Bhinneka News Online: Wednesday Morning Briefing: How one U.S. firm tried escaping Trump's China tariffs

Wednesday, 21 August 2019

Wednesday Morning Briefing: How one U.S. firm tried escaping Trump's China tariffs

Global Trade

“You don’t know what’s coming next in China,” says Larry Sloven. When he heard last year that U.S. tariffs threatened his China electronics business, he knew that setting up shop elsewhere would be a slog rather than an adventure. The 70-year-old had spent half his life building supply chains in southern China to produce goods for big-box U.S. retailers. Rising labor costs and tighter regulations in China had already led him to consider moving the business elsewhere in Asia. But the trade war forced his hand. President Trump’s tariff plans have roiled global markets and unnerved investors as the trade dispute between the world’s two largest economies stretches into its second year with no end in sight.

Japan and the United States will seek to narrow gaps on trade when their top negotiators meet this week, but hopes for a deal in September are fading as both sides fail to make concessions on agriculture and automobiles, sources say. The talks aim to lay the groundwork for a possible meeting between Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump on the sidelines of a Group of Seven summit later this week in France, where the two could discuss trade.

Trump or Europe? Britain's Boris Johnson will sample post-Brexit reality at G7 summit. The UK prime minister is about to feel the pinch of Brexit Britain’s new global status: squeezed on one side by Europeans in no mood to yield, and on the other by a United States driving a hard bargain for its economic support.

Business

Alibaba postpones up to $15 billion Hong Kong listing amid protests. Two people with knowledge of the matter told Reuters that China’s biggest e-commerce company Alibaba Group Holding has delayed its up to $15 billion listing in Hong Kong amid growing political unrest in the Asian financial hub.

Healthcare giant Philips was warned of suspicious sales of its medical equipment to the Brazilian government, and failed to halt them, nearly a decade before an alleged bribery racket was exposed in the company’s Brazil operations last year, Reuters has learned. Claims of malfeasance reached the highest levels of the Dutch conglomerate as early as 2010, according to court records filed by federal prosecutors, internal company documents and Reuters interviews with a former manager at a Philips subsidiary in Brazil who says he told superiors of the suspected scheme and was later sacked.

U.S.-based Citigroup and French bank BNP Paribas are caught up in the U.S. criminal case against the chief financial officer of China’s Huawei, according to newly available documents. The two are among at least four financial institutions that had banking relationships with Huawei when CFO Meng Wanzhou and others allegedly misled them about its business dealings in Iran despite U.S. sanctions. Meng is currently fighting extradition to the United States on bank fraud charges.

Politics

Danes expressed shock and disbelief over Trump’s cancellation of a state visit to Denmark after its prime minister rebuffed his interest in purchasing Greenland. Trump’s proposal at first elicited incredulity and humor from politicians in Denmark, a NATO ally of the United States, with former premier Lars Lokke Rasmussen saying: “It must be an April Fool’s Day joke.” But the mood turned to shock when the U.S. president called off the Sept. 2-3 visit after Danish Prime Minister Mette Frederiksen called his idea of the United States buying Greenland, an autonomous Danish territory, “absurd”.

Israeli officials offered a muted response to remarks by Trump who said American Jews who vote for the democratic Party were ‘disloyal.’ Referring to Democrat Congresswomen Ilahn Omar and Rashida Tlaib who, who under pressure from Trump were denied entry to Israel last week, the president told reporters at the Oval Office: “Where has the Democratic Party gone? Where have they gone where they’re defending these two people over the state of Israel. And I think any Jewish people that vote for a Democrat, I think it shows either a total lack of knowledge or great disloyalty.”

President Donald Trump said his administration was in “meaningful” talks with Democrats about gun legislation after the latest mass shootings, but congressional aides downplayed the discussions as low-level and not very productive. Democrats have accused Trump of reversing course after he initially voiced support for tougher background checks following the latest shootings to rock the United States, so that “sick people don’t get guns.” He also suggested the National Rifle Association lobby group might ease its strong opposition to gun restrictions.

World

Italy's PM Conte resigns. What comes next?

Prime Minister Giuseppe Conte handed in his resignation after accusing his interior minister, Matteo Salvini, of putting his League party before the needs of Italy. President Sergio Mattarella begins two days of talks with parties to seek a way out of a political crisis that will lead to the formation of the country’s 67th government since World War Two or to early elections.

4 min read

Hong Kong protests spread to subway as bank warns of economic fallout

A major bank warned that weeks of protests in Hong Kong could hit the economies of the Chinese-ruled city and mainland China itself as demonstrators prepared a sit-in at a subway and site of a mid-summer mob attack. Hong Kong-based Bank of East Asia posted a 75% slump in first-half net profit after it wrote down loans in China because of a downturn in commercial property markets outside China’s top cities.

6 Min Read

Incarcerated Kashmir separatists urge public march over loss of autonomy

Separatist leaders in Indian Kashmir have urged people to defy a ban and join a mass march after Friday prayers this week, the first such call since the federal government revoked the region’s autonomy, stirring anger in the region and beyond.

3 min read