DGFT to issue duty credit scrips worth ₹464 crore
Garment and made-up exporters who have Rebate of State Levies (ROSL) Scheme arrears will receive it in the form of scrips, according to a Department of Revenue communication. The ROSL Scheme, which reimburses the State levies that garment and made-up exports incurred, was discontinued on March 7 last year and replaced with the Rebate of State and Central Taxes and Levies scheme. In order to clear pending claims under the ROSL scheme, ₹464.13 crore has been allocated for issue of duty credit scrips by the DGFT to exporters who have pending claims, according to the communication. The Cotton Textiles Export Promotion Council has welcomed the move, while pointing out that exporters were in need of funds now and that the scrips would provide relief. They can use it for imports too, if needed, according to the Council.
‘Biggest challenge’
Apparel Export Promotion Council chairman A. Sakthivel said the apparel export sector has been asking for release of the ROSL arrears. The present crisis is the biggest challenge faced by the apparel export industry, he added. With Union Textile Minister Smriti Irani facilitating release of pending benefits, exporters will stand to benefit, he said.
Source: The Hindu
The government may soon extend the interest equalisation scheme, which lapsed on March 31, to shore up the export sector impacted by the COVID-19 pandemic, an official said. Under the scheme, exporters get 3-5 per cent subsidy on loans for specified items. It was announced in April 2015 for five years. Addressing a Webinar organised by Ficci, Director General of Foreign Trade Amit Yadav said, "In the weeks ahead, you would be hearing a good news with regard to the extension of interest equalisation scheme." "We are ensuring that exports come back on the track. The export data for March is an indicator; the impact of the present crisis could be seen from the export data of March and that for April would also be similar," a Ficci statement quoted Yadav as saying. He said the government has been holding regular interactions with the stakeholders in these difficult time, which was "never imagined".
Source: Economic Times
Minister of Commerce and Industry Shri Piyush Goyal has said that India is open to mutually benefitting collaborations with interested countries as far as the reciprocity in the deal is maintained. Interacting with foreign missions in New Delhi, through Video Conference, he welcomed the interested countries who are planning to do business with India. The Minister said that India gives the most importance to ‘the fair dealing and the reciprocity’ while signing any multilateral agreements. This was the reason because of which India didn’t participate in Regional Economic Comprehensive Partnership(RECP). He advised that this is the best time to connect digitally for the planning of a road map for bilateral (or multilateral) agreements. The Minister appealed to other countries for the collaborative efforts against the outspread of Coronavirus pandemic. He said that India is ensuring the safety and well-being of the foreign nationals currently in India. He thanked them for participating in 9-minute light off, as asked by the PM on April 5. Shri Goyal said that the recent surveys and studies have proved that ‘the tough and appropriate role played by the PM of India during the crisis’ is the best stimulus against the crisis and it has been appreciated in the country as well as all around the world. Mentioning about many world leaders including President Trump congratulating India for exporting medicines, Shri Goyal said that Indian Pharmaceuticals Industry is playing important role in producing and delivering medicines not only to India but also for the rest of the world. Expressing confidence that India will play a leadership role in the Post- COVID world, he said that India is ensuring that no country will remain deprived of the essential medicines, especially underdeveloped countries. He assured them that if any assistance in the form of medicine is required from India, we will try to fulfill it. But in the long term, we have to make a quick roadmap for the sustainable trade of the pharmacy sector. According to PM, as a global citizen, it is our responsibility to serve the one in need. The Minister said that the role of PradhanMantri Ayushman Bharat Scheme is going to be crucial during the pandemic. He underlined the effectiveness of the immediate nationwide lockdown with a special reference to the high reduction in the rate of doubling the cases. Shri Goyal said that during this crisis, Government is forming long term strategies for the revival of the country’s economy out of the crisis. He said that this is a time to identify the true partner for our own countries to find collaborations in the future.
Source: PIB
Commerce and Industry Minister Piyush Goyal has called upon Indian missions to help identify business opportunities for domestic companies, exporters and make India a preferred investment destination. The minister, along with External Affairs Minister S Jaishankar, interacted with 131 missions from different geographies through video conferencing, the commerce and industry ministry said in a statement. “We should aim for an economic growth higher by 3x … Discussion have happened at the highest levels where clear instructions have been given to capture the opportunities opening after the post-COVID scenario,” Goyal was quoted in the statement. Around 100 countries have benefited from Indian pharma, he said adding all nations are searching for countries which have a transparent dealing, rule of law, and are reliable. Indian missions should help us with identification of business opportunities that exist in their countries,” Goyal said. He added that Invest India and the Department for Promotion of Investment and Internal Trade are working to create a genuine single window for setting up factories and manufacturing units. As per the statement, all the missions have been asked to send a proposal to look at the opportunity post COVID-19. The proposal should have innovative ideas and should be submitted, containing suggestions to improve the country’s exports. It said that missions need to start networking, communicating with companies, come up with business leads and new contacts, and identify technology which can be implemented in India and “fight for India” in their countries. The statement quoted Jaishankar saying that outcome of this pandemic is that now the whole world is aware of the consequences of over dependence on one geography and the recovery path for India will be through trade and investment.
He specifically identified the opportunity in the pharmaceutical and agricultural sectors, and in the African region. The minister said that the missions should be proactive not only in foreign countries but in India also and should work in tandem with the ministries back home.
Source: Economic Times
Prime Minister Narendra Modi on Saturday held a crucial meeting with home minister Amit Shah and finance minister Nirmala Sitharaman to firm up strategies for the financial sector in the aftermath of the Covid-19 outbreak, amid mounting expectations of a stimulus package following the extension of the lockdown. The meeting also dwelt upon the need to usher in long-term structural reforms in infrastructure, credit offtake and corporate governance. In a late night statement on Saturday, the Prime Minister’s Office (PMO) said he also discussed “strategies and interventions to support MSMEs and farmers, enhance liquidity and strengthen credit flows”. “PM also discussed ways and means to ensure financial stability in the wake of COVID-19 and measures taken to enable businesses to recover quickly from the impacts,” according to the statement. Modi pointed out the need to generate gainful employment opportunities by helping businesses overcome difficulties. He stressed the need to expedite work on new infrastructure projects to make up for the time lost due to the lockdown. He wants the projects taken up under the National Infrastructure Pipeline (NIP) be reviewed at the highest level frequently so as to avoid time delays and enable job creation. A government task force on April 29 firmed up a road map for capital investments of Rs 111 lakh crore in infrastructure over six years through FY25, pledging 71% of the expenditure for energy, roads, urban development and railways, and envisaging a key role for private investors. The government on March 26 last announced a Rs 1.7-lakh-crore relief package for the poor and the vulnerable. However, a package to prop up the economy is yet to be extended. Official sources earlier indicated that the total fiscal intervention could be to the tune of 3-4% of GDP (or Rs 6-8 lakh crore). However, the government will come out with several rounds of measures to respond to the evolving situation, instead of declaring one big-bang package. The NITI Aayog has projected the need for an even higher fiscal stimulus of Rs 10 lakh crore. The Prime Minister has already held a series of meetings over the past week on sectors – including MSME, agriculture, aviation, power, coal, mining, defence and aerospace – with the focus on wooing foreign investments and tiding over the Covid-19 outbreak.
Source: Financial Express
New Delhi: The commerce and industry ministry is working to identify certain key sectors -- like capital goods, leather and chemicals -- with a view to establish India as manufacturing hub, according to sources. Several meetings have taken place with stakeholders, including industry chambers, to identify those sectors which have the potential to become global winners and make India a strong manufacturing hub, the sources said. "There are 12 champion sectors which can be looked upon. These include modular furniture, toys, food processing like ready-to-eat food, agro-chemicals, textiles like man-made fibres, air conditioners, capital goods, pharma and auto components," one of the sources said. Groups and sub-groups have been constituted on the matter by engaging representatives from industry chambers like CII and Assocham. The core group would identify specific implementable policy based on issues like technological capability, employment potential, and global as well as domestic demand, they added. Commerce and Industry Minister Piyush Goyal has recently stated that in the post-COVID era, there is going to a be perceptible change in the global supply-chains, and Indian industrialists and exporters should be looking to capture significant share in the world trade. He has said that the ministry is working on identifying the specific sectors which can be taken forward in the immediate future for the exports purpose. Promoting manufacturing will help in creating more jobs and pushing India's dwindling exports. Manufacturing sector contributes about 15 per cent in the country's economy and the government is aiming to increase it significantly. The output of eight core infrastructure industries shrank by a record 6.5 per cent in March due to significant dip in production of crude oil, natural gas, fertiliser, steel, cement and electricity amid the coronavirus lockdown. Exports too contracted by a record 34.6 per cent in March on account of the lockdown due to COVID-19 outbreak.
Source: Economic Times
New Delhi: The two apex tax bodies - income tax department and CBIC - on Sunday asked taxpayers to beware of phishing emails promising refund. Separately GST Network, the company handling the technology backbone for Goods and Services Tax, cautioned against a fraud website onlinefilingindia.in asking taxpayers not to reveal personal and bank details. "BEWARE of FRAUD website onlinefilingindia.in. It is trying to BAIT taxpayers to reveal personal and bank details. DO NOT respond to messages, mails and lookalike websites which ask for your personal details," GSTN tweeted. It further said that some fraudulent messages are being circulated on WhatsApp, Email and SMS claiming to process refund. "Miscreants are attempting to take undue advantage of COVID-19 crisis by sending out fake messages with phishing links. One such link takes to a portal claimed to have been developed by GSTN. the same is fake," GSTN tweeted. Fraudsters may also pose as tax officials or GSTN personnel and send fake email asking to urgently verify or update account. Taxpayers are advised to remain cautious against such messages, it added. GSTN also issued a list of Do's and Don'ts and asked taxpayers to call GST help desk 1800-103-4786 in case of any query. Earlier in the day, the tax department had tweeted: "Taxpayers Beware! Please do not click on any fake link which promises to give refund. These are phishing messages and are not sent by the Income Tax Department". Similarly, the Central Board of Indirect Taxes and Customs (CBIC) in a late evening tweet asked taxpayers not to click on any fake link which promises to give refund. "These are phishing messages and are not sent by CBIC or @Infosys_GSTN. Visit gst.gov.in for online filings related to GST," the CBIC tweeted. The Finance Ministry had on April 8 said it will fast track issuance of pending income tax refunds up to Rs 5 lakh which will benefit around 14 lakh taxpayers, to provide relief to individuals and businesses hit by COVID-19 outbreak. As per latest data, between April 8-20, the department had issued nearly 14 lakh refunds involving an amount of over Rs 9,000 crore to various taxpayers -- including individuals, HUFs, proprietors, firms, corporate, start-ups, MSMEs.The CBIC too had cleared over Rs 10,700 crore worth refunds in GST and Customs duty between April 8-23. The ministry has decided to issue all pending GST and Custom refunds which would benefit around 1 lakh business entities, including MSME. The total refund granted will be approximately Rs 18,000 crore, it had said.
Source: Economic Times
NEW DELHI: Members of the Regional Comprehensive Economic Partnership have offered India a package to return to the negotiating table, taking into account the country’s concerns over tariff base rates and special trade safeguards. Members of the trade bloc urged India to convey its initial response to the package by May 15 as the Indo-Pacific region braces for a post-Covid-19 economic order, ET has learnt. The package comes after RCEP members said last month they would welcome India’s return to the negotiating table for entering the regional trade bloc. The RCEP package recognises India’s preference to use more recent most-favoured nation tariff rates than the 2014 base rates. “The proponents would welcome updated market access offers from India using 2019 MFN tariffs on a limited number of products of concern to India to be negotiated bilaterally with RCEP Participating Countries… This is offered on the understanding that the outcome on market access, which will be achieved through bilateral negotiations, will remain balanced and that India’s tariff commitments will be acceptable to all,” according to the RCEP note on the package. India opted out of the RCEP negotiations last year after the group did not assuage its concerns over getting swamped by imports and putting its domestic industry and agriculture at risk. “The present form of the RCEP pact does not fully reflect the basic spirit and the agreed guiding principles of RCEP,” Prime Minister Narendra Modi had said in his address at the RCEP summit in Bangkok last November. India has a trade deficit with 11 of the 15 RCEP countries.The RCEP agreed in principle to incorporate a volume-based safeguard mechanism and would welcome an indication of the products to which India would seek to apply the special safeguard. “The proponents understand the importance of identifying mutually satisfactory solutions on these issues, while noting that progress made to date in market access negotiations as a whole should be preserved as much as possible and that requests on products of specific interest should be accommodated where possible,” according to the package offered to India. India does not have free trade agreements with Australia, China and New Zealand. These three RCEP members remain committed to negotiating a mutually satisfactory outcome with India on special safeguards that preserves the interests of all members, according to the package. Some RCEP members said India has much to contribute, not only in terms of its huge market, but also its participation in regional affairs as a whole. “India can bring a lot to the table. Covid-19 demonstrated India’s contribution in terms of active pharmaceutical ingredients and the medical capacity to support others, as well as technical and medical research,” a senior diplomat from an RCEP member state told ET. “A world that will be more digital in the future will rely on India’s pool of engineers. India, too, needs the region as it cannot reach its vision and ambition without win-win cooperation with its neighbours in the Indo-Pacific.”The RCEP members “reaffirmed their commitment to continue working with India to address its outstanding issues” at the 29the meeting of the RCEP trade negotiating committee held via video conference on April 20, 22 and 24, according to a joint statement. Recognising India as a valuable original participant, the members would welcome India’s return to the RCEP negotiations, according to the statement. The current RCEP consists of members from the Association of Southeast Asian Nations, Australia, China, Japan, Korea and New Zealand
Source: Economic Times
In a bid to speed up project implementation under the Prime Minister’s Employment Generation Programme (PMEGP) when Covid-19 has impacted all sectors, the Ministry of Micro, Small and Medium Enterprises has done away with district-level approval systems and eased procedures to help fund enterprises. Under PMEGP, loans of up to Rs 25 lakh are given for manufacturing projects while as Rs 10 lakh is given for the business and service sector. The Khadi and Village Industries Commission (KVIC), which implements the programme, subsidises 15% to 35% of a project’s cost, depending on the classification of the area where the project has been proposed. So far, the proposals were scrutinised by a district-level task force headed by the district collector. Since district collectors are often busy with administrative duties, there had been considerable delays in sanctioning projects. KVIC chairman Vinai Kumar Saxena took up the matter with MSME minister Nitin Gadkari earlier this month. In light of the impact of the pandemic on employment and entrepreneurship, Gadkari is said to have considered the matter on priority and approved a simplified procedure this week. According to the amended guidelines issued on April 28, the KVIC will now directly clear the proposals and applications of prospective entrepreneurs and forward them to banks for taking credit decisions. The MSME ministry issued a notification that said the role of the district-level task force “as constituted under Clause 11.9 of the Scheme guidelines, may be discontinued for recommendation of proposals/applications to the financing banks.” All pending applications have been moved out of the task force’s purview and sent ahead to banks for processing them. The ministry also ordered that all PMEGP applications presently pending at the task force level “may also be withdrawn by the implementing agencies and forwarded to the banks immediately for taking credit decisions.” The KVIC, in association with the Bankers Association of India, will also develop a scoring sheet that will be uploaded on the PMEGP Eportal to allow applicants to check the status of their applications, making the process transparent.
Source: Economic Times
Small businesses may get more time to repay working capital loans and even become eligible to borrow more, as banks try to support millions of enterprises brought to their knees by an extended national lockdown, said two people aware of the matter. The Indian Banks’ Association (IBA) proposed this flexibility to the Reserve Bank of India (RBI), which on 27 March allowed banks to recalculate “drawing power by reducing margins or by reassessing the working capital cycle for the borrowers".While some banks have already started implementing this, others are finalizing the contours of their revised framework, they said, requesting anonymity. “However, it is taking time because credit committees of individual banks will have to approve it," the first person said, adding India’s largest lender State Bank of India (SBI) has prepared a protocol for extending the working capital cycle and most banks are followingCoronavirus, Covid-19, Corona it. Under the IBA’s proposal, banks may extend small borrowers’ working capital cycle—the period from when the money is borrowed to purchase raw material, till the receipt of cash from buyers by selling the finished product. Besides, they will also re-assess the credit drawing power—the maximum a working capital borrower can utilise based on the level of inventory and receivables—for small businesses hit hard by the coronavirus pandemic. The MSME sector, which employs millions of people, is one of the casualties of the countrywide lockdown that has led to the closure of factories and businesses. The second person said that considering the current scenario, sales have come to a halt and many small businesses are not getting paid by their buyers, jeopardising their repayment capacity. “We have decided to extend the cycle by a maximum of 90 days to help micro, small and medium enterprises (MSMEs) tide over the current crisis. Several of our customers have also reached out to us seeking reassessment of their working capital cycles," he said, adding margins have fallen by 10-15 basis points (bps) across banks. Vikramaditya Singh Khichi, executive director, Bank of Baroda (BoB), said that the bank held an MSME outreach programme through video conferencing, where small business owners spoke of how their business cycles have become elongated and their receivables cycles had changed. “I have proposed a plan to reduce margins and reassess working capital limits. We are looking at this model and are expected to come out with this shortly. See, the norms will be slightly relaxed under the new framework, appreciating the difficult times that they are facing." Meanwhile, Kotak Institutional Equities conducted a survey of SMEs in the manufacturing segment across 17 different sectors, including textiles, chemicals, electrical and electronic goods, food processing, leather and plastics. According to this survey, very few SMEs, about 7%, think they will be able to survive for more than three months if their business remains closed.
Source: Live Mint
Most industry bodies and exporters expressed relief at the broad relaxations announced by the government on Friday, but reiterated their demand that the government bring out a stimulus package to help distressed segments of the economy. The Ministry of Home Affairs said after May 3, when the nationwide lockdown imposed to curb the spread of Covid-19 was scheduled to end, restrictions on movement of people will span only night hours (between 7 pm and 7 am), while private offices can operate with 33 per cent of employees even in urban areas, most of which are classified as red zones.“The relaxation to many industrial activities including industrial establishments in urban areas such as Special Economic Zones, industrial estates and industrial townships with access control within the red zone with restrictions, is absolutely in line with what Confederation of Indian Industry (CII) had been asking for and we especially welcome it,” said Chandrajit Banerjee, CII director general. The government also allowed the production of information technology hardware, jute and packaging material in red zones, along with construction activities with requisite restrictions. While the Centre has said the relaxations will be subject to clearances from state governments and local authorities, it strictly bars them from providing further relaxations. “It is imperative that lower level authorities get the power to use their discretionary judgement to provide specific relaxations in areas where they can be freely given,” Banerjee added. Industries have also cheered the government’s move to allow the movement of individuals and vehicles with restrictions for permitted sectors. “In the orange and green zones, buses have been allowed to operate with up to 50 per cent capacity. This will partly ease the pressure on companies, which have struggled to ferry employees to and from industrial units,” said a senior functionary of the Federation of Indian Chambers of Commerce and Industry (Ficci).
Fiscal stimulus
However, demands for a stimulus package continued to gather steam. “While a regular assessment of the zones and activities is required to further relax the opening up of business activities, it is also now opportune time for the government to come up with the financial package, especially for the micro, small and medium enterprises, and for industry on the whole,” said Sangita Reddy, president of Ficci. This was echoed by others as well. “Businesses across different sectors, be it hospitality, construction, logistics, manufacturing and trade find themselves locked up in grave financial woes. Fixed costs such as wages, electricity, rentals, communication are hard to meet even as operational losses are inevitable. Such a dire state of affairs demands a large fiscal stimulus, even if it requires monetisation of fiscal deficit by direct lending by RBI to the government,” said Assocham Secretary General Deepak Sood. Assocham has also petitioned the government to include reduction in goods and services tax rates, government guarantee to banks for lending to weaker businesses, release of all government dues, and restructuring of loans in a possible stimulus.
Source: Business Standard
The business community reacted cautiously with many pointing out that the partial relaxation of the lockdown won’t be enough to repair the fractured supply chain. Industry leaders, however, said they understood the government’s predicament. “49 days of lockdown makes statistical sense. Complete opening before that duration could have been risky. This is just four days beyond 49 days. It is, in fact, a calibrated preamble or pre-opening strategy. So, this is better than I had hoped,” Mahindra Group chairman Anand Mahindra said. “But it won’t solve the supply chain problem in this pre-opening phase. Hence, I can only hope that the exit post-May 17 will indeed be pan-India and comprehensive,” he said. “Post May 17, red zones and containment zones should be by exception only and full interstate movement of people and workers should be opened up. That will ‘join the dots’ of the supply chain network. If sequential opening of different parts of the country continues then, as I have said earlier, industrial recovery will be painfully slow. In manufacturing, if even one feeder factory is still locked down, then the final product assembly will be stalled,” Mahindra told ET. Maruti Suzuki’s chairman RC Bhargava, empathising with the challenges before the government, said: “The reason why the disease is spreading is that people are not following government regulations. If the lockdown was not extended, even districts which are now orange and green may turn into red zones. Would you want that to happen?” Bhargava said the government has specified activities which can happen in certain zones and the company has to evaluate the new measures which have been announced. Others were not so hopeful. “There’s no point. They’re unable to accept their mistake. Instead, they claim victory and opt for partially opening when cases are higher than ever before,” an industrialist who did not want to be named said. Many fear that sequential opening of different parts of the country will not enable industrial activity to resume smoothly. But IT hardware companies say they had been requesting the government for such a move. “It is a good move,” said the India CEO of an MNC IT hardware firm without wanting to be named. He would not comment whether the firm would resume production saying he had not gone through the notification. Industry lobby groups have also been asking the government for a strong stimulus. “With restricted economic activities, the imperative for a quick and forceful economic support package for the industry is even more compelling now. CII has suggested instituting a government spending package equivalent to 3% of GDP which would add Rs 6 lakh crore to the available firepower. Enhanced debt to GDP ratio can be a way out for adding fiscal space at a time when the debt to GDP ratio is modest in India,” said Chandrajit Banerjee, Director General, CII. Mobile phone sellers are set to reopen stores as the government eases restrictions. “All standalone (single) shops, neighbourhood (colony) shops and shops in residential complexes are permitted to remain open in urban areas, without any distinction of essential and non-essential,” the ministry of home affairs said on Friday.
Source: Economic Times
Direct tax collection recorded a healthy growth in April despite the nationwide lockdown and grew by 36.6%. Data accessed by The Hindu showed that the net direct tax collection for April 2020 was ₹34,780.4 crore as compared to ₹25,466 crore recorded in April 2019, a jump of 36.6%.Income tax collection in April was ₹19,762.1 crore while corporate tax collection was ₹14,608.1 crore. The Central Board of Direct Taxes (CBDT) had convened a video-conference on Friday with tax commissioners to review the collection position during the lockdown period. The collection figures of different zones were discussed during the meeting. The department noted the effort of the officers in ensuring healthy growth of tax collection in these testing times. Among the zones, Mumbai reported a massive 500% growth in net tax collections, followed by Bengaluru that reported 160% growth. Delhi, at number three, reported a 34% growth in April.
Revised targets
The government is expected to miss the direct tax collection target for the financial year 2019-20. The revised estimate has pegged the target for collection of direct taxes for 2019-20 at ₹11.70 lakh crore. The government had collected over ₹7.52 lakh crore as direct taxes till January 31.
Bleak forecast
In addition, the outlook for indirect tax collection is also bleak in the first few months of the current financial year due to the countrywide lockdown. Some reports suggest that GST collection in April and May could decline drastically as the number of electronic permits for transporting goods are down 80% in April. With the lockdown extended till May 17, tax collections are expected to remain subdued.
Source: The Hindu
If all goes well, the engines of the apparel cluster in Tirupur would be kickstarted over the next week. The Tirupur district administration is in favour of resuming industrial operations in all places of the textile hub excluding containment zones. Authorities have expressed their views for reopening the textile units in the report on their suggestions and recommendations on lockdown exit strategy sent to the state government. Once the recommendations are accepted, roughly 85% of the apparel units would bounce back to business. “If the government gives the nod, all the industries outside the containment zones would resume operations,’’ said a senior official. However, the industries would not go full throttle to start with and there would be enough checks and balances keeping in mind the Covid-19 situation. For the multi-million-dollar forex earning textile units that were staring at an uncertain future, the recommendation of the authorities has come as a relief. But the officials have told the industrialists that they must exercise utmost caution to ensure that the units do not become breeding grounds for Covid-19 patients. “It is the onus of the units to ensure that there is no violation of rules,’’ the official said. The apparel units should strictly adhere to social distancing norms and other rules like wearing face masks. The industries however said that they cannot operate to their full capacity right from Day 1 of reopening and that they would start with 25% workforce. “We are not ready to take any risk now by resuming 100 % operations. We would start and slowly increase our workforce,’’ said an industrialist. The industrialists have been demanding the government to allow reopening of units so that they can make sample pieces of garments which can be sent to their buyers.
Source: Times of India
U.S. President Donald Trump said on Thursday his hard-fought trade deal with China was now of secondary importance to the coronavirus pandemic and he threatened new tariffs on Beijing, as his administration crafted retaliatory measures over the outbreak. Trump's sharpened rhetoric against China reflected his growing frustration with Beijing over the pandemic, which has cost tens of thousands of lives in the United States alone, sparked an economic contraction and threatened his chances of re-election in November. Two U.S. officials, speaking on condition of anonymity, said a range of options against China were under discussion, but cautioned that efforts were in the early stages. Recommendations have not yet reached the level of Trump’s top national security team or the president, one official told Reuters. "There is a discussion as to how hard to hit China and how to calibrate it properly," one of the sources said as Washington walks a tightrope in its ties with Beijing while it imports personal protection equipment (PPE) from there and is wary of harming a sensitive trade deal. Trump made clear, however, that his concerns about China's role in the origin and spread of the coronavirus were taking priority for now over his efforts to build on an initial trade agreement with Beijing that long dominated his dealings with the world's second-largest economy. "We signed a trade deal where they're supposed to buy, and they've been buying a lot, actually. But that now becomes secondary to what took place with the virus," Trump told reporters. "The virus situation is just not acceptable." The Washington Post, citing two people with knowledge of internal discussions, reported on Thursday that some officials had discussed the idea of canceling some of the massive U.S. debt held by China as a way to strike at Beijing for perceived shortfalls in its candidness on the COVID-19 pandemic. Trump's top economic adviser denied the report. "The full faith and credit of U.S. debt obligations is sacrosanct. Period. Full stop," White House economic adviser Larry Kudlow told Reuters. Asked whether he would consider having the United States stop payment of its debt obligations as a way to punish Beijing, Trump said: "Well, I can do it differently. I can do the same thing, but even for more money, just by putting on tariffs. So, I don't have to do that."
WAR OF WORDS
Seeking to quell a damaging trade war, Trump signed a first phase of a multibillion-dollar trade deal with China in January that cut some U.S. tariffs on Chinese goods in exchange for Chinese pledges to purchase more American farm, energy and manufactured goods and address some U.S. complaints about intellectual property practices. Tariffs of up to 25% remain on some $370 billion worth of Chinese goods imports annually. Trump has touted his tough stance on China trade as a key differentiator from Democratic challengers in the presidential race. Keeping tariffs in place on Chinese goods allows him to say he is maintaining leverage over China for a Phase 2 trade deal. Speaking to reporters, Trump declined to say whether he held Chinese President Xi Jinping responsible for what he feels is misinformation from China when the virus emerged from Wuhan, China, and quickly spread around the world. A senior Trump administration official, speaking on condition of anonymity, said on Wednesday that an informal “truce” in the war of words that Trump and Xi essentially agreed to in a phone call in late March appeared to be over. Washington and Beijing have traded increasingly bitter recriminations over the origin of the virus and the response to it. Trump and his top aides, while stepping up their anti-China rhetoric, have stopped short of directly criticizing Xi, whom the U.S. president has repeatedly called his “friend.” Some of Trump's domestic critics say that although China performed poorly at the start of the outbreak, he now appears to be trying to use Beijing to help deflect from the shortcomings of his own response. While saying China should ultimately be held to account, Daniel Russel, who served as the State Department’s top Asia adviser until early in Trump’s term, said in a tweet: "You would be hard pressed to find a political leader in Asia or Europe who does not believe this anti-China push by the Trump administration is an entirely a political move." Among the other ideas under consideration for retaliation against China are sanctions, new non-tariff trade restrictions and a possible effort to lift China’s sovereign immunity, two sources familiar with the matter said. Lifting sovereign immunity could allow the U.S. government and American citizens to file lawsuits seeking damages from Beijing in U.S. courts. The options are being discussed, informally for now, across government agencies including the State Department, White House National Security Council, Treasury Department and Pentagon, two of the sources said. The strongest pressure for action is coming from the National Security Council, including deputy national security adviser Matthew Pottinger, while Treasury officials are advising caution, the sources said. Conversations are at a very preliminary stage and significant action is not considered imminent, the sources said. When asked, U.S. Secretary of State Mike Pompeo has repeatedly said Washington's priority at the moment is to fight the virus but that the time to hold China accountable would come.
Source: Reuters/ NY Times
The Ministry of Health and Family Welfare has called a high-level inter-ministerial meeting on Sunday to decide on the matter. After a month of closure, the government is planning to open factories, industrial units, and other business entities on a limited scale soon. The Ministry of Health and Family Welfare has called a high-level inter-ministerial meeting on Sunday to decide on the matter. Health Minister Zahid Maleque is expected to chair the meeting, scheduled for 12pm at the ministry's conference room at Bangladesh Secretariat. Senior secretary of the public security division of the home ministry, and secretaries to industries, labour and employment, and commerce ministries have been asked to participate, according to a notice issued on Thursday. Also, the inspector general of police and chief health officials of both Dhaka city corporations were invited to the meeting. Presidents of leading chambers and associations including Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Dhaka Chamber of Commerce and Industry (DCCI), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Textiles Mills Association (BTMA), and Metropolitan Chambers of Commerce and Industry (MCCI) were also invited to attend the meeting. According to the notice, the meeting would decide whether factories and industrial units should be opened on a limited scale amid the current coronavirus situation in the country. The government had called for a shutdown of industries and commerce since March 26 which was extended till May 5. On April 20, Prime Minister Sheikh Hasina said the government has a plan to allow some export-oriented industries to reopen, on a limited scale, if the guidelines on health and safety are properly maintained, and protective measures are taken for their workers. Garments in Dhaka reopened on April 26 – under certain conditions – while factories in Savar, Dhamrai, and Manikganj reopened on April 28, 29, and 30. Till Friday, at least 8,238 people have tested positive for coronavirus infection. The virus has claimed 170 lives while 174 people recovered.
Source: Dhaka Tribune
South Korea's export posted a double-digit decline last month as the COVID-19 outbreak across the world weakened global demand for locally-made products, trade ministry data showed Friday. Export, which accounts for about half of the export-driven economy, amounted to 36.92 billion U.S. dollars in April, down 24.3 percent from a year earlier, according to the Ministry of Trade, Industry and Energy. Import retreated 15.9 percent to 37.87 billion dollars, sending a trade deficit to 950 million dollars. The trade balance turned into red for the first time in 99 months. The ministry said demand for local products plummeted from major export destinations, especially from the United States and the European Union (EU) that imposed lockdowns and shut down the economies to contain the COVID-19 spread. Adding to the soft demand and supply disruption, the lower global crude oil price made things worse, the ministry noted. Export to the United States contracted 13.5 percent on weak demand for smartphones, automobiles and consumer electronics, and shipment to the EU went down 12.8 percent on slowing demand for cars, steels and petrochemicals. Shipment to the Association of Southeast Asian Nations (ASEAN) dropped 32.9 percent on soft demand for general machinery, chips, display panels and oil products, while shipments to India and Latin America nosedived more than 50 percent. Those to China, South Korea's biggest trading partner, as well as the Middle East and Japan also declined in double figures last month. Meanwhile, the daily average export shrank 17.4 percent in April from a year earlier. The number of business days in April fell by two compared with the same month of last year. The export fall was mainly ascribed to a slide of the export price that tumbled 15.0 percent last month. In terms of volume, the daily average export was down 2.9 percent. Computer export almost doubled as the coronavirus pandemic encouraged working at home and attending online classes. The computer shipment kept rising for seven months in a row. Biopharmaceutical product shipment continued to grow for the eighth consecutive month on solid demand for the locally-made diagnostic testing kits for the COVID-19. Automotive export plunged 36.3 percent as the lockdowns in the United States and Europe led car dealers there to stop business. Car parts shipment dived 49.6 percent amid the shutdown of vehicle factories in Europe. Exports for oil products and petrochemicals plummeted 56.8 percent and 33.6 percent each on the back of cheaper global crude oil and the weakened global demand, driven by the economic fallout from the COVID-19 outbreak. Shipments of semiconductors, display panels, smartphones, consumer electronics, general machinery, steel products, ships and textiles all reduced in double digits last month. Amidst the falling export, the country's import of capital and intermediary goods continued as local manufacturers operated factories without shutdowns, according to the ministry. Capital goods import added 1.3 percent in April from a year earlier, while the intermediary goods import diminished 13.9 percent in the month. It was a relatively slow pace of sliding compared with raw materials, of which import plunged 34.6 percent.
Source: Xinhua
