Month: January 2019

China’s trade surplus with the United States rose dramatically in 2018, despite a tit-for-tat tariff war with the U.S. that has roiled global markets. The surplus stood at a record-high $323.3 billion, compared to $275.8 billion recorded the year before.  Data released Monday by China’s customs bureau shows the country’s exports to the U.S. grew more than 11 percent in 2018. Imports from the United States rose only slightly (0.7 percent).  But the data also revealed that exports slowed by 3.5 percent last month, as the administration of President Donald Trump imposed a series of stiff tariffs on billions of dollars of Chinese goods to force Beijing to buy more American goods and to resolve issues involving technology, intellectual property and cyber theft issues. The data also revealed mixed news about the strength of the world’s second-biggest economy – while China’s global trade surplus was $352 billion for 2018, its global exports dropped 4.4 percent in December compared to a year earlier, while imports plunged 7.6 percent, suggesting softening demand both at home and abroad. Figures released by the China Association of Automobile Manufacturers show that car sales fell in 2018 – the first time in 20 years for a decline. …

The auto industry gathered in Detroit on Sunday, on the eve of the last winter edition of North America’s premiere auto show, as carmakers grapple with a contracting market and uncertainty in the year ahead. Concerns over the health of the global economy and a US-China trade war loomed over the North American International Auto Show, as it prepared to open Monday with the first five days dedicated to the media and industry insiders. The show opens to the general public on January 19. While a number of major announcements were expected — including an anticipated strategic alliance between Ford and Volkswagen — there will be fewer automakers and new car unveilings, making it more subdued.  “This is a transition year for the Detroit show,” said analyst Michelle Krebs of Autotrader. “It’s kind of emblematic of where the industry is. We’re in a transition in the industry.” After a 10-year boom, analysts expect North American auto sales to contract in 2019, as consumers face pressures and carmakers grapple with multiple uncertainties.  Rising interest rates and car prices have squeezed car buyers, and fewer of them are able to afford increasingly pricey, technology-heavy cars.  Kelley Blue Book predicted the average new-car price was up about three percent in 2018 to more than $36,000. – Tariffs cause uncertainty – Meanwhile, tariffs on imported steel and aluminum products and a potentially intensifying trade dispute between the Donald Trump administration and Beijing has automakers spooked, analysts said. “Tariffs already had an impact in 2018,” …

Saudi Arabia’s energy minister said Sunday that major oil producers need to do better to narrow swings in prices that dip below $60 a barrel and rise above $86. “I think what we need to do is narrow the range… of volatility,” Khalid al-Falih said.   “We need to do better and the more producers that work with us, the better we’re able” to do so, he told the Atlantic Council’s Global Energy Forum in Abu Dhabi.   Cautious not to set a price target or range, he explained there are consequences when oil prices dip too low or rise too high.   Last month, OPEC countries, including Saudi Arabia, and other major oil producers agreed to cut production by 1.2 million barrels a day to reduce oversupply and boost prices for the first six months of 2019.   Oil producers are under pressure to reduce production following a sharp fall in oil prices in recent months because major producers — including the United States — are pumping oil at high rates.   Brent crude, the international standard, traded at $60.48 a barrel in London on Friday. Benchmark U.S. crude stood at $51.59 a barrel in New York.   Analysts say the kingdom needs oil between $75 and $80 a barrel to balance its budget, with spending for this year to reach a record high of $295 billion.   Speaking to reporters on the sidelines of the forum, al-Falih said that despite continued concerns over the volatility in price seen in the …

Zimbabwe will introduce a new currency in the next 12 months, the finance minister said, as a shortage of U.S. dollars has plunged the financial system into disarray and forced businesses to close. In the past two months, the southern African nation has suffered acute shortages of imported goods, including fuel whose price was increased by 150 percent Saturday. Zimbabwe abandoned its own currency in 2009 after it was wrecked by hyperinflation and adopted the greenback and other currencies, such as sterling and the South African rand. But there is not enough hard currency in the country to back up the $10 billion of electronic funds trapped in local bank accounts, prompting demands from businesses and civil servants for cash that can be deposited and used to make payments. ​Two weeks of reserves Finance Minister Mthuli Ncube told a townhall meeting Friday a new local currency would be introduced in less than 12 months. “On the issue of raising enough foreign currency to introduce the new currency, we are on our way already, give us months, not years,” he said. Zimbabwe’s foreign reserves now provide less than two weeks cover for imports, central bank data show. The government has previously said it would only consider launching a new currency if it had at least six months of reserves. Bad memories of Zimbabwean dollar Locals are haunted by memories of the Zimbabwean dollar, which became worthless as inflation spiraled to reach 500 billion percent in 2008, the highest rate in the …

Elon Musk’s rocket company SpaceX will reduce its workforce by about 10 percent of the company’s more than 6,000 employees, it said on Friday. The company said it will “part ways” with some of its manpower, citing “extraordinarily difficult challenges ahead.” “To continue delivering for our customers and to succeed in developing interplanetary spacecraft and a global space based Internet, SpaceX must become a leaner company. Either of these developments, even when attempted separately, have bankrupted other organizations,” a spokesman said in an email. In June, Elon Musk fired at least seven people in the senior management team leading a SpaceX satellite launch project, Reuters reported in November. The firings were related to disagreements over the pace at which the team was developing and testing its Starlink satellites. SpaceX’s Starlink program is competing with OneWeb and Canada’s Telesat to be the first to market with a new satellite-based internet service. The management shakeup involved Musk bringing in new managers from SpaceX headquarters in California to replace a number of the managers he fired in Seattle. Last month, SpaceX launched its first U.S. national security space mission, when a SpaceX rocket carrying a U.S. military navigation satellite blasted off from Florida’s Cape Canaveral. In December, the Wall Street Journal reported that SpaceX was raising $500 million, taking its valuation to $30.5 billion. The Hawthorne, California-based company had earlier outlined plans for a trip to Mars in 2022, to be followed by a manned mission to the red planet by 2024. Another Elon …

The United States on Friday signaled it would not bow to the European Union’s request to keep agriculture out of planned U.S.-EU trade talks, publishing negotiating objectives that seek comprehensive EU access for American farm products. The objectives, required by Congress under the “fast-track” trade negotiating authority law, seek to reduce or eliminate EU tariffs on U.S. farm products and break down non-tariff barriers, including on products developed through biotechnology, the U.S. Trade Representative’s (USTR) office said. Agricultural issues were among the major sticking points in past negotiations for a major U.S.-EU trade deal, the Trans-Atlantic Trade and Investment Partnership (TTIP), before talks were shelved after Donald Trump was elected president in 2016. EU trade commissioner Cecilia Malmstrom told U.S. Trade Representative Robert Lighthizer in Washington on Wednesday that the 28-country bloc could not negotiate on agriculture in a new, more limited set of negotiations expected to start this year. “We have made very clear agriculture will not be included,” Malmstrom told reporters after meeting Lighthizer, adding that the two sides had not yet agreed on the scope of the talks. Trump and EU president Jean-Claude Juncker agreed last July to re-launch negotiations to cut tariffs on industrial goods, including autos, and also discuss ways for Europe to buy more U.S. soybeans. Trump told Juncker that he would refrain from levying threatened 25-percent tariffs on EU-produced cars and auto parts, which he is considering imposing worldwide on national security grounds. Trump has long complained about Europe’s 10-percent import tariff on …

Uganda’s growing debt is sustainable, and the country is not at risk of losing state assets to China, the country’s finance minister, Matia Kasaija, said this week. Uganda’s auditor-general warned in a report released this month that public debt from June 2017 to 2018 had increased from $9.1 billion to $11.1 billion. The report — without naming China — warned that conditions placed on major loans were a threat to Uganda’s sovereign assets.  It said that in some loans, Uganda had agreed to waive sovereignty over properties if it defaults on the debt — a possibility that Kasaija rejected. “China taking over assets? … in Uganda, I have told you, as long as some of us are still in charge, unless there is really a catastrophe, and which I don’t see at all, that will make this economy going behind. So, … I’m not worried about China taking assets. They can do it elsewhere, I don’t know. But here, I don’t think it will come,” he said. China is one of Uganda’s biggest country-lenders, with about $3 billion in development projects through state-owned banks. China’s Exim Bank has funded about 85 percent of two major Ugandan power projects — Karuma and Isimba dams. It also financed and built Kampala’s $476 million Entebbe Express Highway to the airport, which cuts driving time by more than half. China’s National Offshore Oil Corporation, France’s Total, and Britain’s Tullow Oil co-own Uganda’s western oil fields, set to be tapped by 2021. Economist Fred Muhumuza …

Despite the U.S. stock market recovery, Macy’s and American Airlines’ revised revenue forecasts for 2018 have sent their stock prices spiraling. Other retail stocks fell, too, including J.C. Penney, Nordstrom and Kohl’s. The reports come amid news of another iconic department store, Sears, fighting for survival. But U.S. trade and financial officials say the U.S. economy is on solid ground and will continue to grow for years to come. VOA’s Zlatica Hoke reports. …

The 800,000 federal workers who are not being paid or are working without pay during the partial government shutdown were the first to feel its impact. But as Anna Kook reports, other segments of the economy are also being hurt, especially in Washington, home to the largest number of federal workers in the country. …

U.S. officials expect a visit from China’s top trade negotiator this month in Washington, signaling that higher-level discussions are likely to follow this week’s talks with midlevel officials in Beijing as the world’s two largest economies try to reach a deal to end a tit-for-tat tariff war. “The current intent is that the Vice Premier Liu He will most likely come and visit us later in the month and I would expect the government shutdown would have no impact,” U.S. Treasury Secretary Steven Mnuchin told reporters Thursday in Washington. “We will continue with those meetings just as we sent a delegation to China.” The U.S. government is in the 20th day of a partial shutdown with President Donald Trump, a Republican, and congressional Democrats feuding over funding and Trump’s desire for a wall on the U.S.-Mexico border. People familiar with the talks in Beijing said Thursday that hopes were mounting that Liu would continue talks with U.S. Trade Representative Robert Lighthizer and Mnuchin. Higher level, key decisions Talks at that level are viewed as important for making the key decisions to ease a festering trade war, which has disrupted trade flows for hundreds of billions of dollars worth of goods and roiled global markets. Trump has demanded better terms of trade with China, with the United States pressing Beijing to address issues that would require structural change such as intellectual property theft, forced technology transfers and other non-tariff barriers. On Thursday Trump said the United States was having “tremendous success” …