The member states of BRICS, the association of five major emerging economies, have pledged to strengthen their economic cooperation as the US continues to beat the drum for trade war and unilateralism.

“We express concern at the spill-over effects of macro-economic policy measures in some major advanced economies,” the heads of the BRICS group — Brazil, Russia, India, China and South Africa – said in a joint statement on Thursday after meeting in Johannesburg for an annual summit.

They added that the multilateral trading system is facing unprecedented challenges, stressing the importance of an open world economy.

Addressing the 10th BRICS summit in South Africa on the second day of the talks, Chinese President Xi Jinping said, “We should stay committed to multilateralism”.

He further called on BRICS members states to deepen strategic partnership and open up the second “golden decade”.

The session, hosted by South African President Cyril Ramaphosa, was also attended by Brazilian President Michel Temer, Russian President Vladimir Putin, and Indian Prime Minister Narendra Modi.

Putin also addressed the summit, saying, “BRICS has a unique place in the global economy — this is the largest market in the world, the joint GDP is 42 percent of the global GDP and it keeps growing”.

“In 2017, the trade with our BRICS countries has grown 30 percent, and we are aiming at further developing this kind of partnership,” he said.

US President Donald Trump has said he is ready to impose tariffs on all $500 billion (428 billion euros) of Chinese imports, complaining that China’s trade surplus with the US is due to unfair currency manipulation.

Trump has slapped levies on goods from China worth tens of billions of dollars, as well as tariffs on steel and aluminum from the EU, Canada and Mexico.

The BRICS summit is taking place in Johannesburg between July 25 and 27. Heads of state or government from the five member states (Brazil, Russia, India, China and South Africa) are discussing areas of possible cooperation.

Source: Presstv

Leader of Germany’s Social Democratic Party (SPD) has slammed the new US envoy to Berlin for quietly engaging in talks with major German carmakers over a trade dispute between Washington and the European Union.

US Ambassador to Berlin Richard Grenell has reportedly been in talks with the heads of German carmakers such as BMW, Daimler and Volkswagen. He argues he is empowered by the US administration to work out a solution to the trade dispute.

Grenell, a staunch supporter of President Donald Trump, suggested a “zero tariff” solution, which requires both Berlin and Washington to lift all tariffs on automobile imports from their respective countries.

His closed-door talks, however, prompted a response from SPD leader Andrea Nahles, who said Germany is not “a banana republic.”

“That is news to me that ambassadors hold talks on such issues. What kind of an approach is it?” she said.

“If the US government wants to talk about tariffs with us, then this issue must be discussed between the US Secretary of Commerce and German Minister for Economic Affairs and Energy Peter Altmaier. We are not some kind of banana republic!” Nahles added.

Trump hit the EU, Canada and Mexico with tariffs of 25 percent on steel and 10 percent on aluminum at the start of June, ending exemptions that had been in place since March.

Washington currently imposes a 2.5 percent tariff on imported passenger cars from the EU and a 25 percent tariff on imported pickup trucks.

“If these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the US Build them here!” Trump said last month.

The EU also imposes a 10-percent tariff on imported US cars.

Not long after his arrival in Berlin in May, the US envoy prompted anger in Germany by calling on German companies via Twitter to “wind down operations in Iran immediately.”

The move was part of a broader policy taken by the Trump administration to convince European companies to voluntarily disengage with Iran after Washington pulled out from a 2015 landmark nuclear agreement.

Source: Presstv

Cameroon’s economy is expected to grow 4 percent this year, up from 3.2 percent in 2017 due to the start of natural gas production and construction work for an upcoming soccer tournament, the International Monetary Fund (IMF) said.

Growth was slower in 2017 because of a sharp decline in oil output but new infrastructure projects and increased private investment should bring it to at least 5 percent in the medium term, the IMF said in a statement late on Friday.

Cameroon, one of central Africa’s largest economies, produces about 180,000 barrels per day of oil and is Africa’s fourth-biggest cocoa producer.

The IMF statement followed a decision by its executive board to approve the disbursement of $77.8 million as part of a three-year, $680.7-million financial aid package.

Security risks

The IMF warned, however, that the economy faces considerable risks, including deteriorating security in its English-speaking regions — cocoa and oil-producing areas where separatists are waging a deadly insurgency, and high debts.

“With significant spending pressures associated with the 2018 elections, a worsening security situation and the 2019 African Soccer Cup, any additional oil revenue should be saved,” said Mitsuhiro Furusawa, the Fund’s deputy managing director, referring to the 2019 Africa Cup of Nations due to be held next June.

President Paul Biya is due to stand for re-election in the vote later this year. The 85-year-old has governed since 1982 with little tolerance for dissent.

REUTERS

On Friday, US President Donald Trump carried his protectionist promises to another level and slapped tariffs on more than $34 billion worth of Chinese products. And this is just the beginning. Another $16 billion is on its way in two weeks from now, adding to a total of $50 billion of Chinese goods that would be charged a 25 percent import tax at US borders. And yet even more is to come. Trump has threatened another $500 billion worth of Chinese goods with tariffs if China retaliates. On Thursday, Trump said that initially, “34 [billion], and then you have another 16 in two weeks and then as you know we have 200 billion in abeyance and then after the 200 billion we have 300 billion in abeyance. Ok? So we have 50 plus 200 plus almost 300.”

Of course China has retaliated swiftly, actually very swiftly. Two hours after the Trump administration announced the first salvo of tariffs, China immediately torpedoed back by imposing its own 25 percent tariffs on $34 billion worth of US goods – most of them strategic exports such as soybeans and automobiles, chosen by China to sting crucial US exports. The Chinese government then issued a statement declaring that the United States “has launched the biggest trade war in economic history so far.”

Vox reports, “China has deliberately targeted big US agricultural exports like soybeans that come from states in the heart of Trump country, where neither the president nor his party want to see economic instability or job losses right before the 2018 midterm elections.” So basically China is attempting to both retaliate and also discredit a “protectionist” Republican president among his staunchest supporters.

The latter goal is one that Trump is less likely to achieve when imposing his tariffs on a country where the president is selected by the Communist Party, not by popular vote, thus creating an obvious advantage for the Chinese against Trump if China’s version of tariffs manage to hurt US exports, and as a result hurt US manufacturers.

Will tariffs on China make America great again?

Trump had promised his popular base that he would “make America great again” by supporting American manufacturers, but he never substantially explained how he would manage to achieve this lofty goal in a country where the “Made in China” tag is so prevalent that if one sees another country on a label, she might once again turn around to make sure. Almost one and a half years into his presidency, it seems imposing tariffs are his solution to the demise of American production.

But tariffs have been historically a double edged sword and while they might limit buying foreign products they almost immediately draw the ire of the countries which the tariffs are imposed on, effectively suffocating exports because of the retaliatory measures.

So in a nutshell, you don’t gain much in trade wars, at least never in the past. And unless the protectionist businessman-turned president has some magical panacea, the recent tariffs of his administration will be no exception. As the Smoot-Hawley Tariff Act of 1930 illustrates, tariffs not only hurt US exports but destroyed global trade. World trade decreased by some 66 percent between 1929 and 1934 while the Act was in place. So basically as a consequence of trade wars, all players in the international economic system tend to incur substantial losses as overall trade plummets and prices increase.

So if there is no guarantee that the Trump imposed tariffs will make America great again, there are fewer guarantees that they would not be detrimental to the US. Actually one could both historically and theoretically argue that the possibility that the Trump tariffs would actually cause more injury to US manufacturing is much higher than the tariffs committing to production growth.

This is exactly why, back in June 14, Christine Lagarde, the head of the International Monetary Fund (IMF), warned that the trade war sparked by unilateral US import tariffs would have no winners and that the tit-for-tat cycle of retaliation would only create “losers on both sides.” She said the outcome of such a trade conflict would have a “serious” economic impact on the US and global economies, including by causing inflation to speed up

In the case of China, if Trump imposes tariffs on all the $500 billion of goods he claims, that would represent the lion’s share of all of China’s exports to the US. This basically means inflation rates in the US would spike. For instance prices for washing machines have increased by 16 percent in recent months, and this is only the beginning of a long trade fight.

Of course there will be a positive effect on US trade imbalance with China. CBS reported yesterday that “trade imbalance with China in May totaled $43.1 billion, down from the $47.2 billion posted in March; it’s the smallest monthly deficit since October 2016 and caps the largest three-month reduction in 10 years.”

And to Trump’s relief, exports account for only 12 percent of US GDP (Compare this with Canada’s 31 percent of GDP) where a country with 320 million makes an isolationist economic policy a more viable option for Trump who views countries like China as national security threats.

So both set of economic arguments, for or against Trump’s new trade policy, have some credit to claim. Those opposed point to historical precedent, theoretical inconsistency, rising inflation and lower levels of exports as arguments against Trump’s tariffs. Those in favor of Trump’s tariffs point to US trade imbalance, relatively lower levels of exports and increased national security to justify the new policy.

What the future holds?

Indeed it is too soon to conclude how the trade war with China might conclude. One factor is whether China could rally other countries to support Beijing against the US. Again, it is too soon to see whether disgruntled traditional US allies such as the EU, Canada, Mexico and other countries that have also been hit by the Trump tariffs would support Beijing over Washington. For now this seems far-fetched, but if Trump prevails over his Democrat opponents and pro-trade mainstream Republican rivals, then, as Paul Haavardsrud puts it: “the international community will be left to reinvent a global trade order that’s not anchored by the US.” In the long term, this new global order would definitely translate to a US with less influence in the new world order.

Couple the new Trump tariffs with statements from him that threaten to withdraw from the WTO, pull out of NAFTA and other international organizations and accords and then you can see, if pursued, Trump’s policies will structure new international alliances where the US is not necessarily the dominant player and where others like China and Russia are ready to lead.

Culled from Presstv

China says the United States is “opening fire” on the global economy and damaging the international supply chains by imposing tariffs on products from China and other countries, as controversial US duties on Chinese goods worth tens of billions are due to come into force at midnight Thursday.

“The US measures are essentially attacking global supply and value chains. To put it simply, the US is opening fire on the entire world, including itself,” said Gao Feng, a spokesman for the Chinese Ministry of Commerce, at a press conference in Beijing on Thursday, referring to the American practice of protectionism.

He said Beijing would continue to assess the impact of the current trade dispute with Washington and would help firms cope with possible shocks.

Last month, US President Donald Trump announced 25-percent tariffs on $50 billion in annual Chinese imports. He said he had also directed the US Trade Representative to identify $200 billion worth of imports for additional tariffs.

Trump also stressed at the time that his administration would be identifying another $200 billion in tariffs if China retaliated the new measures.

The total of $450 billion in goods represents the lion’s share of all of China’s exports to the US.

The US administration had originally proposed duties in April, starting with 1,333 Chinese products. After obtaining some public feedback, it omitted 515 imports from the blacklist but added 284 others.

Washington will impose duties on 818 Chinese products, worth $34 billion a year, from the original list, due to take effect on July 6. The Trump administration will not target the 284 other items — worth $16 billion — until it collects further public comments.

China, for its part, has vowed to retaliate with matching duties on US goods.

Beijing has said that Chinese tariffs on American products would come into force shortly after those of Washington do.

Trump is also involved in a similar trade tussle with Europe, Canada, Mexico, and South Korea.

China ‘will not fire the first shot’

If the US duties proceed to take effect on Friday as planned, Beijing will hit back with its own tariffs, initially on nearly $30 billion in US goods on the same day, China’s General Administration of Customs said in a statement on Thursday.

It added that China would not be the first to pull the trigger, however.

The Chinese tariffs include duties on vehicles and many agricultural and food products, such as soybeans, which will hit American farmers — normally part of Trump’s popular base — hard.

The remaining $15-billion Chinese tariffs would be imposed in the second phase and would target US crude oil, propane, and chemicals.

Elsewhere in his remarks, Gao also said that China’s foreign trade was expected to continue on an unwavering trail even though investors were afraid that a full-scale Sino-US trade conflict would deal a body blow to Chinese exports and its economy.

Back on June 14, Christine Lagarde, the head of the International Monetary Fund (IMF), warned that the trade war sparked by unilateral US import tariffs would have no winners and that the tit-for-tat cycle of retaliation would only create “losers on both sides.”

She also added at the time that the outcome of such a trade conflict would have a “serious” economic impact on the US and global economies, including by causing inflation to speed up.