Major International Business Headlines Brief::: 30 November 2018

Fri Nov 30 06:38:22 CAT 2018

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Major International Business Headlines Brief::: 30 November 2018

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*  World Bank sees Nigerian 2018 GDP growth at under 2 percent

*  Britain's CDC to invest up to $4.5 bln in Africa over next four years

*  Lonmin turns first profit in four years ahead of Sibanye takeover

*  Ethiopia overtakes Dubai as top feeder of air traffic to Africa

*  MTN Rwanda signs deal for 50 billion franc loan for network upgrade

*  Carrefour signs deal with Jumia to offer online shopping in Kenya

*  S.African credit demand growth slows to 5.82 pct in Oct

*  South Africa to amend moratorium on gas, oil exploration licences: minerals minister

*  South African central bank expects volatile rand in 2019

*  Trump's trade war: Stakes are high at G20 summit

*  Drunk Japan Airlines pilot jailed for 10 months

*  WTO: ‘Worst crisis in trading system since 1947’

*  Bayer to cut 12,000 jobs and sell brands

*  Deutsche Bank headquarters raided over money laundering

*  Trump threatens new car tariffs after GM closures

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World Bank sees Nigerian 2018 GDP growth at under 2 percent

LAGOS (Reuters) - The World Bank expects Nigeria’s economy to grow slightly less than 2 percent this year, largely driven by the non-oil industry and services sectors, as the approach of elections keeps foreign investors away, it said on Wednesday.

Nigeria emerged from a recession last year but growth remains fragile, with the government borrowing both at home and abroad to help fund its budget. It has raised almost $9 billion from the eurobond market since 2017 to boost growth.

“Nigeria’s emergence from recession remains sluggish, and sectoral growth patterns are unstable. In the second quarter of 2018, the oil sector contracted by 4.0 percent,” the bank said in a statement.

GDP grew by 0.83 percent last year after shrinking by 1.58 percent in 2016, its first annual contraction in 25 years. For this year, Nigeria’s central bank is projecting growth of 1.75 percent.

The World Bank said growth in the farm sector, which has been resilient in the past, had slowed to 1.2 percent under the impact of security challenges in the north.

The World Bank said non-oil industry and services, which make up more than half of Nigeria’s economy, had been boosted by growth in construction, transport and communication technology.

But it said investment in human capital, which the government has been seeking to boost, remained low compared with other countries.

Nigeria is largely dependent on its oil sector for government revenues and foreign exchange, but it has been constrained by a subsidy on petrol and other deductions, the bank said, noting that foreign investment was stagnant.

It said higher oil exports had helped current account data in the first half but non-oil revenue had come in lower than expected despite reforms to improve the economy.

The World Bank expected the fiscal deficit to widen in 2018, with portfolio investors exercising caution ahead of the election, despite rising local yields.

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Britain's CDC to invest up to $4.5 bln in Africa over next four years

LAGOS (Reuters) - British development finance agency CDC Group plans to invest up to $4.5 billion across Africa over the next four years to boost ties with the continent, its chief executive told Reuters on Wednesday, as the country prepares to leave the European Union.

With Britain set to leave the world’s biggest trading bloc in March, government officials have been touring Africa, hoping to bolster ties with main economies such as Nigeria, South Africa and Kenya.

Nick O’Donohoe said CDC, which has invested nearly $400 million in Nigeria, had committed $25 million to a local private equity firm, Synergy, to support small and medium sized companies in Africa’s most populous nation.

CDC also provided a $100 million loan to Nigerian fertiliser company Indorama. O’Donohoe said the agency would like to invest more in infrastructure, power, manufacturing and agriculture.

“We are opening a new office to help originate more transactions in Nigeria,” O’Donohoe said.

CDC aims to open a regional office for West Africa in Nigeria’s commercial hub of Lagos early next year and establish a presence in Nairobi, while also expanding in Johannesburg and with representative offices in Abidjan and Cairo.

In August, British Prime Minister Theresa May visited Nigeria where she sought to build a new trading relationship and urged the West African nation to tap London’s financial expertise for its infrastructure projects.

“Part of the reason the prime minister came here was to try to focus people’s attention on the growth opportunity and the investment and trade opportunity in Nigeria and that, you can be cynical to say, that’s partly Brexit,” O’Donohoe said.

Earlier this year, Britain added the naira as a “pre-approved” trade currency for Nigerian firms buying goods in Britain, while also exploring ways to list naira-denominated bonds on the London Stock Exchange to help fund projects.

In April, Britain hosted a meeting of Commonwealth countries, including South Africa, Kenya and Nigeria, seeking to reinvigorate the network of mostly former colonies and drum up new trade among its members.

Lonmin turns first profit in four years ahead of Sibanye takeover

(Reuters) - Lonmin Plc, which is being bought by Sibanye-Stillwater, reported its first annual operating profit in four years as cost cuts by the platinum miner paid off.

Lonmin also said on Thursday it expects Sibanye’s deal to close early next year, but cautioned that some uncertainty still exists over its completion, which is subject to certain conditions.

Lonmin shares rose as much as 9.3 percent to 47 pence after its results for the year ended September showed an operating profit of $101 million, compared with a more than $1 billion loss a year earlier.

The London-listed miner, crippled by soaring costs and subdued platinum prices, has been cutting spending to conserve cash and retain a positive cash balance, one of the conditions upon which South Africa-based Sibanye’s takeover is contingent.

The completion of the merger is vital to Lonmin’s survival.

Sibanye late last year proposed to buy Lonmin for about 285 million pounds ($365 million) to create the world’s No. 2 platinum producer in a bid to ride out depressed prices for the metal.

Lonmin said net cash rose 10.7 percent to $114 million as of Sept. 30, adding that its liquidity and funding arrangements improved during the year as it secured a new $200 million forward metal sale facility.

Lonmin projected it would spend between 1.4 billion rand and 1.5 billion rand ($102.5 million-$109.8 million) in 2019, well above the 967 million rand it spent in the 2018 financial year.

Unit costs in 2019 are expected to range between 12,900 rand and 13,400 rand per ounce of platinum group metals, above the previous year’s 12,307 rand.

Platinum sales should range between 640,000 and 670,000 ounces, the company said, lower than the 681,580 ounces in 2018.

($1 = 13.6601 rand)

Ethiopia overtakes Dubai as top feeder of air traffic to Africa

NAIROBI (Reuters) - Ethiopia has overtaken Dubai as a conduit for long-haul passengers to Africa, highlighting the success of the state airline’s expansion drive and the reforms of its new prime minister.

Travel consultancy ForwardKeys said on Wednesday Addis Ababa airport had increased the number of international transfer passengers to sub-Saharan Africa for five years in a row, and in 2018 had surpassed Dubai, one of the world’s busiest airports, as the transfer hub for long-haul travel to the region.

Analysing data from travel booking systems that record 17 million flight bookings a day, ForwardKeys found the number of long-haul transfers to sub-Saharan Africa via Addis Ababa jumped by 85 percent from 2013 to 2017. Transfers via Dubai over the same period rose by 31 percent.

So far this year, Addis Ababa’s growth is 18 percent, versus 3 percent for Dubai.

Dubai has long been a major global air travel hub because it is the base of Gulf carrier Emirates. Given the lack of an “open skies” deal smoothing flights across Africa, many passengers travelling between one part of the continent and another, or from Asia or Europe to Africa, must often transit through Dubai.

But this is changing.

Ethiopian Airlines, the country’s most successful state company, is accelerating a 15-year strategy it launched in 2010 to win back market share on routes to and from Africa that are dominated by Turkish Airlines and Emirates.

It is also weaving a patchwork of new African routes to rapidly expanding and lucrative Asian markets.

ForwardKeys also attributed the recent jump in bookings via Addis Ababa in part to a positive international response to the broad reforms introduced by Ethiopian Prime Minister Abiy Ahmed, who came to power in April and has upended politics in the Horn of Africa country of around 105 million people.

It cited two changes in particular: a move to allow visitors to apply for visas online, and Abiy’s pledge to open Ethiopia’s largely state-controlled economy to foreign investment.

After Abiy made peace with Eritrea to end a two-decade state of war, Ethiopian resumed flights to its neighbour in July. This month, it relaunched flights to Somalia’s capital after four decades.

And the rise of travel via Addis Ababa looks set to continue. International bookings via Ethiopia are up 40 percent year-on-year for November to January 2019, ahead of all other destinations in Africa, ForwardKeys said.

MTN Rwanda signs deal for 50 billion franc loan for network upgrade

KIGALI (Reuters) - MTN Rwanda, the biggest telecoms operator in the East African nation, has signed a 50 billion franc ($56.20 million) loan with eight local banks, whose proceeds will be used to expand and modernise its network.

The company, which had close to 4.5 million subscribers in September, is owned by South Africa’s MTN Group and Crystal Telecom, a local company under the ruling party’s investment branch, Crystal Ventures.

The loan, with a seven-year term, was provided by a syndicate of eight banks comprising Ecobank Rwanda, Cogebanque, BPR Atlas Mara, I&M Bank, Bank of Kigali, KCB Bank, Equity Bank and GT Trust Bank, the bank said in a statement on Wednesday.

($1 = 889.6867 Rwandan francs)

Carrefour signs deal with Jumia to offer online shopping in Kenya

NAIROBI (Reuters) - Carrefour’s franchisee in Kenya, Majid Al Futtaim, has signed a partnership agreement with online retailer Jumia to offer online shopping in the East African nation from January next year.

Franck Moreau, the head of Carrefour Kenya, said the deal will allow the retailer to use Jumia’s e-commerce platform and network to offer its products to more Kenyans, where it started operations in 2016 and has six outlets.

The terms of the partnership were not disclosed.

Online shopping is gaining popularity in Kenya as shoppers seek to buy products from the convenience of their homes, as well as growing use of smart phones, Carrefour said in a statement seen by Reuters on Thursday.

Carrefour Group’s Western and Central Africa partners CFAO have also signed commercial deals to sell their products on Jumia’s platform in Ivory Coast, Cameroon and Senegal, it added.

S.African credit demand growth slows to 5.82 pct in Oct

JOHANNESBURG (Reuters) - Growth in private sector credit demand in South Africa slowed to 5.82 percent in October from 6.27 percent in the previous month, central bank data showed on Thursday.

Expansion in the broadly defined M3 measure of money supply dropped to 5.99 percent last month from 7 percent in September.

South Africa to amend moratorium on gas, oil exploration licences: minerals minister

CAPE TOWN (Reuters) - South Africa will amend a moratorium on gas and oil exploration licences implemented earlier this year to allow new exploration and production applications currently in the system to be granted, Mineral Resources Minister Gwede Mantashe said on Thursday.

In June, Mantashe published a notice in the government gazette stating there would be a restriction on the granting of technical cooperation permits, exploration rights and production rights.

South African central bank expects volatile rand in 2019

JOHANNESBURG (Reuters) - South Africa’s rand will remain volatile in 2019, making monetary policy complicated and focused on long-term inflation factors rather than short-term market shocks, central bank Deputy Governor Daniel Mminele said on Wednesday.

Mminele said the bank expected the rand to average 14.50 against the dollar but trade would be volatile, forcing the monetary policy committee to remain flexible in its responses.

“We will continue to allow the exchange rate to absorb the initial shocks, and focus our policy actions on addressing second-round price effects,” Mminele said at a foreign exchange conference after the bank raised lending rates last week.

“It is important that policy decisions should not be informed by short-run market developments in either direction.”

The rand has slumped more than 20 percent against the dollar in 2018 since a sharp sell off of emerging market assets in April triggered by rising U.S. rates and worries about a trade dispute between the United States and China.

The South African Reserve Bank raised lending rates for the first time in nearly three years last Thursday, by 25 basis points to 6.75 percent, saying it could not risk waiting for risks to inflation to materialise before acting.

The bank targets inflation of between 3 and 6 percent, but has emphasised that it is more comfortable with consumer price growth closer to 4.5 percent, the mid-point of the range. Inflation came in at 5.1 percent in October.

Trump's trade war: Stakes are high at G20 summit

The stakes are high at this week's G20 summit, where President Trump is due to meet China's President Xi Jinping.

Hopes that the meeting could open the way for a deal over trade between the two countries have been undermined by recent threats by the US president.

Only days before the summit in Argentina, President Trump said current tariff levels on $200bn (£157bn) of Chinese imports would rise as planned.

He also threatened tariffs on $267bn of other Chinese exports to the US.

Then, just before taking off for Argentina, President Trump told reporters at the White House that while China was interested in striking a deal, "I don't know if I want to do it" and "I like the deal we have now".

The stage could now be set for a possible escalation of the trade war between the two nations.

President Trump started the dispute with China earlier this year, accusing the Chinese of "unfair" trade practices and intellectual property theft.

The US has hit a total $250bn of Chinese goods with tariffs since July, and China has retaliated by imposing duties on $110bn of US products.

Media captionSo how does a G20 summit work?

China had already hit the US with $3bn of tariffs in April, in response to US tariffs on global steel and aluminium imports.

President Trump offered a glimmer of hope earlier this month, when he said he thought the US could strike a trade deal with China.

But only days before the summit, he poured cold water on such optimism.

President Trump told the Wall Street Journal he expected to go ahead with plans to raise tariffs on $200bn of Chinese goods - first introduced in September - to 25% (up from 10%) starting in January 2019.

President Trump also said that if talks were unsuccessful, he would carry out a threat to hit the remaining $267bn of annual Chinese exports to the US with tariffs of 10-25%.

The Trump administration also recently accused China of not changing its "unfair" trade practices.

"I think the most likely scenario is that Xi Jinping doesn't offer big enough concessions to Trump, and so nothing much comes of the G20 meeting," says Julian Evans-Pritchard from Capital Economics.

Recent summits also do not bode well for any resolutions at the G20 level.

The Asia-Pacific Economic Cooperation (Apec) summit recently ended without a formal leaders' statement because of US-China divisions over trade.

And a G7 summit in Canada in June ended in disarray as Trump retracted his endorsement of the joint statement.

"I think unfortunately, the US and China remain quite far apart in the issues behind the trade conflict, so we are not too optimistic," says Valerie Mercer-Blackman, senior economist at the Asia Development Bank.

"Failure to agree on the communique at the Apec meeting... also suggests that there is quite substantial distance between the two sides, and there doesn't seem to be a specific proposal on the table yet to end the impasse."

What's at stake?

The stakes are high.

"If the meeting fails to deliver a truce, then the US will almost certainly hike tariff rates [on $200bn of existing Chinese goods] in January, and a further expansion in tariffs is quite likely," says Mr Evans-Pritchard.

A rise in those tariffs would see many multinational firms accelerate their plans to move supply chains away from China, while tariffs on additional Chinese imports would pose "a significant political and economic risk for Trump", says Michael Hirson, Asia director at Eurasia Group.

"Remaining US imports from China are more heavily tilted towards consumer items. American households, especially those from lower income brackets, will feel the impact more than they have over tariffs on previous rounds," he adds.

What happens next?

If the US were to impose tariffs on additional Chinese goods, China could seek to retaliate, but would have limited room to do so via trade.

This is because China's existing $113bn tariffs on US goods are not far from the $130bn it imported from the US in 2017.

Global Trade

More from the BBC's series taking an international perspective on trade:

*         Why Switzerland worries about Brexit

*         Should we pay people for donating blood?

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Instead of fighting back aggressively with more tariffs, China is more likely to defend its economy by easing fiscal and monetary policy, letting its currency fall and forging trade deals with other countries, analysts say.

"China's strategy towards Trump will favour resilience over retaliation," Mr Hirson says.

If the conflict between China and the US continues to escalate, non-tariff barriers particularly in the technology sector are likely to become increasingly popular.

The US has already made moves in this direction. It recently restricted American firms from selling parts to a Chinese company over national security concerns.

"While tariffs draw most of the attention, non-tariff measures are just as important in this trade war and will probably be in play for much longer," says Mr Hirson.

"On the US side, this includes measures such as recently passed legislation that tightens investment restrictions and export controls... In China, it involves using regulatory tools such as anti-trust investigations to squeeze US tech firms and tip the advantage to domestic competitors."--bbc

Drunk Japan Airlines pilot jailed for 10 months

A Japanese pilot has been jailed after being caught more than nine times over the alcohol limit as he prepared to fly a passenger jet from Heathrow airport.

Judge Phillip Matthews condemned Katsutoshi Jitsukawa, 42, saying the prospect of him flying the Japan Airlines (JAL) plane was "too appalling to contemplate".

Jitsukawa, of no fixed abode, was sentenced to 10 months in prison at Isleworth Crown Court.

He said he felt an "abject disgrace".

He was arrested on 28 October at the airport after failing a breath test 50 minutes before the Japan Airlines (JAL) flight to Tokyo was due to fly with him in the cockpit.

He was found to have 189mg of alcohol per 100ml of blood in his system - the legal limit for a pilot is 20mg.

The drink-drive limit in England, Wales and Northern Ireland is 80mg per 100ml of blood.

Jitsukawa admitted to one count of performing an aviation function when his ability was impaired through alcohol.

'Catastrophic consequences'

Judge Phillip Matthews described the co-pilot, who has since lost his job, as "very intoxicated" ahead of the 28 October flight.

"You are an experienced pilot but you had clearly been drinking for a long period up to a time shortly before you were due to go into that plane," the judge said.

"Most important is the safety of all persons on board that very long-haul flight, potentially 12 hours or more. Their safety was put at risk by your inebriation and drunkenness.

"The prospect of you taking over control of that aircraft is too appalling to contemplate. The potential consequences for those on board was catastrophic."

Jitsukawa was caught after security noticed he smelled of alcohol, appeared drunk and had "glazed eyes". An officer later noticed he had "difficulty standing straight".

The judge suggested Jitsukawa put colleagues in a position of either performing a "cover up" or reporting him to superiors.

Speaking outside court, the company's vice president Yasuhiro Kikuchi denied Jitsukawa's colleagues acted improperly.

"As an organisation we are going to work together to prevent this happening again," he said.

Prosecutor Douglas Adams said that after he was challenged by security staff on the plane, Jitsukawa said he drank whisky the night before but had already passed a breathalyser test.

After Jitsukawa said he needed to get his blazer from the plane, the security manager followed him on to find the pilot in the toilet rinsing and gargling his mouth with mouthwash, the prosecutor said.

The plane, a Boeing 777 holding up to 244 passengers, departed for Tokyo after a 69 minute delay.

Bill Emlyn Jones, mitigating, said Jitsukawa had become depressed. "It would seem he used alcohol as a means of self-medication," the lawyer said.

The pilot feels "abject disgrace" and wishes to apologise to the airline, passengers and his family "for the shame he had brought upon them", he added.

Jitsukawa was clean-shaven and in a grey tracksuit as he appeared on a videolink from Wandsworth prison.

Jitsukawa had earlier cheated on an in-house breathalyser test, taking it at a distance from the chief pilots who were supposed to oversee it, the Asahi Shimbun newspaper reported.

Earlier this month Japan Airlines said it would introduce a new breathalyser system at airports abroad.

Since August 2017, there have been 19 cases where Japan Airlines pilots have failed the company's alcohol tests, the company confirmed.--bbc

WTO: ‘Worst crisis in trading system since 1947’

The head of the World Trade Organisation (WTO) has said global free trade is facing its "worst crisis" since 1947.

Roberto Azevedo told the BBC that the current protectionist wave is threatening free trade.

He is in Buenos Aires where world leaders are gathering for the G20 summit on Friday and Saturday.

The escalating trade war between the US and China is high on the agenda at the global summit.

US President Donald Trump and Chinese leader Xi Jinping are scheduled to meet on Saturday evening.

Mr Azevedo said: "I would say this is the worst crisis not for the WTO but for the whole multilateral trading system since the GATT [General Agreement on Tariffs and Trade, that preceded the WTO] in 1947".

"This is the moment when some very basic principles of the organisation, principles of cooperation, principles of non-discrimination are being challenged and put into question. And I think that is very serious."

Mr Azevedo said that the "mode of engagement" between China and the US must shift from "threats, accusations and finger pointing to one of finding solutions".

Don't judge me

The US and the WTO are currently in a row over the Appellate Body, which settles trade disputes between countries - a key function of the entire organisation.

The US has been blocking new appointments to the body in an argument over its role, leaving it with the bare minimum needed to function. If this is not settled soon, trade disputes between countries could be paralysed as soon as next year.

Mr Azevedo says WTO countries are discussing a "Plan B" to avoid the collapse of the Appellate Body so it can continue to operate.

"Of course the big question is going to be: will the US be part of that [Plan B] or not? If the US is not, I would say that dispute settlement with the United States will be compromised."

The head of the WTO also commented on the possibility of a no-deal Brexit.

"If there is what some people call a 'hard Brexit', with no agreement whatsoever, I would say about half of the UK trade would not be affected, because WTO terms are already what applies. In trade with the US, China, Japan, Brazil, Mexico - those terms will not change."

"But of course almost half of trade that is conducted with the UK is with the European Union. So it all depends on the margin of preference and the tariffs that would apply once Brexit comes into effect."--BBC

Bayer to cut 12,000 jobs and sell brands

Bayer plans to sell brands including Dr Scholl's foot care and Coppertone sunscreen in a cost-cutting drive that includes about 12,000 job cuts following its takeover of Monsanto.

The cuts will account for about one in ten workers globally, with a "significant number" going in Germany.

Bayer also plans to sell its animal health division, which could be worth up to €7bn (£6.2bn).

Shares in the German drug giant have fallen more than a third this year.

Investors fear the ramifications of some 9,000 lawsuits brought over the alleged carcinogenic effects of Monsanto weedkillers.

In August Bayer shares dropped sharply after a US ruling linking glyphosate to cancer. Glyphosate, which Bayer says is safe, is used in Monsanto's Roundup and RangerPro.

The company acquired Dr Scholl and Coppertone four years ago when it bought Merck's consumer healthcare division for $14bn (£11bn).

The unit is grappling with falling revenues as US consumers switch to online shops and cheaper brands.

Bayer will also seek a buyer for its 60% stake in German chemical production site services provider Currenta.

The $66bn merger with Monsanto in 2016 created the world's biggest seeds and pesticides company.

Its decision to sell its animal health business means Bayer will now focus on pharmaceuticals, consumer health and crop science.

More than 4,000 jobs in the combined crop science division will go by the end of 2021.

Bayer chief executive Werner Baumann said: "These changes are necessary and lay the foundation for Bayer to enhance its performance and agility."

The job cuts and sales will result in costs of more than €4bn.--BBC

Deutsche Bank headquarters raided over money laundering

The Frankfurt headquarters of Deutsche Bank have been raided by prosecutors in a money laundering investigation.

Germany's public prosecutor alleged that two staff members have helped clients launder money from criminal activities.

Police cars were seen outside the tower blocks that house the headquarters of Germany's biggest bank.

Five other Deutsche offices in the city were searched in an operation involving about 170 police and officials.

Prosecutors are looking into whether Deutsche Bank staff helped clients set up offshore accounts to "transfer money from criminal activities".

The investigation, which began in August, focuses on activities between 2013 and the start of 2018.

In 2016 alone, more than 900 customers were served by a Deutsche Bank subsidiary registered in the British Virgin Islands, generating a volume of €311m, the prosecutors allege.

The investigation was sparked by revelations in the 2016 "Panama Papers" - an enormous amount of information leaked from a Panamanian law firm called Mossack Fonseca.

What are the Panama Papers?

Other banks have been fined as a result of information contained in the Panama Papers.

Deutsche shares fell 3% after news of the raid emerged. The bank confirmed that police had raided several locations in Germany and that it was co-operating fully with the probe.

Paperwork and electronic documents were seized by officials during the raids on the bank's properties.

Deutsche has been connected with another huge money laundering scandal at Denmark's Danske Bank.

Earlier this month, Deutsche confirmed that it was involved in processing payments for the Danish bank in Estonia.

An internal investigation by Danske found that about €200bn (£177bn) of payments were funnelled through its Estonian branch.

The Danish bank said many of those payments were suspicious.

Deutsche said it had terminated its relationship with Danske in 2015 after "identifying suspicious activity".

Fines and sanctions

Deutsche Bank has been sanctioned in the past for failing to tackle money laundering.

In September, Germany's financial regulator ordered the bank to take further action to prevent money laundering and terrorism financing.

It also appointed an independent auditor to monitor Deutsche Bank's efforts over three years.

In 2017, Deutsche Bank was fined $630m (£504m) by US and UK regulators in connection with a Russian money laundering plan.

Under the scheme, clients illegally moved $10bn out of Russia via shares bought and sold through the bank's Moscow, London and New York offices.

The trouble with authorities comes at a time when Deutsche continued to face problems with its business.

Pre-tax profits for the three months to September fell 45% to €506m compared with the same period last year.

Chief executive Christian Sewing, who took over in April, has been shedding jobs and making other cost cuts in an attempt to revive the bank's performance.

However, investors have yet to be been won over by his efforts and Deutsche shares have halved this year.--BBC

Trump threatens new car tariffs after GM closures

Donald Trump has renewed threats to impose tariffs on imported cars after General Motors announced job cuts and plant closures.

The US President tweeted that tariffs were "being studied" and that duties could have stopped the GM closures.

Separately, the Trump administration warned it may raise tariffs on Chinese car imports.

The fresh trade threats come as Mr Trump prepares to meet his counterparts at the G20 summit.

The US president has lashed out at GM over its plan to cut more than 14,000 jobs and close factories in North America.

In his latest attack, Mr Trump pointed to the 25% duty on imported pickup trucks and commercial vans from markets outside North America as supporting the industry.

A similar tariff on car imports would mean "many more cars would be built here" and "GM would not be closing their plants in Ohio, Michigan & Maryland," he tweeted.

GM's decision to halt production at factories in the US and Canada has angered many politicians.

For Mr Trump in particular, the cuts are a blow, as he has made rebuilding the US car industry one of his administration's priorities.

While his latest comments mark an escalation in frustration over GM's restructuring plan, the administration has long been considering imposing new tariffs on vehicle imports.

In May, Mr Trump asked the department to determine the effect of imports of cars and car parts on national security. A similar process led to new tariffs on foreign steel and aluminium this spring.

The proposal to put tariffs on foreign cars and car parts in the name of national security has been widely criticised, both in Congress and in the business world.

China tariff threat

Separately, US trade representative Robert Lighthizer said he was examining options to raise US tariffs on Chinese vehicles to 40% - the level Beijing charges on US-made cars.

"China's policies are especially egregious with respect to automobile tariffs," Mr Lighthizer said.

Car tariffs on both sides have increased in the US-China trade war.

The US imposed a 25% tariff on Chinese cars, on top of the 2.5% already in place. China imposed a 40% tariff on US vehicle imports - much higher than the 15% it places on other trading partners.

A quick guide to the US-China trade war

"As the president has repeatedly noted, China's aggressive, state-directed industrial policies are causing severe harm to US workers and manufacturers," Mr Lighthizer said.

It comes a day before a highly anticipated meeting between Mr Trump and Chinese President Xi Jinping.

The pair are expected to speak on the sidelines of the G20 summit in Argentina, in a meeting that will be closely watched for any progress on their bitter trade dispute.--BBC

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

GetBucks

AGM

Conference Room 1, Monomotapa Hotel

04/12/2018 (10am )

Innscor

AGM

Royal Harare Golf Club

05/12/2018 (8:15am)

Truworths

AGM

Boardroom, Prospect Park, 808 Seke Road

06/12/2018 (9am)

TSL

EGM

Head Office, 28 Simon Mazorodze Road, Southerton

07/11/2018 (10am )

Cassava shares list on the ZSE

11/12/2018

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Cellphone:      <tel:%2B263%2077%20344%201674> +263 77 344 1674

Alt. Email:       <mailto:info at bulls.co.zw> info at bulls.co.zw  

Website:         <http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw&sa=D&sntz=1&usg=AFQjCNH8LYgdY55h-XKseuM8Kpr-JKdfhQ> www.bulls.co.zw 

Blog:            <http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw%2Fblog&sa=D&sntz=1&usg=AFQjCNFoIy6F9IXAiYnSoPSgWDYsr8Sqtw> www.bulls.co.zw/blog

Twitter:         @bullsbears2010

LinkedIn:       Bulls n Bears Zimbabwe

Facebook:      <http://www.google.com/url?q=http%3A%2F%2Fwww.facebook.com%2FBullsBearsZimbabwe&sa=D&sntz=1&usg=AFQjCNGhb_A5rp4biV1dGHbgiAhUxQqBXA> www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 

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