Latest news with #tariff war
Zawya
5 days ago
- Business
- Zawya
G20 finance chiefs back central banks' independence as they seal communique
Finance chiefs from the Group of 20 countries stressed the importance of central bank independence in a communique issued on Friday following a two-day meeting in South Africa's coastal city of Durban. The ministers and central bankers pledged to boost cooperation as they sealed their first communique since October 2024, a month before President Donald Trump's election victory and subsequent tariff war. The issue of central bank independence hung heavily over the meeting following Trump's repeated berating of U.S. Federal Reserve Chair Jerome Powell for not cutting interest rates, attacks that have roiled global financial markets. The communique was reached in the absence of U.S. Treasury Secretary Scott Bessent from the two-day meeting, though Washington was represented by Michael Kaplan, acting under secretary of the Treasury for international affairs. Bessent also skipped the previous G20 finance chiefs' gathering in Cape Town in February, even though Washington is due to assume the G20's rotating presidency in December. "Central banks are strongly committed to ensuring price stability, consistent with their respective mandates, and will continue to adjust their policies in a data-dependent manner. Central bank independence is crucial to achieving this goal," the communique said. South Africa's deputy finance minister David Masondo told reporters that the meeting outcomes contained in the communique were "consented to by all members" and centred on "strategic macroeconomic issues". The communique also recognised "the importance of the World Trade Organisation to advance trade issues", while adding the body needed reform. The agreement is seen as an achievement even though communiques issued by the G20, which emerged as a forum for cooperation to combat the 2008 global financial crisis, are non-binding. G20 finance ministers failed to reach a joint stance when they met in February, to the dismay of hosts South Africa. South Africa, under its presidency's motto "Solidarity, Equality, Sustainability", has aimed to promote an African agenda, with topics including the high cost of capital and funding for climate change action. The finance ministers and central bank governors said in Friday's communique that they were committed to addressing debt vulnerabilities in low- and middle-income countries in an effective, comprehensive and systematic manner. (Reporting by Olivia Kumwenda-Mtambo, Kopano Gumbi, Colleen Goko, Philip Blenkinsop, Maria Martinez in Durban and Andrea Shalal in Washington; Writing by Philip Blenkinsop and Emelia Sithole-Matarise; Editing by Rachna Uppal and Joe Bavier)
Malay Mail
5 days ago
- Business
- Malay Mail
Trade war avoidable if US will ‘act like a superpower', China says as Aug 12 deadline looms
China, US talks in Europe show tariff war unnecessary, commerce minister says Wang Wentao urges United States to act like a superpower China facing August 12 tariff deadline BEIJING, July 18 — China wants to bring its trade ties with the US back to a stable footing, its commerce minister said, adding that recent talks in Europe showed there was no need for a tariff war while urging the US to act in a manner befitting of a superpower. Commerce Minister Wang Wentao told reporters on Friday that the 'ups and downs' in the two countries' relationship underscored their economic interdependence. Asked about the United States specifically, Wang said: 'Major countries should act like major countries. They must shoulder their responsibilities,' adding that China would protect its national interests. China is facing an August 12 deadline to reach a durable tariff agreement with the United States, after Beijing and Washington reached a preliminary deal last month to end weeks of escalating tit-for-tat tariffs. If no deal is reached, global supply chains could face renewed turmoil from duties exceeding 100 per cent. Wang said negotiations in Geneva and London earlier this year demonstrated there was no need to return to a trade war. 'Practice has proven that through dialogue and consultation, with leadership and communication at the highest levels, we can properly manage contradictions and resolve our differences,' he said. 'We will continue to strengthen dialogue and communication, deepen consensus, reduce misunderstandings, enhance cooperation, to jointly put China-US economic and trade relations back on track to achieve healthy, stable and sustainable development.' China's rare earths exports rose 32 per cent month-on-month in June, customs data showed on Monday, in a sign that agreements struck last month in London to free up the flow of the metals were possibly bearing fruit. Chipmaker Nvidia will also resume selling its H20 AI chips to China, Chief Executive Jensen Huang said at an event in Beijing this week, a move US Commerce Secretary Howard Lutnick said was also part of negotiations on rare earths. Wang said on Friday that he had met Huang the previous day, describing the meeting as evidence that 'as the dust settles, everyone has come to the conclusion – especially the US side – that forced decoupling is impossible.' Wang said the current overall tariff level imposed by the US on China was 'still high' at 53.6 per cent. Analysts have said that additional duties exceeding 35 per cent will probably wipe out Chinese manufacturers' profit margins. 'Both sides have come to understand that they need each other, as lots of the goods and services that we exchange are irreplaceable, or at least difficult to exchange in the short-term,' Wang said. 'China does not want a trade war, but it is not afraid of one,' he reiterated. (US$1 = 7.1811 Chinese yuan renminbi) — Reuters
Asharq Al-Awsat
5 days ago
- Business
- Asharq Al-Awsat
China Says Successful US Trade Talks Make Return to Tariff War Unnecessary
China wants to bring its trade ties with the US back to a stable footing, its commerce minister said, adding that recent talks in Europe showed there was no need for a tariff war while urging the US to act in a manner befitting of a superpower. According to Reuters, Commerce Minister Wang Wentao told reporters on Friday that the "ups and downs" in the two countries' relationship underscored their economic interdependence. Asked about the United States specifically, Wang said: "Major countries should act like major countries. They must shoulder their responsibilities," adding that China would protect its national interests. China is facing an August 12 deadline to reach a durable tariff agreement with the United States, after Beijing and Washington reached a preliminary deal last month to end weeks of escalating tit-for-tat tariffs. If no deal is reached, global supply chains could face renewed turmoil from duties exceeding 100%. Wang said negotiations in Geneva and London earlier this year demonstrated there was no need to return to a trade war. "Practice has proven that through dialogue and consultation, with leadership and communication at the highest levels, we can properly manage contradictions and resolve our differences," he said. "We will continue to strengthen dialogue and communication, deepen consensus, reduce misunderstandings, enhance cooperation, to jointly put China-US economic and trade relations back on track to achieve healthy, stable and sustainable development." China's rare earths exports rose 32% month-on-month in June, customs data showed on Monday, in a sign that agreements struck last month in London to free up the flow of the metals were possibly bearing fruit. Chipmaker Nvidia will also resume selling its H20 AI chips to China, Chief Executive Jensen Huang said at an event in Beijing this week, a move US Commerce Secretary Howard Lutnick said was also part of negotiations on rare earths. Wang said on Friday that he had met Huang the previous day, describing the meeting as evidence that "as the dust settles, everyone has come to the conclusion - especially the US side - that forced decoupling is impossible." Wang said the current overall tariff level imposed by the US on China was "still high" at 53.6%. Analysts have said that additional duties exceeding 35% will probably wipe out Chinese manufacturers' profit margins. "Both sides have come to understand that they need each other, as lots of the goods and services that we exchange are irreplaceable, or at least difficult to exchange in the short-term," Wang said. "China does not want a trade war, but it is not afraid of one," he reiterated.
Irish Times
16-07-2025
- Business
- Irish Times
Trump reaps $50bn tariff haul as world ‘chickens out'
America's trading partners have largely failed to retaliate against Donald Trump 's tariff war , allowing a president taunted for 'always chickening out' to raise nearly $50 billion in extra customs revenues at little cost. Four months since Mr Trump fired the opening salvo of his trade war, only China and Canada have dared to hit back at Washington imposing a minimum 10 per cent global tariff, 50 per cent levies on steel and aluminium, and 25 per cent on autos. At the same time US revenues from customs duties hit a record high of $64 billion in the second quarter – $47 billion more than over the same period last year, according to data published by the US treasury on Friday. China's retaliatory tariffs on American imports, the most sustained and significant of any country, have not had the same effect, with overall income from custom duties only 1.9 per cent higher in May 2025 than the year before. READ MORE Combined with limited retaliation from Canada, which has yet to release second-quarter customs data, the duties imposed on American exports worldwide represent a tiny fraction of the US revenue during the same period. Some other US trading partners decided against responding in kind while negotiating with Mr Trump to avoid even higher threatened tariffs. The European Union , the world's biggest trading bloc, has planned counter-tariffs but has repeatedly deferred implementation, now linking them to Trump's August 1st deadline for talks. The cost of Mr Trump's tariffs are also not falling solely on American consumers, supply chain experts say, as international brands look to spread the impact of cost increases around the globe to minimise the impact on the US market. Simon Geale, executive vice-president at Proxima, a supply chain consultancy owned by Bain & Company, said big brands such as Apple, Adidas and Mercedes would look to mitigate the impact of price increases. 'Global brands can try and swallow some of the tariff cost through smart sourcing and cost savings but the majority will have to be distributed across other markets, because US consumers might swallow a 5 per cent increase, but not 20 or even 40,' Mr Geale said. Despite US tariffs hitting levels not seen since the 1930s, the timidity of the global response to Mr Trump has forestalled a retaliatory spiral of the kind that decimated global trade between the first and second world wars. Economists said the US's dominant position as the world's largest consumer market, coupled with Mr Trump's threats to redouble tariffs on states that defy him, meant that for most countries the decision to 'chicken out' was not cowardice, but economic common sense. Modelling by Capital Economics, a consultancy, found that a high-escalation trade war where the average reciprocal tariff rate reached 24 per cent would cause a 1.3 per cent hit to world GDP over two years, compared with 0.3 per cent in a base case it remained at 10 per cent. 'Unlike the 1930s when countries had more balanced trading relationships, today's world features a hub-and-spoke system with the US at the centre,' said Marta Bengoa, professor of international economics at City University of New York. 'That makes retaliation economically less desirable for most countries, even when it might be politically satisfying.' Alexander Klein, professor of economic history at Sussex University, added that short-term considerations – reducing exposure to tariffs and minimising the risk of inflation – were driving most negotiations with Mr Trump, which gave the White House the upper hand. 'I'd like to think leaders were learning the lessons of history, but I fear that's optimistic. More likely, the EU, Canada and many other governments fear the hit to global supply linkages and inflation from escalation,' he said. 'Trump cares less about that, so is taking advantage.' The US's largest trading partner Mexico did not retaliate after being hit with 25 per cent tariffs in March on exports not covered by the US-Mexico-Canada Agreement. From the beginning of her talks with Mr Trump, President Claudia Sheinbaum said she preferred a deal. The failure of the world to unite and collectively face down Mr Trump's threats has also left the US president more space to pick off individual states. He threatened a 50 per cent tariff on Brazil last week, citing largely political justifications. 'Trump has made it clear that he is prepared to raise tariffs further in the face of retaliation,' said Prof Bengoa of City University of New York. 'Many countries learned from the 2018-19 trade war that retaliation often leads to counter-retaliation rather than negotiated solutions.' Even within unified blocs such as the EU, the competing interests of individual member states, combined with wider fears over whether a confrontation with Mr Trump could undermine US security guarantees to Europe, have bred intense caution. Mr Trump's decision to threaten to increase tariffs to 30 per cent did not provoke a big reaction in Brussels, in part because senior US officials, including treasury secretary Scott Bessent , reached out behind the scenes to counsel caution, according to insiders. An EU official familiar with the talks added that negotiations were not taking place in isolation, at a time when Europe was looking for continued US backing for Ukraine. 'They affect the whole spectrum of US relations including those regarding security,' they said. As a result, unlike China which matched Mr Trump tariff for tariff in April, the EU has repeatedly delayed implementing its packages of retaliatory measures as it seeks to leave space to cut a deal with Mr Trump in advance of August 1st. When the European Commission published its latest list of potential retaliatory targets on €72 billion of goods on Tuesday – including Boeing aircraft, cars and bourbon – it put no specific tariff rates against individual products, in an apparent attempt not to rile Mr Trump further. Even Canada and China have been wary of antagonising Mr Trump despite being the only two countries to impose retaliatory tariffs. US tariffs on China escalated to 145 per cent by mid-April, causing Chinese exports to the US to plummet by a third in May. Both sides quickly stepped back, agreeing a 90-day pause in Geneva in May, cutting the rate down to 30 per cent. In February and March Canada imposed nearly C$155 billion in retaliatory tariffs, including on steel and auto parts. In recent weeks though, it has retreated in the face of US pressure despite election promises by Canadian premier Mark Carney to confront Mr Trump. With US trade accounting for 20 per cent of Canadian GDP – compared with 2 per cent for the US – Mr Carney has calibrated his responses. He ditched a digital services tax under US pressure and did not match Mr Trump's decision last month to double steel tariffs to 50 per cent. 'Carney's 'elbows up' rhetoric worked during the election campaign, but we can't be confrontational with the US,' said Dan Nowlan, an adviser to former Conservative Canadian premier Stephen Harper. 'It's now a much more realist approach.' Diplomats say whether the world will eventually unite to confront Mr Trump will depend in part on where tariff levels settle around the August 1st deadline. Trade commissioner Maros Sefcovic said this week that a 30 per cent tariff on EU exports would leave the bloc with nothing to lose since transatlantic trade would be 'almost impossible'. He added the EU was talking with 'like-minded' trading partners about potential joint measures. Longer term, the failure to retaliate would also give US companies a relatively free pass into global supply chains while EU and Asian manufacturers still faced high tariffs into the US, said Creon Butler, head of global economy at Chatham House. 'The calculation is short term versus long term,' he said. 'It makes sense not to retaliate in the short term, but long term, there's a calculation for other countries over the extent to which we are going to fight for global supply chains outside the US.' – Copyright The Financial Times Limited 2025
France 24
15-07-2025
- Business
- France 24
China's economy grows 5.2% on trade war truce
The figures offer a rare bit of good news for the country's leadership as it fights a multi-front battle to kickstart growth -- a challenge made all the more difficult by Donald Trump's tariff war. But the knock-on effects of the trade turmoil abroad and persistent sluggish consumption mean the economy could slump in the second half of year, analysts warned. The US president has imposed tolls on China and most other major trading partners since returning to office in January, threatening Beijing's exports just as it becomes more reliant on them to stimulate economic activity. The two superpowers have sought to de-escalate their row after reaching a framework for a deal at talks in London last month, but observers warn of lingering uncertainty. On Tuesday, Beijing's National Bureau of Statistics (NBS) said the Chinese economy grew 5.2 percent in April-June, matching a prediction by an AFP survey of analysts and topping an official growth goal for the year set by the government. But it marked a slowdown from the 5.4 percent seen in the first quarter, which was boosted by exporters rushing to shift goods ahead of swingeing US tariffs kicking in. "The national economy withstood pressure and made steady improvement despite challenges," NBS deputy director Sheng Laiyun told a news conference. "Production and demand grew steadily, employment was generally stable, household income continued to increase, new growth drivers witnessed robust development, and high-quality development made new strides," he said. Markets were mixed in response -- after a strong start to the day, Hong Kong pared an early rally while Shanghai dipped into negative territory. Elsewhere, Tokyo, Sydney, Singapore and Taipei, but Seoul, Wellington and Manila retreated. "The figures probably still overstate the strength of growth," Zichun Huang, China Economist at Capital Economics, said in a note. "With exports set to slow and the tailwind from fiscal support on course to fade, growth is likely to slow further during the second half of this year," Huang added. Retail sales rose 4.8 percent on-year, below a forecast in a Bloomberg survey of economists, suggesting efforts to kickstart consumption have fallen flat. The weak readings come even as Beijing tries to shift towards a growth model propelled more by domestic demand than the traditional key drivers of infrastructure investment, manufacturing and exports. Factory output meanwhile gained 6.8 percent, higher than the estimate -- reflecting continued high demand for Chinese exports that has boosted growth. 'More deflation' But analysts warn that strong exports could be driving deflationary pressures and further dampening already sluggish consumer demand. "Recent efforts to boost spending, such as the broadening of the consumer goods trade-in scheme earlier this year, did temporarily lift retail sales," said Sarah Tan, an economist at Moody's Analytics. "However, this support proved unsustainable, with funding reportedly drying up in several provinces. The scheme's limitations highlight the need for policymakers to address the deeper structural challenges behind consumer caution." Data last week showed consumer prices edged up in June, barely snapping a four-month deflationary dip, but factory gate prices dropped at their fastest clip in nearly two years. "The economy posted a solid first half, supported by resilient exports, though this momentum is contributing to deepening deflationary trends," Louise Loo, Head of Asia Economics at Oxford Economics, said in a note. "The cost of strong exports is more deflation," she said. Disagreements also persist between Beijing and Washington, despite the framework agreement reached last month. Trump upped the ante on Monday, warning Russia's trading partners that he will impose "very severe" tariffs reaching 100 percent if Moscow fails to end its war on Ukraine within 50 days. Western nations have repeatedly urged China -- a key commercial ally of Russia -- to wield its influence and get President Vladimir Putin to stop his three-year-old war with Ukraine. "The economic outlook for the rest of the year remains challenging," Capital Economics' Huang said. "With tariffs set to remain high, fiscal ammunition being depleted and structural headwinds persisting, growth is likely to slow further over the second half," she said.
