Trade war on 'hold', but tariffs will be back if China breaks promises: US

The Trump administration won’t impose tariffs on Chinese products for now, after the two nations made progress on trade issues during two days of talks, Treasury Secretary Steven Mnuchin said.

“We’re putting the trade war on hold. So right now, we have agreed to put the tariffs on hold while we try to execute the framework,” Mnuchin said on “Fox News Sunday.”

President Donald Trump has threatened to impose tariffs on as much as $150 billion in Chinese imports to punish Beijing for allegedly violating American intellectual property and unfair trade practices. China vowed to retaliate with tariffs on everything from soybeans to airplanes.

Mnuchin’s remarks will be a relief to investors, who had feared the world’s two biggest economies were on the brink of an all-out trade conflict. The International Monetary Fund has warned that a global trade war would undermine the broadest global upswing in years.

News digest: Exports rise 30%, Adani to build highways, and more

Exports jump 30%, trade deficit high at $13.8 bn

The GST Council's efforts to resolve exporters' woes on refunds seem to have started yielding results. Exports grew 30.55 per cent in November, a month after it contracted 1.1 per cent, also due to the low base effect and rising petroleum prices. In fact, petroleum products, along with engineering goods, gems and jewellery, and chemicals, drove nearly 80 per cent of the rise in merchandise exports. Read more


Govt okays sops for leather sector, waives fee for small digital payments

The Cabinet on Friday cleared a Rs 2,600-crore proposal to boost job creation in the leather industry, lowered the merchant discount rate (MDR) on transactions up to Rs 2,000 through debit cards, BHIM UPI or Aadhaar-enabled payment systems to promote digital transactions, and approved a series of Bills, including one amending the Specific Relief Act to smoothen enforcement of contracts. Read more

Growth slowdown bottoming out, says RBI governor

While expectations on price rise remain stable for the moment, “considerable caution and vigilance is warranted on the inflation front” but the slowing in growth could be over, said Reserve Bank of India (RBI) Governor Urjit Patel. Read more

Adani group to foray into highway construction sector

The Adani group, which has a presence in the power, coal and maritime sectors, would soon foray into the highway construction sector. Read more
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Catalonia, Spain and the economic consequences of a split

The prospect of Catalonia seceding from Spain has never looked closer. Following a messy referendum vote on the matter (which the Spanish government refused to recognise but sent police in to prevent from taking place) and a series of protests, there seems to be a real possibility of a split taking place. But what might the economic consequences be?

In terms of size and population, Catalonia is comparable to several European countries, such as Switzerland. Although it has 16% of the Spanish population, it generates 19% of Spain’s GDP and 25% of its exports. Its GDP per person is currently 14% higher than the EU average (but slightly below that of other regions of Spain such as the Madrid region, the Basque Country and Navarra). Meanwhile, the rest of Spain has a GDP per person of about 10%-15% below the EU average. Unemployment is also lower in Catalonia than in the rest of Spain, and similar to that of the region of Madrid.

This means that Catalonia, as well as the new Spanish state that emerges from a split, could be perfectly viable countries on their own. There would, of course, be economic consequences for both following a split – but this may be worse in the short-term than the long-term.
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EU ministers approve new sanctions to punish North Korea

The European Union mposed fresh sanctions on North Korea today as part of international efforts to punish the pariah regime for its nuclear and ballistic weapons programmes.

Foreign ministers meeting in Luxembourg signed off a new package of measures including a ban on investments in North Korea and on EU exports of oil to Pyongyang.

They also tightened the restrictions on North Korean workers in the EU to try to stop money being sent home that could be used to fund the disputed weapons programmes.

The EU said the new steps were taken in view of the "persistent threat to international peace and stability" posed by Kim Jong-Un's regime.

The North carried out its sixth nuclear test -- and most powerful to date -- on September 3, sparking international outrage and a fresh round of sanctions.

More people and entities associated with Kim Jong-Un's regime have been blacklisted and the ceiling for payments that can be made to North Korea has been cut from 15,000 euros to 5,000 euros.

A total ban on EU investment in North Korea is now in force, along with a complete halt to sales of crude oil and refined petroleum products.

As part of efforts to ensure sanctions are effective, EU members will instruct their embassies in countries seen as a risk of evading North Korean sanctions to deliver formal warnings to comply.
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Opec calls on US shale oil producers to slash global supply, prop up prices

Opec's Secretary General Mohammed Barkindo on Tuesday called on US shale oil producers to help curtail global oil supply, warning extraordinary measures might be needed next year to sustain the rebalanced market in the medium to long term.

"We urge our friends, in the shale basins of North America to take this shared responsibility with all seriousness it deserves, as one of the key lessons learnt from the current unique supply-driven cycle," said Barkindo.
The comments by the Organisation of the Petroleum Exporting Countries official came during a speech delivered at a conference in New Delhi.

While Opec and some other producers, including Russia have cut supplies this year in order to prop up prices, US production has soared by almost 10 per cent this year, driven largely by shale drillers. Barkindo said he hoped that new producers, not just US shale drillers, would join production cuts.

On Monday, Saudi Arabia cut crude oil allocations for November by 560,000 barrels per day (bpd), in line with the kingdom's commitment to the Opec-led supply reduction pact.

Still, the top oil exporter plans to ship slightly above 7 million bpd next month, up from low levels during summer when domestic demand was at its peak.
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Foreigners scramble out of Iraqi Kurdistan ahead of retaliatory flight ban

Foreigners scrambled to leave Iraqi Kurdistan on Friday hours before the start of a flight ban imposed by Baghdad in retaliation for an independence referendum that has sent regional tensions soaring.

Iraq's central government has ordered a halt to all international flights to and from the autonomous region from 6:00 pm (local time) on Friday after Iraqi Kurds overwhelmingly voted for independence.

Washington has said it would be willing to facilitate talks between the Iraqi Kurdish authorities and Baghdad to calm escalating tensions over the 92-percent "yes" vote, as a top Shiite cleric called for solving the crisis in an Iraqi court.

Neighbouring Turkey and Iran also strongly opposed the vote, fearing it would inflame the separatist aspirations of their own sizable Kurdish population.

Ankara has threatened a series of measures including blocking crucial oil exports from the region via Turkey.

The Kurds have condemned the flight suspension as "collective punishment".

Today, Iraqi Kurdistan's transport ministry sent a letter to Baghdad asking to "open negotiations" on flights but was still awaiting a reply, a ministry spokesman said.
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UN Security Council unanimously steps up sanctions against North Korea

The UN Security Council has unanimously passed a US-drafted resolution that imposes strongest sanctions ever on North Korea, with measures targeting its last remaining major exports and reducing about 30 percent of oil provided to it.

"Today, we are saying the world will never accept a nuclear-armed North Korea. And today, the Security Council is saying that if the North Korean regime does not halt its nuclear program, we will act to stop it ourselves," the US Ambassador to the UN, Nikki Haley, said as the 15-membered UN body passed the resolution 2375 on North Korea.

"We are done trying to prod the regime to do the right thing. We are now acting to stop it from having the ability to continue doing the wrong thing," she said.

Haley said the international community is doing that by hitting North Korea's ability to fuel and fund its weapons program.

Noting that oil is the lifeblood of North Korea's effort to build and deliver a nuclear weapon, Haley said the resolution reduces almost 30 per cent of oil provided to North Korea by cutting off over 55 per cent of its gas, diesel, and heavy fuel oil.
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US asks UN to slap oil embargo on North Korea, freeze Kim Jong-Un's assets

The United States has asked the UN Security Council to slap an oil embargo on North Korea and freeze the assets of leader Kim Jong-Un, in response to Pyongyang's sixth and most powerful nuclear test.

A US-drafted resolution obtained by AFP also called for banning textile exports and ending payments made to North Korean labourers sent abroad, further depriving the regime of revenue to pursue its military programs.

The United States circulated the proposed resolution to the 14 other council members two days after Ambassador Nikki Haley called for the "strongest possible measures" to be imposed on North Korea.

Haley said on Monday that the United States was seeking a vote on the new sanctions on September 11.

The draft text takes aim directly at North Korea's leadership with a freeze on leader Kim's assets as well as those of the ruling Worker's Party of Korea and the government of North Korea.

Kim would be added to a UN sanctions blacklist that would subject him to a global travel ban, along with four other senior North Korean officials, according to the draft.
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Global planned exports at 18-month high; India's exports to improve: Report

Planned exports activity has hit an 18-month high globally, and India is among the countries expecting an increase in exports going forward, says a Grant Thornton report.

Countries with the greatest increases in planned exports in January-March quarter were Germany (up 13 percentage points to 35 per cent from 22 per cent), Greece (up from 26 per cent to 34 per cent).

India's planned exports touched 34 per cent from 28 per cent in the year-ago period, the figure for Netherlands stood at 30 per cent from 18 per cent and Ireland (from 18 per cent to 28 per cent).

A global survey by Grant Thornton of 2,500 businesses in 36 economies finds that while planned export activity has hit an 18-month high, challenges loom in balancing long-term trends and sudden policy shifts.

"For businesses thinking about their future export plans, assessing longer-term trends and sudden changes in government policy will be a balancing act, according to the data from our last quarterly Grant Thornton International Business Report (IBR)," said Paul Raleigh, Grant Thornton Global Leader- Growth and Advisory services.

"Export expectations are up in the G7 (up 3 percentage points) and the EU (up 2 percentage points)," Raleigh said adding "the strong US dollar puts imports at an advantage compared to local products".

Regarding the US and China major trade deals, Raleigh said "the impact on global trade flows could be sizeable. These are the world's two biggest economies and if the amount they sell to each other increases, we could see a positive knock-on effect through American and Chinese business supply chains".
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High exports, increase in investment boost German economy in 2017

BREAKING NEWS - The German economy defied increased political risks and picked up speed in the first quarter of 2017 as companies invested more, consumers and the state continued to spend and exports soared despite the threat of rising protectionism.

Europe's biggest economy grew by 0.6 per cent in the quarter from the quarter before, when it expanded 0.4 per cent, the Federal Statistics Office said on Friday.

That was the strongest quarterly growth rate since the first quarter of 2016, when the economy grew 0.7 per cent. It was in line with the consensus forecast in a Reuters poll.

The figures are the latest in a batch of solid data that are likely to help Chancellor Angela Merkel and her centre-right CDU/CSU bloc to burnish their economic credentials before a Sept. 24 federal election, when she will seek a fourth term.

Merkel's conservatives have already widened their lead in opinion polls over the main opposition Social Democrats (SPD), who are junior partners in the current coalition and want to replace Merkel with their chancellor candidate, Martin Schulz.

"A boom without end in Germany... and despite all the risks," Bankhaus Lampe analyst Alexander Krueger said, calling it a good sign that the upswing was based on a broad foundation.

"However, it should be noted that the economy would be humming less without the support of interest rates, which are too low for Germany," he added, in reference to the European Central Bank's ultra-loose monetary policy.

The Federal Statistics Office said investments in buildings and equipment grew strongly, partly due to a mild winter, while households and state authorities increased their expenditures slightly at the beginning of the year.
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Note ban impact: Cash situation to become normal in March, says Nomura

Latest News -The impact of demonetisation is still visible and cash levels in the economy are not expected to be sufficient until March, which may keep trade volumes depressed for the next two months, says a Nomura report.

As per data released by the commerce ministry, growth in exports in January was lower than 5.72 per cent in December.

The moderation in India's exports volume suggests that demonetisation may still be affecting cash-intensive export sectors, Nomura said in a research note, adding that "we do not interpret this as a sign of reduced competitiveness".

"We expect trade volumes to remain subdued for another month or two as we do( Read More)