Latest news with #AlfredoMontufar-Helu
Mint
2 days ago
- Business
- Mint
Supply chains become new battleground in the global trade war
SINGAPORE : A key lesson from the latest skirmish in the U.S.-China trade war: The era of weaponized supply chains has arrived. Earlier this week, Washington and Beijing ended a standoff involving the most potent new tool in superpower statecraft—export controls. As part of a monthslong trade fight, the two sides choked off the supply of such exports as rare earths or semiconductor technology in bid to gain an edge. So when Chinese and American negotiators finally met in London to discuss a truce, the talk focused far more on dialing back supply-chain curbs than they did on tariffs, market access and other standard trade-negotiation topics. That shift highlights how the rivalry between the U.S. and China is increasingly about who controls the levers of global economic power. For businesses and investors, the potential for these tools to be used more broadly in the pursuit of geopolitical goals by Washington and Beijing adds another layer of complexity to an economic backdrop already clouded by tariffs. 'The amount of uncertainty generated by this is significant," said Alfredo Montufar-Helu, senior adviser at the Conference Board in Beijing. 'It is something new." To some analysts, the use of export controls means future trade talks between the U.S. and China will increasingly resemble the arms-control dialogues of the Cold War, when the U.S. and the Soviet Union worked to limit the buildup of nuclear weapons, without giving up the deterrent effect their possession conferred. Today, instead of warheads, the U.S. and China are wielding a range of new economic weapons that have the potential to cause widespread economic pain. Following the latest skirmish, China agreed to resume exports of rare-earth magnets and critical minerals needed by U.S. companies—but only for six months, The Wall Street Journal reported. 'If you look at traditional arms-control treaties, the primary goal was to prevent a catastrophic, worst-case scenario from materializing," said Emily Benson, head of strategy at the advisory firm Minerva Technology Futures and a former Commerce Department official. 'And that's certainly what we see here in the economic domain." In many essential sectors of the modern economy, China has the upper hand. The world's second-largest economy accounts for around a third of global manufacturing output, giving it a potential chokehold on auto parts, basic ingredients for drugs, key parts of the electronics supply chain and a host of other industrial sectors. It is the world's No. 1 exporter of machinery, ships, steel, ceramics, textiles and dozens of other goods, according to data from the International Trade Center, a U.N.-backed agency that promotes open trade. The U.S. dominates fewer sectors—but its clout in advanced technology gives it an outsize advantage. Supply-chain resilience became a hot topic in government buildings and corporate boardrooms during the Covid-19 pandemic, when the virus and the lockdowns aimed at containing it revealed the global economy's vulnerability to major disruptions, especially in China, the world's largest factory floor. Auto factories in Missouri shut down in 2021 over a shortage of Chinese-made chips. European Union solidarity crumbled as individual countries raced to secure their own domestic supplies of ventilators, masks and other equipment. Companies examined their supply chains to check for weak spots and in many cases opted to build up inventory, find additional manufacturing bases and take other steps to build greater resilience in their supply chains in the event of fresh disruption. These efforts did little to weaken China's grip on key supply chains. The pandemic also underlined the potential for governments to turn their economic dominance against their rivals and adversaries. Under the Biden administration, the U.S., which for years made abundant use of its dominant position in global finance to impose sanctions on countries including Iran and Russia, wielded one of the most powerful economic tools America possesses: its tech prowess. Washington tightened controls on exports of high-end semiconductors to China, and persuaded allies including Japan and the Netherlands to limit supplies to China of lithography machines and other essential chipmaking tools. The goal was to thwart China's ambition to supplant the U.S. as the world's foremost technological power. In response, China has begun flexing its own economic muscle by tightly controlling the export of rare earths and other critical minerals that are essential for the manufacture of car engines, chips, smartphones and a host of other advanced technologies. It upped the ante this year by extending those controls to the export of rare-earth magnets, indispensable components in everything from air-conditioning units to jet fighters. The U.S. said China agreed to speed approvals of magnet exports as part of a trade truce agreed in Geneva in May, which lowered substantially tariffs imposed by both countries on the other's imports. Yet Washington soon grew frustrated at the slow pace of approvals, which automakers complained was hurting production. Officials again reached for export controls to raise the pressure on Beijing, notifying companies that exports to China of jet engines and related parts, chipmaking software, and ethane, a component of natural gas used in manufacturing plastics, were suspended, The Wall Street Journal reported. This week's talks in London were aimed at easing this standoff. The two sides said they agreed to 'a framework" to restore the May truce, without providing many details. President Trump in a post on his Truth Social network said Wednesday that a deal is done and that the supply of magnets and rare earths from China to the U.S. economy will resume. But China's move to put a six-month limit on rare-earth export licenses for American manufacturers signals that Beijing could use this weapon against the U.S. again if trade tensions erupt again. The potential for export controls to disrupt trade adds to the pressure on companies already struggling to navigate tariffs and mushrooming trade conflicts. Companies operating in the U.S. and China will increasingly need to split their supply chains into two, said Eric Zheng, president of the American Chamber of Commerce in Shanghai. 'Companies will, generally speaking, continue to derisk, however you define this, essentially by treating the U.S. and China as two separate markets," he said. Write to Jason Douglas at
Gulf Today
25-04-2025
- Business
- Gulf Today
China exempts some goods from US tariffs to limit trade war pain
China has exempted some US imports from its 125% tariffs and is asking firms to identify critical goods they need levy-free, according to businesses notified, in the clearest sign yet of Beijing's concerns about the trade war's economic fallout. The dispensation, which follows de-escalatory statements from Washington, signals that the world's two largest economies were prepared to rein in their conflict, which had frozen much of the trade between them, raising fears of a global recession. Beijing's exemptions - which business groups hope would extend to dozens of industries - pushed the US dollar up slightly and lifted equity markets in Hong Kong and Japan. 'As a quid-pro-quo move, it could provide a potential way to de-escalate tensions,' said Alfredo Montufar-Helu, a senior adviser to the Conference Board's China centre, a think tank. But, he cautioned: 'It's clear that neither the US nor China want to be the first in reaching out for a deal.' China has not yet communicated publicly on any exemptions. A Friday statement by the Politburo, the Communist Party's elite decision-making body, focused on efforts to maintain stability at home by supporting firms and workers most affected by tariffs. The readout, which followed the Politburo's regular monthly meeting, showed that Beijing was also ready to hunker down and fight a trade war of attrition if needed to outlast Washington in enduring the pain from the breakdown of their relationship. A Ministry of Commerce taskforce is collecting lists of items that could be exempted from tariffs and is asking companies to submit their own requests, according to a person with knowledge of that outreach. The ministry said on Thursday it had held a meeting with more than 80 foreign companies and business chambers in China to discuss the impact of US tariffs on investment and the operation of foreign firms in the country. 'The Chinese government, for example, has been asking our companies what sort of things are you importing to China from the US that you cannot find anywhere else and so would shut down your supply chain,' American Chamber of Commerce in China President Michael Hart said. Hart added some member pharmaceutical companies had reported being able to import drugs to China without tariffs. He believed the exemptions were drug-specific, not industry-wide. The chief executive of French aircraft engine maker Safran said on Friday it had been informed last night that China had granted tariff exemptions on 'a certain number of aerospace equipment parts' including engines and landing gear. The tariff exemptions under consideration by Beijing could provide cost relief for companies in China and take pressure off US exports at a time when the Trump administration has shown signs of wanting to make a deal with Beijing. The European Union Chamber of Commerce in China also said it had raised the issue of tariff exemptions with the commerce ministry and was awaiting a response. 'Many of our member companies are significantly impacted by the tariffs on critical components imported from the US,' President Jens Eskelund said. A list of 131 categories of products said to be under consideration for tariff exemptions was circulating on Chinese social media platforms and among some businesses and trade groups on Friday. Reuters could not verify the list, which included items ranging from vaccines and chemicals to jet engines. Huatai Securities said the list corresponded to $45 billion worth of imports to China last year. China's customs agency and Ministry of Commerce did not reply to requests for comment. China's foreign ministry said it was not familiar with tariff exemption plans, redirecting queries to 'relevant authorities'. LASTING FIGHT While Washington has said the trade stand-off with China is economically untenable and already offered tariff exemptions to some electronic goods, China has repeatedly said it is willing to fight to the end unless the US lifts its 145% tariffs. But China's economy headed into the trade war with rising unemployment, deflationary pressures and heightened concern that a mounting backlog of unsold exports could drive domestic prices even lower. While China ran a trillion-dollar trade surplus in 2024, it also relies on the United States for key imports, including the petrochemical ethane needed to make plastics, and some drugs. Big pharmaceutical companies including AstraZeneca and GSK have at least one manufacturing site in the US for drugs sold in China, according to Chinese government data. Major ethane processors have already sought tariff waivers from Beijing because the US is the only supplier. Exemptions may be only a tiny step in a long process. 'For those U.S.-manufactured goods that cannot be procured from any other country, I do think there is an interest to exempt them of import tariffs, even if this is done unilaterally,' Montufar-Helu said. 'But for some other goods like energy and agricultural commodities, I think the calculation is very different given that there are other sources that China can tap.' Reuters
Asharq Al-Awsat
25-04-2025
- Business
- Asharq Al-Awsat
China Exempts Some Goods from US Tariffs to Limit trade War Pain
China has exempted some US imports from its 125% tariffs and is asking firms to identify critical goods they need levy-free, according to businesses notified, in the clearest sign yet of Beijing's concerns about the trade war's economic fallout. The dispensation, which follows de-escalatory statements from Washington, signals that the world's two largest economies were prepared to rein in their conflict, which had frozen much of the trade between them, raising fears of a global recession. Beijing's exemptions - which business groups hope would extend to dozens of industries - pushed the US dollar up slightly and lifted equity markets in Hong Kong and Japan. 'As a quid-pro-quo move, it could provide a potential way to de-escalate tensions," said Alfredo Montufar-Helu, a senior adviser to the Conference Board's China Center, a think tank. But, he cautioned: "It's clear that neither the US nor China want to be the first in reaching out for a deal." China has not yet communicated publicly on any exemptions. A Friday statement by the Politburo, the Communist Party's elite decision-making body, focused on efforts to maintain stability at home by supporting firms and workers most affected by tariffs. The readout, which followed the Politburo's regular monthly meeting, showed that Beijing was also ready to hunker down and fight a trade war of attrition if needed to outlast Washington in enduring the pain from the breakdown of their relationship. A Ministry of Commerce taskforce is collecting lists of items that could be exempted from tariffs and is asking companies to submit their own requests, according to a person with knowledge of that outreach. The ministry said on Thursday it had held a meeting with more than 80 foreign companies and business chambers in China to discuss the impact of US tariffs on investment and the operation of foreign firms in the country. "The Chinese government, for example, has been asking our companies what sort of things are you importing to China from the US that you cannot find anywhere else and so would shut down your supply chain," American Chamber of Commerce in China President Michael Hart said. Hart added some member pharmaceutical companies had reported being able to import drugs to China without tariffs. He believed the exemptions were drug-specific, not industry-wide. The chief executive of French aircraft engine maker Safran said on Friday it had been informed last night that China had granted tariff exemptions on "a certain number of aerospace equipment parts" including engines and landing gear. The tariff exemptions under consideration by Beijing could provide cost relief for companies in China and take pressure off US exports at a time when the Trump administration has shown signs of wanting to make a deal with Beijing. The European Union Chamber of Commerce in China also said it had raised the issue of tariff exemptions with the commerce ministry and was awaiting a response. "Many of our member companies are significantly impacted by the tariffs on critical components imported from the US," President Jens Eskelund said. A list of 131 categories of products said to be under consideration for tariff exemptions was circulating on Chinese social media platforms and among some businesses and trade groups on Friday. Reuters could not verify the list, which included items ranging from vaccines and chemicals to jet engines. Huatai Securities said the list corresponded to $45 billion worth of imports to China last year. China's customs agency and Ministry of Commerce did not reply to requests for comment. China's foreign ministry said it was not familiar with tariff exemption plans, redirecting queries to "relevant authorities".
CBC
25-04-2025
- Business
- CBC
China exempts some U.S. imports from 125% tariff rate
China has exempted some U.S. imports from its 125 per cent tariffs and is asking firms to identify critical goods they need levy-free, according to businesses that have been notified. The move, which follows de-escalatory statements from Washington, signals that the world's two largest economies might be prepared to rein in their conflict, which had frozen much of the trade between them and raised fears of a global recession. Beijing's exemptions — which business groups hope might extend to dozens of industries — pushed the U.S. dollar up slightly and lifted equity markets in Hong Kong and Japan. "As a quid-pro-quo move, it could provide a potential way to de-escalate tensions," said Alfredo Montufar-Helu, a senior adviser to the Conference Board's China Center, a think-tank. But he cautioned: "It's clear that neither the U.S. nor China want to be the first in reaching out for a deal." China has not communicated publicly on any exemptions. U.S. President Donald Trump told Time magazine in an interview that U.S.-China talks were taking place on tariffs and that Chinese President Xi Jinping had called him. "He's called. And I don't think that's a sign of weakness on his behalf," Trump told the magazine. He did not say when Xi called or what the two leaders discussed. Beijing has so far disputed the U.S. characterization of talks — the Chinese embassy said again on Friday that there have been no talks between the two countries, adding in a statement that the U.S. should "stop creating confusion." WATCH | What a trade war could mean for the world order: Trade war: How far will China go to beat the U.S.? 15 days ago Duration 11:01 A Friday statement by the Politburo, the Communist Party's elite decision-making body, focused on efforts to maintain stability at home by supporting firms and workers most affected by tariffs. The readout, which followed the Politburo's regular monthly meeting, showed that Beijing was also ready to hunker down and fight a trade war of attrition if needed to outlast Washington in enduring trade war pain. A Ministry of Commerce task force is collecting lists of items that could be exempted from tariffs and is asking companies to submit their own requests, according to a person with knowledge of that outreach. The ministry said on Thursday it had held a meeting with more than 80 foreign companies and business chambers in China to discuss the impact of U.S. tariffs on investment and the operation of foreign firms. "The Chinese government, for example, has been asking our companies what sort of things are you importing to China from the U.S. that you cannot find anywhere else and so would shut down your supply chain," American Chamber of Commerce in China President Michael Hart said. Hart added some member pharmaceutical companies had reported being able to import drugs to China without tariffs. He believed the exemptions were drug-specific, not industry-wide. The chief executive of French aircraft engine maker Safran said on Friday it had been informed the previous night that China had granted tariff exemptions on "a certain number of aerospace equipment parts" including engines and landing gear. The tariff exemptions under consideration by Beijing could provide cost relief for companies in China and take pressure off U.S. exports at a time when the Trump administration has shown signs of wanting to make a deal with Beijing. The European Union Chamber of Commerce in China also said it had raised the issue of tariff exemptions with the commerce ministry and was awaiting a response. "Many of our member companies are significantly impacted by the tariffs on critical components imported from the U.S.," President Jens Eskelund said. A list of 131 categories of products said to be under consideration for tariff exemptions was circulating on Chinese social media platforms and among some businesses and trade groups on Friday. Reuters could not verify the list, which included items ranging from vaccines and chemicals to jet engines. WATCH | The escalation of an international trade war: U.S. trade war: How China is fighting Trump's tariffs | About That 18 days ago Duration 10:58 China is hitting the U.S. where it hurts by imposing a 34 per cent reciprocal tariff on imports and restrictions on key rare-earth minerals. In response, U.S. President Donald Trump is threatening an additional 50 per cent tariff if China fails to withdraw its measures. Andrew Chang explains the escalation of the trade war between the world's two largest economies and the potential impact of China's retaliation. Huatai Securities said the list corresponded to $45 billion US worth of imports to China last year. China's customs agency and Ministry of Commerce did not reply to requests for comment. China's foreign ministry said it was not familiar with tariff exemption plans, redirecting queries to "relevant authorities." Lasting fight While Washington has said the trade standoff with China is economically untenable and already offered tariff exemptions to some electronic goods, China has repeatedly said it is willing to fight to the end unless the U.S. lifts its 145 per cent tariffs. But China's economy headed into the trade war with rising unemployment, deflationary pressures and heightened concern that a mounting backlog of unsold exports could drive domestic prices even lower. While China ran a trillion-dollar trade surplus in 2024, it also relies on the United States for key imports, including the petrochemical ethane needed to make plastics and some drugs. Big pharmaceutical companies including AstraZeneca and GSK have at least one manufacturing site in the U.S. for drugs sold in China, according to Chinese government data. Major ethane processors have already sought tariff waivers from Beijing because the U.S. is the only supplier.
Business Recorder
25-04-2025
- Business
- Business Recorder
China exempts some goods from US tariffs to limit trade war pain
China has exempted some U.S. imports from its 125% tariffs and is asking firms to identify critical goods they need levy-free, according to businesses notified, in the clearest sign yet of Beijing's concerns about the trade war's economic fallout. The dispensation, which follows de-escalatory statements from Washington, signals that the world's two largest economies were prepared to rein in their conflict, which had frozen much of the trade between them, raising fears of a global recession. Beijing's exemptions - which business groups hope would extend to dozens of industries - pushed the U.S. dollar up slightly and lifted equity markets in Hong Kong and Japan. 'As a quid-pro-quo move, it could provide a potential way to de-escalate tensions,' said Alfredo Montufar-Helu, a senior adviser to the Conference Board's China Center, a think tank. But, he cautioned: 'It's clear that neither the U.S. nor China want to be the first in reaching out for a deal.' China has not yet communicated publicly on any exemptions. A Friday statement by the Politburo, the Communist Party's elite decision-making body, focused on efforts to maintain stability at home by supporting firms and workers most affected by tariffs. US Treasury Secretary Bessent says China tariffs are not sustainable as US signals willingness to de-escalate The readout, which followed the Politburo's regular monthly meeting, showed that Beijing was also ready to hunker down and fight a trade war of attrition if needed to outlast Washington in enduring the pain from the breakdown of their relationship. A Ministry of Commerce taskforce is collecting lists of items that could be exempted from tariffs and is asking companies to submit their own requests, according to a person with knowledge of that outreach. The ministry said on Thursday it had held a meeting with more than 80 foreign companies and business chambers in China to discuss the impact of U.S. tariffs on investment and the operation of foreign firms in the country. 'The Chinese government, for example, has been asking our companies what sort of things are you importing to China from the U.S. that you cannot find anywhere else and so would shut down your supply chain,' American Chamber of Commerce in China President Michael Hart said. Hart added some member pharmaceutical companies had reported being able to import drugs to China without tariffs. He believed the exemptions were drug-specific, not industry-wide. White House would consider cutting China tariffs as part of talks, source says The chief executive of French aircraft engine maker Safran said on Friday it had been informed last night that China had granted tariff exemptions on 'a certain number of aerospace equipment parts' including engines and landing gear. The tariff exemptions under consideration by Beijing could provide cost relief for companies in China and take pressure off U.S. exports at a time when the Trump administration has shown signs of wanting to make a deal with Beijing. The European Union Chamber of Commerce in China also said it had raised the issue of tariff exemptions with the commerce ministry and was awaiting a response. 'Many of our member companies are significantly impacted by the tariffs on critical components imported from the U.S.,' President Jens Eskelund said. A list of 131 categories of products said to be under consideration for tariff exemptions was circulating on Chinese social media platforms and among some businesses and trade groups on Friday. Reuters could not verify the list, which included items ranging from vaccines and chemicals to jet engines. Huatai Securities said the list corresponded to $45 billion worth of imports to China last year. Bessent says China tariffs are not sustainable as US signals willingness to de-escalate China's customs agency and Ministry of Commerce did not reply to requests for comment. China's foreign ministry said it was not familiar with tariff exemption plans, redirecting queries to 'relevant authorities'. Lasting fight While Washington has said the trade stand-off with China is economically untenable and already offered tariff exemptions to some electronic goods, China has repeatedly said it is willing to fight to the end unless the U.S. lifts its 145% tariffs. But China's economy headed into the trade war with rising unemployment, deflationary pressures and heightened concern that a mounting backlog of unsold exports could drive domestic prices even lower. While China ran a trillion-dollar trade surplus in 2024, it also relies on the United States for key imports, including the petrochemical ethane needed to make plastics, and some drugs. Big pharmaceutical companies including AstraZeneca and GSK have at least one manufacturing site in the U.S. for drugs sold in China, according to Chinese government data. China's President Xi says tariffs and trade wars hurt world economic order Major ethane processors have already sought tariff waivers from Beijing because the U.S. is the only supplier. Exemptions may be only a tiny step in a long process. 'For those U.S.-manufactured goods that cannot be procured from any other country, I do think there is an interest to exempt them of import tariffs, even if this is done unilaterally,' Montufar-Helu said. 'But for some other goods like energy and agricultural commodities, I think the calculation is very different given that there are other sources that China can tap.'
