Washington :China said it doesn’t fear a trade war with the US and announced plans for reciprocal tariffs on $3 billion of imports from the US in the first response to President Donald Trump’s ordering of levies on Chinese metal exports.
China will also pursue legal action against the US at the World Trade Organization in response to the US planned tariffs on steel and aluminium imports, the statement said, and called for dialogue to resolve the dispute.
Earlier, Trump instructed US Trade Representative Robert Lighthizer to impose broader tariffs on at least $50 billion in Chinese imports, as recompense for alleged intellectual property abuses. Officials then went on to roll out temporary exemptions for the metals levies for Argentina, Australia, Brazil, Canada, Mexico, the European Union and South Korea.
The announcement of broader tariffs directed specifically at China sent equities tumbling. US stock futures traded lower after the S&P 500 Index closed down 2.5%, the biggest drop in six weeks. Stock indexes from Tokyo to Hong Kong tumbled more than 3% and the yen jumped past 105 per dollar for the first time since November 2016.
“The US declared a trade war, but China is acting quite restrained. The list that China has announced appears to be a retaliation, but still it is very measured,” said Li Yong, senior fellow of China Association of International Trade.
The US declared a trade war, but China is acting quite restrained. The list that China has announced appears to be a retaliation, but still it is very measured,” said Li Yong, senior fellow of China Association of International Trade. “The move sends a message that China is able to fight back, but we still want a trade peace instead of a trade war.”
The US will impose 25% duties on targeted Chinese products to compensate for the harm caused to the American economy from China’s policies, according to a fact sheet released by United States Trade Representative (USTR). The proposed product list will include items in aerospace, information and communication technology and machinery. The USTR will announce the proposed list in the next “several days,” according to the fact sheet.
“This has been long in the making,” Trump said, adding that the tariffs could affect as much as $60 billion in goods. “We have a tremendous intellectual property theft situation going on” with China affecting hundreds of billions of dollars in trade each year, he said.
As he signed the tariffs order, Trump told reporters, “This is the first of many.”
“This is an opening gambit by China, signaling that the imposition of tariffs by the US will elicit what Beijing views as a proportionate retaliatory response,”said Eswar Prasad, a former chief of the International Monetary Fund’s China division and now a professor at Cornell University in Ithaca, New York. “China has the ability to inflict significant economic harm on US exporters of certain goods and can also use other overt as well as covert actions such as supply chain disruptions to hurt US manufacturers.”
Policy makers across the world are warning of a brewing trade war that could undermine the broadest global recovery in years. Meanwhile, business groups representing companies ranging from Walmart Inc. to Amazon.com Inc. are warning US tariffs could raise prices for consumers and sideswipe stock prices.
Even central banks, which normally stay above the fray of trade spats, are weighing in. “A number of participants reported about their conversations with business leaders around the country and reported that trade policy has become a concern,” Federal Reserve Chairman Jerome Powell said this week, while cautioning that trade issues haven’t changed the Fed’s outlook. The Bank of England warned Thursday that increased protectionism could have a “significant negative impact” on global growth.
Trump also directed Treasury Secretary Steven Mnuchin to propose new investment restrictions on Chinese companies within 60 days to safeguard technologies the US views as strategic, said senior White House economic adviser Everett Eissenstat.
The Trump administration is framing the move as a major turning point in US-China relations. It followed a seven-month investigation by USTR into allegations China violates US intellectual property, under the seldom-used section 301 of the 1974 Trade Act. The US concluded China engages in a range of violations, including policies that force American companies to transfer technology and the accessing of trade secrets through hacking, said Eissenstat.
The initial Chinese response may not be as severe as many fear but the conflict could easily escalate, said Robert Manning, an expert on US-China relations at the Atlantic Council in Washington.
“What you’re probably going to get from the Chinese is a low-key response to try to negotiate their way out of it,” Manning said. “I just worry if it gets really ugly, they may go for the nuclear option.”
He says nuclear option would be to sell a “couple hundred billion” in US Treasuries, which would tank markets and raise US interest rates.
Trump tried to make it clear he wasn’t trying to provoke China or its leader, President Xi Jinping.
“I view them as a friend. I have tremendous respect for President Xi,” Trump said. But, the US’s trade deficit with China is “the largest deficit in the history of our world,” he said.
Trump’s actions represent a “seismic shift from an era dating back to Nixon and Kissinger, where we had as a government viewed China in terms of economic engagement,” White House trade adviser Peter Navarro told reporters on Thursday. “That process has failed.”
“The problem is that with the Chinese in this case, talk is not cheap. It has been very expensive for America,” said Navarro. “Finally the president decided that we needed to move forward.”
Commerce Secretary Wilbur Ross predicted a strong stand on trade would bring concessions without escalating into a broader conflict. ‘We will end up negotiating these things rather than fighting over them, in my view,” Ross said.
Before the tariffs become final, there will be a 30-day comment period, the White House said. Trump also directed his officials to pursue a World Trade Organization complaint against China for discriminatory licensing practices.
India can’t achieve 9-10 per cent GDP growth without agri-revolution: Kant
New Delhi: India cannot achieve 9-10 per cent GDP growth without revolution in the farm sector, Niti Aayog CEO Amitabh Kant said.
Addressing Mahindra Samriddhi Agri awards, he said there is a need to boost investment in the agriculture sector as well as to introduce new technology and market reforms.
Kant also stressed on scrapping Agriculture Produce Marketing Committee and some old laws like Essential Commodites Act, which restrict movement of farm produces.
However, he said agriculture is a state subject and the central government has limited role in it.
“In India 50 per cent of our population is dependent on agriculture. If India’s GDP has to grow at 9-10 per cent for the next 30 years, then it cannot be without bringing revolution in the agri sector,” Kant said.
He also emphasised on eliminating middlemen in marketing of farm produces to boost farmers’ income.
Kant expressed confidence that farmer income will be doubled by 2022.
He said there is a need to spread good agriculture practice and success stories of farmers across the country.
“The second revolution in agriculture will come from technology and marketing,” Kant said.
Pawan Goenka, Managing Director, Mahindra & Mahindra Ltd,, said: “The contribution made by our farming community is a manifestation of this new age of farming which we celebrate through our annual awards”.
As part of Mahindra Agri Village (MAV) programme, he said the company has worked closely with more than 50 villages.
“Our Prerna initative has empowered nearly 2,000 women farmers over 40 villages, through the introduction of gender-neutral farm tools for reducing farm drudgery, and dissemination of knowledge and essential capabilities,” Goenka said.
Mahindra Samriddhi Krishi Shiromani Samman (Lifetime Achievement Award) 2019 was conferred upon E A Siddiq for his immense contribution to Indian agriculture. The award was handed over to recognise his contribution of enhancing productivity of paddy (Both Basmati & Non Basmati).
The group gave awards in total 11 categories.
Mukesh Ambani bails out Anil in Ericsson payout case day before SC deadline
Mumbai: Billionaire Mukesh Ambani stepped in to bail out younger brother Anil Ambani by helping him repay Reliance Communications’ (RCom’s) dues to Ericsson. The last-minute rescue spares the younger Ambani a three-month jail term for contempt of court.
RCom cleared the entire dues to Ericsson India to purge the contempt of a Supreme Court order. The debt-ridden company had already paid Rs 118 crore of the Rs 550-crore dues. In addition, the company had paid around Rs 3 crore in penalties to Ericsson.
“My sincere and heartfelt thanks to my respected elder brother, Mukesh, and Nita for standing by me during these trying times and demonstrating the importance of staying true to our strong family values by extending this timely support,” said Anil Ambani in a media statement. RCom had time until Tuesday to make the payment, failing which Anil Ambani, its chairman, would have had to serve a three-month jail term, according to the court’s order.
Probing Amazon, Flipkart for alleged violation of foreign exchange law: ED
New Delhi : Investigation has been initiated against e-commerce giants Amazon and Flipkart for alleged violation of foreign exchange law, the Enforcement Directorate (ED) Monday informed the Delhi High Court.
A bench of Chief Justice Rajendra Menon and Justice A J Bhambhani noted the submissions of the ED that a case has been registered under provisions of the Foreign Exchange Management Act (FEMA) against the two companies and disposed of a PIL which has alleged that the e-commerce giants were violating foreign direct investment (FDI) norms.
The court had earlier sought response of the central government, Amazon and Flipkart to the plea which has sought a probe into the alleged FDI violations.
The ED, in its reply filed through central government standing counsel Amit Mahajan, has said the “department has already registered and initiated investigation under the provisions of FEMA against the two companies to ascertain whether they have been contravening any provisions of FEMA or contravening any rule, regulations, notification, direction or order issued in exercise of the powers under FEMA….”
The agency also sought dismissal of the petition.
The petition by an NGO, Telecom Watchdog, also asked for initiation of legal proceedings against the two e-commerce companies under the FEMA for alleged violation and circumvention of FDI norms.
The plea, filed through advocate Pranav Sachdeva, has claimed that Amazon and Flipkart have created multiple entities to circumvent the FDI norms and route the hot-selling stock at cheaper rates.
The petition has contended that according to Press Note 3 of 2016, which regulates FDI in e-commerce, entities like Amazon and Flipkart are not to exercise ownership over stock, nor directly or indirectly influence price of goods and services sold on their marketplace.
It claimed that by creating name lending companies, Amazon and Flipkart buy branded goods in bulk at discounts from manufacturers and render small sellers uncompetitive by a wide margin, thus influencing the prices in violation of the FDI norms.
“As a consequence of this FDI norms violation, smaller sellers are unable to participate in the fast growing e-commerce sector,” the plea has contended, adding that due to subsidised prices on such platforms, small sellers are unable to sell in the brick-n-mortar world too.
Besides, the plea has also claimed that the two e-commerce firms have created several other group companies in the chain to divide discounts and losses.
“Exchange offers, EMI costs and bank offers are funded completely or substantially by Amazon and Flipkart and constitute a clear influence on price in violation of FDI norms,” it has alleged.