Trade

G7 risks becoming G-zero without consensus

7 Jun 2018

President Donald Trump is the sore thumb among leaders meeting in Canada on Friday. Last year’s G7 pledges were already watered down, and he hadn’t then left the global climate accord or started erecting trade barriers. The forum loses relevance if it lacks U.S. economic backing.

The Exchange: A Down Under take on Trump

6 Jun 2018

Former Australia Prime Minister Kevin Rudd gives the U.S. president some credit for his dealings with North Korea’s Kim Jong Un. But he explains that Donald Trump’s protectionism has enraged China’s leaders and may play into the hands of the country’s own nationalists.

Malaysia’s 1MDB purges may hurt before they help

6 Jun 2018

The central bank is the latest institution caught in the backlash over the disgraced wealth fund, with the mooted departure of its governor. More heads will roll in the bureaucracy and beyond, creating extra uncertainty just as external pressures mount and fiscal plans shift.

Election shake-ups will make NAFTA more elusive

5 Jun 2018

Doug Ford, a Canada-first candidate, has a shot at becoming the next premier of Ontario – the province that will be hardest hit by U.S. steel tariffs. Voters also go to the polls this year in Mexico and the U.S. New political faces will make sealing a trade deal even harder.

Italy’s new cabinet draws inspiration from Trump

5 Jun 2018

Rome’s new radical ministers will run departments whose policies they campaigned against. From labour and pensions to infrastructure and health, iconoclasts of questionable competence are taking over. Such “Trumpismo” governance brings added risk to Italy.

EU divisions are weak spot in U.S. trade fight

1 Jun 2018

Responding to American tariffs with duties that hit Republican-controlled districts is shrewd. The next step is harder. Germany’s best option is to ease tensions by cutting car tariffs, but France opposes concessions. Eastern Europe may care more about U.S. security guarantees.

EU has political trump card in trade conflict

31 May 2018

The United States is imposing steel and aluminum tariffs on Germany and others. Europe has threatened levies against Harley motorcycles and Kentucky bourbon, among other goods. That hits Republican leaders’ bases as the party faces elections in November. It’s a smart tactic.

Trump moves on China give investors whiplash

29 May 2018

Congress hopes to stop the U.S. president from rolling back penalties on telecoms manufacturer ZTE. The White House also wants tariffs on $50 bln in Chinese imports. It would be unwise to tune out Trump’s good-cop-bad-cop tactics, as lawmakers can only do so much to rein him in.

Startups bump up against myth of Southeast Asia

25 May 2018

Indonesia’s Go-Jek is moving into four nearby markets. For this, the $5 bln ride-hailing firm will spend heavily on separate brands and apps. The problem for it, Alibaba and others is that this region of 660 mln remains more of a political concept than an economic reality.

U.S.-China spat poses serious hazard for WTO

25 May 2018

The two countries are sparring at the Geneva-based organisation about how the WTO should handle Beijing’s brand of state capitalism. A U.S. threat to veto the appointment of judges could paralyse the trading body’s dispute resolution mechanism – and hold the outfit to ransom.

Viewsroom: America sees red on China trade deal

24 May 2018

Getting Beijing to force companies to buy more U.S. soybeans and oil may help the Trump administration claim a numbers victory. But it reinforces China’s statist instincts while ignoring most U.S. business beefs with Sino-American trade. Plus: has Tencent hit a peak?

Autos investors too quick to call Trump’s bluff

24 May 2018

German carmakers export a ton of vehicles, yet their stocks fell just 3 pct after the U.S. president threatened import tariffs. It implies they think Washington is just posturing, or that BMW and the like can mitigate the impact. That may prove to be overly optimistic.

Canada adds to global muddle with Chinese M&A veto

24 May 2018

Ottawa blocked the $1.2 bln sale of construction company Aecon to a Beijing-backed rival on national security grounds. The controversial decision could confound trade talks between the two countries. Increasingly, mergers are getting mixed up in the wider geopolitical realm.

U.S.-China trade gap is best filled with software

23 May 2018

Beijing plans to shrink the $375 bln surplus by buying commodities like oil and soybeans. Better to import intellectual property, and pay for the millions of unlicensed copies of Microsoft and Adobe products running in China. Local firms could use the productivity upgrade.

Trump indulges China’s statist instincts on trade

22 May 2018

To spare Chinese telecoms giant ZTE from extinction, its execs will be scapegoated for violating sanctions, averting an export ban. Beijing will also order firms to import more U.S. goods. Washington is effectively encouraging command, rather than market, economics in China.

U.S.-China trade deal kicks nearly every can

21 May 2018

Beijing agreed vaguely to reduce imbalances and improve IP rights, both of which it has signaled before. A U.S. demand that China shrink its surplus by $200 bln went missing. Such details may yet get hammered out, but Xi Jinping's industrial policy looks safe amid the detente.

China’s airlines are set for a long-haul price war

17 May 2018

Beijing is freeing local carriers to raise fees at home and fight for share on international routes. State ownership endures, however, as do distorting airspace restrictions. A painful battle over fares is in the offing, and will come at foreign rivals' expense.

Malaysia can push for a healthy China rebalance

11 May 2018

Mahathir Mohamad has accused his predecessor of selling out to Beijing, and vows to review deals. The country's strategic position and historic ties with the People's Republic gives him leverage to reset the relationship. But Malaysia needs China too, so the haggle will stay polite.

Saudi gets new license to be selfish over oil

9 May 2018

Since 2016 the kingdom has championed output cuts that have drained a supply glut and helped spur prices. Now that the U.S. President has amped up sanctions on Iran, Saudi can fill any gap left by lower Iranian exports. What it loses on price, it gains in volume and U.S. gratitude.

Europe has uphill fight to keep Iran trade flowing

9 May 2018

Politicians can offer EU companies that keep doing business in the Islamic Republic legal cover to offset the risk of U.S. sanctions. But groups wary of huge fines may still demur. And governments may not want to annoy President Donald Trump when trade tariffs are still a risk.