Trumps Trade War With India

(THIS ARTICLE IS COURTESY OF THE HINDUSTAN TIMES OF INDIA)

 

No official confirmation from US on H-1B cap for Indians: Centre

Trade tensions between the two sides have increased in recent weeks, with India imposing higher tariffs on some American goods on June 16 after the US withdrew export benefits under GPS programme.

WORLD Updated: Jun 20, 2019 23:58 IST

Rezaul H Laskar
Rezaul H Laskar
Hindustan Times, New Delhi
india-US,India-US trade,H-1B
Asked about the H-1B visa issue at a news briefing on Thursday, external affairs ministry spokesperson Raveesh Kumar said, “We have not heard anything officially from the US government on this matter. (SONU MEHTA/HT PHOTO)

There are no immediate plans to impose caps on H-1B work visas in retaliation for New Delhi’s data localisation plans though India and the US will have to contend with a full plate of trade-related issues during secretary of state Mike Pompeo’s visit next week, people familiar with developments said.

Trade tensions between the two sides have increased in recent weeks, with India imposing higher tariffs on some American goods on June 16 after the US withdrew export benefits under the Generalised System of Preferences (GSP) programme. The US has opposed India’s data storage plans that could hit firms such as Wal-Mart and Amazon.

“We are not aware of such plans,” a person familiar with developments said in the wake of a Reuters report that the US is considering a 15% cap on H-1B visas for countries that force foreign companies to store data locally. India is the largest beneficiary of the programme, with about 70% of the 85,000 H-1B visas issued each year going to Indians.

Asked about the H-1B visa issue at a regular news briefing on Thursday, external affairs ministry spokesperson Raveesh Kumar said, “We have not heard anything officially from the US government on this matter.

“We remain engaged with the US administration…and we have emphasised time and again at all our high-level interactions the contributions of Indian skilled professionals to the growth and development of the US economy.”

Kumar said consultations are underway within the Indian government and between the government and industry on data localisation or the storage of private data of users by foreign firms. The use of such data will have to be balanced with “national priorities and sensitivities,” he said.

“India’s position is in line with global best practices. We will remain engaged with the US on this matter and see how we can dispel any misconceptions on data localisation which they might have,” he added.

The Indian side is looking to Pompeo’s visit during June 25-27 – the first high-level engagement with the US since the general elections – as an opportunity to clear the air on differences over trade-related issues, which are in marked contrast to the robust cooperation on strategic security and defence issues.

Kumar said Pompeo’s visit will be “an important opportunity for both sides to explore ways to further strengthen the India-US strategic partnership and continue the high-level engagement on matters of mutual interest”.

Besides holding talks with his Indian counterpart S Jaishankar, Pompeo will meet Prime Minister Narendra Modi and National Security Adviser Ajit Doval on June 26, the main working day of his visit.

The external affairs ministry sought to play down trade-related differences, with Kumar saying, “In a relationship that is as diverse and as deep as the one we have with the US, that there will be certain issues which will be on the table…The overall direction of the relationship remains very positive.”

First Published: Jun 20, 2019 23:57 IST

China: US risks losing rare-earth supply in trade war

(THIS ARTICLE IS COURTESY OF THE SHANGHAI CHINA NEWS AGENCY ‘SHINE’)

 

US risks losing rare-earth supply in trade war

Xinhua

Waging a trade war against China, the United States risks losing the supply of materials that are vital to sustaining its technological strength.

China produces a majority of the world’s rare earths, chemical elements that have magnetic and luminescent properties and are used in a range of consumer products and electronics.

While rarely heard, the rare-earth elements are the materials that help light up your smartphone, make X-rays possible and ensure the safe use of nuclear reactors.

As the world’s biggest supplier of such materials, China has always been upholding the principles of openness, coordination and sharing in developing its rare-earth industry.

While meeting domestic demands is a priority, China is willing to try its best to satisfy global demand for rare earths as long as they are used for legitimate purposes.

“We are happy to see that the rare-earth resources and related materials can be used in making all kinds of advanced products that help better satisfy the demand for a good life of people from around the world,” said an official with the National Development and Reform Commission.

However, if anyone wants to use imported rare earths against China, the Chinese people will not agree.

By making unilateral moves to contain technological development of other countries, the United States seems to have overlooked one fact: The international supply chain is so intertwined that no economy could thrive on its own.

According to the US Geological Survey, from 2014 to 2017 the United States imported 80 percent of its rare-earth compounds and metals from China.

Along with the technological revolution and industrial evolution, rare earths are expected to be applied in more areas, and their strategic value will become more prominent, said the official.

China has reiterated its stand in promoting multilateralism and tried to avoid a trade war that hurts public interests.

But if necessary, China has plenty of cards to play.

Lost jobs, shrinking growth, and rotting crops-Trump’s trade war is hurting America

(THIS ARTICLE IS COURTESY OF THE BUSINESS INSIDER)

 

Lost jobs, shrinking growth, and rotting crops — here are the ways Trump’s trade war is hurting America

Trump MAGA hat
President Donald Trump.
 Jae C. Hong/AP Images
  • Eight months on from the opening salvos of President Donald Trump’s trade war, and the real-world impacts are starting to be felt across the globe.
  • Business Insider took a look at some of the companies and industries blaming a downturn on the president’s trade policy.
  • The world’s largest shipping company, American farmers, and small manufacturers are among those that have explicitly blamed tariffs for issues in their businesses.

Eight months on from the opening salvos of President Donald Trump’s trade war, and the real-world impacts are starting to be felt across the globe.

The US, which the trade war was ostensibly launched to protect, looks as if it is likely to be the worst affected, with some forecasters suggesting that as much as 1 percentage point could be knocked off economic growth in the coming years.

Read more: Volvo’s $30 billion IPO is officially off, and Trump’s trade war is to blame

On a smaller scale, companies and whole industries are already starting to feel the pinch from the US tariffs, which have raised the price of sending a whole range of goods to the US, increasing costs for the very companies they were designed to protect.

Business Insider decided to take a look at some of the major businesses and industries that have blamed the president’s trade war for a negative impact on their situation.

Shrinking global trade, and hurting shipping companies at the same time

FILE PHOTO: FILE PHOTO: Empty Maersk shipping containers are seen stacked at Peel Ports container terminal in Liverpool, Britain, December 9, 2016. REUTERS/Phil Noble/File Photo
Empty Maersk shipping containers at Peel Ports container terminal in Liverpool.
Thomson Reuters

Maersk, the world’s largest shipping firm, has been particularly explicitabout the threats posed by the tit-for-tat tariffs between the US and China.

In its third-quarter results announcement earlier in November, the Danish giant said global trade was already feeling the effect.

Global container trade continued to lose momentum in the quarter. It has suffered “a much slower pace of growth” this year, rising by 4.2% compared with 5.8% over the same period in 2017, Maersk said.

Trade tariffs may end up stifling global container shipping by as much as 2% in the next two years. The company estimates that those tariffs make up about 2.6% of the global value of traded goods.

Maersk’s warning was not the first time the shipping giant had weighed in on the trade war. CEO Soren Skou said in August, before Trump hitswaths of consumer goods with levies, that the fallout from the tariffs “could easily end up being bigger in the US.”

Farmers forced to leave their crops to rot

FILE PHOTO: A bushel of soybeans are on display in the Monsanto research facility in Creve Coeur, Missouri, U.S., July 28, 2014. REUTERS/Tom Gannam/File Photo
A bushel of soybeans on display in the Monsanto research facility in Creve Coeur, Missouri.
Tom Gannam/Reuters

Perhaps one of the most striking consequences of the trade war is what is happening to some farmers in the US.

For many agricultural goods, particularly soybeans, China is the largest export market for US farmers. That’s changing thanks to Trump’s tariffs, with Chinese importers looking elsewhere for a cheaper supply.

China last year accounted for about 60% of US soybean exports, but such is the lack of demand this year that many farmers are being forced to abandon crops.

Farmers in some US states are being forced into plowing their crops under— effectively burying them under soil in fields — as there is not enough room to store them in storage facilities, and they are unable to sell their products thanks to Chinese tariffs, Reuters reported last week.

All grain depots and silos are almost full, meaning farmers have to find their own storage solutions or allow their crops to rot. Neither option is particularly palatable.

In Louisiana, as much as 15% of this year’s soybean crop has been plowed under or is too damaged to sell, according to data analyzed by Louisiana State University staff and cited by Reuters.

An industry Trump says he wants to help is suffering

tire builderShutterstock

Much of Trump’s reasoning behind the trade war is to reinvigorate the US manufacturing sector, which he said has been ground down by decades of cheaper production in Asia, particularly in China. Early signs, however, suggest the tariffs are doing the opposite and are actively hurting manufacturers.

Manufacturing activity in the US slowed to a six-month low in October,with industry figures citing future protectionism and widespread uncertainty as major reasons for the slowdown.

“For the consumer, the tariffs are for the most part still an abstract idea, but for manufacturers they are real, and a big problem,” Ian Shepherdson, the chief economist at Pantheon Macroeconomics, wrote at the start of November when data from the Institute for Supply Management showed just that.

The ISM, a trade group of purchasing executives, said its index of national factory activity dropped 2.1 percentage points to 57.7 in October from a month earlier. The decline was largely thanks to uncertainty related to tariffs, according to survey respondents.

“Mounting pressure due to pending tariffs,” observed one respondent in the ISM survey. “Bracing for delays in material from China — a rush of orders trying to race tariff implementation is flooding shipping and customs.”

Such a view is corroborated by analysis from the Swiss banking giant UBS, which argued that many new and smaller manufacturers could end up being forced into bankruptcy.

“Brand new firms notoriously have very thin margins and a lack of ability to pass on costs,” Seth Carpenter, UBS’ top US-focused economist, said earlier this month. “Small cost shocks tend to cause large disruptions to new firms. We see some of these new firms failing.”

Many small firms have blamed the trade war for layoffs this year.

For instance, Element Electronics, a TV manufacturer, says it plans to lay off 127 workers from its South Carolina factory as “a result of the new tariffs that were recently and unexpectedly imposed on many goods imported from China.”

One of America’s most iconic brands is slashing 14,000 jobs

general motorsBill Pugliano/Getty Images

General Motors on Monday announced plans to close plants in the US and ax about 14,000 jobs, having previously warned that Trump’s tariffs might force it to do so.

The automaker, which employs about 110,000 workers, said it planned to cut costs by shutting plants in Ohio, Michigan, and elsewhere in North America.

The company did not specifically mention tariffs, instead citing “changing market conditions and customer preferences” among its reasons, but earlier this year GM lowered its profit forecasts for 2018 amid higher steel and aluminum prices caused by new US tariffs. And in June, GM warned that trade tariffs could lead to job losses and lower wages, telling the Commerce Department that higher steel tariffs would affect competitiveness.

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