SURAT: Union textile minister, Smriti Irani said that the fabrics required for armed forces will be manufactured in India as scientists, textile ministry, industry and armed forces are working together for the ‘dream’ project. Irani, who was in the city to inaugurate Yarn Expo-2018 organised by Southern Gujarat Chamber of Commerce and Industry (SGCCI) on Saturday, stated that the government has also appointed group of secretaries for transforming India as the textile machinery manufacturing hub. More than the inauguration, the event provided the platform to the industry leaders to felicitate Irani. They praised her for taking a lead role in resolving the input tax credit (ITC) issue for the powerloom weaving sector, pending since last year. Irani informed that the National Institute of Fashion Technology (NIFT) and SGCCI will work in conjunction on the design diversification project for the city’s textile sector. The design diversification will not only help the manufacturers to get more value for their fabrics, but it will also increase the export potential of the fabrics manufactured in Surat. Irani said, “It’s time to show to the world the true capacity and strength of Indian textile industry. The government has taken many proactive measures for the industry and now it’s time to work and prove that all our efforts in conjunction with the industry is going to pay off to the nation as a whole.” President of Reliance Industries Limited’s (RIL), polyester chain, RD Udeshi said, “Surat is the main hub for polyester yarn consumption. But, we need to scale up our production to compete with China. In China, a single shed has more than 2,000 powerloom machines, while in Surat we have a maximum of 100. Now, that the government has announced relief under GST, it’s time to ramp up our production.” SGCCI president, Hetal Mehta said, “This is first time that about 70 leading yarn manufacturers in the country is participating in the event. We will have about 7,000 buyers from across the country and 100 overseas buyers as well in the coming three days of the event.”
Source: Times News Network
The government is likely to hike import duty on about 300 textile products to boost domestic manufacturing and create employment opportunities, sources said. Foreign direct investment norms for the sector may also be relaxed. Products on which imports duties are expected to increase includes some fabrics, garments and man-made fibres. The duties could be enhanced to 20 per cent from the current level of about 5-10 per cent. According to government sources, the Finance Ministry may soon issue a notification in this regard. If the government decides to notify the duty hikes this week, then it would have to be first tabled in Parliament. Increase in duties would give an edge to domestic manufacturers as the imported products are relatively cheaper. Increase in manufacturing activity will help create jobs in the sector, which employs about 10.5 crore people. In July, the government doubled import duty on over 50 textile products -- including jackets, suits and carpets -- to 20 per cent, a move that is aimed at promoting domestic manufacturing. Through a notification, the Central Board of Indirect Taxes and Custom (CBIC) had hiked import duties as well as raised the ad-valorem rate of duty for certain items. The imported products which have become expensive include woven fabrics, dresses, trousers, suits and baby garments. According to trade experts, India would not be able to give any direct exports incentive to the textile sector, so there is a need to support the segment to encourage domestic manufacturing. Imports of textile yarn, fabric, made-up articles grew by 8.58 per cent to USD 168.64 million in June. However, exports of cotton yarn/fabrics/made-ups, handloom products grew by 24 per cent to USD 986.2 million. Man-made yarn/fabrics/made-ups exports grew 8.45 pc to USD 403.4 million. Exports of all textile readymade garments dipped by 12.3 per cent to USD 13.5 billion
Source: Economic Times
New Delhi: India should focus on new categories such as machinery, vehicles and transport parts for export to the US where it has a competitive advantage in the US-China trade war, according to a report. The report ‘New Export Opportunities for India in Trade with US and China’ by the Confederation of Indian Industry (CII), states that with the US imposing additional duty of 25 per cent on imports worth $34 billion from China, certain Indian products may become more competitive. Between 2012 and 2017, China’s exports to the US have moved up the value chain with accelerated growth in high-technology items such as telecommunications equipment, automotive and cell phones. The US has raised tariffs for 818 product lines for imports from China. Considering this, the report suggested that products such as intermediate parts for the defence and aerospace sector, vehicles, and auto parts and engineering goods have a higher export potential. The report suggests that the trade dialogue with the US should be strategised taking into account India’s competitive advantage in these products. FDIs from the US should be encouraged by boosting confidence of the US companies in India’s business climate. This might necessitate addressing their concerns regarding non-tariff barriers in India for better outcomes in the long term, the report stated.
Source: Financial Express
The textile industry has urged the Centre to push for negotiations with China to provide duty-free access to Indian cotton textiles. Sanjay Jain, chairman of the Confederation of Indian Textile Industry, said in a release that in 2017-2018, India exported textile goods worth $1,362 million to China. But imports from China were to the tune of $2,905 million, indicating a trade deficit of $1,543 million. Between 2010 and 2014, India was a net exporter of textile and apparel products to China. However, after that, India’s trade deficit with China was on the rise. Indian products attract 3.5% (yarn), 10% (fabric), and 14% (made-ups) duty in China, while Vietnam, Cambodia, Pakistan, and Indonesia enjoy duty-free access to the Chinese market. India’s cotton yarn exports to China have decreased 53% in the last five years, while Vietnam’s exports to China have increased 88%, he said. The Indian textile industry is sensitive to even small changes and if it had a level-playing field as its competitors, Indian exports to China could double, he added. Mr. Jain told The Hindu that China buys cotton fibre from India but prefers other countries for value added products, such as yarn and fabric. Even recently, when it cut import duty on several products, textiles were not included. “We do not need incentives (from the Government). FTAs and bilateral agreements will help exports. Refund of embedded taxes to exporters and trade agreements wherever possible are two policy changes that are needed to boost exports,” he said.
Source: The Hindu
A group of ministers will prepare a report after hearing all the problems of MSMEs including tax refunds, the council said in its 29th meeting in New Delhi. The Goods and Services Tax (GST) Council headed by Finance Minister Piyush Goyal approved setting up of a group of ministers (GoM) to tackle taxation related issues faced by micro, small and medium enterprises (MSMEs). It has also decided to incentivise digital transactions by giving 20 percent cashback on the tax paid to users of RuPay, and UPI platforms on a pilot basis. The GoM, headed by Minister of State (MoS) for Finance Shiv Pratap Shukla, is expected to submit its report in the next six weeks on tax issues faced by MSMEs. Delhi. Finance Minister Manish Sisodia, Assam FM Himanta Biswa Sarma, Bihar deputy Chief Minister Sushil Modi, among others, will be part of the panel. A law committee comprising bureaucrats from states and the Centre will be looking at law related issues that MSMEs are dealing with. Similarly, a fitment committee, comprising senior government officials will consider proposals related to rate cut. “All proposals will be reviewed by the ministerial panel in consultation with the law review committee and fitment committee," Goyal said. Punjab Finance Minister Manpreet Singh Badal said that the report will focus on enabling industries to be more competitive. It will try to find out the processes that are destabilising smaller players, he said and added that small companies have been bearing losses of up to 300 percent. In its 29th meeting held on August 4, the Council considered all aspects of GST, while focussing on laws, simplification of the policy, reducing compliance burden and technology-related issues affecting MSMEs. “There were concerns about MSME sector ever since GST was rolled out because in the earlier excise and service tax regime the businesses with (annual) turnover of more than Rs 1.5 crore were treated differently, while those of less than Rs 1.5 crore differently. There is big business who give more taxes, but then there are small businesses who are large in number, who gives employment. Both have to be given importance with this, MSMEs will get the required support,” said Manish Sisodia. The next GST Council meeting will be held on September 28 and 29 in Goa. West Bengal FM Amit Mitra, who was also present at the meeting said it is estimated that government had to bear revenue losses of Rs 43,000 crore during the April-June quarter. However, referring to the cut in GST on around 80 goods a senior official government said that rate cut may not happen for the time being as there are revenue concerns. "The view was that now GST Council should adopt RBI's terminology of a pause in rate cut," the official noted. Revenues from GST in April-June was at Rs 2.86 lakh crore, as compared to an estimate of Rs 3.36 lakh crore, according to monthly data released by the government.
Incentivising digital transactions
The Council approved incentives for digital payments, with a broader idea to promote a cashless economy. Payments made using instant real-time payment system Unified Payments Interface (UPI) and RuPay cards will get a cashback of 20 percent of the GST amount, Goyal said, adding the cashback will be capped at Rs 100. The pilot programme will be implemented by National Payments Corporation of India (NCPI) and can be introduced by any state that is willing to run it voluntarily. Tamil Nadu, Assam, Maharashtra and Bihar are some of the states that are keen on implementing the pilot project. The Centre and states will have to bear a loss of Rs 1,000 crore annually, towards giving sops for digital payments. “It remains to be seen how many states are interested in implementing the scheme and what is the monetary limit fixed on the benefit. Besides, the Banks and the Government will be required to put in place an appropriate software and infrastructure support to facilitate the cashback scheme,” said Abhishek A Rastogi, Partner, Khaitan.
Source: Money Control
Simplification of GST is an ongoing process and lesser tax slabs will emerge in the long term, Sanjeev Sanyal, Principal Economic Adviser, Union Finance Ministry, has said. According to him, there could be three major slabs which include a “low 5 per cent”, a 15 per cent slab covering most goods and services, and finally another with a rate of 25 per cent. Apart from these, there will be items included under a zero tax rate or exempted list, under GST.
Long-term possibility
“This is a tax structure that could be a possibility in the long term. I am not saying that this will happen tomorrow,” he said on the sidelines of an interactive session organised by the Bharat Chamber of Commerce. The current GST rate structure has four tax slabs – 5 per cent, 12 per cent, 18 per cent and 28 per cent. Then there is a list of exempted category goods and services (which have no tax on it). There is also a set of luxury goods and services that carry a cess over and above the 28 per cent tax rate.
Source: The Hindu
New Delhi: India has made a final plea for continuation of the generalized system of preferences (GSP) benefits currently under review before the US Trade Representative (USTR), arguing that the cheaper imports of intermediary products from India enable availability of cost-effective and price-competitive inputs to the US downstream industries and helps the US firms remain domestically and internationally competitive. The GSP programme allows duty-free entry of 1,937 products worth $5.6 billion from India into the US, benefitting exporters of textiles, engineering, gems and jewellery and chemical products. In its initial submission during the hearing, India had threatened to drag the US to the dispute settlement mechanism of the WTO, claiming withdrawal of the GSP benefits would be “discriminatory, arbitrary and detrimental” to its developmental needs. In its post-hearing submission, while answering the queries raised by the USTR GSP sub-committee and other US industry lobbies, India has maintained that GSP benefits are integral and catalytic in promoting the pace and sequence of domestic and external economic reforms in India. “It needs hardly be over-emphasized that the products on which India receive GSP benefits belong to sectors which employ several thousands of men and women, especially in rural areas through micro, small and medium enterprises. Furthermore, India’s GSP exports represent a minuscule part of the total imports of the United States and do not pose any threat or disruption to the US industry,” it said. Mint has reviewed a copy of India’s final submission before the USTR. While the US has been trying to leverage the GSP review to gain more market access in India, India has at least through the written submission, made it clear that the benefits should be “unconditional and not contingent upon reciprocal market access for goods, services or other emerging areas of trade.” However, India on Saturday deferred till 18 September tit-for-tat retaliatory tariffs against the 29 US products worth $235 million intended to counter a US move to unilaterally raise import duties on Indian steel and aluminium products. India’s move is seen as a conciliatory measure pending the GSP review and the upcoming “2+2” dialogue among their foreign and defence ministers on 6 September of the two countries. US supermarket major Walmart in its submission to the USTR has come out in support of continuation of GSP programme for India, holding that it provides significant benefits to Walmart customers and US suppliers by reducing costs. “We support the administration’s efforts to work with GSP countries to concretely address market access and other GSP eligibility concerns but caution against undermining or weakening the significant policy and development benefits embodied in the GSP programme. Revoking GSP-eligibility from GSP countries risks undermining US interests and benefits from GSP while jeopardizing the significant development opportunities GSP has created for poorer countries and workers around the world,” it added. The USTR in April announced that it is reviewing the GSP eligibility of India, along with Indonesia and Kazakhstan, after the US dairy industry and the US medical device industry requested a review of India’s GSP benefits, given India’s alleged trade barriers affecting US exports in these sectors. Total US imports under GSP in 2017 was $21.2 billion, of which India was the biggest beneficiary with $5.6 billion, followed by Thailand ($4.2 billion) and Brazil ($2.5 billion).
Source: Live Mint
The State government will consider establishing a permanent trade fair centre in Tirupur like the CODISSIA Trade Fair Complex in Coimbatore, said Minister for Animal Husbandry Udumalai K. Radhakrishnan here on Sunday. Inaugurating a three-day knit show, the Minister said that the knitwear industry and textile machinery companies were in need of a permanent centre to conduct exhibitions and trade fairs in Tirupur. He said the grievances of the textile industry will be taken to the notice of the Chief Minister and a textile policy will be brought out by the Government. A. Sakthivel, vice-president of the Apparel Export Promotion Council, said the garment industry faced slump in business. To give a boost, the Union Government has enhanced the export incentive package. Tirupur Exporters Association president Raja M. Shanmugam said that the exhibitions and trade fairs brought new businesses to industries in Tirupur.
Source: The Hindu
Trade skirmishes raise fears of a global currency war. A look at how it can affect India and other economies. Last week, Reserve Bank of India Governor Urjit Patel warned that trade wars among various countries may lead to a currency war. What does this expression mean, what leads to a currency war, and what are its implications on economies around the world, including India’s?
When did the world first hear of a currency war?
In the immediate aftermath of the financial crisis that started with the collapse of Lehman Brothers in the US in September 2008, fears of a global contagion followed. The biggest concern of countries then was to avert a sharp slide in their respective economic growth curves; decelerating growth means job losses, and slow growth means no new jobs. In view of the enormity of the situation, then US President George W Bush announced the G20 (Group of 20) Summit, the first to be held, in Washington DC in November 2008. India, the 13th largest economy then, was a member of the G20, a grouping that represented almost four-fifths of the world economy. The single most important decision by the summit leaders in DC was to coordinate efforts and strive for a broad revival of the global economy. Developed countries — the US and members of the European Union — embarked on expansionary fiscal and monetary policies (spending more and keeping interest rates low). Worried about their individual growth prospects, some countries turned protectionist in due course by introducing non-tariff barriers, and also occasionally imposing higher duties on imports. A potent weapon wielded by many countries was to either devalue their currencies, or deliberately keep the value suppressed so that their exports remained cheaper and competitive in the world market. The US and key European countries adopted several measures to keep interest rates low and stoke demand. China, the fourth largest economy and a major global exporter even in 2008, deliberately kept the renminbi value low, and Japanese and South Korean central bankers stepped into the currency markets to keep their currencies low too. Then finance minister of Brazil (also a G20 member). Guido Mantega described such competitive lowering of currency values using monetary and exchange rate instruments as “international currency wars”.
Why talk about a currency war now?
Global trade skirmishes have intensified since March this year, when US President Donald Trump threatened to slap tariffs on Chinese goods. China refused to blink, and the war has only intensified in the past few months. The US tariffs on Chinese imports that are actually in effect are less than 10% of total $506 billion US imports of Chinese products. But the war may escalate given the shrill voices of the currently dominant power, the US, and the rising power, China. Higher tariffs make Chinese products more expensive, but a weakening of the yuan partly offsets the impact. In the last three months, the yuan has depreciated almost 8% vis-à-vis the US dollar. While this may be due to fundamental changes in the Chinese economy (slower growth), it has left Trump frustrated, leading him him to announce more measures. Similarly, a war between the US and Europe too has escalated after Trump imposed tariffs on European steel and aluminum in the beginning of June, and the EU retaliated three weeks later. Such protectionist measures (higher customs duties on EU steel and aluminum make these expensive in the US and protect domestic US producers) entail the risk of countries using various exchange rate and monetary policy instruments competitively to weaken or devalue their currencies. This is what RBI Governor Patel meant on August 1 when, after a meeting of the monetary policy committee, he said: “We are possibly at the beginning of a currency war.” Does India need to worry about this currency war? In the last 10 years, the Indian economy has grown rapidly, from being the 13th largest in 2008 to the sixth largest in 2018. It has integrated more and more with global markets. When world trade is robust and the global economy is on an upswing, India’s growth rate gets a booster. This happened during 2003-08 when the Indian economy grew almost in double digits. Rising crude oil prices (around $68-70 a barrel now), however, do not bode well for India. The country is a net importer of energy and higher prices will put pressure on key macro-economic variables such as fiscal deficit and current account deficit. There is also this fear of capital flight if the macroeconomic situation worsens. Flight of capital may not be restricted to institutions pulling out money from the markets. Indians have been remitting more and more money abroad over the last few years. In 2017-18, these outward remittances totalled $11.33 billion. Just a decade ago, it was just $1.58 billion. This will adversely impact currency, inflation and interest rates. In the calendar year 2018, the Indian rupee has already depreciated or weakened 6.77% against the dollar. Patel’s warning on increasing external risks and a currency war should be seen in the context of the global trade skirmishes that have intensified since March when Trump first threatened tariffs on Chinese goods. China has refused to blink and so has the European Union. Countries are looking inward, and have become more protectionist in trade. The US, and India as well, may be growing at a faster clip now. But fears of a global trade war loom large unless countries retreat from their current positions of remarkable brinkmanship. The current 25-basis-points increase in policy rate, that came quickly on the back of a similar hike in June, in part, addresses the problem of currency too. Higher interest rates and stable inflation make a country more attractive for foreign investment. This helps the rupee strengthen. An international currency war due to heightened tariff tensions can hurt the global economy, and in the process hurt India’s growth prospects too. This is worrisome for India, because it would curtail the central bank’s flexibility in use of instruments to address problems of high inflation, slowing growth and weakening rupee.
Source: Indian Express
Mumbai: Special Economic Zones, or SEZs, are losing their mojo as companies are heading elsewhere due to the “cumbersome documentation” and compliance requirements. Some players in SEZ locations have also raised doubts over the confidentiality of information being shared with authorities regarding their operations, vendors, sources of raw materials and human resource details, says a new report by research firm CBRE. “These cumbersome documentations include separating domestic and NFE (net foreign exchange) operations, along with the process to be adhered to while migration of employees from existing non-SEZ operations to new SEZ units,” said the CBRE report on SEZs. “This has resulted in a few long-term occupiers moving out of the existing SEZ spaces to non-SEZ developments after availing benefits in certain cases,” said Abhinav Joshi, Director – Research, CBRE India, who co-authored the report.
Sunset date
Both developers and occupiers get direct as well as indirect tax exemptions under the SEZ policy announced in 2000. But the approaching sunset date of March 31, 2020, when SEZ tax exemptions will end, is pulling units away from these zones. The Commerce Ministry has pitched for the continuation of tax incentives for units in SEZs, as well as the removal of Minimum Alternate Tax to boost shipments. However, there has been no decision on the extension of the sunset date so far. “We can expect some rationalisation in demand for the SEZ space if the sunset date is not extended, as occupiers would like to evaluate options in tech parks and commercial space as well. This would largely be from a business continuity perspective. “This might impact vacancy levels in SEZs, but mostly in those SEZs, which will get operational post 2019,” said Joshi.
Silver lining
However, a positive for SEZs is the availability of single-ownership, large-floor plates suitable for consolidation. This will continue to attract a select set of companies despite the sunset date, he added. Anshuman Magazine, Chairman, India and South East Asia, CBRE, said the market has shown good traction. “We are witnessing good demand in all areas, especially in the office-leasing space. Developers are showing interest in SEZs as there is a lot of ‘built-to-suit’ demand coming in. Going by the available statistics and trends, we believe SEZs will account for 25 per cent of total office space coming to India.” SEZs currently account for about 22 per cent of the total office stock in India across the seven leading cities. Bengaluru, Hyderabad, Delhi-NCR and Chennai house almost 80 per cent of the SEZs.
Source: Business Line
Keeping to its thrust on textiles & apparel sectors, the Odisha government plans to launch an exclusive policy on handicrafts at its ensuing ‘Make in Odisha’ showpiece conclave on November 11-15. The state government already has a textiles policy in place and the sector is listed as one of the six focus sectors in the Industrial Policy Resolution (IPR), 2015. A dedicated session on textile & apparel sector is scheduled on November 13 as per the tentative itinerary prepared for the conclave. The theme of the session will be centred on apparel and technical textiles. The speakers for the plenary session are set to be drawn from leading apparel manufacturers like Raymond Ltd, Welspun Group, Arvind Ltd, Aditya Birla Fashions & Retail Pvt Ltd, Trident Group and Amrit Exports Pvt Ltd. Federation of Indian Chambers of Commerce & Industry (Ficci), the industry partner for the investment summit will coordinate with the companies for inviting speakers for the seminar. Also, Ficci will contact different machinery manufacturing companies related to apparel and technical textiles. An international guest speaker is planned to be roped in either from Ikea or Bangladesh Apparel Association. The onus will be on Ficci to coordinate with the industries department and Industrial Policy & Investment Corporation of Odisha Ltd (Ipicol) for overall planning of the session. Ahead of the ‘Make in Odisha’ summit, the state government is planning to organise more roadshows at the domestic level. In collaboration with Ficci, a roadshow is planned to be held in Delhi towards the end of this month. Two more roadshows are set to be organised in Chennai and Bengaluru in September. Last month, a state delegation led by its industries minister Ananta Das staged overseas roadshows in Saudi Arabia, Italy and Germany. Companies across sectors like petrochemicals, textiles and aluminium downstream have dangled promise of virgin investments valued at around Rs 100 billion. Among others, Riyadh-based SABIC, a global leader in diversified chemicals, is keen to invest Rs 50 billion on a petrochemical project in Odisha's coast. Though the location is not firmed up yet, the company is eyeing Tata Steel owned Special Economic Zone (SEZ) in Gopalpur on south Odisha coast. SABIC where the Saudi Arabia government owns 70 per cent equity and the rest shares traded on the exchange, has operations spanning 50 countries. With innovation hubs in five key geographies, the company boasts of a workforce pool of over 35,000 employees worldwide. At the inaugural 'Make in Odisha' summit in December 2016, the state drew investment intents worth Rs 2.03 trillion. Investments rushed to the state across sectors with metals & mining being the highest grosser at Rs 970 billion. Nearly 60 per cent of the investments are in various stages of implementation or approval.
Source: Business Standard
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1368.56 |
USD/Ton |
0.54% |
8/5/2018 |
|
VSF |
2056.50 |
USD/Ton |
0.36% |
8/5/2018 |
|
ASF |
3117.68 |
USD/Ton |
0% |
8/5/2018 |
|
Polyester POY |
1488.58 |
USD/Ton |
1.19% |
8/5/2018 |
|
Nylon FDY |
3410.42 |
USD/Ton |
0% |
8/5/2018 |
|
40D Spandex |
5049.77 |
USD/Ton |
-1.43% |
8/5/2018 |
|
Nylon POY |
3220.14 |
USD/Ton |
0% |
8/5/2018 |
|
Acrylic Top 3D |
1690.57 |
USD/Ton |
1.32% |
8/5/2018 |
|
Polyester FDY |
3512.88 |
USD/Ton |
0% |
8/5/2018 |
|
Nylon DTY |
5525.47 |
USD/Ton |
0% |
8/5/2018 |
|
Viscose Long Filament |
1705.21 |
USD/Ton |
0.87% |
8/5/2018 |
|
Polyester DTY |
3088.41 |
USD/Ton |
0% |
8/5/2018 |
|
30S Spun Rayon Yarn |
2751.76 |
USD/Ton |
-0.53% |
8/5/2018 |
|
32S Polyester Yarn |
2129.68 |
USD/Ton |
0.69% |
8/5/2018 |
|
45S T/C Yarn |
2868.85 |
USD/Ton |
0% |
8/5/2018 |
|
40S Rayon Yarn |
2268.74 |
USD/Ton |
0% |
8/5/2018 |
|
T/R Yarn 65/35 32S |
2444.38 |
USD/Ton |
0% |
8/5/2018 |
|
45S Polyester Yarn |
2927.40 |
USD/Ton |
0% |
8/5/2018 |
|
T/C Yarn 65/35 32S |
2502.93 |
USD/Ton |
0% |
8/5/2018 |
|
10S Denim Fabric |
1.37 |
USD/Meter |
0% |
8/5/2018 |
|
32S Twill Fabric |
0.84 |
USD/Meter |
0% |
8/5/2018 |
|
40S Combed Poplin |
1.17 |
USD/Meter |
0% |
8/5/2018 |
|
30S Rayon Fabric |
0.65 |
USD/Meter |
-0.22% |
8/5/2018 |
|
45S T/C Fabric |
0.70 |
USD/Meter |
0% |
8/5/2018 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14637 USD dtd. 5/8/2018). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Higher prices. Disrupted supply chains. Wavering exports. Those are some of the ways some of Europe’s biggest companies have been affected by US President Donald Trump’s trade war, offering a preview of how tensions in global commerce could begin to ripple through the European economy. As companies such as BMW, Siemens and Volkswagen reported otherwise solid earnings last week, they warned that Trump’s aggressive stance on trade presented them with a host of new risks, which already could be acting as a drag on growth. The US President’s tariffs have not just raised the costs of materials such as steel, they also have diverted trade worldwide and warped the complex global supply systems that businesses rely on. In Europe, there are signs of strain, which along with risks ranging from Britain’s withdrawal from the European Union to the excessive debt loads of Italy and Greece, are piling pressure on the region’s economy.
Businesses apprehensive
Beyond the direct effect of Trump’s policies, surveys in both the US and Europe show that businesses are nervous about the fragile détente reached in late July between Trump and the region he had referred to, only a few weeks earlier, as a “foe.” Even though the White House declared a truce with Brussels last week, US tariffs on European steel and aluminium imports remain in effect. The Continent is also caught in the crossfire of a worsening trade dispute between the US and China. European companies could suffer collateral damage in that battle — BMW has already raised prices of SUVs exported to China from its factory in Spartanburg, South Carolina. The German automaker is passing on the added cost from tariffs that China imposed on US products in retaliation for Trump’s tariffs on Chinese goods. If the trade war continues, some companies may begin to move production to avoid paying the levies.
Slowdown
The eurozone economy is slowing down, and evidence is growing that the trade war — or anxiety about a trade war — is one of the reasons. The currency bloc grew 0.3 per cent in the second quarter of 2018, down from 0.4 per cent in the first quarter, Eurostat, the European statistics agency, said last Tuesday. The tariffs that Trump imposed on European steel and aluminium don’t amount to a lot of money, relatively speaking. They hit European exports worth about $8 billion annually, a substantial sum to be sure, but not enough to knock the economy off course. So far, corporate profits have not collapsed, but they are not growing very much either. Gauges of the mood among European businesses, however, show a clear negative trend, one that could have an outsize impact on the regional economy. And if Europe’s economy suffers, so will the US. Despite all the hostile rhetoric, the EU and US remain each other’s biggest trading partner. The damage from trade tensions would be much more substantial if Trump broke the ceasefire he reached in July with JeanClaude Juncker, President of the European Commission. Given Trump’s history of making nice with foreign leaders one day, then blasting them on Twitter the next, there is palpable nervousness about how long the truce will last.
Source : Press Reader
North Korea has violated a textile ban by exporting more than $100 million in goods between October 2017 and March 2018 to several countries including Sri Lanka, according to a confidential U.N. report seen by Reuters on Friday. Pyongyang also violated a textile ban by exporting more than $100 million in goods between October 2017 and March 2018 to China, Ghana, India, Mexico, Sri Lanka, Thailand, Turkey and Uruguay, the report said. It also said that North Korea has not stopped its nuclear and missile programs in violation of United Nations sanctions. The six-month report by independent experts monitoring the implementation of U.N. sanctions was submitted to the Security Council North Korea sanctions committee late on Friday. “(North Korea) has not stopped its nuclear and missile programs and continued to defy Security Council resolutions through a massive increase in illicit ship-to-ship transfers of petroleum products, as well as through transfers of coal at sea during 2018,” the experts wrote in the 149-page report. The North Korean mission to the United Nations did not respond to a request for comment on the report. The U.N report said North Korea is cooperating militarily with Syria and has been trying to sell weapons to Yemen’s Houthis. The report comes as Russia and China suggest the Security Council discuss easing sanctions after U.S. President Donald Trump and North Korean leader Kim Jong Un met for the first time in June and Kim pledged to work toward denuclearization. The United States and other council members have said there must be strict enforcement of sanctions until Pyongyang acts. The U.N. experts said illicit ship-to-ship transfers of petroleum products in international waters had “increased in scope, scale and sophistication.” They said a key North Korean technique was to turn off a ship’s tracking system, but that they were also physically disguising ships and using smaller vessels.
Source: Daily Mirror
Asad Umar has denied his country has a Chinese debt problem but admits a bailout package is the urgent need of the hour. Celebrations are rather muted for Asad Umar despite an imminent rise in political stature in Pakistan. The incoming finance minister of the country has said that Pakistan would need $12 billion in loans - at the very least - just to keep itself afloat.
Umar will have his task cut out.
Inheriting an economy in absolute shambles would be a massive challenge for Imran Khan and his cabinet ministers and all eyes would primarily be on what Umar does. The former head of Pakistan's Engro Corporation said a recent interview to Bloomberg that the loan amount urgently needed would be in the range of $10 billion and $12 billion. He went on to say that the country would need something extra from thereon to move away from the edge. "The decision needs to be taken in the next six weeks, the further you go forward the more difficult, the more expensive the options become," he is quoted as saying.
Pakistan's economy is indeed crumbling.
Rising imports and the volatile oil markets have greatly hurt the country, especially because its exports - mainly textiles - have only seen a trickle of a rise. Relations with the United States are sour and there are accusations of China following an opaque policy towards OBOR in Pakistan. It is most likely that once Imran Khan and his ministers take oath on August 11, Pakistan would rush to the International Monetary Fund (IMF) for a bailout package that could be to the tune of $12 billion. The last time the country turned towards IMF was in 2013 when it got a $6.6 billion loan for a crisis of lesser proportions than the one existing now. This time, the US could act as a roadblock as well, further complicating the matter. That China and Saudi Arabia could help is being predicted but loans from either or both could come with riders. But Umar in his interview negated any fears when it comes to Beijing, stating that 'Pakistan has no Chinese debt problem.'How his PM goes about his plans of establishing a welfare state - as per his pre-poll promise - remains a mystery as the current economic situation is far from conducive for such herocis.
Source: Zee news
The Second Pakistan – Belgium Business and Investment Opportunities Conference jointly organized by the Rawalpindi Chamber of Commerce and Industry (RCCI) and Brussels Enterprises Commerce and Industry (BECI) took place this weekend. A 30 member strong delegation of RCCI led by its president Zahid Latif Khan and businessmen from different regions of Belgium participated in the conference. The RCCI and BECI had signed a Memorandum of Understanding at the conclusion of First Business and Investment Conference held in Brussels in May this year. Both the chambers are keen in promoting trade and investment for the mutual benefit of the two countries. Speaking on the occasion Pakistan’s Ambassador to Belgium, the European Union and Luxembourg Mrs Naghmana Alamgir Hashmi said, “Pakistan is emerging not only economically but also socially and politically”. She said that the recently held general elections in Pakistan have proved strengthening of democratic values in Pakistan. She further pointed out that with the improvement in law and order situation and tackling of energy crises to a greater extent, people of Pakistan have started looking for expanding business ties with outside world and the world has also started approaching Pakistan. She reckoned surge in the number of tourists visiting Pakistan, as 2017 saw an increase of 30% in the number tourists who visited Pakistan. Ambassador Hashmi appreciated the initiative of RCCI for bringing Business delegations to Belgium on regular basis. Highlighting the significance of Belgium in Pakistan’s trade scenario she informed that, as Pakistan’s 9th largest export destination globally, Belgium remained important for exploring more opportunities for business and investment. She said that a second visit of RCCI within two months reflects seriousness of both sides to increase trade relations. Pakistan’s exports to Belgium have increased by 6% since 2015 and stood at 421 Million EUR in 2017. Pakistan’s exports mainly constitute home textiles, surgical goods, sports goods, apparel, leather, cotton and food items especially rice. Ambassador Hashmi called for diversifying exports and also to tap opportunities for investments in Pakistan. Talking about areas of collaboration Ambassador Hashmi said that Belgium could help Pakistan by transfer of technology in the fields of pharmaceuticals, agriculture machinery, dairy products, processing of fruits and vegetables, fisheries and mineral development. Besides this huge potential existed for technical assistance from Belgium in port handling, dredging, science and technology, she added. Secretary General BECI Jan de Brabanter welcomed the delegation of Rawalpindi Chamber of Commerce and Industry. In his presentation he pointed out that due to its central location Belgium serves as the heart of Europe for exports to other destinations. President RCCI Mr. Zahid Latif Khan in his address informed about the business and investment opportunities in various sectors in Pakistan. He said that reality is different in Pakistan against what is portrayed in media and there was a need for more visits of Belgian businessmen to Pakistan in order to acquaint themselves with real potential of the country. He referred to Investment Policy of Pakistan which allows 100% foreign ownership in manufacturing and social sectors and exemption from customs duty on import of plant, machinery and equipment under various schemes. He further pointed out that Special Economic Zones (SEZs) were being set up in all the provinces and regions of Pakistan including AJK, GB and FATA. Khan said that immense potential for investment and collaboration existed in the areas of energy, light engineering, steel manufacturing, pharmaceuticals, textile, food processing, IT and halal food industry. During the conference documentaries on ‘Emerging Pakistan’ and ‘Investment Regime of Pakistan’ were also screened. Both the sides exchanged mementos. Ambassador Hashmi also presented made in Pakistan official football of FIFA tournament ‘Telstar’ to Secretary General BECI as a memento.
Source: Daily Times
Myanmar government is all set to provide visa on arrival facility with effect from August 8 by suspending the special land entry permission which was formerly required for visitors entering the country via land routes. The Myanmar government decided to take this step in a bid to promote tourism and improve business ties with other South East Asian countries, according to official sources. To mark the landmark development, Myanmar government is organising an opening ceremony of “International border of Myanmar-India” at Tamu town of Myanmar on August 8, the preparation for which is almost over, sources informed. It is learnt that Myanmar’s Ministry of Labour, Immigration and Population Permanent secretary U Aye Lwin and Consul General of India in Myanmar Nandan Singh Bahisora will attend the function. Four officials from Manipur will also take part in the opening ceremony including Laxmi Kumar, transport commissioner, P Vaiphei IAS principal secretary of Textiles, Commerce and industries, and R K Shivchandra convenor Act East Policy Committee, Manipur. With the same objective of promoting mutual business ties and tourism, India had also started the construction of an Integrated Check Post (ICP) at Moreh Town which is also known the Eastern Gate of India but it is still incomplete. With the official opening of this route, it will surely enhance the communication system and international relations between the two nations, said R K Shivchandra, convenor Act East Policy Committee, Manipur. Shivchandra noted that there were difficulties to travel to Myanmar as a result of the permit system. However, this problem will be made simpler for the Indians with the issuance of e-visa in a short period, he said adding that the Act East policy Committee will provide assistance for acquiring a visa in Imphal. Earlier Indians travelling to Myanmar had to hire a licensed guide costing about 60 dollars a day, in addition to the land route permit from the authority. But this permit system would be abolished on August 8. “If one possesses a passport one can get visa within two days time minus the burden of special land route permit”, said R K Shivchandra.
Source: Indian Express
The Second Pakistan – Belgium Business and Investment Opportunities Conference jointly organized by the Rawalpindi Chamber of Commerce and Industry (RCCI) and Brussels Enterprises Commerce and Industry (BECI) took place this weekend. A 30 member strong delegation of RCCI led by its president Zahid Latif Khan and businessmen from different regions of Belgium participated in the conference. The RCCI and BECI had signed a Memorandum of Understanding at the conclusion of First Business and Investment Conference held in Brussels in May this year. Both the chambers are keen in promoting trade and investment for the mutual benefit of the two countries. Speaking on the occasion Pakistan’s Ambassador to Belgium, the European Union and Luxembourg Mrs Naghmana Alamgir Hashmi said, “Pakistan is emerging not only economically but also socially and politically”. She said that the recently held general elections in Pakistan have proved strengthening of democratic values in Pakistan. She further pointed out that with the improvement in law and order situation and tackling of energy crises to a greater extent, people of Pakistan have started looking for expanding business ties with outside world and the world has also started approaching Pakistan. She reckoned surge in the number of tourists visiting Pakistan, as 2017 saw an increase of 30% in the number tourists who visited Pakistan. Ambassador Hashmi appreciated the initiative of RCCI for bringing Business delegations to Belgium on regular basis. Highlighting the significance of Belgium in Pakistan’s trade scenario she informed that, as Pakistan’s 9th largest export destination globally, Belgium remained important for exploring more opportunities for business and investment. She said that a second visit of RCCI within two months reflects seriousness of both sides to increase trade relations. Pakistan’s exports to Belgium have increased by 6% since 2015 and stood at 421 Million EUR in 2017. Pakistan’s exports mainly constitute home textiles, surgical goods, sports goods, apparel, leather, cotton and food items especially rice. Ambassador Hashmi called for diversifying exports and also to tap opportunities for investments in Pakistan. Talking about areas of collaboration Ambassador Hashmi said that Belgium could help Pakistan by transfer of technology in the fields of pharmaceuticals, agriculture machinery, dairy products, processing of fruits and vegetables, fisheries and mineral development. Besides this huge potential existed for technical assistance from Belgium in port handling, dredging, science and technology, she added. Secretary General BECI Jan de Brabanter welcomed the delegation of Rawalpindi Chamber of Commerce and Industry. In his presentation he pointed out that due to its central location Belgium serves as the heart of Europe for exports to other destinations. President RCCI Mr. Zahid Latif Khan in his address informed about the business and investment opportunities in various sectors in Pakistan. He said that reality is different in Pakistan against what is portrayed in media and there was a need for more visits of Belgian businessmen to Pakistan in order to acquaint themselves with real potential of the country. He referred to Investment Policy of Pakistan which allows 100% foreign ownership in manufacturing and social sectors and exemption from customs duty on import of plant, machinery and equipment under various schemes. He further pointed out that Special Economic Zones (SEZs) were being set up in all the provinces and regions of Pakistan including AJK, GB and FATA. Khan said that immense potential for investment and collaboration existed in the areas of energy, light engineering, steel manufacturing, pharmaceuticals, textile, food processing, IT and halal food industry. During the conference documentaries on ‘Emerging Pakistan’ and ‘Investment Regime of Pakistan’ were also screened. Both the sides exchanged mementos. Ambassador Hashmi also presented made in Pakistan official football of FIFA tournament ‘Telstar’ to Secretary General BECI as a memento.
Source: Daily Times
President Donald Trump defended his use of tariffs that have inflamed tensions with China and Europe, telling an audience of diehard supporters on Saturday that playing hardball on trade is “my thing.” “We have really rebuilt China, and it’s time that we rebuild our own country now,” Trump said Saturday during about an hour of free-wheeling remarks at a rally outside Columbus, Ohio. He added that Chinese stocks are down, weakening that nation’s bargaining power in the escalating trade war. Trump continued his focus on tariffs Sunday morning, tweeting that the duties are working “big time” and that imported goods should be taxed or made in the U.S. He also suggested duties will allow paying down “large amounts of the $21 Trillion in debt that has been accumulated” while reducing taxes for Americans. “Every country on earth wants to take wealth out of the U.S., always to our detriment,” Trump tweeted, “I say, as they come, Tax them.” Tariffs are working big time. Every country on earth wants to take wealth out of the U.S., always to our detriment. I say, as they come,Tax them. If they don’t want to be taxed, let them make or build the product in the U.S. In either event, it means jobs and great wealth. Because of Tariffs we will be able to start paying down large amounts of the $21 Trillion in debt that has been accumulated, much by the Obama Administration, while at the same time reducing taxes for our people. At minimum, we will make much better Trade Deals for our country! Trump’s tax cuts, passed in late 2017, haven’t happened in isolation. The Congressional Budget Office predicts that the cuts, when combined with new federal spending, will push the U.S. budget deficit to $1 trillion in 2020. That’s forced the U.S. Treasury to lift note and bond sales to levels last seen in the aftermath of the recession that ended in 2009. The president also tweeted on Sunday that the news media “purposely cause great division & distrust. They can also cause War! They are very dangerous & sick!”
‘Stronger Than Ever’
Hours before the rally on Saturday night, Trump also posted a string of tweets on the issue, saying the U.S. market is “stronger than ever,” while the Chinese market “has dropped 27% in last 4 months, and they are talking to us.” It was unclear which measure of Chinese stocks Trump was referring to. The U.S. S&P 500 index, a broad measure of major U.S. companies, has yet to regain highs made in January, just before the escalation of trade tensions initiated by the U.S. “Tariffs are working far better than anyone ever anticipated” and would make the U.S. “much richer than it is today,” the president tweeted. At the rally, Trump added that the Europeans are “dying to make a deal.” Trump went to Lewis Center, Ohio, to stump for Troy Balderson. The Republican state senator is facing an unexpectedly close contest against Democrat Danny O’Connor in an Aug. 7 special election for the congressional seat vacated earlier this year by Representative Pat Tiberi.
Democratic Challenge
In 2016, Trump carried Ohio’s 12th House district, but the current House race is rated as a toss-up in a seat Republicans have held for more than three decades. Whether Trump can help Balderson may be seen as another signal of how likely Democrats are to take control of the House of Representatives in November. In a nod to the Ohio economy, Trump said Saturday on Twitter that tariffs “have had a tremendous impact on our Steel Industry.” The president has said several times in the past two months, without evidence, that U.S. Steel plans to open six or seven new steel mills. He talked about steel at some length during the rally, saying the industry is making “one of the biggest comebacks.” The Ohio stop was Trump’s third political rally in the past week, following stops in Tampa, Florida, and Wilkes-Barre, Pennsylvania. The president is expected to add additional events, one or more per week, through Labor Day.
Demonizing Critics
The events give Trump a chance to frame on his own terms his much-debated moves on trade, foreign policy, media-bashing and interactions with Russian President Vladimir Putin. And that may be a welcome distraction in a week when headlines were dominated by the start of the trial of his one-time campaign chairman Paul Manafort on fraud charges connected to his work for Russians and Ukrainians. The rallies are also a venue for Trump to demonize high-profile critics whom he believes his political base also resents, including the media, Congressional Democratic leaders, and various celebrities. On the eve of Saturday’s event, Trump took to Twitter to question the intelligence of basketball great LeBron James, who’s been critical of the president. James, 33, who left the Cleveland Cavaliers at the end last season to join the Los Angeles Lakers, was in the news this week for using his fortune and fame to launch a school for at-risk youth in his Ohio home town.
Source: Fortune
