July 20, 2019

Sanctions did not change Russian policy but hurt German businesses – Bundestag member

“There is no effect of these sanctions. We have had them for five years and there is no change in Russian policy,” he said in an interview with German news radio Deutschlandfunk.

“If you prescribe a medicine and you notice that the effect of this medicine is missing, and on the contrary, it is rather harmful, including for the German companies, then you have to think at some point that maybe it’s the wrong medicine,” he explained.

Also on rt.com Sanctions on Russia can be lifted ‘at any time’ – French PM

The German politician pointed out that, as a result of the sanctions, Russia had reoriented towards China, with the two countries significantly improving their trade relations.

Meanwhile, trade between Germany and Russia has decreased, and “that’s the real problem.” The consequences of the economic sanctions are felt more clearly in the eastern German states than in the west, said Ernst.

“[Russia is] trying to replace Europe with China,” the politician said, adding: “A strong Europe is simply not possible without Russia, I repeat, not possible.”

Ernst noted that Russia and the European Union “have to get more cooperation.”

Also on rt.com Sanctions cost European economies $240 billion while Russia lost $50 billion – Putin

Relations between Russia and Western countries have declined dramatically over the past five years, after economic penalties imposed by Washington were supported by Brussels.

Politicians from the European countries have been repeatedly calling for the cancelation of punitive measures as they have become a major hurdle for businesses and economic growth.

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Article source: https://www.rt.com/business/464572-sanctions-russia-german-companies/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Grounding of 737 MAX after two deadly crashes will cost Boeing $5 billion to date

That will be the biggest quarterly loss in Boeing’s history when it reports its financial results next week.

According to the company, lost sales, reduced production and the compensation payments it was expecting to hand over to date would cost the plane maker $6.6 billion.

The sum does not include any provision for lawsuits expected to be filed by the families of the victims.

Also on rt.com Airbus to become world’s biggest plane maker as Boeing’s deliveries plunge over 737 MAX disaster

Average estimates of analysts compiled by Refinitiv suggested Boeing would book a per-share profit of $1.80 for the second quarter. The charge, which comes to $8.74 a share, will wipe out the aviation giant’s profits. It would reduce revenue and pre-tax earnings by $5.6 billion in the quarter, Boeing said.

Many global airlines have grounded their fleets of 737 MAX aircraft since mid-March, following crashes in Ethiopia and Indonesia that killed 346 people.

Boeing Chief Executive Dennis Muilenburg wrote on Twitter that the company remained focused on safely returning the 737 MAX to service.

“The MAX grounding presents significant challenges for our customers, company and supply chain,” he tweeted.

The US-based airplane manufacturer said it assumes the 737 MAX will return to service in the United States and other countries in autumn. Boeing also said that it had been forced to cut future services because of uncertainty over the timing of deliveries of 737 MAX planes.

An investigation into MAX crashes has revealed the majority of Boeing 737s had a non-working alert for faulty sensor data. The company scheduled the problem to be fixed three years after discovering it and didn’t inform the FAA until one of the planes crashed.

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Sanctions-hit Iran becoming ‘heaven’ for bitcoin mining, says govt official

The crypto craze has raised concerns from authorities that the energy-hungry process of “mining” bitcoin is abusing Iran’s system of subsidized electricity. Currently at half-a-cent per kilowatt, the subsidized electricity rates have fueled the country’s thriving crypto-mining community. Iran’s Electrical Industry Syndicate has recently revealed its intention to hike prices to seven cents per kilowatt.

Iran’s Minister for Information and Communications Technology Mohammad Javad Azari Jahromi said that the country has become “a heaven for miners.”

Also on rt.com Gold rush: Iran turns to precious metals as US sanctions bite

“The business of ‘mining’ is not forbidden by law but the government and the Central Bank have ordered the Customs Bureau to ban the import of [mining machines] until new regulations are introduced,” he told the Associated Press.

About 1,000 units of mining hardware have been confiscated from the country’s two now-defunct factories. Authorities have also cut off power to crypto miners ahead of the planned energy price hike.

The ban resulted in some miners taking refuge in the country’s mosques, which the government provides with free energy.

Iran is struggling with hyperinflation due to the toughened US sanctions. Statistics showed oil export revenues plunged by almost 90 percent, unemployment is close to 20 percent, with millions working below national poverty-line estimates.

Also on rt.com Iran exceeds uranium enrichment level set by nuclear deal as Europe fails to resist US sanctions

Last year, the head of the Iranian parliament’s economic commission, Mohammad Reza Pour-Ebrahimi, revealed that roughly $2.5 billion had been channeled out of Iran via cryptocurrencies.

The digital currencies have even caught the attention of the ayatollahs, debating that bitcoin is either problematic or definitively forbidden (haram under Islamic law).

“Some of our top clerics have issued fatwas (a ruling on a point of Islamic law given by a recognized authority) that say bitcoin is money without a reserve that it is rejected by Islam and cybercurrencies are haram. When we explain to them this is not a currency but an asset, they change their mind,” Jahromi said.

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Huawei dominates global race to 5G, inking over 50 contracts despite US crackdown

Despite pressure from Washington on its allies to ban Huawei technology, Chen said that 28 contracts were signed in Europe.

In June, Huawei helped to launch the 5G commercial network in Saudi Arabia. The company – which was barred from building fifth-generation networks by the US, Canada, and New Zealand – has also stepped into the Russian market. Huawei announced an agreement with one of Russia’s leading internet and mobile providers, MTS, to develop 5G networks. It has also contacted several Russian tech firms to create joint ventures and use their technology.

Also on rt.com Huawei looking to Russia for technology to cut reliance on US tech

The world’s leading telecommunications solution provider Huawei made the first global 5G call and launched the first 5G terminal device in 2018. Since then, the Shenzhen-based firm has faced pressure from the United States. Washington has accused the company of spying for the Chinese government, a charge both Beijing and Huawei have denied. Huawei was barred from doing business with American companies that supply it with necessary parts and technology.

READ MORE: More US allies defying Trump moving forward with Huawei’s 5G network – Boom Bust

The Trump administration has also been pressing allies to ban Huawei from 5G rollouts. Some countries like Australia and Japan have barred Huawei, while others, including India, are yet to decide whether to permit its 5G rollouts. The UK and Spain have already launched 5G commercial networks powered by Huawei base stations. This week, Brazil said it will not stop the Chinese technology company from operating within its borders.

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China to boost imports of Russian soybeans, cutting out US crop exports

Commerce Minister Zhong Shan met with Russian Minister for Economic Development Maxim Oreshkin this week. They agreed to “deepen trade in soybeans” as China looks to diversify supplies away from the United States.

Also on rt.com No US, no problem! Russia-China trade set to double reach $200 billion soon

The agreement follows Russian President Vladimir Putin’s announcement last year that Russia will increase its production and export of soybeans to China. Putin explained that Russia will fill China’s gap in the market, which was left by the protracted trade war between Beijing and Washington.

China has halted the import of soybeans from its biggest supplier, the United States, after imposing 25 percent tariffs on soybean imports. The levy came in retaliation to American tariffs on Chinese goods.

According to the US Department of Agriculture (USDA), “for 2018/19, sales and shipments of US soybeans to China are drastically low, but they are taking place.”

Also on rt.com Russia to replace US soybean exports to China amid escalating trade war

Meanwhile, trade between the neighboring countries, Russia and China, has been growing. In terms of agricultural products and food, the volume of trade rose by nearly 30 percent last year to more than $5 billion. The overall trade turnover between the two countries has seen historic growth to reach $108 billion, beating all forecasts.

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Article source: https://www.rt.com/business/464476-russia-china-soybeans-us/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

US big tech under attack: Spain to push ahead with tax on digital firms

The country’s acting Economy Minister Nadia Calvino told news radio network Cadena Ser that the government’s “intention is to put (the tax) back on the table as soon as there is a government.”

Spain’s parliament will vote next week on acting Prime Minister Pedro Sanchez’s bid to form a new government. His Socialist party won an early general election in April but without an absolute majority.

According to Calvino, it is necessary “to find a global solution” in regards to the big tech “because it is a global problem.”

Also on rt.com EU launches antitrust probe into Amazon’s use of merchant data

“We must take action because the impact on our economies cannot be minimized,” she said.

Asked about the possibility of the US imposing sanctions on Spain if it goes ahead with the tax, Calvino said it was “very risky” to predict its reaction because of Washington’s “erratic behavior.”

The minister said she believes the US Treasury Secretary Steven Mnuchin “sees the need for a global solution, he is very interested in finding a format for taxation that is fair for big internet firms.”

In January, Madrid introduced a draft law which would slap a 3.0 percent tax on revenues generated from some services to Spanish consumers by the largest tech firms such as Google, Apple, Facebook and Amazon.

Also on rt.com France passes law taxing tech giants despite US anger

In its intention to tax the tech firms, Madrid follows France which has also accused them of exploiting global tax loopholes. Last week, the French parliament passed a law levying a three-percent tax on sales generated in France by multinational firms. In accordance with the new law, any digital company with a revenue of more than €750 million ($850 million) – of which at least €25 million is generated in France – would be subject to the levy.

The law was passed despite Washington claiming it will ‘unfairly’ target Silicon Valley giants and the threats of imposing sanctions.

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Article source: https://www.rt.com/business/464465-spain-tax-us-tech/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

China’s debt tops 300% of GDP, constituting 15% of all global debt – report

Data showed the country’s total corporate, household and government debt rose from 297 percent in the same period a year earlier.

“While authorities’ efforts to curb shadow bank lending (particularly to smaller companies) have prompted a cutback in non-financial corporate debt, net borrowing in other sectors has brought China’s total debt to over $40 trillion – some 15 percent of all global debt,” said the report.

It added: “Of note, onshore bond issuance suggests a big pickup in borrowing by local governments and banks this year.”

Chinese officials have repeatedly said debt risks are manageable overall.

Beijing reported this week that the economy grew 6.2 percent in the second quarter from a year ago. That’s the worst result in nearly three decades for the country dragged into a trade war with the United States.

Also on rt.com China’s slowing economy still shows growth that any country would envy

The country’s authorities have been encouraging banks to lend more in order to revive investment and protect jobs. Beijing has also unveiled billions of dollars in tax cuts and infrastructure spending.

READ MORE: Portugal becomes first eurozone country to issue debt on China’s market

According to the Finance Ministry, in the first half of 2019, local governments’ total net bond issuance reached 2.1765 trillion yuan ($316.5 billion).

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Venezuela may switch from SWIFT to Russian payment system to skirt US sanctions – report

Venezuela’s central bank has sent a request on the matter to the Central Bank of Russia (CBR) as the regulator’s approval is necessary if Caracas wants to use the payment platform, the report said, citing sources. However, neither of the sides involved, nor the world’s largest payment system, SWIFT, has commented on the report.

Also on rt.com Russia, China, Iran Venezuela developing crypto to challenge US financial control – study

Russia developed its own money transfer mechanism –called the System for Transfer of Financial Messages (SPFS)– in 2014, amid concerns that SWIFT’s political neutrality could be shattered under US pressure.

The Russian alternative payment system already includes nearly 400 users, including the country’s major banks. Last month, the Central Bank of Russia (CBR) said that foreign banks had shown interest in joining the platform and are already testing it.

Caracas has already been hit by several rounds of US restrictions, including sanctions against its vital oil sector, which accounts for most of the nation’s revenues. Washington has already threatened to ban globally recognized credit systems such as Visa and Mastercard, as well as other financial institutions, from doing business with Venezuela. It is believed that Belgium-based SWIFT may also fall under the new sanctions.

Also on rt.com The human cost of US ‘economic war’ on Venezuela: Hyperinflation hits 130,000% last year

The cut-off from global banking could further cripple the Venezuelan economy, which is already struggling with the disastrous consequences of an economic crisis and with US restrictions. Venezuela’s GDP shrunk by 47.7 percent in the five years since 2013, while inflation reached more than 130,000 percent last year.

The US has been tightening its sanctions grip on Venezuela since January, when the Trump administration started backing opposition leader Juan Guaido, who proclaimed himself ‘interim president’ and called for the ousting of elected President Nicolas Maduro.

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Article source: https://www.rt.com/business/464389-venezuela-russia-swift-alternative/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Crude oil prices plunge as conflict between US and Iran cools

The comments come a day after Iran’s foreign minister Javad Zarif spoke with NBC News, where he seemed to crack open the door to negotiations of some sort. When asked what it would take to get Iran to the bargaining table, Zarif took issue with the premise of the question. “No, we are at the bargaining table. It is the United States that left the bargaining table,” he said. “And they are always welcome to return.”

© Getty Images / Guy Vanderelst Oil could skyrocket to over $100-per-barrel if Iran-US war breaks out, analysts predict

He then framed Iran’s recent moves to withdraw from parts of the 2015 nuclear deal as a response to the US not holding up its end of the deal. The Trump administration unilaterally left the agreement in 2018.

But again, Zarif seemed to open the door. When NBC News’ Lester Holt asked whether or not Iran’s latest decisions to begin stockpiling low-enriched uranium, among other maneuvers, could be reversed, Zarif was quick to respond. “Of course. It can be reversed within hours.”

So, that prompted NBC’s Holt to ask if Iran would negotiate if sanctions were lifted. “The United States is addicted, unfortunately, to sanctions,” Zarif said, noting longstanding restrictions placed on Iran. However, he took particular issue with the sanctions that were implemented since last year under the Trump administration. Those are the sticking point. “Once those sanctions are lifted, then room for negotiation is wide open,” Zarif said.

Perhaps even more notable was how Zarif responded when asked about Iran’s ballistic missile program. The US has issued a series of demands regarding Iranian missiles, an issue that was not part of the 2015 nuclear deal. That seemed to be a non-starter, but Zarif didn’t necessarily dismiss it as out of hand. He said that Iran would be willing to talk about anything after the US recommits the deal they already have, referring to the nuclear agreement. He also said that the US needed to stop sending weapons to Saudi Arabia and the UAE. It all seems highly unlikely, but the tone was more open than it had been in the past.

Also on rt.com US to punish anyone using EU’s alternative payment system with Iran to skirt sanctions

Zarif even mentioned job creation in the US that would have come from expanded trade between the two countries (Iran was in the midst of planning major airplane purchases from Boeing before the Trump administration scrapped the deal), and said that Tehran would welcome American businesses back to Iran if their issues could be resolved. Perhaps Zarif was hoping to appeal to President Trump’s desire to strike deals.

The lengthy interview and rather accommodating tone from Zarif appeared to succeed in softening up the Trump administration. President Trump said at a cabinet meeting on Tuesday that the US was “not looking for regime change,” although he added that he did “want them out of Yemen.”

© AFP / Fethi Belaid Little drama for OPEC meeting as Russia is the real power behind the scenes

“They’d like to talk, and we’ll see what happens,” Trump said.

Following those comments, Sec. Pompeo said that “for the first time” Iran was “ready to negotiate on their missile program.”

Oil prices plunged by 4 percent on Tuesday after Trump and Pompeo seemed to lay the groundwork for de-escalation. There are no formal next steps that the two countries might take, but the positive back-and-forth is long way from where they were a few weeks ago, on the eve of a US military strike.

Iran’s oil exports are still down to about 400,000 bpd, sharply lower than from earlier this year. However, the de-escalation potentially removes one of the most significant bullish factors in the oil market. “What were tailwinds have become headwinds,” Bob Yawger, director of energy futures at Mizuho in New York, told Reuters.

The nascent thaw in US-Iran relations comes after the US Gulf of Mexico avoided serious damage from Hurricane Barry, and 1.3 million barrels per day of disrupted oil production is in the process of coming back online. Moreover, it was only a few days ago that the IEA and OPEC warned that the market is set to see a substantial supply surplus next year, absent further action from the OPEC+ coalition.

WTI was down to $57 on Tuesday and Brent fell by 3 percent, dipping below $65.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/464372-oil-prices-fall-iran-conflict/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

World Trade Organization allows China to sanction US over Obama-era tariffs

According to the trade regulator, 11 US countervailing measures have violated WTO rules. It has asked Washington to rectify the irregularities.

The decision relates to a case that dates back to 2007. It follows China’s appeal to the WTO in 2012 to challenge US anti-subsidy tariffs on Chinese exports. These exports included solar panels, wind towers, steel cylinders and aluminum extrusions, with an estimated value of $7.3 billion at the time.

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

China’s Ministry of Commerce (MOFCOM) said the WTO appellate report proves the US “repeatedly abused trade remedy measures, which seriously damaged the fairness and impartiality of the international trade environment.”

According to the MOFCOM statement, “China urges the US to take concrete measures immediately to correct its wrongdoings in its anti-subsidy measures to China, and to create a fair international trade environment for companies from both countries.”

It noted that China “has always respected the multilateral trade rules, and is against any abuse of trade remedy measures.”

Also on rt.com Trade war de-escalation? Washington promises not to hit Beijing with new tariffs

If China decides to bring sanctions to bear in the dispute, it would need to enter a new round of legal argument over the value of any damage to its trade.

The Trump administration blasted the WTO decision shortly after it was released, saying that the ruling “undermines WTO rules, making them less effective to counteract Chinese subsidies that are harming US workers and businesses.”

Trump has warned that Washington could impose tariffs on an additional $325 billion-worth of Chinese goods if it needed to so do.

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