challenge American technological dominance. Chinese tactics, the administration says, include outright cybertheft and forcing U.S. companies to hand over technology in exchange for access to the Chinese market.

The initial U.S. tariff list focused on Chinese industrial products in an attempt to limit the impact on American consumers. By expanding the list, the administration is beginning to hit products that U.S. households buy, including such things as electric lamps and fish sticks.

"Tariffs on $200 billion in Chinese products amounts to another multibillion-dollar tax on American businesses and families," said Scott Lincicome, a trade lawyer and senior policy analyst for the group Republicans Fighting Tariffs. "Given China's likelihood of retaliation, it's also billions worth of new tariffs on American exporters."

Members of Congress are increasingly questioning Trump's aggressive trade policies, warning that tariffs on imports raise prices for consumers and expose U.S. farmers and manufacturers to retaliation abroad.

"Tonight's announcement appears reckless and is not a targeted approach," Senate Finance Chairman Orrin Hatch, R-Utah, said in a statement. "We cannot turn a blind eye to China's mercantilist trade practices, but this action falls short of a strategy that will give the administration negotiating leverage with China while maintaining the long-term health and prosperity of the American economy."

source: philstar.com

Asian stocks tumble after new Trump tariff threat

BEIJING — Asian stocks tumbled Tuesday after U.S. President Donald Trump escalated a dispute with Beijing over technology policy by threatening a tariff hike on additional Chinese goods.

KEEPING SCORE: The Shanghai Composite Index fell 2.3 percent to 2,953.54 points and Hong Kong's Hang Seng lost 2 percent to 29,685.28. Tokyo's Nikkei 225 retreated 0.9 percent to 22,482.89 and Seoul's Kospi lost 0.8 percent to 2,356.57. Markets in Taiwan, New Zealand and Southeast Asia also declined. Sydney's S&P-ASX 200 gained 0.3 percent to 6,123.00.

TRADE TENSIONS: Trump directed the U.S. Trade Representative to prepare new tariffs on $200 billion in Chinese imports, stepping up a dispute companies and investors worry could drag down global trade and economic growth. Trump accused Beijing of being unwilling to resolve the dispute over complaints it steals or pressures foreign companies to hand over technology. China's Commerce Ministry criticized the White House action as blackmail and said Beijing was ready to retaliate.

ANALYST'S TAKE: "President Donald Trump's unwillingness to back down became apparent this morning, once again sinking markets into a risk-off atmosphere," said Jingyi Pan of IG in a report. "Attention now turns to China for the country's response towards the latest accusations from the White House, but mostly signs of further retaliation."


WALL STREET: U.S. stocks finished mixed in trading that ended before Trump issued his latest tariff threat. Household goods companies took some of the worst losses as the Standard & Poor's 500 index fell for the third time in four days. The S&P 500 fell 0.2 percent to 2,773.75. The Dow Jones industrial average dropped 0.4 percent to 24,987.47. The Nasdaq composite edged up 0.65 points to 7,747.03. The Russell 2000 index of small-cap stocks rose 0.5 percent to a record 1,692.46. Many investors feel smaller and more U.S.-focused companies are less vulnerable in the event of a major trade dispute.

ENERGY: Benchmark U.S. crude lost 26 cents to $65.59 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 79 cents on Monday to $65.85. Brent crude, used to price international oils, fell 41 cents to $74.93 per barrel in London. The contract rose $1.90 the previous session to $75.34.

CURRENCY: The dollar declined to 109.98 yen from Monday's 110.54 yen. The euro edged up to $1.1633 from $1.1623.

source: philstar.com