Archives for December 2019

The Fed has become the latest body to stress the damaging consequences of “unprecedented” punitive tariffs unleashed by US President Donald Trump on China and other trade partners – including Canada, Mexico and the EU – at the beginning of 2018. In a recently released report, Fed economists Aaron Flaaen and Justin Pierce said that the negative effects of the measure outweighed the benefits, at least in the short term.

The good, the bad the ugly about US-China trade breakthrough

“We find that tariff increases enacted in 2018 are associated with relative reductions in manufacturing employment and relative increases in producer prices,” the paper says.

According to the Fed report, US industries working with aluminum and steel faced the biggest increase in prices, as new import levies accounted for 17.6 percent of costs for aluminum sheet producers, and 8.4 percent of costs for steel products manufactured from purchased steel.

Some American manufacturers could have benefitted from reduced competition in the domestic market, but tit-for-tat tariffs lowered their competitiveness overseas. This affected a range of industries, the study found, including magnetic and optical media, leather goods, aluminum sheet, iron and steel, motor vehicles, household appliances, audio, video and computer equipment.

While some industries managed to enjoy a degree of import protection thanks to the tariffs, this was offset by “larger drags” from rising input costs and retaliatory measures, according to the paper. The economists state that longer-term effects may be different, as US companies can adjust their supply chains to avoid US import levies, but they could also choose to relocate outside of the US, as claimed by some earlier studies.

Also on rt.com US mulls boosting EU tariffs as WTO says Airbus keeps getting European subsidies

“Our results suggest that the traditional use of trade policy as a tool for the protection and promotion of domestic manufacturing is complicated by the presence of globally interconnected supply chains,” the report concludes.

Washington and Beijing are currently trying to finalize phase one of their trade deal, with both sides currently working on the text and other procedures necessary to ink the agreement. The world’s two biggest economies have imposed tariffs on billions of dollars’ worth of each other’s goods, with a new round of tariffs averted by the recent breakthrough. 

Meanwhile, another US trade war with the European Union is still raging. After the World Trade Organization (WTO) ruled that the EU paid improper financial subsidies to airplane manufacturer Airbus, thus hindering sales by US rival Boeing, the Trump administration imposed punitive tariffs on EU goods. The US imposed record duties on Airbus planes and agricultural products like French wine, Italian cheese and Scotch whisky, and has recently threatened the EU with new hikes.

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Article source: https://www.rt.com/business/477035-tariffs-failed-fed-study/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

This is according to Shoichi Tosaka, chief executive of the Japanese materials and electronics company Taiyo Yuden, which supplies ceramic capacitors to various smartphone makers. In an interview, the CEO said that Huawei, together with another Chinese tech firm ZTE, placed the most orders for components to make more 5G base stations.

Also on rt.com China’s Huawei to create alternative to Google services in India by year’s end

“We’re already getting orders for 5G base stations,” he said earlier this week as cited by media. “Early next year we should start seeing 5G-related orders for smartphones.”

The growing demand comes despite the US continuing to push Huawei out of its market and pressures its allies to follow suit. Washington has already blacklisted the company, but European states are still divided on the matter, with many refusing to single out any supplier when it comes to the launch of 5G.

Also on rt.com Huawei should not be banned from 5G deployment in Italy – economic development minister

US restrictions on Huawei, one of the Japanese supplier’s major clients, could have resulted in losses for Taiyo Yuden. However, the capacitor managed to post gains, with the price of its shares more than doubling since the beginning of the year. This could be partly because its other key customer, Samsung, has also presented its 5G smartphones this year, while US tech giant Apple is getting ready to enter the race in 2020.

Huawei has been considered a leader in the development of the super-fast networks. In September, the Shenzhen-based company announced it had already signed 50 commercial 5G contracts globally and shipped 200,000 5G modules, while some European operators continue choosing Huawei as a key supplier for the rollout of 5G networks in their countries.

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

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The high-quality precious stone was mined at the ALROSA-operated Botuobinskaya kimberlite pipe in the remote Yakutia (Sakha Republic) in the early hours of December 25. The gem could have lain undisturbed for around 2 billion years, according to preliminary data, but further examination is set to determine the exact age.  

Russia to sell diamonds in China on WeChat using blockchain technology

The discovery of the diamond just before New Year’s is a “real gift,” the deputy CEO of ALROSA, Evgeny Agureev, said. He added that nature has been very generous this year, with remarkable “surprises” such as a heart-shaped diamond which was also unearthed by the company right before Valentine’s Day.

The massive gem is now set to be sent to the United Selling Organization at ALROSA for further examination and preliminary valuation.

Earlier this year, the Russian diamond major, which is the world’s largest diamond miner by volume, discovered the unusual ‘Matryoshka diamond’, which has one gem moving freely inside a larger crystal, resembling the traditional Russian doll. It is thought to be first of its kind in the history of global diamond mining.

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Nearly 78,000 people are set to lose their jobs, as more than 50 banks have revealed plans to downsize their workforce this year, according to Bloomberg, citing filings by the companies and labor unions. It is the highest number since 2015, when 91,448 employees in the banking sector were let go.

European banks will see the biggest layoffs, as they plan to cut more than 63,500 jobs or almost 82 percent of the total. North American banks come in second, as they reportedly plan to dismiss nearly 7,700 people.  

Also on rt.com Robots are coming for Wall Street: AI threatening top finance jobs

Top investment bank Morgan Stanley has recently joined other lenders in the effort to downsize staff, as it is reportedly planning to axe 1,500 (roughly two percent) of its workforce. But it is still far behind Deutsche Bank, which tops the list of planned job cuts with 18,000 employees set to be laid off through 2022 as part of an $8.3 billion overhaul.

This year’s banking staff reductions bring the total for the last six years to more than 425,000. However, the figure might be even higher as many banks could eliminate jobs without disclosing their plans.

Also on rt.com Deutsche Bank deploys an army of robots to replace 18,000 workers

“Although it’s been a bull market, there’s not been a lot of primary activity and that’s made it very hard to pay the bills,” an investment director at stockbroker AJ Bell, Russ Mould, told Yahoo Finance UK.

The sweeping cuts might continue in 2020, as some analysts believe that banks continue to face “a number of uncertainties.” For example, Swiss multinational private bank Julius Baer as well as Spain’s Banco Bilbao Vizcaya Argentaria SA are reportedly looking into reducing their workforce.

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

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In a document called ‘fact sheet’ on the US opposition to Nord Stream 2, the State Department demands that all related parties “immediately cease construction-related activity” in a “good-faith wind-down,” adding that those who lack this good faith would face sanctions.

Further down in the text, it clarifies that the contractors have 30 days to comply with America’s demands, warning that Secretary of State Mike Pompeo will identify and reveal all “violators” to the US Congress in about two months.

Also on rt.com Trump’s ‘pro-European’ Nordstream 2 sanctions are an obvious market grab. But does Europe have the guts to resist?

Apart from threats of sanctions against those who defy Washington and cooperate with Russia on the gas pipeline project, the document repeats arguments about Nord Stream 2 allegedly harming Ukraine’s interests and threatening European energy security. “The United States’ intention is to stop construction of Nord Stream 2,” it bluntly states.

The threats seem to have worked on Swiss-Dutch construction company Allseas, which halted work on the last section of the pipe. On Friday, Russian Minister of Energy Alexander Novak said that the pipeline would still be launched by the end of 2020, as Russia has the equipment needed to complete construction.

Objections to the pipeline from Washington and its European client states have been mainly political in nature, dealing with the potential loss of leverage more than anything else. The US has even called Germany a “hostage” because of its “increasing dependency” on Russian gas, while offering its own liquefied natural gas – officially described as “molecules of freedom” – as an alternative, though at a much higher price. Ukraine and Poland say the Nord Stream 2 will rob them of billions of dollars in transit fees which they’ve been collecting from Russia over the years.

Also on rt.com ‘Climate tariffs’ on fracked ‘molecules of freedom’: German think tank wants to punish US for sanctions against Nord Stream 2

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Article source: https://www.rt.com/business/476987-nord-stream-sanctions-ultimatum/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Swiss-Dutch construction company Allseas recently succumbed to the pressure of US sanctions and halted work on the last section of the pipe.

Still, the Nord Stream 2 is expected to become operational by the end of 2020, Novak told reporters on Friday – and Russia itself has the equipment needed to complete the project.

Also on rt.com Extra-territorial US sanctions on Nord Stream 2 bringing Russia Europe closer together – economy minister

“One of the options we have [to complete the pipeline] is a vessel that is currently in the Far East. But we’ll need some time for additional preparations,” Novak said. 

The vessel that the minister mentioned is the Akademik Cherskiy pipe laying vessel, which is operated by a Gazprom subsidiary and is currently moored at the port city of Nakhodka. Given the differing climates of Russia’s Far East and the Baltics, the vessel itself would require tuning. Its voyage to the Nord Stream 2 construction site will also take time.

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Article source: https://www.rt.com/business/476972-nord-stream-2-gas-launch/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Novak said in an interview with Russia 24 TV that “A contract will be signed between Gazprom and Naftogaz for providing services as an entity that will act as the organizer of transit. These are commercial agreements which are mutually beneficial.”

He added that starting from January 1, Russia and Ukraine will cancel mutual claims while asset seizures will be lifted.

Also on rt.com What we know so far about Russia-Ukraine gas transit deal

“We have agreed to start from scratch on January 1, reciprocal claims will be nullified, property seizures will be lifted due to court rulings in legal claims,” ​​the minister said.

Moscow and Kiev sealed a gas cooperation protocol on December 20 to secure Russian gas transit after expiration of the current contract. Russia’s Gazprom said last week it would settle court disputes with Ukraine’s Naftogaz, and anti-monopoly disputes with the Ukrainian government by December 29.

Also on rt.com Russia Ukraine sign ‘protocol of agreement’ for gas transit to Europe – Gazprom

Under the new protocol, Naftogaz should reserve capacities for transporting 65 billion cubic meters of gas in 2020 and 40 billion cubic meters annually in 2021-2024.

The protocol also includes legal dispute settlement arrangements. According to them, Gazprom will have to pay Naftogaz $2.9 billion in compliance with the Stockholm arbitration ruling and the sides will have to sign an agreement on dropping lawsuits for which there is no final decision. The Ukrainian government will have to ink a settlement agreement with Gazprom on $7.4 billion in antitrust claims.

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Article source: https://www.rt.com/business/476934-russia-ukraine-gas-transit-agreement/?utm_source=rss&utm_medium=rss&utm_campaign=RSS