‘They’re on’: Trump confirms new tariffs on China imports

A worker in a factory which makes dried vegetables for export to the US, Britain, Japan, South Korea and other countries, in Zhangye in China's northwestern Gansu province. (AFP)
Updated 31 August 2019

‘They’re on’: Trump confirms new tariffs on China imports

  • The new tariffs will go ahead underlines the reality that the two sides remain at loggerheads

WASHINGTON: US President Donald Trump confirmed Friday that steep new tariffs on Chinese goods will kick in on Sunday and said that his economic pressure is forcing Beijing to take a more moderate line in Hong Kong.

“They’re on,” Trump told reporters, two days before the levies on billions of dollars of Chinese imports are set to rise in the latest escalation of the trade war between the world’s two biggest economies.

Trump also said that US economic pressure on China was responsible for preventing the authorities from carrying out a harsher crackdown against pro-democracy demonstrators in Hong Kong.

“Because of what I’m doing with trade, that’s really keeping down the temperature,” he said at the White House.

Trump’s tough line — and his claim that events in Hong Kong are linked to the trade war — follows his insistence over the last week that Chinese negotiators are keener than ever to strike a deal.

However, despite repeated hints that high-level communications have been reopened on the standoff, White House officials have sparked skepticism by failing to provide details of those reported talks.

The US leader’s confirmation that the new tariffs will go ahead underlines the reality that the two sides remain at loggerheads.

Trump earlier this month had called for 10 percent tariffs on $300 billion in goods to take effect on Sept. 1 and Dec. 15. Then Beijing retaliated by targeting $75 billion in US exports and Trump announced that the new tariffs would instead hit 15 percent.  In addition, existing 25 percent duties on $250 billion of Chinese products will rise to 30 percent starting on Oct. 1.

Trump initiated the trade war last year because of complaints over unfair Chinese trade practices.

His comments on Hong Kong could touch political nerves in China, which bristles at anything it sees as outside interference in the protest-wracked city.

Asked if he saw a connection between the way the Chinese respond to the unrest and the difficulties their economy faces under US pressure, Trump said: “I do, I do.”

“If it weren’t for the trade talks, Hong Kong would be in much more trouble,” he said, reiterating a call for Beijing to “handle it in a humane fashion.”

Trump’s call fell on the same day prominent Hong Kong democracy activists, including three lawmakers, were arrested in a protest crackdown.

The move was described by rights groups as a well-worn tactic frequently deployed by China to suffocate dissent ahead of major political events.


WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

Updated 24 January 2021

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

Oil prices have been stable since early January, with Brent crude price hovering around $55. Brent crude closed the week slightly higher at $55.41 per barrel,
while West Texas Intermediate (WTI) closed slightly lower at $52.27 per barrel.

Oil price movement since early January in a narrow range above $50 is healthy, despite pessimism over an increase in oil demand, while expectations of US President Joe Biden taking steps to revive energy demand growth are
still doubtful. The US Energy Information Administration (EIA) reported a hike in US refining utilization to its highest since March 2020, at 82.5 percent. The EIA reported a surprise weekly surge in US commercial crude stocks by 4.4
million barrels. Oil prices remained steady despite the bearish messages sent from the International Energy Agency (IEA), which believes it will take more time for oil demand to recover fully as renewed lockdowns in several countries weighed on oil demand recovery.

The IEA’s January Oil Market Report came as the most pessimistic monthly report among other market bulletins from the Organization of the Petroleum Exporting Countries (OPEC) and EIA. It forecast oil demand will bounce back to 96.6 million bpd this year, an increase of 5.5 million bpd over 2020 levels.

Though the IEA has lowered its forecast for global oil demand in 2021 due to lockdowns and vaccination challenges, it still expects a sharp rebound in oil consumption in the second half of 2021,
and the continuation of global inventory depletion.

The IEA reported global oil stocks fell by 2.58 million bpd in the fourth quarter of 2020 after preliminary data showed hefty drawdowns toward the end of the year. The IEA reported OECD industry stocks fell for a fourth consecutive month at 166.7
million barrels above the last five-year average. It forecast that global refinery throughput is expected to rebound by 4.5 million bpd in 2021, after a 7.3 million bpd drop in 2020.

The IEA monthly report has led to some short term concern about weakness in the physical crude spot market, and the IEA has acknowledged OPEC’s firm role in stabilizing the market.

Controversially, the IEA believes that a big chunk of shale oil production is profitable at current prices, and hence insinuated that shale oil might threaten OPEC market share.

It also believes that US shale oil producers have quickly responded to oil price gains, winning market share over OPEC producers. However, even if US shale oil drillers added more oil rigs for almost three months in a row, the number of operating rigs is still less than half that of a year ago, at 289 rigs.

The latest figures from the Commodity Futures Trading Commission show that crude futures “long positions” on the New York Mercantile Exchange are at 668,078 contracts, down by 18,414 contracts from the previous week (at 1,000 barrels for each contract).