Latest news with #tradedeficit
Bloomberg
4 days ago
- Business
- Bloomberg
A Glass Plant Shows How US Can Revive Manufacturing
Rising imports of glass containers are just one sign of how the US lost its manufacturing culture. The value of glass-container imports has more than doubled to $1.7 billion in the last two decades from $660 million. The trade deficit for glass containers has tripled to $1.4 billion over the same period. Local manufacturers of glass containers should have advantages over imports from halfway around the world. The shape of empty bottles, jars and other glass recipients means the shipper is moving a lot of air along with the product. Glass is heavy and obviously breakable, requiring extra packing materials during transportation. Moreover, the raw materials are basic and readily found in the US: sand, limestone and sodium carbonate, more commonly known as soda ash. Blowing glass has been around for millennia, and the industry is often one of the original manufacturing activities of nations. In other words, it has deep local roots.
Free Malaysia Today
5 days ago
- Business
- Free Malaysia Today
Malaysia sees reducing the US's proposed tariff to 10% as a good outcome
The US ran a goods trade deficit with Malaysia that hit US$24.8 billion last year. (Web pic) KUALA LUMPUR : The US reducing its proposed tariffs on Malaysia to a 10% baseline would be seen as a positive move, investment, trade and industry minister Tengku Zafrul Aziz said, conceding that a previously hoped for levy of zero may not be possible. 'To be fair, and the US has also been public about this, the 10% is not negotiable — it seems to be the floor,' he said in an interview with Bloomberg TV today on the sidelines of a regional summit in Kuala Lumpur. 'So for us, anything that can go below 24%, or at least 10%, the minimum' levy proposed by President Donald Trump last month 'would be good for our industries and our exporters,' he said. Malaysia had previously been in talks with Washington on reducing the tariffs. In return, the Trump administration wants Malaysia to address trade imbalances, non-tariff barriers and safeguard US technology from being channelled to other parties and investments. Southeast Asian countries would be among the hardest hit by Trump's levies, with rates as high as 49%. Officials from several countries in the region are working on deals to avert the higher tariffs, which have been put on hold for 90 days. The US ran a goods trade deficit with Malaysia that hit US$24.8 billion last year, according to data from the office of the US trade representative. 'Malaysian negotiators are set to return to the table next week,' Tengku Zafrul said. 'What's important for us is to try and come to a win-win solution,' he said, adding the US is Malaysia's largest export market and its largest investor. Southeast Asian leaders began two days of talks from yesterday as they sought to deepen ties with China and Gulf nations as well as mitigate the fallout from any tariffs. Malaysia, for its part, launched negotiations for a free trade agreement with the Gulf Cooperation Council. At the same time, Malaysia is imposing stricter rules to address the issue of possible transhipment of sensitive materials through its entry and exit points to countries barred from receiving the goods. The investment, trade and industry ministry announced this month that it will be the sole issuer of all non-preferential certificates of origin for shipment to the US effective May 6. Trump officials this year pressured Malaysian authorities to crack down on what Washington said was semiconductor transhipment to China. 'The process so far has been quite smooth,' Tengku Zafrul said in the interview, adding the issue would not impact trade to Malaysia. 'We have increased the capacity and resources to ensure that we do not have bottlenecks for the exporters to export to the US,' he added.
Globe and Mail
5 days ago
- Business
- Globe and Mail
The loonie's free-floating exchange rate should soften the blow of Trumpian trade chaos
Drowned out by the din from Donald Trump's tariff war is a second front in the president's obsession with eliminating his country's trade deficit: the U.S. dollar. Some of the administration's advisers want to devalue the greenback to bring manufacturing back to the U.S. Others want to reduce the dollar's role as the world's reserve currency. According to the IMF, the greenback accounts for almost 60% of all foreign currency reserves held by international central banks and other financial institutions. (A Belgian-American economist named Robert Triffin predicted this phenomenon in the 1960s, when he theorized that a country whose currency is used as a global reserve tends to have systemic trade deficits.) Regardless of whether the logic behind Trump's tariff-plus-dollar-devaluation strategy, dubbed the 'Mar-a-Lago Accord,' is economically sound, the question for Canadian policy makers is this: What are the implications for the loonie? After all, for a country that still depends on U.S. exports and a low Canadian dollar to power international demand for our goods, the Mar-a-Lago Accord poses what seems like an existential threat to the loonie, that (undeserved) butt of countless Canadian jokes featuring 'Monopoly money' in the punchline. For years, the Bank of Canada's approach has been to let the exchange rate float so it serves as a shock absorber against all manner of body blows, from roiling commodity prices to, well, trade wars. How does that work? Say next year's FIFA World Cup creates a surge of a million visitors to Toronto, all of whom buy Canadian dollars to spend here. This demand for Canadian dollars increases the loonie's value. Here's the shock-absorber part: The higher dollar will dampen that tourism to bring demand more in line with supply. 'Whenever you have a flexible exchange rate, it smooths the economy, so the economy is much more stable than otherwise would be the case,' says Walid Hejazi, a professor of economic analysis and policy at the University of Toronto's Rotman School of Management. Consequently, Canada's foreign currency reserves—a tool that some countries use to intervene in global markets to defend the value of their currency—tend to be low. Currently, our reserves stand at about US$126 billion, or roughly 5% of GDP, compared to an average of about 13% for other advanced economies. Heck, we don't even have a stash of gold bars. 'In contrast to some other central banks, the Bank of Canada doesn't hold a large war chest of reserves to keep the Canadian dollar from fluctuating against the U.S. dollar,' says Timothy Lane, a visiting professor in the Max Bell School of Public Policy at McGill University and a former Bank of Canada deputy governor. In fact, Canada hasn't intervened to stabilize the Canadian dollar for more than a quarter-century—neither during the 2008 credit crisis nor in the early days of the COVID-19 pandemic. Even now, with Trump's perverse threat to kneecap our economy to eliminate a trade deficit caused almost entirely by the inexpensive Alberta crude we ship to refineries in Illinois, the Bank of Canada has kept its foreign-reserve powder dry. 'The effect of the tariffs,' says Lane, 'is probably largely going to make our products less competitive, and some of that is going to be counteracted by the effect of a weaker Canadian dollar.' Hejazi says the Bank of Canada does have options. It could, for example, fix the exchange rate to the U.S. dollar—a move that would likely be politically untenable and, more to the point, relinquish control. He points to the BoC's spring interest rate cut, which contrasted with the U.S. Federal Reserve's unpopular decision to stand firm. 'If you have a fixed exchange rate, you lose flexibility,' Hejazi says. 'That would make us even more vulnerable to people like Donald Trump.' Some central banks take a Goldilocks approach, intervening in currency markets to manage their exchange rates within a desired band. For example, during the Obama years, China faced intense criticism about the artificially low value of the renminbi (a.k.a. the yuan) and allegations of currency manipulation. Chinese central bankers eventually responded by allowing the renminbi to appreciate, meaning more imports, but no more than 5% per year. 'What they were trying to do,' Hejazi notes, 'was get their businesses to adjust to this new reality.' With a central banker as prime minister, it seems unlikely that Canada will depart from an approach that has worked well (including when Mark Carney was head of the BoC). Yet Canadian policy makers have to contend with not just a new era of extreme uncertainty, but an administration that sends out wildly contradictory signals. Trump wants to vanquish the U.S. trade deficit, Lane notes, but is not prepared to allow the U.S. dollar to be dislodged from its prestigious role as the world's default currency. 'On the one hand, they want the U.S. to remain the dominant world currency,' he says. 'On the other hand, the logic of being the dominant world currency is that other people have to want to hold it, and for other people to be able to hold it, they have to get it. And the way they get it is by selling stuff to the U.S. and getting paid for it in U.S. dollars.' Indeed, at an IMF/World Bank conference held in April, U.S. Treasury Secretary Scott Bessent—who seems to have become the meat in Donald Trump's sandwich—was asked point blank whether the dollar's pre-eminent status was a privilege or a burden. 'I actually am not sure that anyone else wants it,' Bessent reportedly said, according to The New York Times. The Financial Times cast the question more starkly: 'Can the dollar remain king of currencies?' Hejazi stresses that while a floating loonie provides a necessary cushion against Trumpian chaos, the policy is not, in and of itself, sufficient. Like many other observers, he argues that the Canadian government needs to get serious about diversifying our international trade and bolstering private-sector productivity after decades of under-investment. He recently completed a paper, to be published later this year in Canadian Public Policy, showing that during the run-up of the Canadian dollar in the early to mid-2000s, the firms that prospered had invested in R&D to create more innovative and distinctive goods that still found offshore customers, despite the high dollar. There's a curious footnote to all the psychodrama about the U.S. dollar in the Trump era. Over the past several years, the Canadian dollar has quietly become more widely held in international currency reserves. These days, according to the IMF, it's sixth in terms of the size of all foreign reserve holdings, after the U.S. dollar, the euro, the yen and the pound, but ahead of the renminbi—despite the fact that China's economy is many times larger than ours. 'We're not a large economy,' Lane points out, 'but we still have some features that make for a good reserve asset. We have a pretty open financial system and reasonably liquid financial markets. We have the rule of law. We have a pretty stable political environment. We have a fairly predictable regulatory framework.' In short, in a world that's watching aghast as the U.S. scores one own-goal after another, our free-floating loonie looks a bit more like the safe currency harbour that the greenback was for all these decades. Maybe it's time to pack up the Monopoly money jokes, once and for all. Your time is valuable. 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Zawya
23-05-2025
- Business
- Zawya
Jordan: National exports rise 11.6% in Q1 2025, value $3bln
AMMAN — Jordan's total exports increased by 11.6 per cent during the first quarter of 2025 compared with the same period last year, driven by an 11.7 per cent increase in national exports and a 10.4 per cent rise in re-exports, according to figures released by the Department of Statistics (DoS). The DoS monthly report on foreign trade also highlighted a 6.6 per cent rise in imports, which in turn contributed to a 2.2 per cent increase in the trade deficit during the first quarter of 2025 compared to the same period in 2024. Total exports during this period reached JD 2.306 billion, with national exports amounting to JD 2.093 billion and re-exports totalling JD 213 million, while imports stood at JD 4.679 billion for the same period. The trade deficit, defined as the gap between the value of total exports and imports, amounted to JD 2.373 billion in the first quarter of 2025, up from JD 2.323 billion during the corresponding period of 2024. In March 2025 alone, total exports amounted to JD 856 million, including JD 784 million in national exports and JD 72 million in re-exports, while Imports valued at JD 1.614 billion, resulting in a trade deficit of JD 758 million for March 2025. These figures reflect a notable improvement, with total exports increasing by 16.0 per cent compared to March 2024, and national exports rising by 18.4 per cent. Imports also grew by 4.2 per cent, while re-exports declined by 5.3 per cent, leading to a 6.5 per cent decrease in the trade deficit.
Zawya
23-05-2025
- Business
- Zawya
Jordan's oil bill drops 6.4% in Q1 2025
AMMAN — The Kingdom's oil bill declined by 6.4 per cent in the first quarter of 2025, according to foreign trade data released by the Department of Statistics (DoS) on Thursday. The report, cited by Al Mamlaka TV, showed that the value of the Kingdom's imports of crude oil, petroleum products and mineral oils reached JD770 million during the first quarter of this year, down from JD821 million in the same period of 2024. The figures showed that national exports rose by 11.7 per cent and re-exports by 10.4 per cent, resulting in overall export growth of 11.6 per cent compared to the first quarter of last year. The DoS' monthly foreign trade report noted that this export growth was accompanied by a 6.6 per cent increase in imports, which led to a 2.2 per cent rise in the trade deficit in Q1 2025 compared to the same period in 2024. Total exports during the first three months of the year amounted to JD2.306 billion, including JD2.093 billion in national exports and JD213 million in re-exports. Imports reached JD4.679 billion for the same period. Jordan's trade deficit, the difference between total exports and imports, increased to JD2.373 billion in Q1 2025, up from JD2.323 billion in the same period of 2024. © Copyright The Jordan Times. All rights reserved. Provided by SyndiGate Media Inc. (
