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In Meghalaya, the Union Minister of Textiles Smriti Zubin Irani today laid the foundation stone of the Integrated Textiles Tourism Complex at Nongpoh, Ri Bhoi district in the presence of Chief Minister Conrad K Sangma.
The Union Minister during her address said that the Central Government is committed to supplement the endeavours of the State Government for development in the sector of textiles; women and child development.
She said the complex and the activities therein have been funded by the Government of India so that the art of Meghalaya prospers. The Union Minister informed that it has been the direction of the Prime Minister to skill the people of Meghalaya, specially for a state like Meghalaya which celebrates the aptitude of 54000 artisans in the beautiful state, to ensure that those who currently undertake crafts in wood, bamboo, stone carving, embroidering, pottery, dry flower and jewellery get benefitted and aided from the Government of India.
She also announced that under the ‘Samarth’ scheme which erstwhile plans to skill 7,200 youth in apparel and garments, textiles and handloom sectors has now been extended, after the request of the Chief Minister, and now Meghalaya has the historic opportunity to skill 30,000 citizens.
Meanwhile, Meghalaya Chief Minister appreciated the efforts put in by the Government of India and the commitment of the Union Minister to work for the welfare of the people of Meghalaya.
The Union Minister before laying the foundation stone earlier also interacted with the children and Anganwadi Workers at the Umdihar 1, Ri Bhoi district.
Source: All India Radio
The Goods & Services Tax (GST) Council will hold its 37th meeting on September 20 in Goa, but is unlikely to consider any rate reduction.
A senior Finance Ministry official told BusinessLine: “Many sectors are clamouring for a rate reduction. They range from automobile to cement to biscuit. Now, if it is done for one sector, it can open floodgates. We should not forget the revenue situation.” The automobile sector has requested the government to lower the duty for a brief period while biscuit companies are pressing for reducing GST from 18 per cent as consumers are thinking twice before buying even a ₹5 packet.
When asked about the demand for lowering the GST on biscuits, during her press conference last week, Finance Minister Nirmala Sitharaman said if State Finance Ministers have sensed that branded companies are shutting down because of GST, she would like to hear from them. “After all, the GST Council is not just the Union government. I would want many of the GST related issues discussed as issues that affect the States too and GST related decisions are not unilaterally taken by the Central government. So, I like to hear States Ministers much before all of us together take a call on it,” she had said.
The official said ‘as of now’ there is no proposal for lowering rate on any of the item. The Finance Ministry is having a tough time on the revenue front. The average revenue collection during the current fiscal is over ₹1 lakh crore. Certainly, this is sufficient to meet the scaled down target of GST collection as projected in the Budget.
The Finance Minister scaled down the GST collection target to ₹6.63 lakh crore, from ₹7.61 lakh crore. Accordingly, combined with State GST (SGST), the average monthly collection is now estimated at nearly ₹1 lakh crore as against ₹1.14 lakh crore (based on the data of Interim Budget). However, scaling down the target does not mean that the government wants less revenue. It needs more funds to meet the rising expenditure and contain fiscal deficit.
Review return filings
The official said the rules prescribe the GST Council to meet at least once in three months and since the Goa government had offered to host the meeting, it was accepted. The meeting is expected to review return filings and phased introduction of new return forms. It is also likely to consider action against non-filers which include debarring them for issuance of e-way bill. So far, on an average 20 per cent assessees do not file return by due date which affects overall revenue collection.
The Council has met 36 times and no occasion has arisen so far that required voting to decide any matter. Till its 34th meeting, the GST Council has taken 1,064 decisions which include 219 decisions taken by the GST Implementation Council (GIC). As on May 14, as many as 1,006 decisions have been implemented and only 58 decisions of the GST Council (of which 39 were unique issues) are yet to be implemented. In other words, 94.5 per cent of the decisions of the GST Council have already been implemented, which is a significant achievement, given the complicated nature and wide area of subjects/issues involved and the fact that all decisions were taken unanimously.
Source: The Hindu Business Line
Ends regulator-Centre tiff over sharing of RBI’s profits; will help govt meet fiscal deficit target.The Jalan panel said the entire income above the realised equity needed to maintain buffer be transferred.
MUMBAI: The Reserve Bank of India’s central board accepted the recommendations of the Bimal Jalan committee on capital transfer and decided to pay Rs 1.76 lakh crore for the current fiscal year to the government, ending nearly a year of conflict between the regulator and its only shareholder on the quantum of dividend payout.
The adoption of the Jalan committee report ends the discretion enjoyed by the central bank’s board on payouts. From now on, dividend payouts would be based on a formula. Importantly, the Jalan committee recommendations pave the way for the government to meet its fiscal deficit target for the year.
In the current fiscal, the RBI will pay Rs 1.23 lakh crore of surplus and Rs 52,637 crore of excess contingency provisions lying in its books, which some in the government had lobbied to be transferred to the Centre to help it meet expenses.
“The committee’s recommendations were based on the consideration of the role of central banks’ financial resilience, cross country practices, statutory provisions and the impact of the RBI’s public policy mandate and operating environment on its balance sheet and the risks involved,” the RBI said in a statement. “The RBI forms the primary bulwark for monetary, financial and external stability. Hence, the resilience of the RBI needs to be commensurate with its public policy objectives and must be maintained above the level of peer central banks.”
Bonus for Government
For the current fiscal year, the surplus transfer would be Rs 5,000 crore more than the Rs 90,000 crore the government had budgeted. There was an interim payout of Rs 28,000 crore in March. Thus, of the Rs 1.23 lakh crore, Rs 95,000 crore remains to be transferred this fiscal.
The transfer of Rs 52,637 crore from the RBI’s contingency reserves of about Rs 2.3 lakh crore would be a bonus that would ensure the government doesn’t overshoot the fiscal deficit target.
“The transfer of surplus from the RBI should help offset the expected shortfall in various tax revenues in FY20 and aid the government in meeting its fiscal deficit target. As a result, G-Sec (government securities) yields are likely to ease in the immediate term,” said Aditi Nayar, principal economist at ICRA.
The finalisation of the report by the six-member Jalan panel comes as a relief for policymakers both in New Delhi and at Mint Street as the deliberations were marred by disputes between North Block and the members of the panel. Former finance secretary SC Garg had dissented before finalisation of the report. The panel concluded its proceedings after Garg’s exit from the ministry.
“It looks like a conservative set of recommendations by the panel,” said A Prasanna, economist at ICICI Securities Primary Dealership Ltd. “The issue of excess capital appears to be settled with the current year’s transfer, and in future one could see the dividend being higher.”
While the latest move settles the dispute, it comes as a disappointment for some who were expecting the transfer of as much as Rs 3 lakh crore, factoring in the transfer of excess contingency and revaluation reserves as well.
CLEARER DISTINCTION
“A clearer distinction between the two components of economic capital (realised equity and revaluation balances) was also recommended by the committee as realised equity could be used for meeting all risks/losses as they were primarily built up from retained earnings, while revaluation balances could be reckoned only as risk buffers against market risks as they represented unrealised valuation gains and hence were not distributable,” said the RBI statement.
On economic capital, the Jalan panel, which also had former deputy governor Rakesh Mohan as a member, suggested that while income could be used to raise risk provisions, the reverse of it — i.e., dipping into reserves to pay dividend in the event of a shortfall in income — shouldn’t be done.
“The committee recommended revising the presentation of the liabilities side of the RBI balance sheet to reflect this distinction,” the regulator said.
The Jalan panel was set up on December 26, 2018, to review the Economic Capital Framework for the banking regulator after the finance ministry said the RBI should follow global best practices and transfer more surplus to the government.
The other members of the committee included deputy governor NS Vishwanathan, and two RBI central board members — Bharat Doshi and Sudhir Mankad.
Provisioning for market risk of the portfolio would be done based on the ‘Expected Shortfall’ methodology — a financial tool to project the likely shortfall in returns from a particular portfolio.
“The surplus will vary from year to year, depending on the RBI’s interventions, while the excess provisions is closer to a one-time transfer. If this is used for bridging a tax revenue shortfall, the broad contours of spends will be maintained. If this represents a surplus over budgeted revenues, the government will have space for increasing capex spends,” said Saugata Bhattacharya, chief economist at Axis Bank.
FORMULA TO TRANSFER SURPLUS
The computation of the formula to transfer surplus could be the differentiator between the recommendations of the earlier panels and the present one.
The Jalan panel said the entire income above the realised equity needed to maintain buffer be transferred. It suggested that the risk provisioning from the realised equity should be 5.5-6.5% of its balance sheet.
“Only if realised equity is above its requirement, will the entire net income be transferable to the government. If it is below the lower bound of requirement, risk provisioning will be made to the extent necessary and only the residual net income (if any) will be transferred to the government,” the RBI said.
The issue of appropriate size of RBI reserves has been examined by three committees in the past — headed by V Subrahmanyam in 1997, Usha Thorat in 2004 and YH Malegam in 2013.
Source: The Economic Times
Hungary is stepping up its economic relations with India, said Hungarian Minister of Foreign Affairs and Trade Peter Szijjarto here on Monday at a joint press conference with visiting Indian Minister of External Affairs Subrahmanyam Jaishankar.
"The economies of the emerging Asian economies have a major impact on the open Hungarian economy, so it is worth stepping up cooperation with India," Szijjarto declared.
"We will focus on five main areas when building cooperation, these are film production, digitalization, water management, solar energy and pharmaceuticals," he added.
"Indian companies make up the fourth largest Asian investor community in Hungary, 35 Indian firms employ nearly 7,000 Hungarians," he underlined.
For his part, Jaishankar said: "Hungary's competitiveness and investor-friendly environment make the country a useful partner with which India seeks mutually beneficial cooperation."
"We also had talks about political issues, the V4 cooperation (between Poland, Hungary, Czech Republic and Slovakia), the European Union and cooperation in the fields of education, tourism and science," he noted.
According to Jaishankar, Hungary and India have many goals in common and there are many opportunities for cooperation.
Source: Xinhua
A host of high-frequency indicators - consumption and investment - have continued to weaken including auto sales, the output of consumer durables, cement and steel production.
The Indian economy likely expanded at its slowest pace in more than five years in the April-June quarter, driven by weak investment growth and sluggish demand, according to economists polled by Reuters.
That would reinforce concerns seen in the minutes from the central bank's August meeting, which showed policymakers were worried about weak growth and indicated further rate cuts in the next few months to boost the slowing economy.
The poll median showed the economy was expected to have grown at a year-on-year pace of 5.7 per cent in the June quarter, a touch slower than 5.8 per cent in the preceding three months. But a large minority - about 40 per cent of nearly 65 economists - expect an expansion of 5.6 per cent or lower.
The GDP data is due to be released on Friday.
If the forecast is realised, it would be the weakest start in the first three months of a fiscal year in seven years.
“The deceleration in growth that commenced in the second quarter of the fiscal year ending March 2019 is likely to have continued,” said Rini Sen, India economist at ANZ.
“A host of high-frequency indicators - consumption and investment - have continued to weaken. The most prominent ones include auto sales, the output of consumer durables, cement and steel production.”
Domestic passenger vehicle sales in July dived at the steepest pace in nearly two decades and declined for the ninth straight month in July, largely due to a liquidity crunch causing huge job cuts in the sector.
These measures, in addition to the risk of further escalation of the U.S. and China trade war, are weighing on demand and business confidence in India.
The median response to an extra question in the poll, which was taken Aug. 21-26, showed the average growth rate for the current fiscal year 2019-2020 is likely to be 6.5 per cent despite a weak start. But it is a downgrade from 6.8 per cent predicted just last month and well below the RBI's projection of 6.9 per cent.
The RBI lowered its outlook for the fiscal year 2019-2020 at its August meeting. It has cut a total of 110 basis points in the repo rate since February, which includes an unconventional cut of 35 basis points earlier this month to 5.40 per cent.
But with inflation not expected to rise anytime soon, the central bank will likely ease its benchmark rate by 25 basis points again to 5.15 per cent at its October meeting, followed by a 15 basis point cut in the first quarter of 2020, according to a separate Reuters poll.
Those cuts, in addition to a suite of recently announced fiscal measures, could provide some cushion for the economy in coming months.
On Friday, Finance Minister Nirmala Sitharaman announced reforms to revive economic growth, including rolling back recent tax hikes on foreign and domestic equity investors and several measures for industries.
“We believe that the measures announced by the finance minister will help to provide a fillip to credit growth, rate transmission and improving investor sentiment,” noted economists at Morgan Stanley.
“We continue to see a slow recovery in growth, as monetary measures will help but may not be sufficient to create a V-shaped recovery, especially in the context of slowing global growth.”
Source: The Hindu Business Line
Our exports share is still very small. Our share of global export trade itself is about 2%, said CEA
The ongoing trade war between United States of America and China will not have any impact on Indian export which is just below 2 per cent of the global trade, Chief Economic Advisor Krishnamurthy Subramanian said on Monday.
Speaking to reporters on the sidelines of a programme here, he said the slew of measures announced by the Centre for the revival of muted growth in the economy was in the right direction, though it was necessary to focus on the 'structural reforms.' "Our exports share is still very small. Our share of global export trade itself is about 2%. Therefore, we still have enormous opportunity to grow. Even if there is actually some shrinkage in the pie of the global trade, still we can grow our pie. Exports cannot grow unless actually we emphasise on productivity, he said when asked about the impact of the tariff war between US and China on India.
"I would also add that news that the United States and China are actually sitting together and there may be a breakthrough that is coming possibly in which case will be good," he further said.
Last week, Finance Minister Nirmala Sitharaman had announced a raft of measures, including rollback of enhanced super-rich tax on foreign and domestic equity investors, exemption of start-ups from 'angel tax' and a package to address distress in the automobile sector, among others.
"The measures that have been announced actually are in the right direction. What I have said is that it is important to focus on economic growth and it is also important for us to focus on structural reforms which is what the policy announcement that I've made essential in corporate sector," he said justifying the measures announced by the Finance Minister.
According to him, the Centre would do all that is needed for the economic growth.
Subramanian said investments is a key driver of the economic growth while consumption is a force multiplier.
On the proposed Rs 70,000-crore capital infusion by the Centre in public sector banks, he said, "I think this Rs 70,000 crore that has been announced for recapitalisation of banks is quite important because the financial sector matters a lot for economic growth. Credit is basically the lifeline for economic growth. Therefore that is something which actually is important.
Source: Business Standard
The rupee has also been the worst performer among the Asian currencies over the last one month, having depreciated by over 4% against the dollar.
The rupee on Monday fell 36 paise to close at a nine-month low of 72.02 against the dollar following a drop in the yuan, as the US-China trade war intensified. The onshore yuan on Monday slid to a fresh 11-year low of 7.1455 against the dollar.
The US-China trade war escalated after US President Donald Trump on Friday tweeted about raising the tax by 5% on Chinese imports worth $550 billion.
Trump had tweeted, “China should not have put new Tariffs on $75 billion of United States product (politically motivated!). Starting on October 1st, the $250 billion of goods and products from China, currently being taxed at 25%, will be taxed at 30%. Additionally, the remaining $300 billion of goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%.”
The rupee touched an intra-day low of 72.25 against the greenback on Monday before paring losses. Dealers believe that the Reserve Bank of India (RBI) was likely to have intervened during the day.
MV Srinivasan, vice-president, Mecklai Financial Services, said the positive moves announced by the government on Friday have been passed to the stock markets but they did not help the rupee. “Forex market is concerned about what is happening globally between US and China. At the 72.25 level, the RBI is likely to have intervened which caused the rupee to strengthen. However, that was not enough because yuan did not reverse. The direction of the rupee is now totally controlled by the Chinese yuan. Other positive news are not having any major impact,” he said.
Despite the slew of announcements by the government on Friday, FPIs have sold over $100 million Indian equities on a net basis, as per provisional figures released by the exchanges. Since the beginning of August,FPIs have pulled out about $1.9 billion from the equity markets.
The rupee has also been the worst performer among the Asian currencies over the last one month, having depreciated by over 4% against the dollar.
Ananth Narayan, professor of finance at SPJIMR, said the US-China trade war has dominated currency markets and a weakening yuan has impacted emerging markets and India. “The rupee has also faced pressure from foreign portfolio investors (FPI) outflows over the past few months. Despite recent rupee weakening, the currency still remains overvalued by about 14% in real effective terms. Our current account deficit remains large despite oil prices coming down. For our own competitiveness and for a more sustainable external balance, a gently weakening rupee is welcome news,” he said.
Source: The Financial Express
Pakistan’s textile sector tends to be more productive and innovative ostensibly for export markets because such markets only buy products when local companies become globally compliant.
However, “there still exist problems like lack of financing for textile firms when it comes to the need for innovation in the country’s largest export sector,” said a report released by the Innovation and Technology Centre of Lahore School of Economics based on data collected from 125 firms.
In the paper, innovation-related behaviour has been linked to export behaviour.
According to the survey, a large percentage of these firms were exporting most of their output (81-100%). They mostly make shipments to Europe and Asia.
The survey found that exporters turned out to be more innovative than non-exporters. However, funding for innovation can be a major issue for these firms.
In the survey, when asked about sources of funding for making innovations, a large proportion of firms reported that those ideas were financed solely by their internal resources (equity funds).
On the other hand, almost half of the firms said their innovative ideas were financed by using their internal sources as well as taking loans from banks. A very small percentage of firms stated that their schemes were financed by using both internal resources and aid from the government.
Looking at the sources of funding for innovation across different sectors, most of the garment manufacturing firms were found to be self-financed whereas almost half of the textile manufacturing firms financed their innovation activities through assistance from financial institutions.
In the survey, it was found that a significant amount of innovation had been directed towards improving the quality of products and had also resulted in an increase in revenues.
Taking a sector-wise look, the innovation had led to improved quality of products for textile and readymade garment sectors besides reducing the cost of production for readymade garments and enhancing revenues for the textile sector. When inquired about the impact of various types of innovations on profits, a majority of firms reported that innovation in products resulted in higher profits while less than half of the firms claimed that innovation in technology/equipment resulted in higher profits. The incentives to innovate are particularly important for the firms. In the survey, when asked about the most significant factor driving innovation in their industry, a massive chunk of firms reported that the pressure to improve product quality was one of the most significant drivers of innovation followed by the desire for market leadership.
One simple measure of innovation is the purchase of machinery. Looking at the purchases of machinery by these firms, the survey found out that a large number of firms purchased new machinery and/or software.
A majority of firms in both the textile and readymade garment sectors said they purchased new machinery and the percentage was similar across sectors.
The timing of innovation is also important as over half of the firms said the innovation took place in the last one to five years. A majority of the innovating firms claimed that they were planning to introduce new technology again in the next 12 months.
More than half of the textile firms said they were planning to introduce new technology in the next 12 months. On the other hand, most of the readymade garment manufacturing firms were not planning to innovate in the next 12 months.
The survey added that 83% of firms reported that they introduced innovative ideas in the area of product manufacturing, 77% in marketing, 75% in processing, 63% in technology and 33% in the business model. A majority of both readymade garment and textile firms preferred adopting the already established innovation.
During the survey, managers of the firms said the two greatest barriers faced by them were financing and lack of innovation opportunities. A large number of firms said they did not have to keep their employees in order to adopt new technologies/software and a significant percentage of them claimed to have faced no resistance from their employees when trying to introduce innovation.
The report concluded that more incentives for innovation could be given by providing more sources of funding for the innovating firms in the form of aid from the government and assistance from financial institutions.
Source: The Tribune
Only 37 buying houses got registered with the Department of Textiles in the government-set two-month timeframe that ended on July 28, according to DoT officials.
In a gazette notification issued on May 28, the textiles and jute ministry directed all the buying houses in the garment and textile sector to get registered with the DoT within 60 days of issuance of the notification to run business in the country.
DoT officials said as of Monday 135 buying houses including the 37 that got registered submitted applications to the department to obtain registration following the government instruction.
In the gazette notification, the ministry also said that as per the section 14 of Textile Act 2018, all the buying houses must have to be registered with the DoT within 60 days of
issuance of the notification and if any buying house sought time extension with valid reasons, the registrar could allow 60 more days.
If any buying house fails to obtain registration on time, the government will take legal action against the company as per law, it said.
DoT director general Dilip Kumar Saha told reporters that they extended 60 more days for buying houses to file applications with the department for registration.
Regarding poor response from buying houses, he said it was a new initiative and many of the buying houses were yet to be aware about the government notification.
Earlier, on April 1, the ministry issued a gazette notification detailing what would be the procedure for getting the registration of buying houses with the DoT.
It said that the buying houses would have to file applications with the DoT with the documents of updated trade licence, income tax certificate, certificate of incorporation as limited company, estimated yearly turnover and bank solvency certificate.
The ministry has set Tk 20,000 as fee for the registration and it would have to be paid through bank draft or pay order.
Subject to receiving documents and if necessary, inspection report, the registrar would give registration within 60 days of submitting application and the validity of the registration certificate would be three years.
According to the DoT officials, there are more than 1,000 garment and textile buying houses across the country.
They said that many buying houses, which are associate members of the Bangladesh Garment Manufacturers and Exporters Association, were not getting registration as they were not members of the Bangladesh Garment Buying House Association.
Bangladesh Garment Buying House Association president Kazi Iftequer Hossain on Monday told New Age that it was difficult to say the actual number of buying houses but there were many companies across the country beyond their 470 members.
‘Now we are receiving 10 to 15 applications for membership every day as the government has made it mandatory for buying houses to obtain membership certificate from the association concerned to get registered with the DoT,’ he said.
Iftequer said that 135 applications had been filed with DoT in two months and it was a poor number but many of the buying houses were facing problem in renewal of their trade licences.
He hoped that the government initiative to bring buying houses under registration would ensure discipline in the buying house sector.
Source: New Age Business
Anta’s global ambitions come at a tricky time, as an intensifying tit-for-tat tariff war is making it more expensive to manufacture in China
The bigger Anta Sports Products Ltd. becomes, the more vulnerable it feels. That’s the tight rope China’s largest athletic-apparel producer is walking as it expands beyond the Asian nation amid the trade war.
“In the past, Anta only focused on the China market and felt little impact,” Lai Shixian, Anta’s chief financial officer, told Bloomberg in Hong Kong. But now with its product sales and supply chain spread all across the globe, “the trade war is having a massive impact on all fronts.”
Anta’s global ambitions come at a tricky time, as an intensifying tit-for-tat tariff war is making it more expensive to manufacture in China -- long considered the world’s workshop. The sportswear maker struck a $5.2 billion deal to acquire Finland’s Amer Sports Oyj in December to boost its overseas business.
The Fujian-based firm already has suppliers in Southeast Asia, according to Lai. If Anta keeps improving its operations, the impact of the trade war could “still be controlled at this point,” he said.
While the trade war has reduced orders for Chinese factories, it has given local brands including Anta more sourcing choices. But Anta’s choice for sourcing partner will not be a simple function of cost, Lai said. Other parameters such as quality and delivery period will also be considered.
Investors have so far cheered Anta’s acquisition of Amer, the maker of Salomon ski boots and Wilson tennis rackets. It reported first-half revenue of 14.8 billion yuan ($2.1 billion) on Monday that beat analyst estimates. The stock has climbed 63% this year while the broader gauge Hang Sang Index slipped 0.6%.
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The sportswear maker decided to disclose the breakdown of Anta and FILA’s financials in this interim report after two short sellers attacked its accounting and corporate governance earlier this year. Anta will make more efforts to increase transparency in financial reporting, Lai said.
Slowing Chinese consumption, global brands entering China and being able to engage the younger generation are the biggest challenges for Anta.
Lai is confident that the company can achieve the retail sales target of 100 billion yuan by 2025.
Source: The Economic Times
China's lead negotiator in the US trade talks said Beijing was willing to resolve its trade dispute with the US through "calm negotiations" and resolutely opposed the escalation of the conflict
US President Donald Trump on Monday offered an olive branch to China after days of intense feuding over trade and opened the door to diplomacy on Iran, easing tension on the last day of a strained G7 summit. The leaders of the world’s major industrialised nations, meeting in the French coastal resort of Biarritz, look set to reach an agreement on how to help fight the Amazon forest fires and try to repair the devastation.
While they are not expected to leave with a more comprehensive set of agreements or even a joint communique, Trump and his Western allies appear to have agreed amicably to disagree on issues dividing them. These ranged from Washington’s escalating trade war with China, which many fear could tip the slowing world economy into recession; how to deal with the nuclear ambitions of both Iran and North Korea; and the question of whether Russian President Vladimir Putin should be readmitted to the group.
Trump, a turbulent presence at last year’s G7 gathering, insisted during the Biarritz meeting that he was getting along well with other leaders of a group that also comprises Britain, Canada, France, Germany, Italy and Japan.
The trade war between the US and China, escalated on Friday as both sides levelled more tariffs on each other’s exports, sending more shockwaves through financial markets.
Speaking on the sidelines of the G7 summit on Monday, Trump said he believed China wanted to make a trade deal after it contacted US trade officials overnight to say it wanted to return to the negotiating table. China’s lead negotiator in the US trade talks said earlier on Monday Beijing was willing to resolve its trade dispute with the US through “calm negotiations” and resolutely opposed the escalation of the conflict.
Trump hailed Chinese President Xi Jinping as a great leader and said the prospect of talks was a very positive development. Trump also backed away from confrontation over Iran on Monday, a day after French President Emmanuel Macron stunned other leaders by inviting Iran’s foreign minister to Biarritz for talks on the stand-off between Washington and Tehran.
Taking more heat out of the annual meeting, French and US negotiators meeting behind the scenes reached a compromise agreement on France’s digital tax, a levy that had prompted Trump to threaten a separate tax on French wine imports.
The row had threatened to open up a new front in the trade spat between Washington and the EU as economic relations between the two appeared to sour.
France’s 3 per cent levy applies to revenue from digital services earned by firms with more than 25 million euros in French revenue and ^750 million ($830 million) worldwide.
US officials complain it unfairly targets US companies like Facebook, Google and Amazon. They are currently able to book profits in low-tax countries such as Ireland and Luxembourg, no matter where the revenue originates. A source close to the negotiations said the deal envisaged that France would repay to companies the difference between a French tax and a planned mechanism being drawn up by the OECD. The G7 leaders were due to discuss climate change in one of their final sessions on Monday and were expected to consider a deal on technical and financial help for the Amazon.
Source: Reuters
