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  • How Nigeria-China currency swap deal will benefit economy

    Expectations are high over the $2.5billion bilateral currency swap agreement between the Central Bank of Nigeria and the People’s Bank of China. Ibrahim Apekhade Yusuf in this report looks at the fallout

    The official signing ceremony of the currency swap deal between Nigeria and China last weekend proved bookmakers wrong that the proposal which had been in the cooler for over two years was not a ruse after all.

    The Asian powerhouse has multiple year currency swap agreements of the Renminbi with Argentina, Belarus, Brazil, Hong Kong, Iceland, Indonesia, Malaysia, Singapore, South Korea, United Kingdom and Uzbekistan. According to the People’s Bank of China (PBoC), those swap agreements were intended not only to “stabilise the international financial market,” but also to “facilitate bilateral trade and investment.”

    Nigeria, in any case was the third country in Africa (after South Africa and Egypt) to sign such a deal with China.

    The Director- General of the African Affairs Department of China’s Foreign Ministry, Lin Songtian told reporters in Beijing after the agreement was signed by both central bank governors that the Renminbi (yuan) is free to flow among different banks in Nigeria and has been included in the foreign exchange reserves of Nigeria.

    What the deal is all about

    According to the statement issued by the CBN spokesman, Isaac Okorafor, Godwin Emefiele, the CBN governor, and Yi Gang, the PBoC governor, had entered a three-year currency swap agreement on behalf of Nigeria and China respectively at the official signing ceremony in Beijing, China.

    The deal, which is valued at Renminbi (RMB) 16 billion or USD2.5bn had taken two years of negotiation between both governments.

    The deal which will be in force for three years can be extended by mutual consent.

    The agreement is expected to bring more flexibility into both markets by easing up the challenges encountered in the search for third currencies and “providing adequate local currency liquidity to Nigerian and China industrialists,’’ the statement read.

    The CBN spokesman added that the ‘’agreement will provide Naira liquidity to Chinese businesses and provide RMB liquidity to Nigeria businesses respectively, thereby improving the speed, convenience and volume of transactions between the two countries.

    ‘’It will also assist both countries in their foreign exchange reserves management, enhance financial stability and promote broader economic cooperation between the two countries.’’

    According to Okorafor, Nigerian manufacturers, particularly Small and Medium Enterprises (SMEs), manufacturers and cottage industries, who import raw materials, spare-parts and simple machinery, will have access to the RMB liquidity from Nigerian banks without being exposed to the difficulties of seeking other scarce foreign currencies.

    Checks by The Nation revealed that ahead of the currency swap deal,the CBN had since diversified its FX reserves away from the dollar by switching into Yuan, which currently represents approximately a tenth of its total reserves.

    Flipside of the swap deal

    It is however instructive to note that the currency-swap was calculated at the Nigerian central bank’s interbank rate of NGN305:USD1, rather than the Nigerian Foreign Exchange Fixings (NIFEX) rate of NGN338.7:USD1. This implies that chances of seeing any unification between Nigerian exchange rates anytime soon is unlikely.

    Excitements over currency swap deal

    The Chairman, Mobile Software Solution, Chris Uwaje, believes that the naira to yuan swap agreement should reduce the pressure on the naira if properly implemented.

    According to Uwaje, “Nigerian businesses don’t need to use dollar to pay anymore because it’s going to be costlier, we pay with yuan. By so doing we avoid every form of round tripping.”

    He also urged Buhari’s economic team to see how the country can indeed leverage on the technology prowess of China for Nigeria to attain a sustainable economy.

    In the assertion of Gbade Buraimoh, a Lagos-based financial expert, the quest for dollar through banks will definitely reduce, as all transactions between Nigeria and China will be in yuan instead of dollar.

    He observed that oil sales from Nigeria to China would be settled in Chinese currency, stressing that access to yuan would also be easier.

    “The swap will eliminate challenges arising from transactions with the dollar and promote business flexibility between Nigerian and Chinese,’’ Buraimoh explained.

    An Abuja-based international affairs and diplomacy expert, Kadiri Abdulrahman, viewed the currency swap deal as a positive move towards enhancing the value of the naira, thereby improving access to cheaper foreign exchange, in favour of members of the business community

    In the opinion of the Ecobank Group Research, the currency swap deal is a good one.

    In a statement released by the Bank’s research team,they noted amongst other things that the deal aims to facilitate bilateral trade and investment as well as promote financial stability and broader economic cooperation between the two countries.

    It’s also the team’s opinion that it will help the country to position itself as a trading hub with China in the West African sub-region.

    Specifically, they noted that this agreement will provide NGN   liquidity to Chinese firms looking to do business with Nigeria and provide RMB liquidity to Nigerian firms looking to do business with China, helping achieving effectiveness and efficiency in trade transactions between the two countries, without being exposed to the challenge of seeking another foreign currency.

    “In terms of the impact and implication, we believe that pressure on Nigerian importers who need US dollars to import goods from China is likely to dissipate as well as improve CBN’s management of the country’s FX reserves.”

    While commenting on the nation’s FX reserves which they acknowledged had improved over the past year and stands at USD47.0bn (as of April 2018) from USD30.9bn a year ago, the Ecobank stated matter-of-factly that it was made possible in part by the improved oil receipts alongside significant FPI inflows via the Investor and Exporter (I&E) window introduced in April 2017.

    In addition, this agreement (in addition to ongoing import ban on selected items) is likely to reduce further the strong demand for the USD and support the NGN.

    With improved trading activity, stronger FX reserves and continued CBN support, the official exchange rate has been static at NGN360:USD1. In light of this new currency swap, we expect a strengthening bias on the NGN in the near term as this agreement is likely to improve FX liquidity and lead to higher flows from China.

    While urging caution, the Ecobank analysts said, “By year end, our expectations of lower oil prices and increased FPI exits from NGN assets ahead of the 2019 elections, are likely to offset some of the gains, resulting in softer NGN and bearish activity in the bonds market.”

    This is just it said, the CBN is likely to retain its exchange rate at NGN305-306:USD1 and maintain interventions in the Secondary Market Intervention Sales (SMIS) windows at the NIFEX exchange rate of NGN327-340:USD1.

    Stakeholders urge cautious optimism over currency swap deal

    Expected stakeholders have urged Nigeria to tread with caution as far as the currency swap deal with China is concerned.

    The Director-General of Lagos Chamber of Commerce and Industry, Muda Yusuf agreed that the swap deal would smoothen the payment system in the bilateral trade between the two countries but stressed that it might not really strengthen the naira in the foreign exchange market, as the nation would have to enhance its productive base to achieve that.

    Mr Boniface Okezie, the president Progressive Shareholders Association of Nigeria, told newsmen that the currency swap deal was unnecessary. He said the deal would ensure that majority of the country’s foreign trade deals were channelled to the Chinese economy.

    “This will lead to economic dependence despite that Nigeria is a sovereign nation. The policy will lead to the influx of Chinese goods into our country considering that we are contending with weak regulation,” he said.

    In the view of Dr Austin Nweze, a lecturer in the department of Economics, Pan Atlantic University, Ibeju-Lekki, Lagos, the deal was only good on its surface value.

    He noted that in the long run, the initiative would allow the Chinese to compete with our local businesses, thereby, impeding the growth of indigenous firms.

    According to the political economist,  the only benefit of the currency swap deal for Nigeria was that in the short run, it would address third party sourcing of the Chinese currency by Nigerian importers.

    “However, it will take the trade deals with the Chinese to a new height and reduce the pressures of our foreign exchange,” he said.

    Echoing similar sentiments, Ken Ukaoha, President General, National Association of Nigerian Traders (NANTS), an umbrella organisation for businesses trading across continents of the globe from Middle East, Asia, etc, acknowledged the fact that the currency swap has some of its downsides.

    Speaking in an interview with The Nation, he expressed that things might go awry unless the government is alive to its responsibility.

    “Certainly, as far as we’re concerned, it is our view that the federal government should sound a note of caution as well as beam its searchlight on the activities of the regulatory agencies such as the Standards Organisation of Nigeria (SON), NAFDAC, Consumer Protection Council, the Nigeria Export Promotion Council, the Customs, Federal Ministry of Trade and Investment to ensure that they collaborate with the Central Bank of Nigeria so that the policy will not bring about any negative effects to Nigeria.”

    Expatiating, he said: “This policy can trigger high volumes of import into this country which is good. But of course, it can also trigger unrestricted imports, especially the influx of substandard goods into the country. Therefore what should be done is that the regulatory agencies should mount serious surveillance to ensure that influx of substandard goods does not take over our domestic market.

    “More importantly, our local industries must not surrender or succumb to the whims and caprices of importation. That is to say we’re not going to slaughter our local industries on the altar of unrestricted importation from China courtesy of the currency swap.

    “The agencies, including the Nigeria Customs Service, I must reiterate, must rise to ensure the standardisation of products coming into this country. We must not just allow all manner of imported goods into the country all the name of the currency swap deal between China and Nigeria.”

  • Trump’s gambit Iran: World awaits decision on nuclear deal

    “Insane,” “ridiculous,” “worst deal ever” are some of the descriptions used by US President Donald Trump for the Iran nuclear agreement, which he has bitterly opposed since early in his campaign for the White House.

    The world will soon find out whether Trump’s rants about the 2015 deal will produce a concrete shift in US diplomacy, regarding one of the most important foreign policy issues of his presidency.

    Trump officially has until Saturday to decide whether to reintroduce US sanctions on Iran, which among other things could spell an end to the accord.

    But he has said he will announce his decision at 2.00 p.m. ( 1800 GMT ) on Tuesday.

    In January, Trump renewed waivers for US sanctions on Iran but warned that it was the last time he would do so unless several “disastrous flaws” in the agreement were addressed.

    His ultimatum triggered a 120-day period that ends this weekend.

    There is a growing consensus in the United States that his decision will effectively pull the US out of the deal, and that prospect has been accompanied by a range of speculation over what comes next.

    French President, Emmanuel Macron, said he didn’t know what Trump would decide.

    But after several meetings with the president over a three-day state visit recently he said: “My view is that he will get rid of this deal on his own for domestic reasons’’.

    “The president campaigned on getting out of the deal and I think that he’s going to do so,’’ Lieut.-Gen. William G Boykin said on Thursday on Fox News.

    Iranian leaders already have pledged to abandon the deal if the US withdraws.

    But it could remain in the deal with Britain, France and Germany, along with China and Russia, which have expressed their continued support.

    Meanwhile, UN Secretary-General, Antonio Guterres, has warned that if Trump withdraws, it could risk war.

    Since Trump issued the ultimatum in January, U.S. and European negotiators have met a number of times to address US concerns within and beyond the Joint Comprehensive Plan of Action ( JCPOA ), as the deal is formally known.

    The U.S. side has raised four main issues: Iran’s ballistic missile programme, its involvement in regional conflicts, inspection of Iranian nuclear sites and so-called sunset clauses.

    The sunset clauses, which let some restrictions on Iran’s nuclear programme expire, have proved the most difficult of these.

    The U.S. claims that the clauses provide Iran with a pathway to building nuclear weapons over time.

    Trump has pushed the European partners to search for possible compromises.

    Determined to stay in the deal, the bloc has argued that abandoning it would not help address the ballistic weapons issue or Iran’s role in the region.

    “The JCPOA is a non-proliferation agreement.

    “Other issues of concern are addressed separately,’’ a senior EU official said on condition of anonymity.

    “If the deal falls apart, you would not be in any better position to tackle these issues.’’

    Furthermore, the deal is doing what it is supposed to do, by curbing Iran’s nuclear activities, the official noted.

    If the agreement falls apart and there’s no substitute, he said, it would “probably trigger a nuclear arms race in the region.’’

    The dramatic developments on the Korean Peninsula may also influence Trump’s thinking on the nuclear deal.

    Pulling out of the JCPOA could erode the trust he’s tried to build in the effort to denuclearise the Korean Peninsula, ahead of a planned meeting with the North Korean leader, Kim Jong Un; or it could send a strong message to Pyongyang that Trump is prepared to deliver on his threats.

    Domestic politics could likewise have a role to play, as Trump could be thinking about fulfilling a campaign promise ahead of the November mid-term elections to boost his Republican Party’s chances of maintaining its majority in Congress.

    In recent weeks, Trump has manoeuvred aggressively.

    Read Also: U.S. Ambassador to UN disapproves of Trump’s “communication style”

    He has changed his secretary of state, switching the moderate Rex Tillerson for the more hawkish Mike Pompeo, a fierce critic of the Iran deal.

    He has also brought in John Bolton, a foreign policy hawk, as his national security adviser.

    Pompeo met Israeli President, Benjamin Netanyahu, on his first foreign trip after taking office, stressing that if the Iran nuclear deal cannot be fixed, Trump will withdraw.

    The “full array of threats,’’ including Iran’s missile systems and support for militant groups in Syria, Lebanon and Yemen must be addressed as part of a revised agreement, he said.

    Pompeo also said documents that Netanyahu revealed April 30 show that Iran had a secret nuclear weapons programme for years and lied about it.

    “What this means is the deal was not constructed on a foundation of good faith or transparency,’’ Pompeo said.

    NAN

  • CBN: $2.5b currency swap to boost naira liquidity

    Apex bank injects $349.34m into retail SMIS

    The Central Bank of Nigeria (CBN) on Friday said the $2.5 billion (16 billion Renminbi (RMB) currency swap deal with Chinese government would provide adequate local currency liquidity to Nigerian and Chinese industrialists and other businesses.

    CBN Spokesman, Isaac Okorafor, disclosed that the deal would protect Nigerian business men and women from the harsh effects of third currency fluctuations.

    The CBN spokesman also disclosed that the apex bank also in its last intervention for the week, injected the total sum of $349.34 million in the Retail Secondary Market Intervention Sales (SMIS) segment of the forex market.

    Figures obtained from the CBN, indicated that the interventions were meant to meet obligations in the agricultural, airlines, petroleum products and raw materials and machinery sectors.

    Okorafor, who confirmed the releases, reiterated that the bank continued to intervene in the foreign exchange market owing mainly to its commitment to guarantee liquidity in the foreign exchange market and boost the production sector.

    According to him, the continued interventions by the CBN in the forex market in addition to the recent currency swap with the People’s Bank of China (PBoC) would ease pressure on the country’s reserves.

    Speaking further, he explained that the Bank, in injecting funds into the market, was playing its role of safeguarding the international value of the legal tender currency through exchange rate stability. He said the Bank was also committed to diversifying the Nigerian economy from oil.

    The CBN also, last week injected $339.89 into the SMIS while also intervening in the inter-bank Foreign Exchange Market to the tune of $210,000,000, comprising $100 million for the wholesale segment and $55 million for both the Small and Medium Enterprises (SMEs) and invisibles segment on Wednesday, May 2, 2018.

  • Nigeria, China in $2.5b currency swap deal

    The Central Bank of Nigeria (CBN) and Peoples Bank of China (PBoC) have begun the execution of a $2.5 billion (Renminbi 16 billion) bilateral currency swap agreement entered into over two years ago.

    CBN Governor Godwin Emefiele led some CBN officials to the signing ceremony in Beijing, China. His PBoC counterpart Yi Gang headed the Chinese team. The pact was the result of over two years negotiations between both banks.

    The transaction is aimed at providing adequate local currency liquidity for Nigerian and Chinese industrialists and other businesses in order to reduce their difficulties in the search for a third currency.

    In a statement, CBN Acting Director, Corporate Communications Isaac Okorafor explained that Chinese businesses would get naira liquidity and Nigerian businesses, RMB liquidity under the agreement.

    This, he said, would improve the speed, convenience and volume of transactions between both countries. It will also assist both countries in their foreign exchange reserves management, enhance financial stability and promote broader economic cooperation between them.

    It will also be easier for Nigerian manufacturers, especially small and medium enterprises (SMEs) and cottage industries to import raw materials, spare-parts and machines. To facilitate their imports, they can get RMB facility from Nigerian banks without being exposed to the difficulties of seeking other scarce foreign currencies.

    The deal, which is purely an exchange of currencies, will also make it easier for Chinese manufacturers seeking to buy raw materials from Nigeria to obtain naira from Chinese banks to pay for their imports.

    The pact will protect Nigerian businesses from the harsh effects of third currency fluctuations.

    Nigeria is the third African country to have this kind of agreement with the PBoC. Nigerian and Chinese officials expressed delight at the signing of the agreement and expressed hope that it would boost mutually beneficial business transactions between their countries.

    The agreement will allow both sides to swap a total of 15 billion Chinese yuan ($2.35 billion) for N720 billion, or vice versa, in the next three years, PBoC said on its website.

    The move is aimed at facilitating bilateral trade and investment and promoting the financial stability of both countries, the PBoC said. The deal can be extended by mutual consent.

    A currency swap deal allows two institutions to exchange payments in one currency for equivalent amounts in order to facilitate bilateral trade settlements and provide liquidity support to financial markets.

    The News Agency of Nigeria (NAN) reports that in 2014, then CBN deputy governor, Kingsley Moghalu, said the bank was looking into increasing the percentage of Yuan foreign reserves in its possession from two to seven per cent.

    According to him, 85 per cent of the CBN’s foreign reserves were in dollars and it needed to have more in Chinese Yuan, as the country was taking a more important place in global trade.

    “It was clear to us that the future of international economics and trade will shift in large part to business with and by China. Ultimately the renminbi (Yuan) is likely to become a global convertible currency,” Moghalu said.

    Since 2014, the world market has recognised the Yuan as a likely global reserve currency, a replacement for the dollar, which has led countries like Ghana, South Africa and Zimbabwe to integrate the renminbi (Yuan) into their financial markets.

    Consequently, trade (however imbalanced) has increased between certain countries on the continent and China.

  • Vettel ‘not worried’ about lost China, Baku wins

    Sebastian Vettel says Ferrari’s current level of competitiveness leaves him with no worries going into the European season.

    Despite having the fastest car in Formula One and having started the past three races from pole position, Vettel sits behind Lewis Hamilton in the drivers’ championship. The German converted his Bahrain pole into victory, but he was unable to convert pole into a win in China and Azerbaijan.

    In Shanghai, Vettel surrendered the lead to Valtteri Bottas as Ferrari was out-manoeuvred by Mercedes through the round of stops, as well as an untimely Safety Car period which allowed Daniel Ricciardo to put on fresh tyres and slice his way through the field. Baku was a similar case for Vettel as he appeared to have the race under control at the front, but lost the lead to Bottas under the second Safety Car and lost a position to Hamilton while trying to overtake the Finn at the Safety Car restart.

    Unlike in 2017, Ferrari’s impressive race pace is replicated in qualifying leaving Vettel unconcerned about his recent misfortunes.

    “Yes, the most important thing is that we have a good car and we have a car that we can work with in qualifying which if we can put at the front we have good pace for the race.”

  • Iran’s LNG exports jump as China, U.S. lock horns

    Iran’s National Gas Company is intent on raising the country’s share in the global gas trade as the Islamic Republic is shifting its focus to international markets.

    Iranian liquefied natural gas (LNG) exports reportedly rose to around 500,000 metric tons in April as this month’s shipments were 14 percent up from last month’s figure, to bring this year’s total shipments to 1.86 million metric tons.

    According to shipping sources, cited by Iranian media, most of the April cargoes are again bound for China.

    China’s Oriental Energy Company (OE), loaded 34,000 tons of propane and 14,000 tons of butane supplied by Iranian Gas Commercial Co., aboard an LNG tanker at Iran’s Gulf port of Assaluyeh, which is scheduled to arrive at China’s Qinzhou on Wednesday.

    Another ship is due to bring 33,000 tons of propane and 11,000 tons of butane to Ningbo on May 12.

    The shipments of Iranian natural gas come as OE was recently ordered by a Texas state district court to pay $523.8 million in damages to Germany’s Mabanaft following an LPG contract dispute.

    The court ruled that OE had breached its contract by failing to provide a letter of credit ahead of its first scheduled shipment of propane from the US Gulf.

    Beijing also plans a hefty, 25-percent increase in import duties on US propane in a retaliatory move which, if implemented, would add a new twist to the US-China trade war. This could shift China’s import focus to the Middle East, including Iran.

    In the meantime, Iran is pressing ahead with its natural gas shipments to Indonesia, with 33,000 tons of propane and 11,000 tons of butane arriving in the country on April 19.

    A shipment of 44,000 tons of propane and butane is due to arrive on Wednesday and another 45,000 tons are slated to arrive at the Indonesian port of Tanjung later this week.

    Other destinations for Iranian gas exports are India, Thailand and possibly Kenya.

  • 18 Cross Riverians for technical training in China, says Ayade

    Cross River State Governor Ben Ayade has concluded plans to send 18 Cross Riverians for technical training in China.

    The governor spoke in Calabar at the presentation of the certificate of occupancy to Skyrun International of China, manufacturers of home appliances.

    Ayade described the company as a global firm with indelible footprints in Africa.

    His words:  “I am  happy that we are partnering Skyrun to breathe life into the park hoping that all the amalgam of projects they have proposed in the state will manifest in no distant time going by the terms of the agreement.”

    While thanking the electronic giant for their Interest in developing the state,  Ayade said: “This is a typical example of good corporate social responsibility attitude and I want to appreciate Skyrun International for their interest and confident in our administration by taking such unprecedented investment step to investing here.”

    Ayade announced that  “beyond the presentation of C of O that will give them a free hand to invest massively in our industrial park, there is also a technical agreement for them to train our teeming youth and better equip them with the requisite skills in China to enable us realise our signature projects as well as other industrial constructions across the state.”

    The National Coordinator, Nigeria-China Business Council,  and focal point for Skyrun,  Chief Matthew Uwaekwe, said the company decided to provide technical support and utilise incentives provided at the park to establish its presence in the manufacturing line.

    He said:  “As we speak,  we have signed several Memoranda of Understanding (MoUs) with Cross River to partner it in different sectors of the economy and we are committed as one of the reputable companies in China with over N5 billion monthly turn over in Nigeria to expand our business and grow the economy.

    “We will do all it takes to bring more investors to Cross River,  knowing very well that the state remains one of the safest place for business and leisure in Nigeria and Chinese investors will love to take advantage of this and invest.”

    “We are starting this partnership with a ‘train the trainers’ program were 18 Cross Riverians will be sent to China to training while arrangement for the establishment of a world class training facility in core technical areas has begun with the acquisition of C of O,”  adding that “Chinese experts are expected in Calabar to man the facility and train the youths in critical areas of need.”

     

     

     

  • China the rainmaker, to force rainfall over an area 2X Nigeria

    China is almost set to force rainfall and snow over 1.6 million sq km (620,000 sq miles), an area roughly three times the size of Spain or twice the size of Nigeria(923,768 Sq.kms)

    According to media reports, the government will use new military weather-altering technology developed by the state-owned China Aerospace Science and Technology Corporation.

    Since 2013 China has created 55 billion tons of artificial rain a year.

    The latest plan is the biggest rainmaking project ever.

    The country plans to build tens of thousands of combustion chambers on Tibetan mountainsides. The chambers will burn a solid fuel, which will result in a spray of silver iodide billowing towards the sky.

    “More than 500 burners have been deployed on alpine slopes in Tibet, Xinjiang and other areas for experimental use. The data we have collected show very promising results,” an unnamed researcher told the Morning Post.

    “Sometimes snow would start falling almost immediately after we ignited the chamber. It was like standing on the stage of a magic show,” he said.

    The Tibetan plateau is vital to the water supply for much of China and a large area of Asia. Its glaciers and reservoirs feed the Yellow, Yangtze, Mekong, and other major rivers that flow through China, India, Nepal, and other countries.

    Sprayed from planes, the particles will provide something for passing water vapor to condense around, forming clouds. Those clouds will bring the rain. A single cloud-seeding chamber could create a strip of clouds covering a 5km area.

    Traditionally, the rainmaking process or “cloud-seeding” means rocket-launching chemicals into clouds which accelerate the creation of ice crystals that eventually become rain.

    China also uses military aircraft for those purposes. Rainmaking is also a popular way to “clean up” air in China, where heavy smog is a big problem for many cities.

    The practice of weather modification has become more frequent across the country in recent years, including for major public events.

    In 2008, China launched over 1,100 rockets containing silver iodide into Beijing’s skies before the Olympics opening ceremony to disperse clouds and keep the Olympics rain-free. Beijing has a “development plan” for weather modification until 2020.

    Reported by www.rt.com

  • China vows to fight Trump’s tariffs ‘at any cost’

    China vowed to fight “unilateral U.S. protectionism ‘at any cost’ on Friday after President Donald Trump ordered officials to examine posing an additional 100 billion dollars in tariffs on Chinese goods.

    “On Sino-US trade, China has made its position very clear. We don’t want a trade war, but we are not afraid of such a war,” a spokesperson for the Ministry of Commerce told state-run news agency Xinhua on Friday.

    The ministry also vowed to take “comprehensive countermeasures,” according to Xinhua, although it did not add further details.

    The comments echo the fiery rhetoric in state and Communist Party-backed publications over the past week as the standoff with the U.S. escalates into a possible all-out trade war.

    In a statement on Thursday, Trump said he had ordered the move “in light of China’s unfair retaliation” to U.S. tariffs of 25 per cent on 50 billion dollars worth of Chinese goods he announced earlier this week.

    “Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers,” Trump said.

    “I have instructed the U.S. Trade Representative to consider whether 100 billion dollars of additional tariffs would be appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs.”

    He also said he had ordered the secretary of agriculture “to implement a plan to protect our farmers and agricultural interests.”

    The retaliatory tariffs ordered by Beijing this week targeted 50 billion dollars worth of U.S. goods including key exports like soybeans, wheat, aircraft and chemical products designed to hit the rural regions where Trump is particularly popular.

    They were announced after the Trump administration unveiled a list of 1,300 Chinese products to be targeted by tariffs including from the aerospace, information and communication technology, robotics, and machinery industries.

    Tensions have been rising between the world’s two largest economies since August, when the US president initiated an investigation into anti-competitive trade practices by China and alleged theft of US intellectual property.

    US Trade Representative Robert Lighthizer said Thursday Trump was “right to ask for additional appropriate action to obtain the elimination of the unfair acts, policies, and practices identified in USTR’s report.”

    He also said the tariffs, like those previously announced, would undergo a review period before going into effect, leaving the door open for talks.

    Trump also said the U.S. was “still prepared to have discussions in further support of our commitment to achieving free, fair, and reciprocal trade and to protect the technology and intellectual property of American companies and American people.”

    The potential total of 150 billion dollars in tariffs on Chinese goods come on top of the Trump administration’s announcement in March that it was slapping duties of 25 per cent on steel imports and 10 per cent on aluminium products.

    Key allies including the European Union, Canada and Mexico were excluded from those tariffs, but not China.

    Trump’s tariffs have been criticized by U.S. businesses and members of his own Republican party alike.

    “The announcement that the administration may issue 100 billion dollars in additional tariffs on Chinese products is irresponsible and destabilising,” Dean Garfield, head of the Information Technology Industry Council, said.

    The National Retail Federation accused the White House of “playing chicken with the economy.”

    “This is what a trade war looks like, and what we have warned against from the start. We are on a dangerous downward spiral and American families will be on the losing end,” its president Matthew Shay said.

    Republican Senator Ben Sasse said Trump was “threatening to light American agriculture on fire” and that “if he’s even half-serious, this is nuts.”

    “Let’s absolutely take on Chinese bad behaviour but with a plan that punishes them instead of us,” he said.

    “This is the dumbest possible way to do this.”

    dpa/NAN

  • Gold rises after Trump proposes more tariffs on China

    Gold prices rose on Friday as investors sought safer assets after U.S. President Donald Trump proposed 100 billion dollars in new tariffs on China, raising concerns about an escalating trade spat between the United States and China.

    Spot gold was 0.4 per cent higher at 1,330.78 dollars per ounce as of 0032 GMT, and the U.S. gold futures rose 0.4 per cent to 1,334.10 dollars an ounce.

    Spot gold on Thursday dropped to a one-week low of 1,322.40 dollars an ounce after the United States and China signalled willingness to negotiate a trade dispute.

    However, President Donald Trump late on Thursday said he had instructed U.S. trade officials to consider $100 billion in additional tariffs on China, fueling an already heated trade dispute between the world’s two biggest economies.

    U.S. stock markets slid and the yen rose against the dollar on Friday.

    Gold-backed exchange traded funds in North America saw inflows in March, amid market volatility and as trade tensions between the United States and China drove safe-haven purchases to bullion, while Europe saw outflows for the second straight month.

    Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.24 per cent to 854.09 tonnes on Thursday from 852.03 tonnes on Wednesday.

    Physical-gold demand in most Asian hubs was muted this week, weighed down by stronger prices, despite a slight pick-up in buying in India ahead of the wedding-season and a key-festival.

    The U.S. trade deficit increased to a near 9-1/2-year high in February, with both imports and exports rising to record highs in a sign of strong domestic and global demand.

    Koza Ltd, whose founder had to abandon his Turkish gold assets, is expanding its operations in Britain.

    It has a one million programme to drill for it in Ayrshire, Scotland, together with a venture partner, the company said on Thursday.

    Swiss refiner Valcambi said it has signed a long-term deal to refine and sell-on gold from a Fairtrade-accredited concession of Peruvian mining co-operative Minera Limata.

    The concession is part of a broader strategy to drive responsible mining.

    International mining companies have insisted that Democratic Republic of Congo amend portions of a new mining code to respect exemptions they were granted by its predecessor.

    Reuters/NAN