Latest news with #KohGuiQing
Yahoo
12-05-2025
- Business
- Yahoo
Stocks, dollar surge as US and China agree 90-day tariff relief
By Koh Gui Qing and Naomi Rovnick NEW YORK/LONDON (Reuters) -Global shares rallied, while gold and safe-haven currencies slumped against a resurgent dollar on Monday as the U.S. and China agreed to temporarily slash harsh reciprocal tariffs and cooperate to avoid rupturing the global economy. Following weekend talks in Geneva, both sides agreed that the U.S. would drop levies on Chinese imports from 145% to 30% during a 90-day negotiation period and China would cut duties from 125% to 10%. Wall Street stocks were set for significant daily gains, with the S&P 500 index jumping 3% and the tech-focused Nasdaq Composite advancing 4.1%. In a joint statement on Monday, Washington and Beijing said they recognised the importance of their bilateral trade relationship to both countries and the global economy, in language that analysts said had brightened the market outlook. An index tracking the dollar against other major currencies rose further from last month's three-year trough with an almost 1.25% gain, while Japan's yen fell 2.2% to 148.48 per dollar. The retreat from safe-haven assets pushed Switzerland's franc 1.4% lower on the day, in a jolt of relief for Swiss exporters and the nation's central bank. Spot gold prices, which hit an all-time high of $3,500 last month and often move inversely to the dollar, fell 3% to $3,225.3 an ounce. "This is a textbook recovery after the market's waterfall declines," said Gina Bolvin, the president of Bolvin Wealth Management Group in Boston. "The market is blowing through resistance levels and if it sticks, this is a big 'WIN' for Trump, for stocks and for investors." The euro, which surged in April as investors questioned the dollar's long-held status as the world's reserve currency, was 1.2% lower at $1.1113. 'RELIEF' Kit Juckes, chief FX strategist at Societe Generale, said the tariff pause was a "substantial relief" for the U.S. and China. With tariff anxiety having already caused some Chinese exporters to consider their futures, data this weekend showed the nation's factory-gate prices had dropped by the most in six months in April. Trump's erratic trade policies had also sparked fears over U.S. corporate earnings, with investors having entered this week nervous about an impending update from retail giant Walmart after a slew of U.S. multi-nationals pulled their forecasts. On Monday, however, commodities traders rushed to reassess the recessionary risks of tariff uncertainty, with oil traders pricing Brent crude for delivery next month almost 1.9% higher at $65.10 a barrel, up from around $57 a week ago. Europe's regional STOXX 600 was last trading 1.2% higher and Hong Kong's Hang Seng Index ended the day with an almost 3% gain. FURTHER TO RUN? While Trump's April 2 tariff announcement initially caused world stocks to drop sharply, MSCI's index of global shares, which is U.S.-dominated, was trading back at levels last seen in late March and was up 1.8%. Some analysts and investors warned, however, that this was not the end of unpredictable trade talks between the White House and Beijing and that any relief may soon be overshadowed by data showing the U.S. economy had slowed. Sheldon MacDonald, CIO at British asset manager Marlborough, said that even if the U.S. maintained 30% tariffs on China this was still "negative" for growth, with "no all-clear on recession fears just yet". Market pricing at the start of the U.S. morning showed extreme optimism that a trade war with China would be avoided, however, with investors cashing out of traditionally low-risk government debt instruments to load up on stocks. The 10-year U.S. Treasury yield rose almost 8 basis points on the day, as the price of the government debt fell, with almost identical moves for benchmark German Bunds and British gilts. But analysts at Citi cautioned Trump supporters may not support a compromise with China and recalled the short-lived trade truce during his first presidency in 2018-2019, when both nations agreed a 90-day tariff halt before tensions resumed. "It's going to take some time to get more clarity," said John Praveen, managing director co-chief investment officer at Paleo Leon in New Jersey. "Until we have a final agreement on both sides, when Trump and Chinese President Xi meet and shake hands, that's when we will begin to see the blue skies." (Additional reporting by Wayne Cole in Sydney and Vidya Ranganathan in Singapore; Editing by Ros Russell and Alex Richardson) Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Zawya
29-04-2025
- Business
- Zawya
Export employment to dive if trade war persists -US business group
All American exports to China worth $140.7 billion last year now face a retaliatory Chinese tariff of at least 125%, putting at risk hundreds of thousands of American jobs that support the exports, the US-China Business Council said on Tuesday. China imposed a 125% tariff rate on U.S. exports on April 11 to retaliate against a 145% tariff that the U.S. government levied on Chinese goods, in an unprecedented escalating trade war between the world's two largest economies that threaten to dent global growth. In a report released on Tuesday, the US-China Business Council said U.S. exports to China support 862,467 jobs and warned that a continuation of punitive tariff rates on both sides will lead to a "precipitous" fall in jobs and trade revenues. "No one is spared this time," said Sean Stein, president of the US-China Business Council who said all Americans from consumers to farmers and ranchers are hurt by the tariffs. "We urge leaders from both countries to come to the negotiating table," he said. The Business Council said businesses and communities in the South and Midwestern United States are most exposed to Chinese tariffs on U.S. goods, in part because oilseeds and grains -- which are produced in the Midwest -- form the largest U.S. exports to China. Oil and gas exports are the next largest U.S. exports to China, at $12.3 billion, followed by pharmaceuticals and medicines at $10.9 billion and semiconductors and components at $10.5 billion, the Business Council said. Texas, Louisiana, Alabama, Illinois and California are most vulnerable to the retaliatory Chinese tariffs due to the value of their exports that now face tariff rates beyond 125%, the Business Council said. On the services side, the U.S. education industry is the top service exporter to China, selling $14.4 billion worth of services in 2023, the US-China Business Council said. The top U.S. service exporters to China by state were California, New York, Texas, Illinois and Massachusetts in 2023, the council said. (Reporting by Koh Gui Qing; Editing by Chizu Nomiyama )
Yahoo
05-02-2025
- Business
- Yahoo
Analysis-Trump's China focus increases odds its special trading status could end
By Koh Gui Qing NEW YORK (Reuters) - U.S. President Donald Trump's complaints about China's trade practices have increased the odds that a 25-year-old U.S. law that established free trade with Beijing is repealed, trade experts said, a move that could raise tariffs to 61% on average. Buried in the barrage of first-day executive orders was an instruction from Trump to his commerce secretary and trade representative to "assess legislative proposals" regarding Permanent Normal Trade Relations (PNTR) with China. The designation, which generally deters the U.S. government from imposing tariffs on trade partners, was extended to China in 2000, in a major move that opened the floodgates of Chinese exports into the United States. Ditching the normal trade relations designation could lead to an automatic jump in levies, at rates that could far exceed what Trump has so far slapped on China. Over the weekend, Trump imposed a tariff of 10%, calling it an "opening salvo" and sparking retaliation from Beijing. He has threatened to impose tariffs as high as 60%. Last month, Representatives John Moolenaar and Tom Suozzi introduced a bill to repeal PNTR with China. Called the "Restoring Trade Fairness Act," the bipartisan bill proposes suspending normal trade relations with China and increasing tariffs on some of its exports to between 35% and 100% over five years. Since Trump's first term, as the rhetoric about fairness of trade with China has increased, multiple bills seeking repeal of the designation have been introduced in Congress but have failed to muster enough support to pass. But in interviews, seven trade experts said there is growing support for such a bill among U.S. Democratic and Republican lawmakers, increasing the probability that the latest efforts to repeal it might pass. "Every year it gets closer to being repealed because it doesn't make sense," as China does not play by global trade rules, said Jim Lewis, a senior vice president at the Center for Strategic and International Studies. "Trump will be looking to see what kind of deal he can get with the Chinese and everything will be on the table." Representative Jason Smith, who leads the Ways and Means Committee, the main tax-writing panel in the House, has also called for a re-examination of "bad" U.S. trade policies that allowed nations such as China to "cheat" Americans. One business consultant and two lawyers said their corporate clients are preparing for the risk that China's PNTR status is revoked. In response, they are moving supply chains out of China, repatriating foreign employees, abstaining from making new investments in China, and re-negotiating some supply chain contracts so that the cost of tariff increases could be passed on to other parties, these sources said. The White House, the Department of Commerce, the U.S. Trade Representative, and a spokesperson for Representative Moolenaar did not respond to requests for comment. HARD-HITTING CONSEQUENCE The consequences of a removal of PNTR with China would be significant. All Chinese non-fuel exports to the United States, even if they were made by American companies in China, would be subject to an average 61% tariff rate, up from the current 19%, economists at Oxford Economics said in a report prepared for the U.S.-China Business Council, a trade group. That would dent corporate profits, generate job losses, and fuel inflation pressure. Removal of the trade status could cut U.S. gross domestic product by up to $1.9 trillion over five years and slash 801,000 U.S. jobs, according to the report published in November 2023. The U.S.-China Business Council (USCBC) said on Tuesday that even though China has not fulfilled all of its obligations under the World Trade Organization or the Phase One deal - an agreement struck by Beijing and Washington in 2020 requiring China to buy an additional $200 billion worth of U.S. exports over two years - "the USCBC does not support efforts to repeal PNTR." "It is not the right tool for the job at hand," it said. "The United States has other tools to change China's behavior.' For proponents of repealing PNTR, doing so would be an effective way to demonstrate to China that the U.S. is serious about addressing Beijing's trade practices. But for others, the effort would be a draconian move to fix a problem that could be dealt with in other ways, with less impact on the U.S. economy. At present, only four countries - Cuba, North Korea, Belarus and Russia - do not hold normal trade relations status with the United States. Trump already has demonstrated he has other means to impose tariffs on China without revoking PNTR. Moreover, how escalating Sino-U.S. trade tensions might play out is unclear. Trump has used tariffs as a tool to negotiate deals, making it difficult to assess at what rate tariffs, if any, might eventually be applied. It is also unclear whether there is enough support within Congress to remove the PNTR, and even if there were, it is uncertain whether Congress would prioritize the issue over others, and whether Congress would repeal PNTR without Trump's final approval. "The Republicans won't pass the bill (to repeal the PNTR) until Trump tells them to pass it," said Derek Scissors, a senior fellow at the American Enterprise Institute. "The only thing that matters is if we get the green light from Trump." A bill to revoke PNTR needs 60 votes in the Senate to pass, and it was not brought up in September 2024 during "China week," when the House voted on 25 bills related to U.S.-China relations, suggesting that support for it might be mixed. The status was the result of more than a decade of negotiations to bring China into the global trade fold, and which led to China joining the World Trade Organization in 2001. Once removed, it could take years before trade relations are normalized again, said Susan Shirk, a professor at the UC San Diego School of Global Policy and Strategy and a director emeritus at its 21st Century China Center, and who was part of the negotiations that established PNTR with China. "Removing Permanent Normal Trade Relations with China is a very radical and extreme step that would remove any guardrails against a trade war," Shirk said. "It will be pretty chaotic."
Yahoo
05-02-2025
- Business
- Yahoo
Analysis-Trump's China focus increases odds its special trading status could end
By Koh Gui Qing NEW YORK (Reuters) - U.S. President Donald Trump's complaints about China's trade practices have increased the odds that a 25-year-old U.S. law that established free trade with Beijing is repealed, trade experts said, a move that could raise tariffs to 61% on average. Buried in the barrage of first-day executive orders was an instruction from Trump to his commerce secretary and trade representative to "assess legislative proposals" regarding Permanent Normal Trade Relations (PNTR) with China. See for yourself — The Yodel is the go-to source for daily news, entertainment and feel-good stories. By signing up, you agree to our Terms and Privacy Policy. The designation, which generally deters the U.S. government from imposing tariffs on trade partners, was extended to China in 2000, in a major move that opened the floodgates of Chinese exports into the United States. Ditching the normal trade relations designation could lead to an automatic jump in levies, at rates that could far exceed what Trump has so far slapped on China. Over the weekend, Trump imposed a tariff of 10%, calling it an "opening salvo" and sparking retaliation from Beijing. He has threatened to impose tariffs as high as 60%. Last month, Representatives John Moolenaar and Tom Suozzi introduced a bill to repeal PNTR with China. Called the "Restoring Trade Fairness Act," the bipartisan bill proposes suspending normal trade relations with China and increasing tariffs on some of its exports to between 35% and 100% over five years. Since Trump's first term, as the rhetoric about fairness of trade with China has increased, multiple bills seeking repeal of the designation have been introduced in Congress but have failed to muster enough support to pass. But in interviews, seven trade experts said there is growing support for such a bill among U.S. Democratic and Republican lawmakers, increasing the probability that the latest efforts to repeal it might pass. "Every year it gets closer to being repealed because it doesn't make sense," as China does not play by global trade rules, said Jim Lewis, a senior vice president at the Center for Strategic and International Studies. "Trump will be looking to see what kind of deal he can get with the Chinese and everything will be on the table." Representative Jason Smith, who leads the Ways and Means Committee, the main tax-writing panel in the House, has also called for a re-examination of "bad" U.S. trade policies that allowed nations such as China to "cheat" Americans. One business consultant and two lawyers said their corporate clients are preparing for the risk that China's PNTR status is revoked. In response, they are moving supply chains out of China, repatriating foreign employees, abstaining from making new investments in China, and re-negotiating some supply chain contracts so that the cost of tariff increases could be passed on to other parties, these sources said. The White House, the Department of Commerce, the U.S. Trade Representative, and a spokesperson for Representative Moolenaar did not respond to requests for comment. HARD-HITTING CONSEQUENCE The consequences of a removal of PNTR with China would be significant. All Chinese non-fuel exports to the United States, even if they were made by American companies in China, would be subject to an average 61% tariff rate, up from the current 19%, economists at Oxford Economics said in a report prepared for the U.S.-China Business Council, a trade group. That would dent corporate profits, generate job losses, and fuel inflation pressure. Removal of the trade status could cut U.S. gross domestic product by up to $1.9 trillion over five years and slash 801,000 U.S. jobs, according to the report published in November 2023. The U.S.-China Business Council (USCBC) said on Tuesday that even though China has not fulfilled all of its obligations under the World Trade Organization or the Phase One deal - an agreement struck by Beijing and Washington in 2020 requiring China to buy an additional $200 billion worth of U.S. exports over two years - "the USCBC does not support efforts to repeal PNTR." "It is not the right tool for the job at hand," it said. "The United States has other tools to change China's behavior.' For proponents of repealing PNTR, doing so would be an effective way to demonstrate to China that the U.S. is serious about addressing Beijing's trade practices. But for others, the effort would be a draconian move to fix a problem that could be dealt with in other ways, with less impact on the U.S. economy. At present, only four countries - Cuba, North Korea, Belarus and Russia - do not hold normal trade relations status with the United States. Trump already has demonstrated he has other means to impose tariffs on China without revoking PNTR. Moreover, how escalating Sino-U.S. trade tensions might play out is unclear. Trump has used tariffs as a tool to negotiate deals, making it difficult to assess at what rate tariffs, if any, might eventually be applied. It is also unclear whether there is enough support within Congress to remove the PNTR, and even if there were, it is uncertain whether Congress would prioritize the issue over others, and whether Congress would repeal PNTR without Trump's final approval. "The Republicans won't pass the bill (to repeal the PNTR) until Trump tells them to pass it," said Derek Scissors, a senior fellow at the American Enterprise Institute. "The only thing that matters is if we get the green light from Trump." A bill to revoke PNTR needs 60 votes in the Senate to pass, and it was not brought up in September 2024 during "China week," when the House voted on 25 bills related to U.S.-China relations, suggesting that support for it might be mixed. The status was the result of more than a decade of negotiations to bring China into the global trade fold, and which led to China joining the World Trade Organization in 2001. Once removed, it could take years before trade relations are normalized again, said Susan Shirk, a professor at the UC San Diego School of Global Policy and Strategy and a director emeritus at its 21st Century China Center, and who was part of the negotiations that established PNTR with China. "Removing Permanent Normal Trade Relations with China is a very radical and extreme step that would remove any guardrails against a trade war," Shirk said. "It will be pretty chaotic."
