Archives for June 2019

It was reported earlier this month that the country in southeast Asia had emerged as the main beneficiary from the tit-for-tat tariff war between the world’s two biggest economies. In a bid to dodge the levies and scupper Trump’s efforts to cut the American trade deficit, some exporters are believed to have shipped goods to Vietnam, which then sent them to the US.

Also on rt.com US-China trade war may soon become a currency war, strategist warns

Vietnamese trade data shows that such reports could be true. For example, imports of Chinese computer and electronic goods by Vietnam surged by more than 80 percent to $5.1 billion in the first five months of 2019. During the same period, there was a similar increase of nearly 72 percent in the volume of the same goods exported from Vietnam to the US, according to the WSJ. 

Overall, exports to the US from Vietnam jumped nearly 30 percent from January through May. 

Trump says ‘very big trade deal’ with India may be coming

Another report found that the southeast Asian nation boosted its GDP by 7.9 percent as it increased exports to both China and the US. 

Exporters seeking to dodge tariffs also have been caught illegally relabeling goods of Chinese origin as “Made in Vietnam.” Vietnam’s customs agency has already vowed to crack down on the practice, stepping up control and imposing penalties on businesses for such actions. 

All of this has been enough to draw the ire of the US president. “Vietnam is almost the single worst – that’s much smaller than China, much – but it’s almost the single worst abuser of everybody,” Trump said on Wednesday, adding that the two countries are currently in trade talks.

Notably, it seems that Trump was aware that Vietnam may have gained from the US-Beijing trade spat. In his tweet storm in May, he said that many “tariffed companies will be leaving China for Vietnam and other such countries in Asia,” but did not accuse Hanoi of any unfairness.

Following the US threat and apparently in fear of losing access to the lucrative American market, Vietnam rushed to assure its overseas partner that it wanted a free and mutually beneficial trading relationship.

Also on rt.com US-China trade war is a ‘blessing in disguise’ for Indonesia

“Vietnam seeks to further economic, trade and investment ties with the United States which promote freedom and fairness, based on mutual benefits,” Vietnam’s Foreign Ministry spokesperson Le Thi Thu Hang said on Friday.

The US’ trade deficit with Vietnam stood at $39.5 billion last year. In an apparent attempt to address it, Hang said that the country “made efforts to improve the bilateral trade balance” and promote the importation of US goods to Vietnam.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/463065-vietnam-trade-war-trump/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The agreement, reached at the end of last year between OPEC (Organization of the Petroleum Exporting Countries) members and allied major oil producers led by Russia, has almost expired. However, the agreement has, apparently, not produced the desired results and the parties have signalled their preference for keeping the production limits in place. The ministers of OPEC and non-OPEC states will meet in Vienna on Tuesday.

Also on rt.com $300 oil? US war with Iran spells catastrophe for global economy, expert tells RT

Speaking after the G20 summit on Saturday, Russian president Vladimir Putin said that both Moscow and Riyadh are on the same page over the fate of the deal and will advocate for its extension. It was the first time a leader from the OPEC+ club indicated that the curbs may be need to be in place up to next year and even beyond.

“We’ll think for how long [to extend it] – six or nine months,” the Russian leader told journalists.

Meanwhile, Russia’s Energy Minister Alexander Novak said it would be better to keep the agreed output cuts in place so as not to disturb the market. He explained that Russia’s decision on the deal was driven by the current market situation, existing uncertainties and the forecast for the second half of the year.

Also on rt.com Oil may hold the secret to ending the trade war

Saudi Arabia, OPEC’s largest producer and the group’s de facto leader, agrees that the output-cutting deal should be prolonged.

“I think most likely a nine-month extension,” Saudi Energy Minister Khalid al-Falih told reporters on Sunday. However, the minister believes that the markets would not need any deeper cuts after that.

Riyadh contributed most to the cuts of 1.2 million barrels per day stipulated by OPEC+ deal. The kingdom curbed its crude production to 9.7 million barrels-a-day in May, a 120,000 bpd drop from April and much behind its OPEC+ ceiling of 10.3 million bpd.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/463055-opec-oil-cuts-extension/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Looking at the current volatility in the Persian/Arabian Gulf and the possibility of a temporary closure of the Strait of Hormuz, the Aramco CEO’s message might be a bit overoptimistic. In reality, Aramco will not be able to keep the necessary crude oil and products volumes flowing to Asian and European markets in the case of a full Strait of Hormuz blockade. Even that Aramco owns and operates a crude oil pipeline with a capacity of 5 million bpd, carrying crude 1,200 kilometers between the Arabian Gulf and Red Sea, much more is needed to keep the oil market stable. 

Also on rt.com Thorny dilemma: Will Trump manage to rein in oil prices keep on pressuring Iran Venezuela?

Nasr’s move to stabilize the market is praiseworthy but should be seen as an attempt to quell fears of traders and financial analysts, especially just before the OPEC+ meeting in Vienna next week. Nasr reiterated that Aramco (aka the Kingdom) is able to supply sufficient crude through the Red Sea, reiterating that the necessary pipeline and terminal infrastructure is there. However, what analysts tend to forget, Nasr’s statement is only linked to Saudi’s oil export volumes, which will likely be not higher this summer than around the level this pipeline can support. The real issue, if it comes to a full-blown conflict, is that not only Saudi oil is being threatened.

At present, between 20-21 million bpd of crude and petroleum products are transported via the Strait of Hormuz. Saudi exports are a vast part of it, but also the UAE, Iraq, Kuwait, Bahrain, Qatar and Iran, will have to look at additional routes. A closure or military action in the region will cause a temporary disruption for all maritime traffic. Besides the options that are the already on the table, such as the Saudi onshore pipeline and the UAE’s Fujairah pipeline,  no other real alternatives are available, as overland trucking or rail transport is minimal. Transferring volumes via the Saudi and UAE’s pipelines is not an option at all, as the total capacity of the two is less than 10 million bpd, representing not even 50 percent of the current maritime flows through Hormuz. Another thing that should be noted is that pipelines can’t ship crude and crude products at the same time.

Another consequence of a blockade would be that most available VLCCs and other tankers will either be in the Persian Gulf (and blocked) or will not be able to be rerouted. Before the market will have found a solution for this, days and probably weeks will have gone by, and a price spike for all products is to be expected.  This will likely also be the case for LNG and other commodity flows.

Also on rt.com Oil could skyrocket to over $100-per-barrel if Iran-US war breaks out, analysts predict

Few analysts are talking about oilfield security and pipeline availability. Any military advisor will put these options as part of his or her 1st phase military action plan. If Iran were to be attacked, or faces a surgical strike by an opponent, all Arab oil and gas infrastructure will become a legitimate offensive target (at least in the eyes of Tehran and its proxies). Geographically seen, Tehran has been dealt the best cards. Looking at the majority of oil and gas production assets and infrastructure in the Arab world, especially in Saudi Arabia, UAE or even Iraq, everything is in reach of short-distance missiles, fighter jets and even drones. Any move against Iran will result in a full-scale attack on Saudi’s Eastern Province (which produces 80 percent of all its oil and gas), Abu Dhabi’s offshore oil infrastructure and the regional pipelines. Looking at history, denying energy access and diminishing the opponents stability is a no-brainer in military strategy.

It can be taken for granted that Iran, the Houthis, Hezbollah and others, already have prepared their oil and gas infrastructure strategy. Washington, Riyadh, Abu Dhabi and even Manama, will be frantically looking for answers, but the geographical situation is disastrous.

Also on rt.com OPEC ‘likely to collapse’ thanks to some members’ unilateralism – Iran’s oil minister

Quelling fears in the market is the right thing to do, but reality also needs to be addressed. Nasr’s message is that of an oil company CEO, taking all precautions to deal with a calamity. ADNOC’s Sultan will be doing the same. Still, the oil market is at present a victim of geopolitical power projections of emotional leaders superseding rationality. This confrontation is one of a possibly unprecedented order, not for oil (as sceptics again will state) but with oil as a weapon for defeat or survival. The continuing reference to the Iran-Iraq tanker war during 1980-1988 is out of touch with reality. At this time, it is not going to be Iran denying support or trade with Iraq, but a possible Arab-Iranian confrontation, led by the USA if no countermeasures are being implemented.

Asian consumers will need to prepare for severe price hikes in the most optimistic scenario, but also for a shutdown of vast parts of their economy. Hormuz will not be standing on its own, more is to be taken into account, especially proxy reactions in Yemen (Gulf of Aden) or East Med (Hezbollah).  Negative repercussions for Europeans are also in the picture. Saudi Arabia can do a lot, but saving the global economy if the Gulf explodes is not one of their capabilities.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/463045-oil-crisis-saudi-arabia/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The new airport covers the area of 1.4 million square meters and the terminal’s territory is equivalent to 25 football fields. The construction and inspection of the hub, which is located 46km south of downtown Beijing, was completed on Sunday.

Daxing International Airport is currently being prepared to become fully operational. It is scheduled to open its doors before the end of September.

China has invested around $60 billion in the undertaking, project manager Li Jianhua told RIA.

The hub has been designed to reduce pressure on the overcrowded Beijing Capital International Airport. It is also set to support China’s intention of becoming the world’s largest civil aviation market by the mid-2020s, according to Xinhua.

The airport is set to serve 72 million passengers and 620,000 flights annually by 2025, and will further increase its capacity to 100 million passengers and 880,000 flights by 2040. It is therefore expected to match world’s busiest airport, Atlanta in the US, and will likely surpass it in terms of passenger throughput.

“It is the world’s largest integrated transportation hub. The terminal building is also the world’s largest built with seamless steel structure, boasting the world’s first design of double-deck departure and double-deck arrival platforms,” said Bai Henghong, director of the Beijing Daxing International Airport project command of Beijing Construction Group, as quoted by Xinhua.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/463040-worlds-largest-airport-beijing/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

He told CNBC that the US Federal Reserve has been yielding to pressure from the White House with a policy which could shape the dollar’s future.

“[The Fed] moved 180 degrees from being in auto-pilot, tightening mode to cutting rates and easing monetary policy, so I think there is a certain pressure on,” Gattiker said.

Also on rt.com US Fed cuts rates like an alcoholic who always drinks no matter what – RT’s Keiser Report

The expert strategist added that the current geopolitical environment was creating new objectives for the Fed, including the maintenance of an “orderly economic environment.”

“With its new mandate, [the Fed] is entitled to yield to this pressure, even in the greater scheme of things with the trade war. So, I think a weaker dollar is warranted, from a US perspective,” he said. “We might actually be turning from a trade war situation to a currency war situation in the next two to three years.”

Among other causes, a currency war begins when a country deliberately depreciates the value of its domestic currency in order to stimulate its own economy.

President Donald Trump has recently accused other countries, China in particular, of manipulating their currencies to gain “unfair” competitive advantages.

Also on rt.com US proposes penalties on countries it accuses of manipulating currencies

Last month the US Commerce Department proposed a new rule to impose anti-subsidy duties on products from countries that Washington sees as undervaluing their currencies against the dollar to get an advantage in trade.

The rule could place goods from Japan, South Korea, India, Germany and Switzerland at risk of higher tariffs. Those countries, along with China, were all listed on the Treasury Department’s currency report’s “monitoring list.” The list tracks currency market interventions, high global current account surpluses and high bilateral trade surpluses.

In its recent report, the United Nations warned that elevated trade tensions could “spiral into currency wars, making dollar-denominated debt more difficult to service.”

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/463034-us-china-currency-war/?utm_source=rss&utm_medium=rss&utm_campaign=RSS