Vietnam will contend with severe power shortages from 2021 as electricity demand outpaces construction of new power plants in the Southeast Asian country, the Ministry of Industry and Trade told Reuters on Wednesday.

The lack of energy infrastructure could put the brakes on foreign investment inflows into one of Asia's fastest-growing economies and challenge Vietnam's position as the top beneficiary of the US-China trade war.

Vietnam's demand for electricity will exceed its supply by 6.6 billion kilowatt-hours (kWh) in 2021, increasing to 15 billion kWh by 2023, equivalent to about 5% of forecasted demand for electricity then, the ministry said in an emailed statement.

In addition to the shortfall, many energy projects in Vietnam have been facing long delays, the ministry told Reuters.

"Developers are facing difficulties securing sufficient funds from local sources, and the government has limited its guarantee for foreign loans," the ministry statement said.

Vietnam will need an average of $6.7 billion a year to expand its annual power generation capacity by 10% between 2016 and 2030, it added.&nbsp;

"This is a big challenge, given that current electricity prices in Vietnam are barely enough for the developers to make a profit," the statement said.

Last month, state media said 47 of Vietnam's 62 electric generation projects of 200 megawatts (MW) or more faced delays, with some at least two years behind schedule.

With a population of 96 million and annual gross domestic product growth of about 7% backed by robust foreign investment and exports, Vietnam's power generation will need to rise from about 48,600 MW currently to 60,000 MW by 2020 and 129,500 MW by 2030, according to government data.

Daine Loh, power and renewables analyst at Fitch Solutions, said the potential power shortage will pose some degree of risk to Vietnam's manufacturing sector, but the shortage won't be significant enough to have a severe impact on foreign investment into the country.

"We believe that Vietnam will have the capacity to resolve their power shortages by increasing electricity imports over the coming years, which will come largely from Laos and China," Loh said on Wednesday.

She said Vietnam already has some infrastructure in place to buy around 1 GW of electricity a year from its neighbours.&nbsp;

The World Bank last year said that Vietnam needs to invest up to $150 billion by 2030, almost twice the $80 billion spent on its power sector since 2010.

Vietnam is increasingly reliant on coal, which makes up 38.1% of the country's generating capacity, the ministry said, adding that Vietnam will have to use 720 million tonnes of domestic coal in addition to 680 million tonnes of imported coal to feed its power plants during the 2016-2030 period.

It will also have to import liquefied natural gas (LNG) for its power plants, the ministry said, and the power shortage is expected to subside gradually after 2025 when several new gas-fired power plants go online.

Fitch Solutions'&nbsp;Loh said the key risks to foreign investment and other economic benefits in Vietnam are more likely to stem from political factors, referring to ongoing disputes over the South China Sea.

&nbsp;

Vietnam will contend with severe power shortages from 2021 as electricity demand outpaces construction of new power plants in the Southeast Asian country, the Ministry of Industry and Trade told Reuters on Wednesday.

Vietnam will contend with severe power shortages from 2021 as electricity demand outpaces construction of new power plants in the Southeast Asian country, the Ministry of Industry and Trade told Reuters on Wednesday. The lack of energy infrastructure could put the brakes on foreign investment inflows into one of Asia's fastest-growing economies and challenge Vietnam's position as the top beneficiary of the US-China trade war. Vietnam's demand for electricity will exceed its supply by 6.6 billion kilowatt-hours (kWh) in 2021, increasing to 15 billion kWh by 2023, equivalent to about 5% of forecasted demand for electricity then, the ministry said in an emailed statement. In addition to the shortfall, many energy projects in Vietnam have been facing long delays, the ministry told Reuters. "Developers are facing difficulties securing sufficient funds from local sources, and the government has limited its guarantee for foreign loans," the ministry statement said. Vietnam will need an average of $6.7 billion a year to expand its annual power generation capacity by 10% between 2016 and 2030, it added. "This is a big challenge, given that current electricity prices in Vietnam are barely enough for the developers to make a profit," the statement said. Last month, state media said 47 of Vietnam's 62 electric generation projects of 200 megawatts (MW) or more faced delays, with some at least two years behind schedule. With a population of 96 million and annual gross domestic product growth of about 7% backed by robust foreign investment and exports, Vietnam's power generation will need to rise from about 48,600 MW currently to 60,000 MW by 2020 and 129,500 MW by 2030, according to government data. Daine Loh, power and renewables analyst at Fitch Solutions, said the potential power shortage will pose some degree of risk to Vietnam's manufacturing sector, but the shortage won't be significant enough to have a severe impact on foreign investment into the country. "We believe that Vietnam will have the capacity to resolve their power shortages by increasing electricity imports over the coming years, which will come largely from Laos and China," Loh said on Wednesday. She said Vietnam already has some infrastructure in place to buy around 1 GW of electricity a year from its neighbours. The World Bank last year said that Vietnam needs to invest up to $150 billion by 2030, almost twice the $80 billion spent on its power sector since 2010. Vietnam is increasingly reliant on coal, which makes up 38.1% of the country's generating capacity, the ministry said, adding that Vietnam will have to use 720 million tonnes of domestic coal in addition to 680 million tonnes of imported coal to feed its power plants during the 2016-2030 period. It will also have to import liquefied natural gas (LNG) for its power plants, the ministry said, and the power shortage is expected to subside gradually after 2025 when several new gas-fired power plants go online. Fitch Solutions' Loh said the key risks to foreign investment and other economic benefits in Vietnam are more likely to stem from political factors, referring to ongoing disputes over the South China Sea.

Vietnam will face severe power shortages from 2021: Ministry

The US economy likely grew at its slowest pace in more than two years in the second quarter as an acceleration in consumer spending was probably offset by weak exports and business investment.

The anticipated moderation in growth will come against the backdrop of rising risks to the economy's outlook, especially from a trade war between the United States and China as well as slowing growth overseas, which are seen encouraging the Federal Reserve to cut interest rates next Wednesday for the first time in a decade.

With a strong labour market supporting consumer spending, a recession is, however, not on the horizon. The Commerce Department will publish the second-quarter gross domestic product (GDP) report on Friday at 8:30 am EDT (1230 GMT).

"The slowing in the economy spooked the Fed and markets, but the sky is not falling," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania. "If we do get a recession next year it would be because we shot ourselves in the foot with the trade tensions."

Gross domestic product probably increased at a 1.8% annualized rate in the second quarter, also because of a smaller inventory build, according to a Reuters survey of economists, after surging at a 3.1% pace in the January-March period.

But with the volatile exports and inventory categories accounting for much of the expected step-down in GDP, the slowest growth pace since the first quarter of 2017 will likely mask some underlying strength in the 10-year economic expansion, the longest in history.

The survey was completed before the release of June wholesale and retail inventories as well as durable goods and goods trade deficit data, which led the Atlanta Fed to cut its forecast by three-tenths of a percentage point to a 1.3% rate.

The economy is slowing largely as the stimulus from the White House's $1.5 trillion tax cut package fades. The tax cuts together with more government spending and deregulation were part of measures adopted by the Trump administration to boost annual economic growth to 3.0% on a sustained basis.

The economy grew 2.9% in 2018 and growth this year is expected to be around 2.5%. Economists estimate the speed at which the economy can grow over a long period without igniting inflation at between 1.7% and 2.0%.

"As the benefits of fiscal stimulus fade and trade policy uncertainty and slowing global demand remain headwinds to business investment, US GDP growth should moderate," said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

The GDP report is also expected to show a pickup in inflation last quarter, but the overall trend likely remained benign. The government will also publish revisions to GDP data from 2014 through the first quarter of 2019.

Strong consumer spending

Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, is expected to have surged after slowing to a 0.9% rate in the first quarter, the weakest in a year. Some of the slowdown in consumer spending early in the year was blamed on a 35-day partial shutdown of the government. Spending is being supported by the lowest unemployment rate in nearly 50 years, which is lifting wages.

The jump in consumer spending was, however, likely blunted by a sharp drop in exports, in a reversal of the strong growth experienced in the first quarter. Weak exports are expected to have resulted in the deterioration of the trade deficit in the second quarter. Trade is believed to have subtracted from GDP growth last quarter after contributing 0.94 percentage point in the January-March period.

The acceleration in consumer spending likely helped businesses to whittle down an inventory overhang, resulting in a smaller inventory build. While that probably weighed on GDP growth in the second quarter, it is a potential boost to manufacturing. Businesses have been placing fewer orders with factories while working through stockpiles of unsold goods, which contributed to undercutting manufacturing production.

Business investment was probably weak in the second quarter, with spending on equipment expected to have contracted again after declining at its steepest pace in three years in the January-March period.

Fed Chairman Jerome Powell early this month flagged business investment as one area of weakness in the economy, noting it had "slowed notably," and that this might "reflect concerns about trade tensions and slower growth in the global economy."

Design problems at aerospace giant Boeing have hurt business investment, with some spillover to exports.

Boeing reported its biggest-ever quarterly loss on Wednesday due to the spiraling cost of resolving issues with its 737 MAX airplane and warned it might have to shut production of the grounded jet completely if it runs into new hurdles with global regulators to getting its best-selling aircraft back in the air.

The plane was grounded worldwide in March after two fatal crashes in Ethiopia and Indonesia. Production of the aircraft has been reduced and deliveries suspended. Economists estimate the 737 MAX troubles cut at least two-tenths of a percentage point from GDP growth in the second quarter.

"There could be more noticeable effects on various growth components, with weakness in related equipment spending and exports and a partially offsetting increase in inventories," said Daniel Silver, an economist at JPMorgan in New York.

Business spending on structures, which include oil and gas well drilling, is expected to have declined last quarter. Spending on intellectual products, including research and development, likely increased.

Strong growth in government investment is expected, but spending on homebuilding likely contracted for a sixth straight quarter.

The US economy likely grew at its slowest pace in more than two years in the second quarter as an acceleration in consumer spending was probably offset by weak exports and business investment.

The US economy likely grew at its slowest pace in more than two years in the second quarter as an acceleration in consumer spending was probably offset by weak exports and business investment. The anticipated moderation in growth will come against the backdrop of rising risks to the economy's outlook, especially from a trade war between the United States and China as well as slowing growth overseas, which are seen encouraging the Federal Reserve to cut interest rates next Wednesday for the first time in a decade. With a strong labour market supporting consumer spending, a recession is, however, not on the horizon. The Commerce Department will publish the second-quarter gross domestic product (GDP) report on Friday at 8:30 am EDT (1230 GMT). "The slowing in the economy spooked the Fed and markets, but the sky is not falling," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania. "If we do get a recession next year it would be because we shot ourselves in the foot with the trade tensions." Gross domestic product probably increased at a 1.8% annualized rate in the second quarter, also because of a smaller inventory build, according to a Reuters survey of economists, after surging at a 3.1% pace in the January-March period. But with the volatile exports and inventory categories accounting for much of the expected step-down in GDP, the slowest growth pace since the first quarter of 2017 will likely mask some underlying strength in the 10-year economic expansion, the longest in history. The survey was completed before the release of June wholesale and retail inventories as well as durable goods and goods trade deficit data, which led the Atlanta Fed to cut its forecast by three-tenths of a percentage point to a 1.3% rate. The economy is slowing largely as the stimulus from the White House's $1.5 trillion tax cut package fades. The tax cuts together with more government spending and deregulation were part of measures adopted by the Trump administration to boost annual economic growth to 3.0% on a sustained basis. The economy grew 2.9% in 2018 and growth this year is expected to be around 2.5%. Economists estimate the speed at which the economy can grow over a long period without igniting inflation at between 1.7% and 2.0%. "As the benefits of fiscal stimulus fade and trade policy uncertainty and slowing global demand remain headwinds to business investment, US GDP growth should moderate," said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. The GDP report is also expected to show a pickup in inflation last quarter, but the overall trend likely remained benign. The government will also publish revisions to GDP data from 2014 through the first quarter of 2019. Strong consumer spending Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, is expected to have surged after slowing to a 0.9% rate in the first quarter, the weakest in a year. Some of the slowdown in consumer spending early in the year was blamed on a 35-day partial shutdown of the government. Spending is being supported by the lowest unemployment rate in nearly 50 years, which is lifting wages. The jump in consumer spending was, however, likely blunted by a sharp drop in exports, in a reversal of the strong growth experienced in the first quarter. Weak exports are expected to have resulted in the deterioration of the trade deficit in the second quarter. Trade is believed to have subtracted from GDP growth last quarter after contributing 0.94 percentage point in the January-March period. The acceleration in consumer spending likely helped businesses to whittle down an inventory overhang, resulting in a smaller inventory build. While that probably weighed on GDP growth in the second quarter, it is a potential boost to manufacturing. Businesses have been placing fewer orders with factories while working through stockpiles of unsold goods, which contributed to undercutting manufacturing production. Business investment was probably weak in the second quarter, with spending on equipment expected to have contracted again after declining at its steepest pace in three years in the January-March period. Fed Chairman Jerome Powell early this month flagged business investment as one area of weakness in the economy, noting it had "slowed notably," and that this might "reflect concerns about trade tensions and slower growth in the global economy." Design problems at aerospace giant Boeing have hurt business investment, with some spillover to exports. Boeing reported its biggest-ever quarterly loss on Wednesday due to the spiraling cost of resolving issues with its 737 MAX airplane and warned it might have to shut production of the grounded jet completely if it runs into new hurdles with global regulators to getting its best-selling aircraft back in the air. The plane was grounded worldwide in March after two fatal crashes in Ethiopia and Indonesia. Production of the aircraft has been reduced and deliveries suspended. Economists estimate the 737 MAX troubles cut at least two-tenths of a percentage point from GDP growth in the second quarter. "There could be more noticeable effects on various growth components, with weakness in related equipment spending and exports and a partially offsetting increase in inventories," said Daniel Silver, an economist at JPMorgan in New York. Business spending on structures, which include oil and gas well drilling, is expected to have declined last quarter. Spending on intellectual products, including research and development, likely increased. Strong growth in government investment is expected, but spending on homebuilding likely contracted for a sixth straight quarter.

US economic growth seen slowing in second quarter

China's Huawei Technologies laid off more than two-thirds of the 850-strong workforce at its Futurewei Technologies research arm in the United States, after being blacklisted by the government.

Futurewei, which has offices in Silicon Valley and the greater Seattle, Chicago and Dallas areas, said it cut more than 600 jobs. The unit, set up in part to work with universities and researchers, recorded $510 million in operating costs last year.

Huawei is the world's largest telecommunications equipment manufacturers. The US Commerce Department in May placed the firm on its "entity list" of organizations that pose security risks. The Justice Department has filed charges against the firm alleging theft of trade secrets and other crimes.

Huawei said the job cuts, effective July 22, were "due to the curtailment of business operations" caused by the US government's actions.

The trade blacklist has made it illegal for Futurewei to transfer sensitive technologies to its parent. The blacklist also restricts Huawei from purchasing products from US technology companies.

On Monday, US President Donald Trump agreed at a meeting with the heads of top technology companies including Alphabet Inc's Google to make "timely" decisions on requests by US companies to sell to Huawei.

Futurewei began laying off workers on Monday, Reuters had reported earlier citing employees, including one who spoke as he left the company's Silicon Valley campus.

One employee, who declined to give his name, said he had been laid off, as he put a bag full of personal belongings into his car. At least half a dozen staff with boxes were seen leaving the office before noon on Monday.

An employee not affected by the layoffs said work had come to a standstill since Huawei was blacklisted.

"On the 17th of May, Huawei asked everyone at Futurewei to upload everything to the Huawei cloud, right before the ban took effect," that employee said. "After that basically Futurewei has stopped doing any work - almost stopped everything."

Futurewei has filed more than 2,100 patents in such areas as telecommunications, 5G cellular networks, and video and camera technologies, according to data from the United States Patent and Trademark Office.

Huawei employed around 1,500 people in the United States including the 850 in Futurewei prior to the layoffs. The rest of Huawei's US employees manage its supply chain, customer support, or service functions such as public affairs.

It had added sales executives and chip certification engineers given plans to enter the U.S. smartphone market.

But its headcount has steadily declined since January 2018, when a highly-anticipated deal to enter the U.S. smartphone market with AT&amp;T and Verizon collapsed last minute due to pressure from the US government.

China's Huawei Technologies laid off more than two-thirds of the 850-strong workforce at its Futurewei Technologies research arm in the United States, after being blacklisted by the government.

China's Huawei Technologies laid off more than two-thirds of the 850-strong workforce at its Futurewei Technologies research arm in the United States, after being blacklisted by the government. Futurewei, which has offices in Silicon Valley and the greater Seattle, Chicago and Dallas areas, said it cut more than 600 jobs. The unit, set up in part to work with universities and researchers, recorded $510 million in operating costs last year. Huawei is the world's largest telecommunications equipment manufacturers. The US Commerce Department in May placed the firm on its "entity list" of organizations that pose security risks. The Justice Department has filed charges against the firm alleging theft of trade secrets and other crimes. Huawei said the job cuts, effective July 22, were "due to the curtailment of business operations" caused by the US government's actions. The trade blacklist has made it illegal for Futurewei to transfer sensitive technologies to its parent. The blacklist also restricts Huawei from purchasing products from US technology companies. On Monday, US President Donald Trump agreed at a meeting with the heads of top technology companies including Alphabet Inc's Google to make "timely" decisions on requests by US companies to sell to Huawei. Futurewei began laying off workers on Monday, Reuters had reported earlier citing employees, including one who spoke as he left the company's Silicon Valley campus. One employee, who declined to give his name, said he had been laid off, as he put a bag full of personal belongings into his car. At least half a dozen staff with boxes were seen leaving the office before noon on Monday. An employee not affected by the layoffs said work had come to a standstill since Huawei was blacklisted. "On the 17th of May, Huawei asked everyone at Futurewei to upload everything to the Huawei cloud, right before the ban took effect," that employee said. "After that basically Futurewei has stopped doing any work - almost stopped everything." Futurewei has filed more than 2,100 patents in such areas as telecommunications, 5G cellular networks, and video and camera technologies, according to data from the United States Patent and Trademark Office. Huawei employed around 1,500 people in the United States including the 850 in Futurewei prior to the layoffs. The rest of Huawei's US employees manage its supply chain, customer support, or service functions such as public affairs. It had added sales executives and chip certification engineers given plans to enter the U.S. smartphone market. But its headcount has steadily declined since January 2018, when a highly-anticipated deal to enter the U.S. smartphone market with AT&T and Verizon collapsed last minute due to pressure from the US government.

Huawei's US research arm slashes jobs as trade ban bites

<a href="https://www.wionews.com/business-economy/calls-for-boycott-of-japan-grow-in-south-korea-as-diplomatic-row-simmers-233755">South Korea</a>'s central bank delivered a surprise interest rate cut on Thursday, and shaved this year's growth forecast to the lowest in a decade, as a brewing dispute with Japan piled more pressure on the trade-dependent economy.

<a href="https://www.wionews.com/business-economy/equity-gauges-on-a-weak-note-yes-bank-drops-over-11-per-cent-236782">The Bank of Korea</a> is not alone in adopting the easier monetary policy, taking into account the dovish stance of global central banks and deteriorating economic conditions. Asia's fourth-largest economy has stuttered in the past few quarters due to slowing demand and rising risks from the US-China trade war.

Bank of Korea Governor Lee Ju-yeol told a news conference the central bank has room to respond to any changes in economic conditions, which analysts took as indicating another policy easing was on the table.

The BOK cut the base rate by 25 basis points to 1.50 per cent - the first reduction in three years and lowest since November - sooner than analysts had expected. A Reuters poll had predicted a move at the Aug. 30 meeting.

"Various remarks from the governor today indicated another cut was possible soon, such as his refusing to deny that markets were pricing in another cut this year and his comment that the bank still has policy room to operate," said Park Seok-gil, economist at JPMorgan in Seoul.

Treasury bond futures jumped on expectations for another rate cut, although stock and currency traders shrugged off Thursday's rate decision.

The central bank followed the rate cut by lowering this year's economic growth forecast to 2.2 per cent, just three months after it cut the projection to 2.5 per cent from 2.6 per cent. It also trimmed its inflation estimate to 0.7 pe cent from 1.1 per cent previously, which was already below its 2 per cent target.

"The policy board decided to lower the interest rate to support the economic recovery as both the growth and inflation trends were weaker than previously thought," the governor said.

"Our economic assessment reflected Japan's imposition of export restrictions as they will have considerable effects on our economy," he added, referring to Japan's curbs on exports to South Korea of key materials for chip and display production.

Lee emphasised the government needed to maintain strict measures aimed at containing housing prices while monetary policy was focused on risks from slowing economic growth.

Japan curbs deal a fresh blow

Korean bond prices had already pencilled in a rate cut or two in the near term especially since the central bank chief and the finance minister both suggested the time for policy easing was near.

Indonesia's central bank is also expected to begin an easing cycle with a rate cut later on Thursday, ahead of an anticipated Federal Reserve reduction of US rates at the end of July.

The BOK has come under more pressure to cut rates after the first-quarter GDP and inflation fell short of expectations and the US-China tariff dispute remains unresolved.

Early this month, South Korea's economy was dealt an additional blow as Japan announced plans to tighten restrictions on exports of materials for making chips and smartphone displays to its smaller neighbour over a diplomatic row.

Analysts say it is too early to estimate the damage but the curbs could affect South Korea's economy at least by hurting profits at the country's computer chip and smartphone makers as well as hitting sentiment for consumption and investment.

Global investment banks have downgraded their forecasts for South Korea's 2019 economic growth, with some expecting the pace to slow below 2 per cent from 2.7 per cent set last year.

South Korea's economy surprisingly contracted in the first quarter from the previous three-month period, while annual inflation has stayed below its 2 per cent target for the past seven successive months.

South Korea's central bank delivered a surprise interest rate cut on Thursday, and shaved this year's growth forecast to the lowest in a decade, as a brewing dispute with Japan piled more pressure on the trade-dependent economy.

South Korea's central bank delivered a surprise interest rate cut on Thursday, and shaved this year's growth forecast to the lowest in a decade, as a brewing dispute with Japan piled more pressure on the trade-dependent economy. The Bank of Korea is not alone in adopting the easier monetary policy, taking into account the dovish stance of global central banks and deteriorating economic conditions. Asia's fourth-largest economy has stuttered in the past few quarters due to slowing demand and rising risks from the US-China trade war. Bank of Korea Governor Lee Ju-yeol told a news conference the central bank has room to respond to any changes in economic conditions, which analysts took as indicating another policy easing was on the table. The BOK cut the base rate by 25 basis points to 1.50 per cent - the first reduction in three years and lowest since November - sooner than analysts had expected. A Reuters poll had predicted a move at the Aug. 30 meeting. "Various remarks from the governor today indicated another cut was possible soon, such as his refusing to deny that markets were pricing in another cut this year and his comment that the bank still has policy room to operate," said Park Seok-gil, economist at JPMorgan in Seoul. Treasury bond futures jumped on expectations for another rate cut, although stock and currency traders shrugged off Thursday's rate decision. The central bank followed the rate cut by lowering this year's economic growth forecast to 2.2 per cent, just three months after it cut the projection to 2.5 per cent from 2.6 per cent. It also trimmed its inflation estimate to 0.7 pe cent from 1.1 per cent previously, which was already below its 2 per cent target. "The policy board decided to lower the interest rate to support the economic recovery as both the growth and inflation trends were weaker than previously thought," the governor said. "Our economic assessment reflected Japan's imposition of export restrictions as they will have considerable effects on our economy," he added, referring to Japan's curbs on exports to South Korea of key materials for chip and display production. Lee emphasised the government needed to maintain strict measures aimed at containing housing prices while monetary policy was focused on risks from slowing economic growth. Japan curbs deal a fresh blow Korean bond prices had already pencilled in a rate cut or two in the near term especially since the central bank chief and the finance minister both suggested the time for policy easing was near. Indonesia's central bank is also expected to begin an easing cycle with a rate cut later on Thursday, ahead of an anticipated Federal Reserve reduction of US rates at the end of July. The BOK has come under more pressure to cut rates after the first-quarter GDP and inflation fell short of expectations and the US-China tariff dispute remains unresolved. Early this month, South Korea's economy was dealt an additional blow as Japan announced plans to tighten restrictions on exports of materials for making chips and smartphone displays to its smaller neighbour over a diplomatic row. Analysts say it is too early to estimate the damage but the curbs could affect South Korea's economy at least by hurting profits at the country's computer chip and smartphone makers as well as hitting sentiment for consumption and investment. Global investment banks have downgraded their forecasts for South Korea's 2019 economic growth, with some expecting the pace to slow below 2 per cent from 2.7 per cent set last year. South Korea's economy surprisingly contracted in the first quarter from the previous three-month period, while annual inflation has stayed below its 2 per cent target for the past seven successive months.

South Korea central bank surprises with rate cut, likely to loosen again

China's economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure.

While more upbeat June factory output and retail sales offered signs of improvement, some analysts cautioned the gains may not be sustainable and expect Beijing will continue to roll out more support measures in coming months.

China's trading partners and financial markets are closely watching the health of the world's second-largest economy as the <a href="https://www.wionews.com/opinions/us-china-trade-war-is-making-china-stronger-234526">Sino-US trade war</a> gets longer and costlier, fuelling worries of a global recession.

Monday's growth data marked a loss of momentum for the economy from the first quarter's 6.4%, amid expectations that Beijing needs to do more to boost consumption and investment and restore business confidence.

The April-June pace was in line with analysts' expectations for the slowest since the first quarter of 1992, the earliest quarterly data on record.

"China's growth could slow to 6% to 6.1% in the second half," said Nie Wen, an economist at Hwabao Trust. That would test the lower end of Beijing's 2019 target range of 6-6.5%.

Cutting banks' reserve requirement ratios (RRR) "is still very likely as the authorities want to support the real economy in a long run," he said, predicting the economy would continue to slow before stabilising around mid-2020.

China has already slashed RRR six times since early 2018 to free up more funds for lending and analysts polled by Reuters forecast two more cuts this quarter and next.

Beijing has leaned largely on fiscal stimulus to underpin growth this year, announcing massive tax cuts worth nearly 2 trillion yuan ($291 billion) and a quota of 2.15 trillion yuan for special bond issuance by local governments aimed at boosting infrastructure construction.

The economy has been slow to respond, however, and business sentiment remains cautious.

Trade pressures have intensified since Washington sharply hiked tariffs on Chinese goods in May. While the two sides have since agreed to resume trade talks and hold off on further punitive action, they remain at odds over significant issues needed for an agreement.

Data on Friday showed China's exports fell in June and its imports shrank more than expected, while an official survey showed factories were shedding jobs at the fastest pace since the global crisis..

Premier Li Keqiang said this month that China will make timely use of cuts in banks' reserve ratios and other financing tools to support smaller firms, while repeating a vow not to use "flood-like" stimulus.

Is better data sustainable?

A steady string of weak economic data in recent months and the sudden escalation in the U.S.-China trade war had sparked questions over whether more forceful easing may be needed to get the Chinese economy back on steadier footing, including some form of interest rate cuts.

But June activity data on Monday showed industrial production, retail sales and fixed-asset investment all beat analysts' forecasts, suggesting that Beijing's earlier growth-boosting efforts may be starting to have an effect.

Analysts also say room for more aggressive monetary policy easing is being limited by fears of adding to high debt levels and structural risks.

"Cutting the benchmark deposit and lending rates -- the likelihood is very low. It's more possible (that) they twist the market-oriented rates -- cutting the interest rates of all those liquidity facilities also sends an important signal to the market," said Aidan Yao, senior Asia emerging markets economist at AXA Investment Managers in Hong Kong.

"Fiscal policy is likely to be in the driving seat and monetary policy will act in a supportive role in the coming months."

Industrial output climbed 6.3% from a year earlier, data from the National Bureau of Statistics showed, picking up from May's 17-year low and handily beating a forecast for 5.2% growth.

Daily output for crude steel and aluminium both rose to record levels.

Retail sales jumped 9.8% - the fastest clip since March 2018 - and confounding expectations for a slight pullback to 8.3%. Gains were led by a 17.2% surge in car sales.

Some analysts, however, questioned the apparent recovery in both output and sales.

Capital Economics said its in-house model suggested slower industrial growth, while the jump in car sales may have been partly due to a one-off factor.

Car dealers in China are offering big discounts to customers to reduce high inventories that have built up due to changing emission standards. Motor vehicle production actually fell 15.2%, the 11th monthly decline in a row, suggesting automakers don't expect a sustained bounce in demand any time soon.

"The monthly data were better than expected... (But) we are sceptical of this apparent recovery given broader evidence of weakness in factory activity," said Julian Evans-Pritchard, Senior China Economist at

"Looking ahead, we doubt that the data for June will mark the start of a turnaround."

Investment also slowly picking up

Fixed-asset investment for the first half of the year rose 5.8% from a year earlier, compared with a 5.5% forecast and 5.6% in the first five months of the year.

Real estate investment, a major growth driver for the world's second-largest economy, quickened in June. It rose 10.1% from a year earlier, accelerating from a 9.5% gain in May but still slower than in April, Reuters calculated.

Still, the economy remains in a complex situation, with external uncertainties on the rise, the statistics bureau said, adding China will work to ensure steady growth.

China's economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure.

China's economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure. While more upbeat June factory output and retail sales offered signs of improvement, some analysts cautioned the gains may not be sustainable and expect Beijing will continue to roll out more support measures in coming months. China's trading partners and financial markets are closely watching the health of the world's second-largest economy as the Sino-US trade war gets longer and costlier, fuelling worries of a global recession. Monday's growth data marked a loss of momentum for the economy from the first quarter's 6.4%, amid expectations that Beijing needs to do more to boost consumption and investment and restore business confidence. The April-June pace was in line with analysts' expectations for the slowest since the first quarter of 1992, the earliest quarterly data on record. "China's growth could slow to 6% to 6.1% in the second half," said Nie Wen, an economist at Hwabao Trust. That would test the lower end of Beijing's 2019 target range of 6-6.5%. Cutting banks' reserve requirement ratios (RRR) "is still very likely as the authorities want to support the real economy in a long run," he said, predicting the economy would continue to slow before stabilising around mid-2020. China has already slashed RRR six times since early 2018 to free up more funds for lending and analysts polled by Reuters forecast two more cuts this quarter and next. Beijing has leaned largely on fiscal stimulus to underpin growth this year, announcing massive tax cuts worth nearly 2 trillion yuan ($291 billion) and a quota of 2.15 trillion yuan for special bond issuance by local governments aimed at boosting infrastructure construction. The economy has been slow to respond, however, and business sentiment remains cautious. Trade pressures have intensified since Washington sharply hiked tariffs on Chinese goods in May. While the two sides have since agreed to resume trade talks and hold off on further punitive action, they remain at odds over significant issues needed for an agreement. Data on Friday showed China's exports fell in June and its imports shrank more than expected, while an official survey showed factories were shedding jobs at the fastest pace since the global crisis.. Premier Li Keqiang said this month that China will make timely use of cuts in banks' reserve ratios and other financing tools to support smaller firms, while repeating a vow not to use "flood-like" stimulus. Is better data sustainable? A steady string of weak economic data in recent months and the sudden escalation in the U.S.-China trade war had sparked questions over whether more forceful easing may be needed to get the Chinese economy back on steadier footing, including some form of interest rate cuts. But June activity data on Monday showed industrial production, retail sales and fixed-asset investment all beat analysts' forecasts, suggesting that Beijing's earlier growth-boosting efforts may be starting to have an effect. Analysts also say room for more aggressive monetary policy easing is being limited by fears of adding to high debt levels and structural risks. "Cutting the benchmark deposit and lending rates -- the likelihood is very low. It's more possible (that) they twist the market-oriented rates -- cutting the interest rates of all those liquidity facilities also sends an important signal to the market," said Aidan Yao, senior Asia emerging markets economist at AXA Investment Managers in Hong Kong. "Fiscal policy is likely to be in the driving seat and monetary policy will act in a supportive role in the coming months." Industrial output climbed 6.3% from a year earlier, data from the National Bureau of Statistics showed, picking up from May's 17-year low and handily beating a forecast for 5.2% growth. Daily output for crude steel and aluminium both rose to record levels. Retail sales jumped 9.8% - the fastest clip since March 2018 - and confounding expectations for a slight pullback to 8.3%. Gains were led by a 17.2% surge in car sales. Some analysts, however, questioned the apparent recovery in both output and sales. Capital Economics said its in-house model suggested slower industrial growth, while the jump in car sales may have been partly due to a one-off factor. Car dealers in China are offering big discounts to customers to reduce high inventories that have built up due to changing emission standards. Motor vehicle production actually fell 15.2%, the 11th monthly decline in a row, suggesting automakers don't expect a sustained bounce in demand any time soon. "The monthly data were better than expected... (But) we are sceptical of this apparent recovery given broader evidence of weakness in factory activity," said Julian Evans-Pritchard, Senior China Economist at "Looking ahead, we doubt that the data for June will mark the start of a turnaround." Investment also slowly picking up Fixed-asset investment for the first half of the year rose 5.8% from a year earlier, compared with a 5.5% forecast and 5.6% in the first five months of the year. Real estate investment, a major growth driver for the world's second-largest economy, quickened in June. It rose 10.1% from a year earlier, accelerating from a 9.5% gain in May but still slower than in April, Reuters calculated. Still, the economy remains in a complex situation, with external uncertainties on the rise, the statistics bureau said, adding China will work to ensure steady growth.

China second-quarter GDP growth slows to 27-year low, more stimulus expected

All three of Wall Street's main indices popped to fresh records on Friday, ending the week on an emphatic note as investors grew increasingly confident the <a href="https://www.wionews.com/business-economy/dow-ends-above-27000-points-for-first-time-sp-500-hits-record-on-federal-reserve-rate-cut-optimism-235154">Federal Reserve will cut </a>interest rates at the end of the month.

In congressional testimony this week, Federal Reserve Chairman Jerome Powell told lawmakers "crosscurrents" increased risks to the US economic outlook -- strongly suggesting a rate cut was in the cards at the Fed's next policy meeting in less than three weeks.

The broad-based S&amp;P 500 closed above the 3,000-mark for the first time ever.

Jack Ablin of Cresset Wealth Advisors said investors also were encouraged by the outlook for what could be better-than-expected corporate revenue.

However, with corporate earnings season set to begin in earnest, S&amp;P 500 companies are forecast to see weaker profit growth compared to last year, according to FactSet. It would be the second consecutive quarter of slowing profit, something that has not happened in three years.

"But the next question we expect is,&nbsp;where do we go from there?" he said.

"The market needs to feed on something. The appetite of the market for low rates is insatiable. The question now is can they shift their attention to earnings."

While the positive sentiment initially filtered through to Asia and Europe on Friday, the momentum petered out in late European trading.

Meanwhile, China's economy grew at its slowest rate in nearly three decades in the second quarter, hit by the US-China trade war and weakening global demand, according to an AFP survey of analysts.

The world's second-largest economy likely expanded 6.2 per cent in April-June, according to the poll of 10 economists ahead of the official gross domestic product report Monday.

Oil prices rise

Elsewhere, geopolitical tensions rose after armed Iranian boats threatened a British oil tanker earlier in the week provided support for oil prices, although gains were limited by longer-term oversupply concerns.

Iran's menacing of the BP supertanker on Wednesday appeared to be in retaliation for Britain's seizure of the Iranian Grace 1 tanker off Gibraltar on July 4.

"With Iran seeking retribution for the UK's actions around Gibraltar, there is a distinct possibility that we could see an upside shock to prices," said IG trading group analyst Joshua Mahony.&nbsp;

Britain said it will send a second warship to the Gulf, while the Pentagon said it was discussing military escorts for vessels in the Gulf.

But the rises in oil prices as a result of the incident have been capped by an oversupplied oil market, according to traders.

And the IEA on Friday said the recent decision by oil-producing countries to prolong cuts in output will not fundamentally change the outlook for the market.&nbsp;

All three of Wall Street's main indices popped to fresh records on Friday, ending the week on an emphatic note as investors grew increasingly confident the Federal Reserve will cut interest rates at the end of the month.

All three of Wall Street's main indices popped to fresh records on Friday, ending the week on an emphatic note as investors grew increasingly confident the Federal Reserve will cut interest rates at the end of the month. In congressional testimony this week, Federal Reserve Chairman Jerome Powell told lawmakers "crosscurrents" increased risks to the US economic outlook -- strongly suggesting a rate cut was in the cards at the Fed's next policy meeting in less than three weeks. The broad-based S&P 500 closed above the 3,000-mark for the first time ever. Jack Ablin of Cresset Wealth Advisors said investors also were encouraged by the outlook for what could be better-than-expected corporate revenue. However, with corporate earnings season set to begin in earnest, S&P 500 companies are forecast to see weaker profit growth compared to last year, according to FactSet. It would be the second consecutive quarter of slowing profit, something that has not happened in three years. "But the next question we expect is, where do we go from there?" he said. "The market needs to feed on something. The appetite of the market for low rates is insatiable. The question now is can they shift their attention to earnings." While the positive sentiment initially filtered through to Asia and Europe on Friday, the momentum petered out in late European trading. Meanwhile, China's economy grew at its slowest rate in nearly three decades in the second quarter, hit by the US-China trade war and weakening global demand, according to an AFP survey of analysts. The world's second-largest economy likely expanded 6.2 per cent in April-June, according to the poll of 10 economists ahead of the official gross domestic product report Monday. Oil prices rise Elsewhere, geopolitical tensions rose after armed Iranian boats threatened a British oil tanker earlier in the week provided support for oil prices, although gains were limited by longer-term oversupply concerns. Iran's menacing of the BP supertanker on Wednesday appeared to be in retaliation for Britain's seizure of the Iranian Grace 1 tanker off Gibraltar on July 4. "With Iran seeking retribution for the UK's actions around Gibraltar, there is a distinct possibility that we could see an upside shock to prices," said IG trading group analyst Joshua Mahony. Britain said it will send a second warship to the Gulf, while the Pentagon said it was discussing military escorts for vessels in the Gulf. But the rises in oil prices as a result of the incident have been capped by an oversupplied oil market, according to traders. And the IEA on Friday said the recent decision by oil-producing countries to prolong cuts in output will not fundamentally change the outlook for the market.

Wall Street notches all-time highs as rate cut hopes lift investor spirits

US officials will soon resume face-to-face trade talks in China, a White House official said Friday, reviving negotiations that had verged on collapse in May.

President Donald Trump and China's leader Xi Jinping agreed to "fully engage" on trade when they met in Osaka at the end of June, and since then trade officials have spoken by phone, White House trade advisor Peter Navarro said on CNBC.

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will go to Beijing "in the very near future and we're going to have constructive talks to deal with these significant structural issues," Navarro said.

The trade dispute has roiled global financial markets and undermined business confidence as Washington and Beijing have lashed out at each other with punitive tariffs on about $360 billion in goods.

The sides appeared to be close to a deal as recently as April but Trump accused China of reneging on its commitments, scuttling the talks until the leaders met on the sidelines on Group of 20 summit in Osaka, where Navarro said they made a "strong commitment" to restart negotiations.

Trump at that meeting agreed to hold off on his threat to hit China with another round of steep tariffs that would cover nearly all the goods exported to the US market.

In another Twitter outburst Friday, Trump called tariffs "a great negotiating tool" and "a great revenue producer."&nbsp;

And he again accused China of weakening its currency to compensate for the 25 per cent tariff.

Lighthizer and Mnuchin spoke with Chinese Vice Premier Liu He and Commerce Minister Zhong Shan by phone on Tuesday, but officials have not provided any details on the status or the topics discussed other than to say they were constructive.

"We are, in my judgment, in a quiet period for the negotiations. My advice for investors is to be patient with this process," Navarro said.

"Don't believe anything you read in either the Chinese or the US press about these negotiations unless it comes from the mouths of either the President or Ambassador Lighthizer."

US officials will soon resume face-to-face trade talks in China, a White House official said Friday, reviving negotiations that had verged on collapse in May. President Donald Trump and China's leader Xi Jinping agreed to "fully engage" on trade when they met in Osaka at the end of June, and since then trade officials have spoken by phone, White House trade advisor Peter Navarro said on CNBC.

US officials will soon resume face-to-face trade talks in China, a White House official said Friday, reviving negotiations that had verged on collapse in May. President Donald Trump and China's leader Xi Jinping agreed to "fully engage" on trade when they met in Osaka at the end of June, and since then trade officials have spoken by phone, White House trade advisor Peter Navarro said on CNBC. US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will go to Beijing "in the very near future and we're going to have constructive talks to deal with these significant structural issues," Navarro said. The trade dispute has roiled global financial markets and undermined business confidence as Washington and Beijing have lashed out at each other with punitive tariffs on about $360 billion in goods. The sides appeared to be close to a deal as recently as April but Trump accused China of reneging on its commitments, scuttling the talks until the leaders met on the sidelines on Group of 20 summit in Osaka, where Navarro said they made a "strong commitment" to restart negotiations. Trump at that meeting agreed to hold off on his threat to hit China with another round of steep tariffs that would cover nearly all the goods exported to the US market. In another Twitter outburst Friday, Trump called tariffs "a great negotiating tool" and "a great revenue producer." And he again accused China of weakening its currency to compensate for the 25 per cent tariff. Lighthizer and Mnuchin spoke with Chinese Vice Premier Liu He and Commerce Minister Zhong Shan by phone on Tuesday, but officials have not provided any details on the status or the topics discussed other than to say they were constructive. "We are, in my judgment, in a quiet period for the negotiations. My advice for investors is to be patient with this process," Navarro said. "Don't believe anything you read in either the Chinese or the US press about these negotiations unless it comes from the mouths of either the President or Ambassador Lighthizer."

US trade negotiators will travel to China in 'very near future': Official

US President Donald Trump on Thursday accused China of backsliding on promises to increase purchases of American farm exports.

The president's latest salvo on Twitter comes the same week that <a href="https://www.wionews.com/world/after-trump-xi-g20-meeting-us-china-resume-talks-to-resolve-trade-war-234508">US and Chinese trade officials</a> had their first contact in months in an effort to revive negotiations that nearly collapsed in May.

Trump and his Chinese counterpart Xi Jinping met last month on the sidelines of the Group of 20 summit&nbsp;in Japan, agreeing to cease further hostilities while the talks resumed.

"Mexico is doing great at the Border, but <a href="https://www.wionews.com/world/chinas-2019-growth-seen-slowing-to-62-per-cent-as-trade-war-weighs-reuters-poll-234697">China</a> is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would," Trump said Thursday on Twitter.&nbsp;

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<blockquote class="twitter-tweet" data-lang="en">
Mexico is doing great at the Border, but China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would. Hopefully they will start soon!
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1149318492711264257?ref_src=twsrc%5Etfw">July 11, 2019</a></blockquote>
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"Hopefully they will start soon!"

Following the Osaka summit, Trump announced that, in return for Washington's pledge to suspend a planned tariff increase on $300 billion in Chinese imports, Beijing had offered to buy "a tremendous amount of food and agriculture product" from the United States.

Hopes for a trade deal with China have lifted spirits on Wall Street but lingering trade conflicts have weighed on US business sentiment and are one of the main dangers on the horizon for the United States, economists say.

Reducing America's soaring trade deficit with China has long been a principal aim in Trump's trade battle with Beijing, which he also accuses of stealing American technology and unfairly intervening in markets.

Since last year, the two countries have traded tariffs on more than $360 billion in two-way trade.

The US global trade deficit has expanded this year but has fallen with China while rising with Mexico, pointing to the realignment of commercial relationships.

Trump has offered billions in aid to buy out US farms badly damaged in the US-China trade war. US soy exports collapsed last year, virtually wiping out foreign markets farmers had spent years cultivating.

Bill Nelson, an analyst at Doane Advisory Services, told AFP the major Chinese purchases that markets had been expecting had so far failed to materialize.

Chinese soybean purchases zoomed higher in the first quarter of the year to 9.5 million tons, according to official numbers, making up for the sales drought at the end of 2018.

But they have since fallen off sharply, with few major sales recorded since the end of last month.

"China is not making major purchases, certainly not since the Xi meeting," Nelson said.&nbsp;

"Trump implied China would be immediately out there and sales would be going to happen right away. This is not what has occurred."

US President Donald Trump on Thursday accused China of backsliding on promises to increase purchases of American farm exports. The president's latest salvo on Twitter comes the same week that US and Chinese trade officials had their first contact in months in an effort to revive negotiations that nearly collapsed in May.

US President Donald Trump on Thursday accused China of backsliding on promises to increase purchases of American farm exports. The president's latest salvo on Twitter comes the same week that US and Chinese trade officials had their first contact in months in an effort to revive negotiations that nearly collapsed in May. Trump and his Chinese counterpart Xi Jinping met last month on the sidelines of the Group of 20 summit in Japan, agreeing to cease further hostilities while the talks resumed. "Mexico is doing great at the Border, but China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would," Trump said Thursday on Twitter. Mexico is doing great at the Border, but China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would. Hopefully they will start soon! — Donald J. Trump (@realDonaldTrump) July 11, 2019 × "Hopefully they will start soon!" Following the Osaka summit, Trump announced that, in return for Washington's pledge to suspend a planned tariff increase on $300 billion in Chinese imports, Beijing had offered to buy "a tremendous amount of food and agriculture product" from the United States. Hopes for a trade deal with China have lifted spirits on Wall Street but lingering trade conflicts have weighed on US business sentiment and are one of the main dangers on the horizon for the United States, economists say. Reducing America's soaring trade deficit with China has long been a principal aim in Trump's trade battle with Beijing, which he also accuses of stealing American technology and unfairly intervening in markets. Since last year, the two countries have traded tariffs on more than $360 billion in two-way trade. The US global trade deficit has expanded this year but has fallen with China while rising with Mexico, pointing to the realignment of commercial relationships. Trump has offered billions in aid to buy out US farms badly damaged in the US-China trade war. US soy exports collapsed last year, virtually wiping out foreign markets farmers had spent years cultivating. Bill Nelson, an analyst at Doane Advisory Services, told AFP the major Chinese purchases that markets had been expecting had so far failed to materialize. Chinese soybean purchases zoomed higher in the first quarter of the year to 9.5 million tons, according to official numbers, making up for the sales drought at the end of 2018. But they have since fallen off sharply, with few major sales recorded since the end of last month. "China is not making major purchases, certainly not since the Xi meeting," Nelson said. "Trump implied China would be immediately out there and sales would be going to happen right away. This is not what has occurred."

China fails to buy agricultural goods as promised: Donald Trump

The United States and China have reached a truce in their escalating trade war. Following a meeting between US president, Donald Trump and his Chinese counterpart, Xi Jinping at the G20, the two leaders agreed to renew talks. Tariffs, which began to be introduced by both sides on an array of imports in 2018, will not be raised further.

But a number of tariffs remain and trade relations are still far from normal between the world’s two largest economies. This may not be a cold war. But it is a great power rivalry focusing on technological supremacy and which side has the best development model.

China’s economy is slowing down and recent tariffs from the US on its exports have not helped. China’s growth rate declined from 6.6 per cent&nbsp;in 2018 to 6.4 per cent in the first quarter of 2019. But in the long term, the pressure exerted by Trump’s administration will strengthen China. It will help China speed up its efforts to restructure its economy, focus more on innovation, and also boost the country’s national pride.

Technological advancements are central to empire building and the rise of new powers, with steam power and then electronic technologies driving previous British and American empires. The fourth industrial revolution will shift international competition away from labour, territory, nuclear arms, and soft power to new technology including robotics, artificial intelligence (AI), and wireless services.

Wake up call

Until recently, US policymakers operated under the assumption that the US was the world’s technological superpower and Silicon Valley was the globe’s innovation hotbed. China was regarded as a copycat that builds clumsy clones of American technologies or uses its big state-owned enterprises to purchase innovative US companies and absorb their intellectual property and know-how.

But when it comes to 5G – the next generation of superfast internet technology – the US has lagged behind. No American company has comparable wireless equipment to Huawei. This spurred Trump to wage war on the Chinese tech company. First he declared a national emergency, banning sales and the use of telecoms equipment deemed to pose “unacceptable risks”. Then he lobbied allies to do the same.

US-based companies followed suit. First, Google removed Huawei from its Android service, then the Wi-Fi Alliance, Bluetooth, and others followed suit.

Huawei’s 5G capabilities and the fallout from them can be seen as China’s Sputnik moment. In the same way the Soviet Union was the first to launch a satellite into space, creating the appearance that the Soviets were winning the engineering challenge of the day, China is outpacing other countries in the development of 5G today. China realises the dangers of technological dependence, economic entanglement, and scientific reliance on the US.

Innovation revolution

Huawei is a product of the Chinese government’s industrial policy strategy. The vision to move up the economic value chain from a low-end manufacturer to a global innovation leader led to the launch of its Made In China 2025 initiative and an Artificial Intelligence Development Plan to channel resources into strategic sectors such as computing, AI, robotics, and aerospace.

China aims to achieve an AI self-sufficiency manufacturing rate of 80 per cent, minimising its dependence on other countries for the complex parts needed in this tech. It also aims to become a leading technology hub in AI by 2030. This is bearing fruit, as in 2017, 48 per cent of global AI funding was Chinese compared to 38% being American. Chinese AI company iFlyTek often beats Facebook, Alphabet’s DeepMind, and IBM’s Watson in competitions to process natural speech, even in its “second language” English.

China is now the world’s biggest producer of scientific research papers and Semantic Scholar, the academic search engine for scientific articles, suggests Chinese scholars have surpassed their US counterparts in producing AI papers.

So the Huawei ban and tariffs on Chinese goods will not slow China – they will stimulate its new innovation system and boost scientific research aimed at becoming more independent.

Domestic boost 
 
Another consequence will be an acceleration of China’s attempt to rebalance its economy away from external demand and investment towards domestic consumption. This started in 2008 with the global financial crisis and has become increasingly necessary as China’s middle class develops. Since then large-scale government-led infrastructure investments, measures to increase household income, reductions of income tax, and improvements to social welfare systems have helped grow domestic consumption.

When Trump first announced tariffs in 2018, China’s domestic consumption was responsible for 76.2 per cent of its GDP growth, and the Chinese stock market absorbed the impact and bounced back after an initial sharp decline. Since then, the Chinese government has introduced new policies to boost domestic consumption further, including more tax cuts, improved childcare, and elderly care initiatives and incentives. So the trade war has helped China’s efforts to redistribute wealth and restructure its economy.

The trade war has also rallied the Chinese public around its government. US treatment of Chinese companies has been perceived as bullying and people have compared it to the way that the British Empire forced unfair trade practices on China in the 19th century. This topic is incredibly emotive in Chinese society and has boosted domestic support for the government.

The Chinese word for crisis is composed of two characters – one for danger and the other for opportunity. The country’s ability to capitalise on the current challenge from the US will strengthen it for years to come. 
 
(This article was originally published on The Conversation. Read the <a href="https://theconversation.com/us-china-trade-war-is-making-china-stronger-118852">original article)</a>

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)&nbsp;

 
&nbsp;

The United States and China have reached a truce in their escalating trade war. Following a meeting between US president, Donald Trump and his Chinese counterpart, Xi Jinping at the G20, the two leaders agreed to renew talks.

The United States and China have reached a truce in their escalating trade war. Following a meeting between US president, Donald Trump and his Chinese counterpart, Xi Jinping at the G20, the two leaders agreed to renew talks. Tariffs, which began to be introduced by both sides on an array of imports in 2018, will not be raised further. But a number of tariffs remain and trade relations are still far from normal between the world’s two largest economies. This may not be a cold war. But it is a great power rivalry focusing on technological supremacy and which side has the best development model. China’s economy is slowing down and recent tariffs from the US on its exports have not helped. China’s growth rate declined from 6.6 per cent in 2018 to 6.4 per cent in the first quarter of 2019. But in the long term, the pressure exerted by Trump’s administration will strengthen China. It will help China speed up its efforts to restructure its economy, focus more on innovation, and also boost the country’s national pride. Technological advancements are central to empire building and the rise of new powers, with steam power and then electronic technologies driving previous British and American empires. The fourth industrial revolution will shift international competition away from labour, territory, nuclear arms, and soft power to new technology including robotics, artificial intelligence (AI), and wireless services. Wake up call Until recently, US policymakers operated under the assumption that the US was the world’s technological superpower and Silicon Valley was the globe’s innovation hotbed. China was regarded as a copycat that builds clumsy clones of American technologies or uses its big state-owned enterprises to purchase innovative US companies and absorb their intellectual property and know-how. But when it comes to 5G – the next generation of superfast internet technology – the US has lagged behind. No American company has comparable wireless equipment to Huawei. This spurred Trump to wage war on the Chinese tech company. First he declared a national emergency, banning sales and the use of telecoms equipment deemed to pose “unacceptable risks”. Then he lobbied allies to do the same. US-based companies followed suit. First, Google removed Huawei from its Android service, then the Wi-Fi Alliance, Bluetooth, and others followed suit. Huawei’s 5G capabilities and the fallout from them can be seen as China’s Sputnik moment. In the same way the Soviet Union was the first to launch a satellite into space, creating the appearance that the Soviets were winning the engineering challenge of the day, China is outpacing other countries in the development of 5G today. China realises the dangers of technological dependence, economic entanglement, and scientific reliance on the US. Innovation revolution Huawei is a product of the Chinese government’s industrial policy strategy. The vision to move up the economic value chain from a low-end manufacturer to a global innovation leader led to the launch of its Made In China 2025 initiative and an Artificial Intelligence Development Plan to channel resources into strategic sectors such as computing, AI, robotics, and aerospace. China aims to achieve an AI self-sufficiency manufacturing rate of 80 per cent, minimising its dependence on other countries for the complex parts needed in this tech. It also aims to become a leading technology hub in AI by 2030. This is bearing fruit, as in 2017, 48 per cent of global AI funding was Chinese compared to 38% being American. Chinese AI company iFlyTek often beats Facebook, Alphabet’s DeepMind, and IBM’s Watson in competitions to process natural speech, even in its “second language” English. China is now the world’s biggest producer of scientific research papers and Semantic Scholar, the academic search engine for scientific articles, suggests Chinese scholars have surpassed their US counterparts in producing AI papers. So the Huawei ban and tariffs on Chinese goods will not slow China – they will stimulate its new innovation system and boost scientific research aimed at becoming more independent. Domestic boost Another consequence will be an acceleration of China’s attempt to rebalance its economy away from external demand and investment towards domestic consumption. This started in 2008 with the global financial crisis and has become increasingly necessary as China’s middle class develops. Since then large-scale government-led infrastructure investments, measures to increase household income, reductions of income tax, and improvements to social welfare systems have helped grow domestic consumption. When Trump first announced tariffs in 2018, China’s domestic consumption was responsible for 76.2 per cent of its GDP growth, and the Chinese stock market absorbed the impact and bounced back after an initial sharp decline. Since then, the Chinese government has introduced new policies to boost domestic consumption further, including more tax cuts, improved childcare, and elderly care initiatives and incentives. So the trade war has helped China’s efforts to redistribute wealth and restructure its economy. The trade war has also rallied the Chinese public around its government. US treatment of Chinese companies has been perceived as bullying and people have compared it to the way that the British Empire forced unfair trade practices on China in the 19th century. This topic is incredibly emotive in Chinese society and has boosted domestic support for the government. The Chinese word for crisis is composed of two characters – one for danger and the other for opportunity. The country’s ability to capitalise on the current challenge from the US will strengthen it for years to come. (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

US-China trade war is making China stronger

Oil fell on Tuesday amid worries over the outlook for demand after the latest signs that international trade disputes have been dragging on the global economy, although tensions in the Middle East offered some support to prices.

Brent crude futures were down 21 cents, or 0.3%, at $63.90 a barrel by 0022 GMT. They fell 12 cents on Monday.

US West Texas Intermediate crude futures were down 20 cents, or 0.4%, at $57.46 a barrel. They rose 15 cents in the previous session.

Oil prices are being pressured by ongoing worries about demand as the US-China trade war, heading into its second year, dampens prospects for global economic growth.

Japan's core machinery orders fell by the most in eight months, data showed on Monday, in a sign the global trade tensions are taking a toll on corporate investment.

Japanese government figures on Tuesday also showed that real wages in the country fell for a fifth straight month.

"The prolonged trade war ... does not seem to be nearing a resolution, and it will keep being a negative factor for crude prices as it impacts global growth forecasts," said Alfonso Esparza, senior market analyst at OANDA in Toronto.

Meanwhile, Goldman Sachs said growth in US shale production was likely to outpace that of global demand at least through 2020, limiting gains in oil prices despite output curbs led by the Organization of the Petroleum Exporting Countries.

Prices are still susceptible to shocks from the lingering tensions in the Middle East, analyst and traders said.

Iran on Monday threatened to restart deactivated centrifuges and step up its enrichment of uranium to 20% in a move that further threatens the 2015 nuclear agreement that Washington abandoned last year.

Washington has imposed sanctions that eliminate benefits Iran was meant to receive in return for agreeing to curbs on its nuclear programme under the 2015 deal with world powers.

The confrontation has brought the United States and Iran close to conflict, with US President Donald Trump calling off air strikes last month minutes before impact.

Oil fell on Tuesday amid worries over the outlook for demand after the latest signs that international trade disputes have been dragging on the global economy, although tensions in the Middle East offered some support to prices.

Oil fell on Tuesday amid worries over the outlook for demand after the latest signs that international trade disputes have been dragging on the global economy, although tensions in the Middle East offered some support to prices. Brent crude futures were down 21 cents, or 0.3%, at $63.90 a barrel by 0022 GMT. They fell 12 cents on Monday. US West Texas Intermediate crude futures were down 20 cents, or 0.4%, at $57.46 a barrel. They rose 15 cents in the previous session. Oil prices are being pressured by ongoing worries about demand as the US-China trade war, heading into its second year, dampens prospects for global economic growth. Japan's core machinery orders fell by the most in eight months, data showed on Monday, in a sign the global trade tensions are taking a toll on corporate investment. Japanese government figures on Tuesday also showed that real wages in the country fell for a fifth straight month. "The prolonged trade war ... does not seem to be nearing a resolution, and it will keep being a negative factor for crude prices as it impacts global growth forecasts," said Alfonso Esparza, senior market analyst at OANDA in Toronto. Meanwhile, Goldman Sachs said growth in US shale production was likely to outpace that of global demand at least through 2020, limiting gains in oil prices despite output curbs led by the Organization of the Petroleum Exporting Countries. Prices are still susceptible to shocks from the lingering tensions in the Middle East, analyst and traders said. Iran on Monday threatened to restart deactivated centrifuges and step up its enrichment of uranium to 20% in a move that further threatens the 2015 nuclear agreement that Washington abandoned last year. Washington has imposed sanctions that eliminate benefits Iran was meant to receive in return for agreeing to curbs on its nuclear programme under the 2015 deal with world powers. The confrontation has brought the United States and Iran close to conflict, with US President Donald Trump calling off air strikes last month minutes before impact.

Oil prices drop as trade tensions stoke economy worries

The <a href="https://www.wionews.com/world/china-us-agree-to-restart-trade-talks-at-xi-trump-meeting-report-231374">United States and China are set to relaunch trade talks</a> this week after a two-month hiatus, but a year after their trade war began there is little sign their differences have narrowed.

After meeting with Chinese President Xi Jinping in Japan just in late June, US President <a href="https://www.wionews.com/world/g20-summit-donald-trump-confirms-wont-impose-new-tariffs-on-china-231445">Donald Trump agreed to suspend a new round of tariffs</a> on $300 billion worth of imported Chinese consumer goods while the two sides resumed negotiations.

Trump said then that China would restart large purchases of US agricultural commodities, and the United States would ease some export restrictions on Chinese telecom equipment giant Huawei Technologies.

But sources familiar with the talks and <a href="https://www.wionews.com/business-economy/oil-prices-drop-as-trade-tensions-stoke-economy-worries-234147">China trade</a> watchers in Washington say the summit did little to clear the path for top negotiators to resolve an impasse that caused trade deal talks to break down in early May.

A US official said last week the <a href="https://www.wionews.com/world/us-china-trade-officials-aim-to-talk-next-week-officials-233488">discussions were expected to resume with a phone call</a> between US <a href="https://www.wionews.com/business-economy/oil-prices-drop-as-trade-tensions-stoke-economy-worries-234147">Trade </a>Representative Robert Lighthizer, Chinese Vice Premier Liu He and Treasury Secretary Steven Mnuchin.

A USTR spokesman said the call was expected this week, but gave no further details.

The United States is demanding that China make sweeping policy changes to better protect American intellectual property, end the forced transfer and theft of trade secrets and curb massive state industrial subsidies. At stake, US officials say, is the dominance of the high-tech industries of the future, from artificial intelligence to aerospace.

"We've had a change in atmospherics," said Derek Scissors, a China expert at the American Enterprise Institute, a business-oriented Washington think tank. "While this is great for markets, the administration has not said one specific thing about how we're unstuck."

Scissors, who has at times consulted with Trump administration officials, said that both sides got what they wanted out of the summit -- a lowering of the temperature and the avoidance of new tariffs that would have been painful for both sides.

Watch: US-China trade friction hurting world economic chain: Chinese scholars

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"The pressure for one side to give in to the other is diffused right now. I expect this to drag out for months," Scissors added.

No firm commitments

Washington and Beijing appear to have different ideas of what the two leaders agreed in Osaka.

Three sources familiar with the state of negotiations say that the Chinese side did not make firm commitments to immediately purchase agricultural commodities.

In pics: <a href="https://www.wionews.com/photos/why-china-is-afraid-of-us-abrams-tanks-to-be-delivered-to-taiwan-234260">Why China is afraid of US Abrams tanks to be delivered to Taiwan</a>

One of the sources said Trump raised the issue of agricultural purchases twice during the meeting, but Xi only agreed to consider purchases in the context of a broader final agreement.

Other than a small purchase of American rice by a private Chinese firm, no purchases have materialized. Chinese officials and state media accounts in the past week have emphasized that any deal, including agricultural purchases, is dependent on the removal of US tariffs.

"The Chinese have been clear they didn't promise anything," said one source familiar with the talks.

"The idea they would give up their main leverage before getting anything doesn’t make sense. I could see them buying some pork and buying some soybeans, but it's still going to be pennies."

Trump administration officials have also downplayed the extent of pledges to allow Huawei to purchase US technology products, with White House trade adviser Peter Navarro saying that only "lower-tech" US semiconductors could be made available for sale to the company. [nL2N243133].

Reuters reported last week that the Commerce Department's export control enforcement staff was told to continue to treat Huawei as a blacklisted entity as the department considers requests for licenses to US&nbsp;firms to sell products and services to Huawei [nL2N24402Y]

Chinese officials point out that they only got the United States to concede on Huawei at the Osaka talks, rather than on their other demand, which was removing the existing tariffs.

So the focus on the upcoming talks will be the scrapping on the tariffs, they say.

A second source said that US tariffs on $250 billion worth of Chinese goods and Chinese tariffs on $160 billion worth of US goods could wind up being "the new normal."

One Chinese official familiar with the situation said that trade talks would be re-started very quickly, but that there was a "fairly large gap" in the core demands of both countries and it would be a challenge to reach consensus on the toughest issues.

"The negotiating environment is even more severe," the official said.

Another official said <a href="https://www.wionews.com/world/sale-of-weapons-to-taiwan-violates-one-china-policy-cancel-it-immediately-china-to-us-234236">China remained concerned</a> about the presence of hawks in the US&nbsp;team, such as Trump advisor Peter Navarro.

"There are bullies there," the official said.

The officials spoke to Reuters on condition of anonymity.

China's foreign ministry cited Xi as telling Trump at Osaka that "on issues concerning China's sovereignty and dignity, China must safeguard its core interests".

A senior Beijing-based Asia diplomat said there would be pressure on China's leadership not to give in to the United States and for any outcomes to seen as equal and balanced.

"A trade deal cannot be portrayed as a victory for the United States," the diplomat said, citing conversations with Chinese officials.

Which text?

There has been no indication the two sides will resume negotiations using a text that had been largely agreed before China backtracked on commitments in early May, prompting Trump to proceed with a long-threatened tariff hike to 25 per cent on a $200 billion list of Chinese imports.

Beijing had cut out of that text commitments to make changes to its laws reflecting reform pledges, arguing that this would violate its national sovereignty.

Lighthizer has insisted on legal changes to make it more likely that Chinese reform pledges will be carried out.

Finding a way around this issue is paramount for talks. Beyond that, there are many other difficult issues to resolve, including the structure of an enforcement mechanism designed to hold the two sides to their pledges.

US demands for curbs to provincial and local subsidies for Chinese state companies, access to China's cloud computing market, agricultural biotech approvals and the ultimate size of China's purchases of agricultural products are all divisive issues for the two sides.

Claire Reade, a former China trade negotiator at USTR who is now a Washington-based trade lawyer with the firm Arnold and Porter, said there was room on both sides to get a deal.

"It's a question of political will and there are ways to manoeuvre around the current red flags that have been put in the ground," Reade said. "Both President Xi and President Trump have to come out of this saying they stood strong, and they in-effect got a win."

One way for China to avoid the appearance of giving in to US demands is to take some legal steps on key issues before the deal is agreed. That way they can say they’re doing it on their terms, she added.

The United States and China are set to relaunch trade talks this week after a two-month hiatus, but a year after their trade war began there is little sign their differences have narrowed.

The United States and China are set to relaunch trade talks this week after a two-month hiatus, but a year after their trade war began there is little sign their differences have narrowed. After meeting with Chinese President Xi Jinping in Japan just in late June, US President Donald Trump agreed to suspend a new round of tariffs on $300 billion worth of imported Chinese consumer goods while the two sides resumed negotiations. Trump said then that China would restart large purchases of US agricultural commodities, and the United States would ease some export restrictions on Chinese telecom equipment giant Huawei Technologies. But sources familiar with the talks and China trade watchers in Washington say the summit did little to clear the path for top negotiators to resolve an impasse that caused trade deal talks to break down in early May. A US official said last week the discussions were expected to resume with a phone call between US Trade Representative Robert Lighthizer, Chinese Vice Premier Liu He and Treasury Secretary Steven Mnuchin. A USTR spokesman said the call was expected this week, but gave no further details. The United States is demanding that China make sweeping policy changes to better protect American intellectual property, end the forced transfer and theft of trade secrets and curb massive state industrial subsidies. At stake, US officials say, is the dominance of the high-tech industries of the future, from artificial intelligence to aerospace. "We've had a change in atmospherics," said Derek Scissors, a China expert at the American Enterprise Institute, a business-oriented Washington think tank. "While this is great for markets, the administration has not said one specific thing about how we're unstuck." Scissors, who has at times consulted with Trump administration officials, said that both sides got what they wanted out of the summit -- a lowering of the temperature and the avoidance of new tariffs that would have been painful for both sides. Watch: US-China trade friction hurting world economic chain: Chinese scholars × "The pressure for one side to give in to the other is diffused right now. I expect this to drag out for months," Scissors added. No firm commitments Washington and Beijing appear to have different ideas of what the two leaders agreed in Osaka. Three sources familiar with the state of negotiations say that the Chinese side did not make firm commitments to immediately purchase agricultural commodities. In pics: Why China is afraid of US Abrams tanks to be delivered to Taiwan One of the sources said Trump raised the issue of agricultural purchases twice during the meeting, but Xi only agreed to consider purchases in the context of a broader final agreement. Other than a small purchase of American rice by a private Chinese firm, no purchases have materialized. Chinese officials and state media accounts in the past week have emphasized that any deal, including agricultural purchases, is dependent on the removal of US tariffs. "The Chinese have been clear they didn't promise anything," said one source familiar with the talks. "The idea they would give up their main leverage before getting anything doesn’t make sense. I could see them buying some pork and buying some soybeans, but it's still going to be pennies." Trump administration officials have also downplayed the extent of pledges to allow Huawei to purchase US technology products, with White House trade adviser Peter Navarro saying that only "lower-tech" US semiconductors could be made available for sale to the company. [nL2N243133]. Reuters reported last week that the Commerce Department's export control enforcement staff was told to continue to treat Huawei as a blacklisted entity as the department considers requests for licenses to US firms to sell products and services to Huawei [nL2N24402Y] Chinese officials point out that they only got the United States to concede on Huawei at the Osaka talks, rather than on their other demand, which was removing the existing tariffs. So the focus on the upcoming talks will be the scrapping on the tariffs, they say. A second source said that US tariffs on $250 billion worth of Chinese goods and Chinese tariffs on $160 billion worth of US goods could wind up being "the new normal." One Chinese official familiar with the situation said that trade talks would be re-started very quickly, but that there was a "fairly large gap" in the core demands of both countries and it would be a challenge to reach consensus on the toughest issues. "The negotiating environment is even more severe," the official said. Another official said China remained concerned about the presence of hawks in the US team, such as Trump advisor Peter Navarro. "There are bullies there," the official said. The officials spoke to Reuters on condition of anonymity. China's foreign ministry cited Xi as telling Trump at Osaka that "on issues concerning China's sovereignty and dignity, China must safeguard its core interests". A senior Beijing-based Asia diplomat said there would be pressure on China's leadership not to give in to the United States and for any outcomes to seen as equal and balanced. "A trade deal cannot be portrayed as a victory for the United States," the diplomat said, citing conversations with Chinese officials. Which text? There has been no indication the two sides will resume negotiations using a text that had been largely agreed before China backtracked on commitments in early May, prompting Trump to proceed with a long-threatened tariff hike to 25 per cent on a $200 billion list of Chinese imports. Beijing had cut out of that text commitments to make changes to its laws reflecting reform pledges, arguing that this would violate its national sovereignty. Lighthizer has insisted on legal changes to make it more likely that Chinese reform pledges will be carried out. Finding a way around this issue is paramount for talks. Beyond that, there are many other difficult issues to resolve, including the structure of an enforcement mechanism designed to hold the two sides to their pledges. US demands for curbs to provincial and local subsidies for Chinese state companies, access to China's cloud computing market, agricultural biotech approvals and the ultimate size of China's purchases of agricultural products are all divisive issues for the two sides. Claire Reade, a former China trade negotiator at USTR who is now a Washington-based trade lawyer with the firm Arnold and Porter, said there was room on both sides to get a deal. "It's a question of political will and there are ways to manoeuvre around the current red flags that have been put in the ground," Reade said. "Both President Xi and President Trump have to come out of this saying they stood strong, and they in-effect got a win." One way for China to avoid the appearance of giving in to US demands is to take some legal steps on key issues before the deal is agreed. That way they can say they’re doing it on their terms, she added.

United States, China to relaunch talks with little changed since deal fell apart

Crude prices were little changed on Monday as traders weighed geopolitical risks against the impact of the Sino-US trade war on the global economy, although last week's better-than-expected US jobs data offered some support.

Brent crude futures were down 3 cents by 0300 GMT at $64.20. US West Texas Intermediate (WTI) was up 6 cents at $57.57 a barrel.

"A very cautious open this morning supported by a better than expected (non-farm payrolls)," said Stephen Innes, managing partner at Vanguard Markets in Bangkok. "Traders remain incredibly cautious about the dimmer global economic overhang."

Both oil benchmarks fell last week as concerns about a slowing global economy outweighed risks to supply. Brent fell more than 3% and WTI shed more than 1.5%.

US job growth rebounded strongly in June, with government payrolls surging, the Labour Department's closely watched employment report showed on Friday, suggesting May's sharp slowdown in hiring was probably a one-off.

Employers added 224,000 jobs last month, the most in five months, the report showed.

But the US-China trade war has dampened prospects of global economic growth and oil demand.

The lack of concrete progress in resolving the acrimonious trade war between the United States and China, however, means the bar could be very high for the US Federal Reserve not to lower borrowing costs at its July 30-31 policy meeting.

White House Economic advisor Larry Kudlow has confirmed top representatives from the United States and China will meet in the coming week to continue trade talks.

Still, Japan's core machinery orders fell for the first time in four months in May, posing the biggest monthly drop in eight months in a worrying sign that global trade tensions are taking a toll on corporate investment.

Oil received some support from simmering tensions over Iran and after an extension last week to output cuts by OPEC and its allies.

Iran said on Sunday it will shortly boost its uranium enrichment above a cap set by a landmark 2015 nuclear deal, prompting a warning 'to be careful' from US President Donald Trump, who pulled out of the pact last year.

"Geopolitical risks remain plentiful, but the start of the week could see Iran worries ease," said Edward Moya, senior market analyst at OANDA.

Meanwhile, US energy companies this week reduced the number of oil rigs operating for the first time in three weeks as drillers follow through on plans to cut spending this year.

Crude prices were little changed on Monday as traders weighed geopolitical risks against the impact of the Sino-US trade war on the global economy, although last week's better-than-expected US jobs data offered some support.

Crude prices were little changed on Monday as traders weighed geopolitical risks against the impact of the Sino-US trade war on the global economy, although last week's better-than-expected US jobs data offered some support. Brent crude futures were down 3 cents by 0300 GMT at $64.20. US West Texas Intermediate (WTI) was up 6 cents at $57.57 a barrel. "A very cautious open this morning supported by a better than expected (non-farm payrolls)," said Stephen Innes, managing partner at Vanguard Markets in Bangkok. "Traders remain incredibly cautious about the dimmer global economic overhang." Both oil benchmarks fell last week as concerns about a slowing global economy outweighed risks to supply. Brent fell more than 3% and WTI shed more than 1.5%. US job growth rebounded strongly in June, with government payrolls surging, the Labour Department's closely watched employment report showed on Friday, suggesting May's sharp slowdown in hiring was probably a one-off. Employers added 224,000 jobs last month, the most in five months, the report showed. But the US-China trade war has dampened prospects of global economic growth and oil demand. The lack of concrete progress in resolving the acrimonious trade war between the United States and China, however, means the bar could be very high for the US Federal Reserve not to lower borrowing costs at its July 30-31 policy meeting. White House Economic advisor Larry Kudlow has confirmed top representatives from the United States and China will meet in the coming week to continue trade talks. Still, Japan's core machinery orders fell for the first time in four months in May, posing the biggest monthly drop in eight months in a worrying sign that global trade tensions are taking a toll on corporate investment. Oil received some support from simmering tensions over Iran and after an extension last week to output cuts by OPEC and its allies. Iran said on Sunday it will shortly boost its uranium enrichment above a cap set by a landmark 2015 nuclear deal, prompting a warning 'to be careful' from US President Donald Trump, who pulled out of the pact last year. "Geopolitical risks remain plentiful, but the start of the week could see Iran worries ease," said Edward Moya, senior market analyst at OANDA. Meanwhile, US energy companies this week reduced the number of oil rigs operating for the first time in three weeks as drillers follow through on plans to cut spending this year.

Oil prices tread water as market eyes global risks

Oil prices steadied on Monday as tensions over Iran's nuclear program were tempered by global economic growth concerns and consequently oil demand.

Brent crude futures were down 1 cent by 1122 GMT at $64.22 a barrel. US&nbsp;<a href="https://www.wionews.com/business-economy/post-budget-sensex-down-over-630-points-pnb-stocks-falls-further-233908">West Texas Intermediate</a> (WTI) was down 2 cents at $57.49.

Iran on Monday threatened to restart deactivated centrifuges and step up its enrichment of uranium to 20% in a move that further threatens the 2015 nuclear agreement that Washington abandoned last year.

Washington has imposed sanctions that eliminate benefits Iran was meant to receive in return for agreeing to curbs on its nuclear program under the 2015 deal with world powers. The confrontation has brought the United States and Iran close to the brink of conflict, with US&nbsp;President Donald Trump calling off air strikes last month minutes before impact.

On Sunday Trump issued another warning over Iran's nuclear activities. "They'd better be careful," he said.

However, oil prices continue to be pressured by lingering fears over demand.

"That the market reacts so little to the tense situation in the Middle East is a reflection of a very well-supplied market in general and a very relaxed market," said SEB chief commodities analyst Bjarne Schieldrop.

The <a href="https://www.wionews.com/world/in-jab-at-united-states-china-vice-president-wang-qishan-says-world-cannot-shut-china-out-233914">US-China trade</a> war has dampened prospects for global economic growth and <a href="https://www.wionews.com/business-economy/oil-prices-tread-water-as-market-eyes-global-risks-233891">oil demand</a>.

However, lack of concrete progress in resolving the acrimonious trade war between the United States and China means the bar could be very high for the US Federal Reserve not to lower borrowing costs at its July 30-31 policy meeting.

Elsewhere, Japan's core machinery orders fell for the first time in four months in May, posting the biggest monthly drop in eight months in a worrying sign that global trade tensions are taking a toll on corporate investment.

"Concern for global growth is at the back of the mind of the whole market all the time these days," SEB's Schieldrop said.

Strong US economic data also put a floor under prices. US job growth rebounded strongly in June, with government payrolls surging, a closely watched employment report showed on Friday, suggesting that May's sharp slowdown in hiring was probably a one-off.

Employers added 224,000 jobs last month, the most in five months.

The owner of Britain's biggest oil pipeline, Ineos, on Sunday said it had started to reduce flows on the Forties pipeline system to about 150,000 barrels per day (bpd) until Tuesday to repair a processing unit at Scotland's Kinneil plant.

The pipeline system typically pumps about 450,000 bpd.

Meanwhile, US energy companies this week reduced the number of oil rigs operating for the first time in three weeks as drillers follow through on plans to cut spending this year.

Oil prices steadied on Monday as tensions over Iran's nuclear program were tempered by global economic growth concerns and consequently oil demand. Brent crude futures were down 1 cent by 1122 GMT at $64.

Oil prices steadied on Monday as tensions over Iran's nuclear program were tempered by global economic growth concerns and consequently oil demand. Brent crude futures were down 1 cent by 1122 GMT at $64.22 a barrel. US West Texas Intermediate (WTI) was down 2 cents at $57.49. Iran on Monday threatened to restart deactivated centrifuges and step up its enrichment of uranium to 20% in a move that further threatens the 2015 nuclear agreement that Washington abandoned last year. Washington has imposed sanctions that eliminate benefits Iran was meant to receive in return for agreeing to curbs on its nuclear program under the 2015 deal with world powers. The confrontation has brought the United States and Iran close to the brink of conflict, with US President Donald Trump calling off air strikes last month minutes before impact. On Sunday Trump issued another warning over Iran's nuclear activities. "They'd better be careful," he said. However, oil prices continue to be pressured by lingering fears over demand. "That the market reacts so little to the tense situation in the Middle East is a reflection of a very well-supplied market in general and a very relaxed market," said SEB chief commodities analyst Bjarne Schieldrop. The US-China trade war has dampened prospects for global economic growth and oil demand. However, lack of concrete progress in resolving the acrimonious trade war between the United States and China means the bar could be very high for the US Federal Reserve not to lower borrowing costs at its July 30-31 policy meeting. Elsewhere, Japan's core machinery orders fell for the first time in four months in May, posting the biggest monthly drop in eight months in a worrying sign that global trade tensions are taking a toll on corporate investment. "Concern for global growth is at the back of the mind of the whole market all the time these days," SEB's Schieldrop said. Strong US economic data also put a floor under prices. US job growth rebounded strongly in June, with government payrolls surging, a closely watched employment report showed on Friday, suggesting that May's sharp slowdown in hiring was probably a one-off. Employers added 224,000 jobs last month, the most in five months. The owner of Britain's biggest oil pipeline, Ineos, on Sunday said it had started to reduce flows on the Forties pipeline system to about 150,000 barrels per day (bpd) until Tuesday to repair a processing unit at Scotland's Kinneil plant. The pipeline system typically pumps about 450,000 bpd. Meanwhile, US energy companies this week reduced the number of oil rigs operating for the first time in three weeks as drillers follow through on plans to cut spending this year.

Oil steadies as demand concern counters Middle East tensions

When President Donald Trump’s administration announced a $12 billion aid package for farmers struggling under the financial strain of his trade dispute with China, the payments were capped. But many large farming operations had no trouble finding legal ways around them, records provided to The Associated Press under the Freedom of Information Act show.

US Farms Evade Trade Aid Limits

United States President Donald Trump in a series of tweets on Saturday said he had a great meeting with Chinese President Xi Jinping on the sidelines of the <a href="https://www.wionews.com/world/g20-summit-donald-trump-confirms-wont-impose-new-tariffs-on-china-231445">G20 summit in Japan's Osaka </a>where he also agreed to continue negotiations over the stalled trade talks between the two world economies.

"I had a great meeting with President Xi of <a href="https://www.wionews.com/world/china-eases-foreign-investment-curbs-amid-cooling-trade-tensions-231699">China </a>yesterday, far better than expected. I agreed not to increase the already existing Tariffs that we charge China while we continue to negotiate," the president wrote on Twitter.

The US-China trade war and climate change have been contentious issues during the G20 summit.

After a meeting with Chinese President Xi Jinping on the last day of the annual summit, US President Donald Trump says relations between the two countries are "back on track" after a breakdown in trade talks last month following Washington`s imposed tariffs on US $300 billion of Chinese goods.

"China has agreed that, during the negotiation, they will begin purchasing large amounts of agricultural product from our great Farmers," Trump added.

The US President further noted that he will allow Huawei Technologies to buy products from US suppliers, in a concession to the communist country.

"At the request of our High Tech companies, and President Xi, I agreed to allow Chinese company Huawei to buy the product from them which will not impact our National Security," Trump said.

"Importantly, we have opened up negotiations again with China as our relationship with them continues to be a very good one. The quality of the transaction is far more important to me than speed. I am in no hurry, but things look very good! There will be no reduction in the Tariffs currently being charged to China," he added.

The remarks came after the US Commerce Department last month had reportedly moved to blacklist Huawei, cutting it off from the US suppliers.

The US also has been engaged in a global campaign to block the Chinese tech giant from so-called 5G communications networks, calling the company a security threat.

The Trump administration has alleged that Beijing could use Huawei`s products to spy on countries that use them in their networks. The allegations were, however, denied by the company.&nbsp;

United States President Donald Trump in a series of tweets on Saturday said he had a great meeting with Chinese President Xi Jinping on the sidelines of the G20 summit in Japan's Osaka where he also agreed to continue negotiations over the stalled trade talks between the two world economies.

United States President Donald Trump in a series of tweets on Saturday said he had a great meeting with Chinese President Xi Jinping on the sidelines of the G20 summit in Japan's Osaka where he also agreed to continue negotiations over the stalled trade talks between the two world economies. "I had a great meeting with President Xi of China yesterday, far better than expected. I agreed not to increase the already existing Tariffs that we charge China while we continue to negotiate," the president wrote on Twitter. The US-China trade war and climate change have been contentious issues during the G20 summit. After a meeting with Chinese President Xi Jinping on the last day of the annual summit, US President Donald Trump says relations between the two countries are "back on track" after a breakdown in trade talks last month following Washington`s imposed tariffs on US $300 billion of Chinese goods. "China has agreed that, during the negotiation, they will begin purchasing large amounts of agricultural product from our great Farmers," Trump added. The US President further noted that he will allow Huawei Technologies to buy products from US suppliers, in a concession to the communist country. "At the request of our High Tech companies, and President Xi, I agreed to allow Chinese company Huawei to buy the product from them which will not impact our National Security," Trump said. "Importantly, we have opened up negotiations again with China as our relationship with them continues to be a very good one. The quality of the transaction is far more important to me than speed. I am in no hurry, but things look very good! There will be no reduction in the Tariffs currently being charged to China," he added. The remarks came after the US Commerce Department last month had reportedly moved to blacklist Huawei, cutting it off from the US suppliers. The US also has been engaged in a global campaign to block the Chinese tech giant from so-called 5G communications networks, calling the company a security threat. The Trump administration has alleged that Beijing could use Huawei`s products to spy on countries that use them in their networks. The allegations were, however, denied by the company.

Huawei allowed to buy from US suppliers as relations with China are 'back on track'

China's factory activity shrank more than expected in June, an official manufacturing survey showed, highlighting the need for more economic stimulus as US tariffs and weaker domestic demand ramped up pressure on new orders for goods.

The Purchasing Managers' Index (PMI) stood at 49.4 in June, China's National Bureau of Statistics said on Sunday, unchanged from the previous month and below the 50-point mark that separates growth from contraction on a monthly basis. Analysts polled by Reuters predicted a reading of 49.5.

The weak manufacturing readings are likely to cast a shadow over the apparent progress US and Chinese leaders made at the G20 summit in Japan over the weekend in restarting their troubled talks over tariffs amid a costly trade war.

They will also spark concerns about stalling growth in China and the risk of a global recession, despite slightly better-than-expected export and industrial profits data in May.

Many economists still expect the economy to face strong headwinds in coming months as domestic demand falters and external risks rise.

"Although the outcome of the G20 summit (in Osaka) might boost confidence for some entities, organic growth in the economy is still insufficient, and counter-cyclical stimulus policies need to be maintained," researchers at Huatai Securities wrote in a research note on Sunday.

"The PMI index continued to fall across the board this month, and only the raw material inventory sub-index was up due to weak demand," the research note read.

In June, China's factory output growth slowed, with the subindex falling to 51.3 from 51.7 in May while the contraction in total new orders accelerated to 49.6 from 49.8.

Export orders extended their decline with the sub-index falling to 46.3 from May's 46.5, suggesting a further weakening in global demand.

Import orders also worsened, reflecting softening demand at home despite a flurry of growth-supporting measures rolled out earlier this year.

Southwest Securities said weak new export orders reflected a fading of the front-loading effect, which had temporarily boosted exports as Chinese companies rushed to place orders before more tariffs took effect.

Presidents Donald Trump and Xi Jinping held ice-breaking talks at the G20 summit on Saturday. However, Chinese state media warned on Sunday Beijing and Washington will likely face a long road before the two countries could reach a deal.

Analysts at Nomura expect any gains achieved on a temporary trade deal between China and the United States would prove fleeting with a renewed escalation likely further down the road.

Trump has already imposed tariffs on $250 billion of Chinese goods and is threatening to extend those to another $300 billion, which would effectively cover all of China's exports to the United States. China has retaliated with tariffs on U.S. imports.

To deal with the economic challenges, policymakers have released a range of measures and are expected to launch more. Premier Li Keqiang last week pledged to cut real interest rates on financing for small and micro firms.

Goldman Sachs said the lack of any substantive progress in Sino-U.S. trade talks at the G20 over the weekend suggested stimulus, including cuts to banks' reserve requirements, was likely to be needed.

"We expect more policy easing (two more reserve requirement ratio cuts in 2H this year, more fiscal measures to support infrastructure investment) to come in the next few months," Goldman Sachs said in a note.

&nbsp; &nbsp; Manufacturers continued to cut jobs in June, with the employment sub-index falling to 46.9, compared with 47.0 in May, when it hit the lowest level seen since March 2009.

An official business survey showed activity in China's services sector held firm in June despite growing pressure on the broader economy from U.S. trade measures, with the official reading at 54.2 in June from 54.3 in May.

Beijing has been counting on a strong services sector to pick up the slack as it tries to shift the economy away from a dependence on heavy industry and manufacturing exports.

China's factory activity shrank more than expected in June, an official manufacturing survey showed, highlighting the need for more economic stimulus as US tariffs and weaker domestic demand ramped up pressure on new orders for goods.

China's factory activity shrank more than expected in June, an official manufacturing survey showed, highlighting the need for more economic stimulus as US tariffs and weaker domestic demand ramped up pressure on new orders for goods. The Purchasing Managers' Index (PMI) stood at 49.4 in June, China's National Bureau of Statistics said on Sunday, unchanged from the previous month and below the 50-point mark that separates growth from contraction on a monthly basis. Analysts polled by Reuters predicted a reading of 49.5. The weak manufacturing readings are likely to cast a shadow over the apparent progress US and Chinese leaders made at the G20 summit in Japan over the weekend in restarting their troubled talks over tariffs amid a costly trade war. They will also spark concerns about stalling growth in China and the risk of a global recession, despite slightly better-than-expected export and industrial profits data in May. Many economists still expect the economy to face strong headwinds in coming months as domestic demand falters and external risks rise. "Although the outcome of the G20 summit (in Osaka) might boost confidence for some entities, organic growth in the economy is still insufficient, and counter-cyclical stimulus policies need to be maintained," researchers at Huatai Securities wrote in a research note on Sunday. "The PMI index continued to fall across the board this month, and only the raw material inventory sub-index was up due to weak demand," the research note read. In June, China's factory output growth slowed, with the subindex falling to 51.3 from 51.7 in May while the contraction in total new orders accelerated to 49.6 from 49.8. Export orders extended their decline with the sub-index falling to 46.3 from May's 46.5, suggesting a further weakening in global demand. Import orders also worsened, reflecting softening demand at home despite a flurry of growth-supporting measures rolled out earlier this year. Southwest Securities said weak new export orders reflected a fading of the front-loading effect, which had temporarily boosted exports as Chinese companies rushed to place orders before more tariffs took effect. Presidents Donald Trump and Xi Jinping held ice-breaking talks at the G20 summit on Saturday. However, Chinese state media warned on Sunday Beijing and Washington will likely face a long road before the two countries could reach a deal. Analysts at Nomura expect any gains achieved on a temporary trade deal between China and the United States would prove fleeting with a renewed escalation likely further down the road. Trump has already imposed tariffs on $250 billion of Chinese goods and is threatening to extend those to another $300 billion, which would effectively cover all of China's exports to the United States. China has retaliated with tariffs on U.S. imports. To deal with the economic challenges, policymakers have released a range of measures and are expected to launch more. Premier Li Keqiang last week pledged to cut real interest rates on financing for small and micro firms. Goldman Sachs said the lack of any substantive progress in Sino-U.S. trade talks at the G20 over the weekend suggested stimulus, including cuts to banks' reserve requirements, was likely to be needed. "We expect more policy easing (two more reserve requirement ratio cuts in 2H this year, more fiscal measures to support infrastructure investment) to come in the next few months," Goldman Sachs said in a note. Manufacturers continued to cut jobs in June, with the employment sub-index falling to 46.9, compared with 47.0 in May, when it hit the lowest level seen since March 2009. An official business survey showed activity in China's services sector held firm in June despite growing pressure on the broader economy from U.S. trade measures, with the official reading at 54.2 in June from 54.3 in May. Beijing has been counting on a strong services sector to pick up the slack as it tries to shift the economy away from a dependence on heavy industry and manufacturing exports.

China's factory activity shrinks as US tariffs, slowdown hit orders

US-based tech giant <a href="https://www.wionews.com/world/apple-explores-moving-15-30-of-production-capacity-from-china-to-southeast-asia-report-228703">Apple</a> will shift production of its Mac Pro computers to China, said a report by The Wall Street Journal on Friday.

That desktop is the only major Apple device produced in the US. It is produced in Texas.

According to the report, Apple has chosen a Taiwanese contractor, Quanta Computer Inc, to manufacture the $6,000 desktop computer near Shanghai.&nbsp;

The shift comes at amid the escalating trade war between the US and China. US President Trump is threatening to slap tariffs on almost all imports from China, which would raise prices for US consumers.

Mac Pro is a niche product for Apple and not a high volume seller. But the shift could still anger Trump, who has been pressing US companies in general and Apple specifically to make things in America.

Meanwhile, news agency Reuters had reported that earlier this month that the company has asked its major suppliers to asses the cost implications of moving 15-30 per cent of their production capacity from China to Southeast Asia.

Key iPhone assemblers Foxconn, Pegatron Corp, Wistron Corp, major MacBook maker Quanta Computer Inc, iPad maker Compal Electronics Inc, and AirPods makers Inventec Corp, Luxshare-ICT and Goertek have been asked to evaluate options outside of China, Reuters had reported citing Nikkei Asian Review report.

The countries being considered to include Mexico, India, Vietnam, Indonesia and Malaysia. India and Vietnam are among the favourites for smartphones, Nikkei said, citing sources who did not want to be identified as the discussions are private.

US-based tech giant Apple will shift production of its Mac Pro computers to China, said a report by The Wall Street Journal on Friday. That desktop is the only major Apple device produced in the US.

US-based tech giant Apple will shift production of its Mac Pro computers to China, said a report by The Wall Street Journal on Friday. That desktop is the only major Apple device produced in the US. It is produced in Texas. According to the report, Apple has chosen a Taiwanese contractor, Quanta Computer Inc, to manufacture the $6,000 desktop computer near Shanghai. The shift comes at amid the escalating trade war between the US and China. US President Trump is threatening to slap tariffs on almost all imports from China, which would raise prices for US consumers. Mac Pro is a niche product for Apple and not a high volume seller. But the shift could still anger Trump, who has been pressing US companies in general and Apple specifically to make things in America. Meanwhile, news agency Reuters had reported that earlier this month that the company has asked its major suppliers to asses the cost implications of moving 15-30 per cent of their production capacity from China to Southeast Asia. Key iPhone assemblers Foxconn, Pegatron Corp, Wistron Corp, major MacBook maker Quanta Computer Inc, iPad maker Compal Electronics Inc, and AirPods makers Inventec Corp, Luxshare-ICT and Goertek have been asked to evaluate options outside of China, Reuters had reported citing Nikkei Asian Review report. The countries being considered to include Mexico, India, Vietnam, Indonesia and Malaysia. India and Vietnam are among the favourites for smartphones, Nikkei said, citing sources who did not want to be identified as the discussions are private.

Apple to move Mac Pro production to China: Report

US President Donald Trump said trade negotiations with China were "back on track" after "excellent" talks Saturday with his Chinese counterpart Xi Jinping in which Washington agreed to hold off on new tariffs.

The crunch talks on the damaging trade war between the world's top two economies came on the sidelines of a meeting of the G20 in Japan's Osaka, with all eyes on whether the pair would agree to a truce.

"We had a very good meeting with President Xi of China," Trump said after the talks. "I would say excellent."

"We are right back on track," he added.

Both sides were expected to issue official formal statements later, but Trump confirmed that Washington had committed not to impose any new tariffs on Beijing's exports and that the two sides will continue talks.&nbsp;

"At least for the time being," Washington will not impose new tariffs or remove existing ones, Trump said at a press conference. "We will be continuing to negotiate."

The outcome was likely to be seen as a win, with experts cautioning ahead of the meeting that a full agreement was unlikely but a truce that avoided a new tit-for-tat round of tariffs would be positive.

Trump has struck a conciliatory tone since his arrival in Japan for the G20 summit, despite saying China's economy was going "down the tubes" before he set out for Osaka.

He said he was ready for a "historic" deal with China as the leaders kicked off their meeting and Xi told him that "dialogue" was better than confrontation.

In their final statement, the G20 leaders admitted that "most importantly, trade and geopolitical tensions have intensified," echoing hard-won language from their finance ministers at a meeting earlier this month.

Climate fight

There were no immediate details about the China-US discussions, including whether they raised the thorny subject of Chinese telecoms firm Huawei.

Washington has banned the company over security concerns and China reportedly wanted the restrictions listed under the terms of any trade truce.

The first tete-a-tete between the leaders of the world's top two economies since the last G20 in December has cast a long shadow over this year's gathering in Osaka.

Economists say that a lengthy trade war could be crippling for the global economy at a time when headwinds including increased geopolitical tensions and Brexit are blowing hard.

On Friday, the European Union and the South American trade bloc Mercosur sealed a blockbuster trade deal after 20 years of talks, with European Commission President Jean-Claude Juncker hailing it as a "strong message" in support of "rules-based trade."

Trade has proved far from the only contentious issue on the table, with climate change becoming another major sticking point.

A diplomatic source said it had been a "difficult" night, with an American negotiator pushing a "very tough position" and a group including France standing united against watering down the climate language in the final statement.&nbsp;

In the end, a deal of sorts was reached, with 19 members, minus the United States, agreeing Saturday to the "irreversibility" of the Paris climate deal and pledging its full implementation.

The language in the final statement after the summit in Japan's Osaka mirrors that agreed during last year's G20 but was the subject of lengthy negotiations after objections from the United States.

Trump-Kim meet?

Trump has dominated the headlines from the summit, and once again caught observers by surprise by tweeting early Saturday that he was open to meeting North Korea's Kim Jong Un while in South Korea this weekend.

"If Chairman Kim of North Korea sees this, I would meet him at the Border/DMZ just to shake his hand and say Hello(?)!," he wrote.

Several experts, however, said the focus on Trump and the talks with China struck at the heart of the G20 format, created to craft a united global response to the Lehman Brothers crisis.

"With much of the fate of the global economy and the likely direction of markets hanging on the outcome of this pivotal Trump-Xi meeting, we think things will get worse before they get better," said ING Economics.

And the focus on bilateral meetings on the sidelines of the summit once again sparked doubts about the future of the gathering, experts said.

"The G20 was created as a forum for cooperation and the question may well be 'have we reached the point where it can no longer serve that purpose'," Thomas Bernes from the Centre for International Governance Innovation told AFP.

US President Donald Trump said trade negotiations with China were "back on track" after "excellent" talks Saturday with his Chinese counterpart Xi Jinping in which Washington agreed to hold off on new tariffs.

US President Donald Trump said trade negotiations with China were "back on track" after "excellent" talks Saturday with his Chinese counterpart Xi Jinping in which Washington agreed to hold off on new tariffs. The crunch talks on the damaging trade war between the world's top two economies came on the sidelines of a meeting of the G20 in Japan's Osaka, with all eyes on whether the pair would agree to a truce. "We had a very good meeting with President Xi of China," Trump said after the talks. "I would say excellent." "We are right back on track," he added. Both sides were expected to issue official formal statements later, but Trump confirmed that Washington had committed not to impose any new tariffs on Beijing's exports and that the two sides will continue talks. "At least for the time being," Washington will not impose new tariffs or remove existing ones, Trump said at a press conference. "We will be continuing to negotiate." The outcome was likely to be seen as a win, with experts cautioning ahead of the meeting that a full agreement was unlikely but a truce that avoided a new tit-for-tat round of tariffs would be positive. Trump has struck a conciliatory tone since his arrival in Japan for the G20 summit, despite saying China's economy was going "down the tubes" before he set out for Osaka. He said he was ready for a "historic" deal with China as the leaders kicked off their meeting and Xi told him that "dialogue" was better than confrontation. In their final statement, the G20 leaders admitted that "most importantly, trade and geopolitical tensions have intensified," echoing hard-won language from their finance ministers at a meeting earlier this month. Climate fight There were no immediate details about the China-US discussions, including whether they raised the thorny subject of Chinese telecoms firm Huawei. Washington has banned the company over security concerns and China reportedly wanted the restrictions listed under the terms of any trade truce. The first tete-a-tete between the leaders of the world's top two economies since the last G20 in December has cast a long shadow over this year's gathering in Osaka. Economists say that a lengthy trade war could be crippling for the global economy at a time when headwinds including increased geopolitical tensions and Brexit are blowing hard. On Friday, the European Union and the South American trade bloc Mercosur sealed a blockbuster trade deal after 20 years of talks, with European Commission President Jean-Claude Juncker hailing it as a "strong message" in support of "rules-based trade." Trade has proved far from the only contentious issue on the table, with climate change becoming another major sticking point. A diplomatic source said it had been a "difficult" night, with an American negotiator pushing a "very tough position" and a group including France standing united against watering down the climate language in the final statement. In the end, a deal of sorts was reached, with 19 members, minus the United States, agreeing Saturday to the "irreversibility" of the Paris climate deal and pledging its full implementation. The language in the final statement after the summit in Japan's Osaka mirrors that agreed during last year's G20 but was the subject of lengthy negotiations after objections from the United States. Trump-Kim meet? Trump has dominated the headlines from the summit, and once again caught observers by surprise by tweeting early Saturday that he was open to meeting North Korea's Kim Jong Un while in South Korea this weekend. "If Chairman Kim of North Korea sees this, I would meet him at the Border/DMZ just to shake his hand and say Hello(?)!," he wrote. Several experts, however, said the focus on Trump and the talks with China struck at the heart of the G20 format, created to craft a united global response to the Lehman Brothers crisis. "With much of the fate of the global economy and the likely direction of markets hanging on the outcome of this pivotal Trump-Xi meeting, we think things will get worse before they get better," said ING Economics. And the focus on bilateral meetings on the sidelines of the summit once again sparked doubts about the future of the gathering, experts said. "The G20 was created as a forum for cooperation and the question may well be 'have we reached the point where it can no longer serve that purpose'," Thomas Bernes from the Centre for International Governance Innovation told AFP.

G20 Summit: Donald Trump confirms won't impose new tariffs on China

US President Donald Trump is set to hold much-anticipated trade talks with Chinese President Xi Jinping in Osaka at 11:30 am&nbsp;(0230 GMT) on Saturday, news agency Reuters reported on Wednesday quoting a&nbsp;White House spokesman.

The bilateral meeting between the head of two world's largest economy&nbsp;is likely to be the most closely watched event at the G20 summit, hosted by Japan.

The talk is&nbsp;aimed at heading off a ratcheting up of <a href="https://www.wionews.com/world/trump-says-trade-deal-possible-with-chinas-xi-tariffs-could-be-lower-230699">US tariffs on imports</a> of consumer and other goods from China.&nbsp;

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Trump - known for preferring one-on-one deal-making over multilateral discussions - is set to hold a total of nine bilateral meetings during his time in Japan, including one with Russian President Vladimir Putin at 2 pm&nbsp;on Friday (0500 GMT), the report added quoting&nbsp;White House spokesman Hogan Gidley who was traveling with Trump to the G20 summit.

The meetings are set to begin on Thursday when Trump lands and has dinner with Australian Prime Minister Scott Morrison, the report added quoting Gidley.

On Friday, Trump will meet with Japanese Prime Minister Shinzo Abe, and then with Abe and Indian Prime Minister Narendra Modi, before meeting separately with Modi.

Trump also added a bilateral meeting with Brazilian President Jair Bolsonaro on Friday to his schedule.

(With inputs from Reuters)&nbsp;

US President Donald Trump is set to hold much-anticipated trade talks with Chinese President Xi Jinping in Osaka at 11:30 am (0230 GMT) on Saturday, news agency Reuters reported on Wednesday quoting a White House spokesman.

US President Donald Trump is set to hold much-anticipated trade talks with Chinese President Xi Jinping in Osaka at 11:30 am (0230 GMT) on Saturday, news agency Reuters reported on Wednesday quoting a White House spokesman. The bilateral meeting between the head of two world's largest economy is likely to be the most closely watched event at the G20 summit, hosted by Japan. The talk is aimed at heading off a ratcheting up of US tariffs on imports of consumer and other goods from China. × Trump - known for preferring one-on-one deal-making over multilateral discussions - is set to hold a total of nine bilateral meetings during his time in Japan, including one with Russian President Vladimir Putin at 2 pm on Friday (0500 GMT), the report added quoting White House spokesman Hogan Gidley who was traveling with Trump to the G20 summit. The meetings are set to begin on Thursday when Trump lands and has dinner with Australian Prime Minister Scott Morrison, the report added quoting Gidley. On Friday, Trump will meet with Japanese Prime Minister Shinzo Abe, and then with Abe and Indian Prime Minister Narendra Modi, before meeting separately with Modi. Trump also added a bilateral meeting with Brazilian President Jair Bolsonaro on Friday to his schedule. (With inputs from Reuters)

Trump-Xi to hold trade talks on Saturday morning in Osaka: White House

Trade talks between Donald Trump and Xi Jinping are expected to dominate the upcoming G20 summit in Osaka, where the two leaders are expected to meet on the final day of the event.

Trump-Xi trade talks to dominate G20 Summit

In an interview to FOX new network, US President Donald Trump has indicated that he is ready to slap tariffs on all remaining Chinese imports. Watch full video to know more.

US President Donald Trump hints at more tariffs on Chinese goods

US President Donald Trump said on Wednesday that a trade deal with Chinese President Xi Jinping was possible this weekend but he is prepared to impose US&nbsp;tariffs on virtually all remaining Chinese imports if the two countries continue to disagree.

Trump, who departed for the G20 leaders summit in Osaka, Japan, on Wednesday, also raised the possibility that he may impose a lower, 10% duty on a $300 billion list of Chinese imports, instead of the proposed 25% rate.

Trump is expected to meet with Xi on Saturday in Osaka, a conversation that could revive stalled negotiations between the world's two biggest economies or launch a much deeper, costlier trade war that would drag down global growth and roil financial markets.

"It's absolutely possible. ... We have to get a good deal," Trump said in an interview with Fox Business Network. "It's possible that we'll make a deal, but I'm also very happy where we are now."

Relations between Washington and Beijing have spiraled downward since talks collapsed in May, when the United States accused China of reneging on pledges to reform its economy.

Trump said Chinese leaders "want to make a deal. They want to make a deal more than I do."

US&nbsp;Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are due to meet with Chinese Vice Premier Liu He ahead of the Trump-Xi meeting. US&nbsp;Commerce Secretary Wilbur Ross also was added to the U.S. delegation at the last minute at Trump's request, a senior U.S. official said at a Washington event where Ross had been scheduled to speak.

Some Chinese officials who were not previously part of China's delegation were also applying for Japanese visas, an industry source briefed on the matter said, adding that this was a possible sign of momentum for the Trump-Xi meeting.

Shortly after Trump returns from the Osaka summit, he will be in a position to impose a 25% tariff on $300 billion worth of Chinese consumer goods from cellphones, laptop and tablet computers to tube socks and baby carriers.

A public comment period on the tariffs ends on July 2 following seven days of public hearings in which US&nbsp;companies large and small begged to be spared from the tariffs and warned of hardships in shifting production out of China..

"I would do additional tariffs, very substantial additional tariffs, if that doesn't work, if we don't make a deal," Trump said on Wednesday. But he added that he could consider lowering the duty to 10% from the proposed 25%.

Administration officials have said that a 10 percent tariff is more easily offset by Chinese companies absorbing the added costs and by declines in the value of China's yuan currency.

China and the United States have already imposed tariffs of up to 25% on hundreds of billions of dollars of each other's goods in a trade war that has lasted nearly a year.

More than half of Chinese consumers have recently avoided U.S.-made products in support of their country, according to a new poll conducted by London-based advisory firm Brunswick. The poll of 1,000 Chinese and 1,000 American consumers showed that 68 percent of Chinese respondents said their opinions of American firms had become more negative, while 59 percent of Americans had an unfavorable opinion of China-based companies.

Global trade tensions contributed to a 2.1% drop in the April US&nbsp;trade deficit to $50.8 billion as both imports and exports fell, the Commerce Department reported on Wednesday. But the April U.S. trade deficit with China jumped nearly 30% to $26.9 billion, while the trade gap with Mexico fell sharply.

Fitch Ratings on Wednesday forecast that imposing a 25% tariff on the $300 billion in Chinese goods would chop 0.4 percent from world economic output. The International Monetary Fund has forecast a 0.5 percent reduction, equivalent to erasing South Africa's economy.

Trump said China knows what the United States needs for a trade deal, and pushed for China to return to the negotiating table with the same concessions they had made before talks abruptly ended in May.

The two sides could agree not to impose new tariffs as a goodwill gesture to get negotiations going, a US&nbsp;official said on Tuesday.

'Drive by tariffs'

Trump has bipartisan support on taking a tough stance on China, although not for his use of tariffs as a tool to exert pressure on Beijing.

A senior Democrat said on Wednesday he hoped the standoff with China would result in lasting changes.

"We’ve gone this far - we ought to be working to try and have some of the structural changes, some of the advantages, some of the (intellectual property) protections, and China living up to its obligations under the (World Trade Organization)," said US&nbsp;Representative Earl Blumenauer.

Blumenauer, who chairs the House of Representatives' Ways and Means trade subcommittee, said he disagreed with what he called Trump's "drive-by tariffs" and hoped the president would not accept a deal that simply involved selling more goods to China rather than changing bilateral terms of trade.

Trump said if Washington was unable to reach a deal, his plan was to reduce business with China. Asked about companies relocating production from China to Vietnam, he said Vietnam treated the United States even worse than China.

The United States is cracking down on companies that have used countries such as Vietnam and Cambodia as staging posts to ship goods from China to the United States without paying tariffs.

US President Donald Trump said on Wednesday that a trade deal with Chinese President Xi Jinping was possible this weekend but he is prepared to impose US tariffs on virtually all remaining Chinese imports if the two countries continue to disagree.

US President Donald Trump said on Wednesday that a trade deal with Chinese President Xi Jinping was possible this weekend but he is prepared to impose US tariffs on virtually all remaining Chinese imports if the two countries continue to disagree. Trump, who departed for the G20 leaders summit in Osaka, Japan, on Wednesday, also raised the possibility that he may impose a lower, 10% duty on a $300 billion list of Chinese imports, instead of the proposed 25% rate. Trump is expected to meet with Xi on Saturday in Osaka, a conversation that could revive stalled negotiations between the world's two biggest economies or launch a much deeper, costlier trade war that would drag down global growth and roil financial markets. "It's absolutely possible. ... We have to get a good deal," Trump said in an interview with Fox Business Network. "It's possible that we'll make a deal, but I'm also very happy where we are now." Relations between Washington and Beijing have spiraled downward since talks collapsed in May, when the United States accused China of reneging on pledges to reform its economy. Trump said Chinese leaders "want to make a deal. They want to make a deal more than I do." US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are due to meet with Chinese Vice Premier Liu He ahead of the Trump-Xi meeting. US Commerce Secretary Wilbur Ross also was added to the U.S. delegation at the last minute at Trump's request, a senior U.S. official said at a Washington event where Ross had been scheduled to speak. Some Chinese officials who were not previously part of China's delegation were also applying for Japanese visas, an industry source briefed on the matter said, adding that this was a possible sign of momentum for the Trump-Xi meeting. Shortly after Trump returns from the Osaka summit, he will be in a position to impose a 25% tariff on $300 billion worth of Chinese consumer goods from cellphones, laptop and tablet computers to tube socks and baby carriers. A public comment period on the tariffs ends on July 2 following seven days of public hearings in which US companies large and small begged to be spared from the tariffs and warned of hardships in shifting production out of China.. "I would do additional tariffs, very substantial additional tariffs, if that doesn't work, if we don't make a deal," Trump said on Wednesday. But he added that he could consider lowering the duty to 10% from the proposed 25%. Administration officials have said that a 10 percent tariff is more easily offset by Chinese companies absorbing the added costs and by declines in the value of China's yuan currency. China and the United States have already imposed tariffs of up to 25% on hundreds of billions of dollars of each other's goods in a trade war that has lasted nearly a year. More than half of Chinese consumers have recently avoided U.S.-made products in support of their country, according to a new poll conducted by London-based advisory firm Brunswick. The poll of 1,000 Chinese and 1,000 American consumers showed that 68 percent of Chinese respondents said their opinions of American firms had become more negative, while 59 percent of Americans had an unfavorable opinion of China-based companies. Global trade tensions contributed to a 2.1% drop in the April US trade deficit to $50.8 billion as both imports and exports fell, the Commerce Department reported on Wednesday. But the April U.S. trade deficit with China jumped nearly 30% to $26.9 billion, while the trade gap with Mexico fell sharply. Fitch Ratings on Wednesday forecast that imposing a 25% tariff on the $300 billion in Chinese goods would chop 0.4 percent from world economic output. The International Monetary Fund has forecast a 0.5 percent reduction, equivalent to erasing South Africa's economy. Trump said China knows what the United States needs for a trade deal, and pushed for China to return to the negotiating table with the same concessions they had made before talks abruptly ended in May. The two sides could agree not to impose new tariffs as a goodwill gesture to get negotiations going, a US official said on Tuesday. 'Drive by tariffs' Trump has bipartisan support on taking a tough stance on China, although not for his use of tariffs as a tool to exert pressure on Beijing. A senior Democrat said on Wednesday he hoped the standoff with China would result in lasting changes. "We’ve gone this far - we ought to be working to try and have some of the structural changes, some of the advantages, some of the (intellectual property) protections, and China living up to its obligations under the (World Trade Organization)," said US Representative Earl Blumenauer. Blumenauer, who chairs the House of Representatives' Ways and Means trade subcommittee, said he disagreed with what he called Trump's "drive-by tariffs" and hoped the president would not accept a deal that simply involved selling more goods to China rather than changing bilateral terms of trade. Trump said if Washington was unable to reach a deal, his plan was to reduce business with China. Asked about companies relocating production from China to Vietnam, he said Vietnam treated the United States even worse than China. The United States is cracking down on companies that have used countries such as Vietnam and Cambodia as staging posts to ship goods from China to the United States without paying tariffs.

Trump says trade deal 'possible' with China's Xi, tariffs could be lower

US President Donald Trump set the tone Thursday for what promises to be a stormy <a href="https://www.wionews.com/india-news/indias-tariffs-are-in-line-with-world-trade-organisation-rules-says-govt-sources-after-trumps-high-tariffs-charge-230762">G20 summit </a>by lashing out at friends and foes alike over trade tariffs and foreign policy.

The long-running US-China trade war looked set to dominate the two-day meeting of world leaders in Osaka from Friday but clashes also loomed over climate and a series of hotspots ranging from North Korea to Iran.

On board Air Force One en route to Japan, Trump fired off a characteristically bullish tweet, chiding long-standing ally India for "unacceptable" tariffs on American goods.

"India, for years having put very high Tariffs against the United States, just recently increased the Tariffs even further. This is unacceptable and the Tariffs must be withdrawn," tweeted Trump.

The US president had earlier taken aim at China, saying Beijing wanted to do a deal because the world's <a href="https://www.wionews.com/world/trump-xi-trade-meeting-set-for-saturday-morning-in-osaka-white-house-230701">number-two economy</a> was "going down the tubes".

Furious at what he sees as an unfair advantage in the trading system, Trump has already hit Beijing with $200 billion in levies on Chinese imports and appeared to threaten more.

"You have another $325 billion that I haven't taxed yet -- it's ripe for taxing, for putting tariffs on," he said in an interview with Fox Business Network.

Chinese President Xi Jinping touched down in Osaka several hours before Trump in driving rain as a potential typhoon edges towards Japan. The two leaders are expected to meet Saturday.

Barely pulling its punches, Chinese state-run news agency Xinhua said a "certain country in the G20 resorts to such tactics as raising tariffs and threatening trade wars to make it's trading partners knuckle under to unreasonable demands".

Such "unilateral bullying" could have "potentially devastating consequences for global prosperity," Xinhua said in an editorial.

Most experts say a formal deal is unlikely at the summit due to a lack of time to prepare the complex issues involved and believe a ceasefire and commitment to keep talking is the most likely outcome.

"I would be very, very surprised if they could work out all of these complicated disagreements in the next few days," said David Dollar, a China expert at the Washington-based Brookings Institution.

"What I'm looking for is whether there's some kind of mini-deal and the most important aspect of that would be the US agreeing to hold off on the next round of tariffs," added Dollar.

"I think if Xi Jinping and President Trump have some negotiations... that will have a very positive impact on the world economy," Naoyuki&nbsp;Yoshino, head of the Asian Development Bank Institute, told.

'Never seeks war'&nbsp;

While US-China trade is likely to dominate the meeting, world leaders are also facing a perfect storm of geopolitical hotspots from Iran to North Korea and Venezuela.

Tensions with Tehran are at fever pitch after Trump pulled back from military action at the last minute in response to the downing of an unmanned US drone.

Before leaving for the G20, Trump said he did not seek conflict with the long-time US foe but warned it "wouldn't last very long" if war did break out.

Iran will be one of several topics when Trump meets his Russian counterpart Vladimir Putin on the sidelines of the meeting, along with arms control, the crisis in Venezuela, and Ukraine.

"I'll have a very good conversation with him," Trump told reporters at the White House. "What I say to him is none of your business."

Sony television&nbsp;

Hosts Japan have desperately tried to steer attention away from the Trump show and on to the formal aspects of their G20 agenda, including the challenges posed by ageing populations and climate change.

"Confrontation tends to attract attention... but Japan, as the chair, hopes to find common ground rather than differences in opinions," said Prime Minister Shinzo Abe as he left Tokyo for Osaka.

But tensions over the final statement on climate change are likely to burst into the open, with a German source saying it was "particularly difficult this year" to reach an agreement.

EU Council President Donald Tusk summed up the pre-meeting mood by predicting "a difficult summit" in talks with Abe, according to a Japanese government source.

And Trump appeared in no mood for compromise, hitting out at traditional allies one-by-one, even his hosts.

He described Vietnam as the "single worst abuser" on trade, lashed Germany as "delinquent" on funding contributions to NATO, and mocked Japan, which has been under a US military umbrella since World War II.

"If Japan is attacked, we will fight World War III. We will go in and protect them with our lives and with our treasure," he said. "But if we're attacked, Japan doesn't have to help us. They can watch it on a Sony television."

US President Donald Trump set the tone Thursday for what promises to be a stormy G20 summit by lashing out at friends and foes alike over trade tariffs and foreign policy.

US President Donald Trump set the tone Thursday for what promises to be a stormy G20 summit by lashing out at friends and foes alike over trade tariffs and foreign policy. The long-running US-China trade war looked set to dominate the two-day meeting of world leaders in Osaka from Friday but clashes also loomed over climate and a series of hotspots ranging from North Korea to Iran. On board Air Force One en route to Japan, Trump fired off a characteristically bullish tweet, chiding long-standing ally India for "unacceptable" tariffs on American goods. "India, for years having put very high Tariffs against the United States, just recently increased the Tariffs even further. This is unacceptable and the Tariffs must be withdrawn," tweeted Trump. The US president had earlier taken aim at China, saying Beijing wanted to do a deal because the world's number-two economy was "going down the tubes". Furious at what he sees as an unfair advantage in the trading system, Trump has already hit Beijing with $200 billion in levies on Chinese imports and appeared to threaten more. "You have another $325 billion that I haven't taxed yet -- it's ripe for taxing, for putting tariffs on," he said in an interview with Fox Business Network. Chinese President Xi Jinping touched down in Osaka several hours before Trump in driving rain as a potential typhoon edges towards Japan. The two leaders are expected to meet Saturday. Barely pulling its punches, Chinese state-run news agency Xinhua said a "certain country in the G20 resorts to such tactics as raising tariffs and threatening trade wars to make it's trading partners knuckle under to unreasonable demands". Such "unilateral bullying" could have "potentially devastating consequences for global prosperity," Xinhua said in an editorial. Most experts say a formal deal is unlikely at the summit due to a lack of time to prepare the complex issues involved and believe a ceasefire and commitment to keep talking is the most likely outcome. "I would be very, very surprised if they could work out all of these complicated disagreements in the next few days," said David Dollar, a China expert at the Washington-based Brookings Institution. "What I'm looking for is whether there's some kind of mini-deal and the most important aspect of that would be the US agreeing to hold off on the next round of tariffs," added Dollar. "I think if Xi Jinping and President Trump have some negotiations... that will have a very positive impact on the world economy," Naoyuki Yoshino, head of the Asian Development Bank Institute, told. 'Never seeks war' While US-China trade is likely to dominate the meeting, world leaders are also facing a perfect storm of geopolitical hotspots from Iran to North Korea and Venezuela. Tensions with Tehran are at fever pitch after Trump pulled back from military action at the last minute in response to the downing of an unmanned US drone. Before leaving for the G20, Trump said he did not seek conflict with the long-time US foe but warned it "wouldn't last very long" if war did break out. Iran will be one of several topics when Trump meets his Russian counterpart Vladimir Putin on the sidelines of the meeting, along with arms control, the crisis in Venezuela, and Ukraine. "I'll have a very good conversation with him," Trump told reporters at the White House. "What I say to him is none of your business." Sony television Hosts Japan have desperately tried to steer attention away from the Trump show and on to the formal aspects of their G20 agenda, including the challenges posed by ageing populations and climate change. "Confrontation tends to attract attention... but Japan, as the chair, hopes to find common ground rather than differences in opinions," said Prime Minister Shinzo Abe as he left Tokyo for Osaka. But tensions over the final statement on climate change are likely to burst into the open, with a German source saying it was "particularly difficult this year" to reach an agreement. EU Council President Donald Tusk summed up the pre-meeting mood by predicting "a difficult summit" in talks with Abe, according to a Japanese government source. And Trump appeared in no mood for compromise, hitting out at traditional allies one-by-one, even his hosts. He described Vietnam as the "single worst abuser" on trade, lashed Germany as "delinquent" on funding contributions to NATO, and mocked Japan, which has been under a US military umbrella since World War II. "If Japan is attacked, we will fight World War III. We will go in and protect them with our lives and with our treasure," he said. "But if we're attacked, Japan doesn't have to help us. They can watch it on a Sony television."

Feisty US President Donald Trump sets tone ahead of G20 Summit in Japan's Osaka

The United States hopes to re-launch trade talks with China after <a href="https://www.wionews.com/world/us-china-trade-negotiators-hold-talks-ahead-of-xi-trump-meeting-report-230147">President Donald Trump and President Xi Jinping</a> meet in Japan on Saturday but Washington will not accept any conditions on tariffs, a senior administration official said on Tuesday.

The two sides could agree not to impose new tariffs as a goodwill gesture to get negotiations going, the official said, but it was unclear if that would happen.

The United States was not willing to come to the Xi meeting with concessions, said the official, who spoke on the condition of anonymity.

The remarks set up what could prove to be a tricky meeting between Trump and Xi, who will sit down together at the Group of 20 summit meeting in Osaka, the first time they have done so since trade talks between the world's two largest economies broke down in May.

Chinese Vice Premier Liu He, who has led trade talks for Beijing, spoke on the phone with his counterparts, US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin on Monday, according to China's Ministry of Commerce. The three men are helping to pave the way for talks between the leaders later this week.

Expectations for that meeting so far appear to be low, with the best-case scenario a resumption of official talks that could ease fears in financial markets that the already long trade dispute would continue indefinitely.

China said on Monday that both sides should make compromises in the trade talks and that a trade deal has to be beneficial for both countries.

Trump advisers have said no broad trade deal is expected to be made at the meeting but they hope to create a path forward for talks. Once negotiations resume, they could take months or even years to complete, the senior Trump administration official said.

Washington has imposed 25% tariffs on $250 billion of Chinese goods, ranging from semiconductors to furniture, that is imported to the United States, as part of the trade war.

Trump has threatened to put tariffs on $325 billion more of goods, covering nearly all the remaining Chinese imports into the United States, including consumer products such as cellphones, computers and clothing.

A resumption of negotiations could put that threat on hold, at least for now. But neither side has shown a great appetite for changing positions, despite a willingness to meet.

"I think if they go with the tariffs, the trade talks are dead. Period," said one person familiar with the talks.

The United States has made clear it wants China to go back to the position it held in a draft trade agreement that was nearly completed before Beijing balked at some of its terms, particularly requirements to change its laws on some issues.

Beijing wants the United States to lift tariffs, while Washington wants China to change a series of practices including on intellectual property and requirements that US companies share their technology with Chinese companies in order to do business there.

Taoran Notes, an influential account on Chinese messaging app WeChat published by China's Economic Daily, said in a post late on Tuesday that "certain people" in the United States did not understand China's determination to uphold its position, and had "illusions" about forcing China to submit.&nbsp;

“If the US side doesn’t change its thinking, doesn’t change its methods, then all that will happen on the China-US trade issue is that an 'exchange of views and maintenance of communication’ will persist, and there won’t be more substantive progress,” the author wrote.

Pressure building

The president has spoken optimistically about the chances of a deal. The administration official said rounds of meetings between top trade officials from both countries likely would begin again after the G20 summit.

He noted that although the vice premier still led China's trade delegation, new names had been added to the list who could be hard-liners.

The official said Trump and Xi were unlikely to get into the fine details of the draft trade pact, although the case of Chinese tech giant Huawei Technologies Co may come up during talks.

Pressure on Huawei, which the US government has labelled a security threat, has increased in recent days.

About a dozen rural US telecom carriers that depend on Huawei for network gear are in discussions with its biggest rivals, Ericsson and Nokia, to replace their Chinese equipment, sources familiar with the matter said.

And the US-based research arm of Huawei - Futurewei Technologies Inc - has moved to separate its operations from its corporate parent since the US government in May put Huawei on a trade blacklist, according to two people familiar with the matter.

Trump has indicated a willingness to include the Huawei issue in a trade deal, despite the national security implications cited by his advisers about the company.

Meanwhile, US parcel delivery firm FedEx Corp on Monday sued the US government, saying it should not be held liable if it inadvertently shipped products that violated a Trump administration ban on exports to some Chinese companies.

FedEx reignited Chinese ire over its business practices when a package containing a Huawei phone sent to the United States was returned last week to its sender in Britain, in what FedEx said was an "operational error."

The United States hopes to re-launch trade talks with China after President Donald Trump and President Xi Jinping meet in Japan on Saturday but Washington will not accept any conditions on tariffs, a senior administration official said on Tuesday.

The United States hopes to re-launch trade talks with China after President Donald Trump and President Xi Jinping meet in Japan on Saturday but Washington will not accept any conditions on tariffs, a senior administration official said on Tuesday. The two sides could agree not to impose new tariffs as a goodwill gesture to get negotiations going, the official said, but it was unclear if that would happen. The United States was not willing to come to the Xi meeting with concessions, said the official, who spoke on the condition of anonymity. The remarks set up what could prove to be a tricky meeting between Trump and Xi, who will sit down together at the Group of 20 summit meeting in Osaka, the first time they have done so since trade talks between the world's two largest economies broke down in May. Chinese Vice Premier Liu He, who has led trade talks for Beijing, spoke on the phone with his counterparts, US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin on Monday, according to China's Ministry of Commerce. The three men are helping to pave the way for talks between the leaders later this week. Expectations for that meeting so far appear to be low, with the best-case scenario a resumption of official talks that could ease fears in financial markets that the already long trade dispute would continue indefinitely. China said on Monday that both sides should make compromises in the trade talks and that a trade deal has to be beneficial for both countries. Trump advisers have said no broad trade deal is expected to be made at the meeting but they hope to create a path forward for talks. Once negotiations resume, they could take months or even years to complete, the senior Trump administration official said. Washington has imposed 25% tariffs on $250 billion of Chinese goods, ranging from semiconductors to furniture, that is imported to the United States, as part of the trade war. Trump has threatened to put tariffs on $325 billion more of goods, covering nearly all the remaining Chinese imports into the United States, including consumer products such as cellphones, computers and clothing. A resumption of negotiations could put that threat on hold, at least for now. But neither side has shown a great appetite for changing positions, despite a willingness to meet. "I think if they go with the tariffs, the trade talks are dead. Period," said one person familiar with the talks. The United States has made clear it wants China to go back to the position it held in a draft trade agreement that was nearly completed before Beijing balked at some of its terms, particularly requirements to change its laws on some issues. Beijing wants the United States to lift tariffs, while Washington wants China to change a series of practices including on intellectual property and requirements that US companies share their technology with Chinese companies in order to do business there. Taoran Notes, an influential account on Chinese messaging app WeChat published by China's Economic Daily, said in a post late on Tuesday that "certain people" in the United States did not understand China's determination to uphold its position, and had "illusions" about forcing China to submit. “If the US side doesn’t change its thinking, doesn’t change its methods, then all that will happen on the China-US trade issue is that an 'exchange of views and maintenance of communication’ will persist, and there won’t be more substantive progress,” the author wrote. Pressure building The president has spoken optimistically about the chances of a deal. The administration official said rounds of meetings between top trade officials from both countries likely would begin again after the G20 summit. He noted that although the vice premier still led China's trade delegation, new names had been added to the list who could be hard-liners. The official said Trump and Xi were unlikely to get into the fine details of the draft trade pact, although the case of Chinese tech giant Huawei Technologies Co may come up during talks. Pressure on Huawei, which the US government has labelled a security threat, has increased in recent days. About a dozen rural US telecom carriers that depend on Huawei for network gear are in discussions with its biggest rivals, Ericsson and Nokia, to replace their Chinese equipment, sources familiar with the matter said. And the US-based research arm of Huawei - Futurewei Technologies Inc - has moved to separate its operations from its corporate parent since the US government in May put Huawei on a trade blacklist, according to two people familiar with the matter. Trump has indicated a willingness to include the Huawei issue in a trade deal, despite the national security implications cited by his advisers about the company. Meanwhile, US parcel delivery firm FedEx Corp on Monday sued the US government, saying it should not be held liable if it inadvertently shipped products that violated a Trump administration ban on exports to some Chinese companies. FedEx reignited Chinese ire over its business practices when a package containing a Huawei phone sent to the United States was returned last week to its sender in Britain, in what FedEx said was an "operational error."

US hopes to re-launch China trade talks, will not accept conditions on tariffs

The US Commerce Department blacklisted five Chinese tech entities Friday in a new move against Beijing's supercomputing industry likely to raise tensions ahead of a meeting between President Trump and Xi Jinping next week.

The notice targets Sugon -- a prominent Chinese supercomputer manufacturer -- along with three of its microchip subsidiaries and a computing institute owned by the People's Liberation Army.

All of the entities will be effectively barred from obtaining US technology after the government determined they were "acting contrary to the national security or foreign policy interests of the United States."

Trade tensions between the world's top two economies have spilled over into the tech sector in recent months, with Trump's administration moving to essentially ban Chinese tech firm <a href="https://www.wionews.com/world/huawei-phone-sales-plunge-cutbacks-planned-as-us-pressure-bites-227979">Huawei</a> from the huge US market on security grounds.

In May, it added Huawei to an "entity list" of companies barred from receiving US-made components without permission from Washington, though the company was granted a 90-day reprieve.

Facebook and Google have since both announced they will move to cut off Huawei in order to comply with the US sanctions, further isolating the Chinese tech giant.

Beijing has responded with threats to release its own blacklist of "unreliable" foreign companies and individuals that appears aimed at pressuring foreign companies to maintain commercial relations with Huawei.

Earlier this month, Beijing summoned executives from American firms Dell and Microsoft and South Korea's Samsung, among others, to warn them that any moves to ramp down their businesses in China may lead to retaliation, The New York Times reported.

Trump and his Chinese counterpart Xi are set to meet next week on the sidelines of the G20 summit in Japan.

The US Commerce Department blacklisted five Chinese tech entities Friday in a new move against Beijing's supercomputing industry likely to raise tensions ahead of a meeting between President Trump and Xi Jinping next week.

The US Commerce Department blacklisted five Chinese tech entities Friday in a new move against Beijing's supercomputing industry likely to raise tensions ahead of a meeting between President Trump and Xi Jinping next week. The notice targets Sugon -- a prominent Chinese supercomputer manufacturer -- along with three of its microchip subsidiaries and a computing institute owned by the People's Liberation Army. All of the entities will be effectively barred from obtaining US technology after the government determined they were "acting contrary to the national security or foreign policy interests of the United States." Trade tensions between the world's top two economies have spilled over into the tech sector in recent months, with Trump's administration moving to essentially ban Chinese tech firm Huawei from the huge US market on security grounds. In May, it added Huawei to an "entity list" of companies barred from receiving US-made components without permission from Washington, though the company was granted a 90-day reprieve. Facebook and Google have since both announced they will move to cut off Huawei in order to comply with the US sanctions, further isolating the Chinese tech giant. Beijing has responded with threats to release its own blacklist of "unreliable" foreign companies and individuals that appears aimed at pressuring foreign companies to maintain commercial relations with Huawei. Earlier this month, Beijing summoned executives from American firms Dell and Microsoft and South Korea's Samsung, among others, to warn them that any moves to ramp down their businesses in China may lead to retaliation, The New York Times reported. Trump and his Chinese counterpart Xi are set to meet next week on the sidelines of the G20 summit in Japan.

US blocks more Chinese tech firms on national security concerns

United States President Donald Trump is obsessed with trade tariffs. He misses no opportunity to upbraid China, India, Mexico and even the European Union (EU) on the high tariffs they impose on US products. &nbsp;

He is especially incensed by India’s 50 per cent import duty on Harley Davidson motorcycles, which have an infinitesimal market share in India. Yet for Trump, it is a symbol of how other countries “rip off America”, as he said in a recent television interview. Trump has used tariff threats to bully Mexico into sending 6,000 Mexican troops to stop refugees fleeing Central American countries like El Salvador and Honduras before they reach the US-Mexico border. &nbsp;

Trump has, meanwhile, held out a threat to slap 25 per cent tariffs on Chinese exports to the US valued at $300 billion in addition to the tariffs already in place on $250 billion worth of Chinese exports. Trump is expected to meet Chinese President Xi Jinping at the G20 Summit in Osaka, Japan, on June 28-29 to thrash out the issues in the escalating US-China trade war. &nbsp;

Where does India fit in? India-US trade is a fraction of China-US trade. China’s trade surplus with the US that sends Trump into near-delirium was $419.2 billion in 2018. India’s trade surplus with the US in 2018 was a relatively puny $24.2 billion. &nbsp;

“Tariffs are a beautiful thing,” Trump told CNBC’s Squawk Box show on June 10, 2019. But so far, the tariffs Trump has imposed on China aren’t working. Latest data shows China’s trade surplus with the US trade climbed by $2.1 billion to $29.2 billion for the month of April 2019.

At the G20 summit, Prime Minister Narendra Modi is scheduled to have a short bilateral meeting with Trump. Trade, technology and defence will dominate the conversation. Trump wants India to cut import duties on a swathe of goods, including medical stents whose suppliers have a strong lobby in the US. &nbsp;

Trump will apply additional pressure on Modi to stop India buying Russia’s S-400 anti-missile system. The US has already told NATO ally Turkey, which is also buying the S-400, that Washington will no longer support the advanced F-35 fighter jet programme in Turkey. &nbsp;

Modi though has several aces up his sleeve and must tackle Trump’s tactics with a few of his own. Strategically, the US needs India to counter China’s emergence as the world’s pre-eminent superpower over the next two decades. India is the only country with a large economy and military that can help Washington contain China in the Indo-Pacific. &nbsp;

As important as strategy is psychology. Trump is a megalomaniac. He relishes praise. But he also respects strong leaders. One of the reasons Trump constantly praises Xi Jinping whilst decrying China is the strongman image the Chinese leader projects. The last thing Modi should, therefore, do at the G20 summit in Osaka next week is fawn over Trump in the hope that his administration will soften its stand over trade tariffs and the S-400. Far better to adopt Xi’s playbook with Trump: be friendly, but firm. Xi hasn’t conceded an inch to Trump on trade or technology but has kept the dialogue going. By slapping tariffs last week on US exports covering 28 items, India has made a good beginning. &nbsp;

India’s consumer market is the world’s second largest. India also has the second highest percentage of Internet users (12 per cent) in the world, behind China (21 per cent) but ahead of the US (8 per cent). Washington does have legitimate complaints on India’s restrictive laws on e-commerce firms. These and other trade issues will need to be sorted out by the new team in the commerce and finance ministries.&nbsp;

As commerce and industry minister, Piyush Goyal is well suited to negotiate knotty trade disputes with the US. The MoS in the commerce ministry, Hardip Singh Puri, is another experienced negotiator, having spent several years as India’s permanent representative at the United Nations in New York. &nbsp;

Finance Minister Nirmala Sitharaman’s stint as defence minister will prove useful while negotiating the difficult terrain over India’s commitment to buy the S-400. Advance payment has already been made to Russia and cancelling the contract is neither feasible nor desirable. India needs to maintain its links with Russian defence contractors to avoid over-dependence on American military hardware. &nbsp;

India’s trump card is the fact that both the US and China need it in their corner. Washington knows that a China-Russia axis can pose a threat to the Western alliance. With the European Union sclerotic and Britain enervated by Brexit, the US has few allies apart from India with both large economies and militaries. &nbsp;

China, for its part, needs to keep India onside as an antidote to the US bullying. The Wuhan spirit and Xi’s likely return trip to Modi’s constituency Varanasi in October this year is aimed at keeping India in good humour and as far out of Washington’s orbit of influence as possible. &nbsp;

Modi will this have to play his cards deftly in Osaka. It is likely to be another decade before India’s economic and military heft reaches a level that makes it part of an emerging Isosceles triangle with the US and China. Till then, stay flexible, but on core issues, resolute as Trump lumbers through the G20 summit in Japan next week.

(This article was originally published on The DNA. Read the <a href="https://www.dnaindia.com/analysis/column-dealing-with-donald-trump-2762858">original article)</a>

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)&nbsp;

United States President Donald Trump is obsessed with trade tariffs. He misses no opportunity to upbraid China, India, Mexico and even the European Union (EU) on the high tariffs they impose on US products.

United States President Donald Trump is obsessed with trade tariffs. He misses no opportunity to upbraid China, India, Mexico and even the European Union (EU) on the high tariffs they impose on US products. He is especially incensed by India’s 50 per cent import duty on Harley Davidson motorcycles, which have an infinitesimal market share in India. Yet for Trump, it is a symbol of how other countries “rip off America”, as he said in a recent television interview. Trump has used tariff threats to bully Mexico into sending 6,000 Mexican troops to stop refugees fleeing Central American countries like El Salvador and Honduras before they reach the US-Mexico border. Trump has, meanwhile, held out a threat to slap 25 per cent tariffs on Chinese exports to the US valued at $300 billion in addition to the tariffs already in place on $250 billion worth of Chinese exports. Trump is expected to meet Chinese President Xi Jinping at the G20 Summit in Osaka, Japan, on June 28-29 to thrash out the issues in the escalating US-China trade war. Where does India fit in? India-US trade is a fraction of China-US trade. China’s trade surplus with the US that sends Trump into near-delirium was $419.2 billion in 2018. India’s trade surplus with the US in 2018 was a relatively puny $24.2 billion. “Tariffs are a beautiful thing,” Trump told CNBC’s Squawk Box show on June 10, 2019. But so far, the tariffs Trump has imposed on China aren’t working. Latest data shows China’s trade surplus with the US trade climbed by $2.1 billion to $29.2 billion for the month of April 2019. At the G20 summit, Prime Minister Narendra Modi is scheduled to have a short bilateral meeting with Trump. Trade, technology and defence will dominate the conversation. Trump wants India to cut import duties on a swathe of goods, including medical stents whose suppliers have a strong lobby in the US. Trump will apply additional pressure on Modi to stop India buying Russia’s S-400 anti-missile system. The US has already told NATO ally Turkey, which is also buying the S-400, that Washington will no longer support the advanced F-35 fighter jet programme in Turkey. Modi though has several aces up his sleeve and must tackle Trump’s tactics with a few of his own. Strategically, the US needs India to counter China’s emergence as the world’s pre-eminent superpower over the next two decades. India is the only country with a large economy and military that can help Washington contain China in the Indo-Pacific. As important as strategy is psychology. Trump is a megalomaniac. He relishes praise. But he also respects strong leaders. One of the reasons Trump constantly praises Xi Jinping whilst decrying China is the strongman image the Chinese leader projects. The last thing Modi should, therefore, do at the G20 summit in Osaka next week is fawn over Trump in the hope that his administration will soften its stand over trade tariffs and the S-400. Far better to adopt Xi’s playbook with Trump: be friendly, but firm. Xi hasn’t conceded an inch to Trump on trade or technology but has kept the dialogue going. By slapping tariffs last week on US exports covering 28 items, India has made a good beginning. India’s consumer market is the world’s second largest. India also has the second highest percentage of Internet users (12 per cent) in the world, behind China (21 per cent) but ahead of the US (8 per cent). Washington does have legitimate complaints on India’s restrictive laws on e-commerce firms. These and other trade issues will need to be sorted out by the new team in the commerce and finance ministries. As commerce and industry minister, Piyush Goyal is well suited to negotiate knotty trade disputes with the US. The MoS in the commerce ministry, Hardip Singh Puri, is another experienced negotiator, having spent several years as India’s permanent representative at the United Nations in New York. Finance Minister Nirmala Sitharaman’s stint as defence minister will prove useful while negotiating the difficult terrain over India’s commitment to buy the S-400. Advance payment has already been made to Russia and cancelling the contract is neither feasible nor desirable. India needs to maintain its links with Russian defence contractors to avoid over-dependence on American military hardware. India’s trump card is the fact that both the US and China need it in their corner. Washington knows that a China-Russia axis can pose a threat to the Western alliance. With the European Union sclerotic and Britain enervated by Brexit, the US has few allies apart from India with both large economies and militaries. China, for its part, needs to keep India onside as an antidote to the US bullying. The Wuhan spirit and Xi’s likely return trip to Modi’s constituency Varanasi in October this year is aimed at keeping India in good humour and as far out of Washington’s orbit of influence as possible. Modi will this have to play his cards deftly in Osaka. It is likely to be another decade before India’s economic and military heft reaches a level that makes it part of an emerging Isosceles triangle with the US and China. Till then, stay flexible, but on core issues, resolute as Trump lumbers through the G20 summit in Japan next week. (This article was originally published on The DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

PM Narendra Modi must play his cards deftly when he meets Donald Trump at G20 Summit

Harley-Davidson Inc will partner with China's Qianjiang Motorcycle Co to build a new smaller motorcycle than its trademark "big hogs", making good on promises to move more production outside the United States that have angered President Donald Trump.

Trump last year threatened to impose<a href="https://www.wionews.com/world/modi-reduced-tariffs-on-harley-davidson-motorcycles-by-50-i-said-it-was-still-unacceptable-trump-226103"> higher taxes on Harley</a> after it made plans to move production for European customers overseas, part of a longer-term strategy for dealing with lower sales in the US and higher costs because of trade tariffs.

The partnership Harley outlined on Wednesday is aimed both at taking a bigger chunk of China's huge bike and moped market, while also fitting in with a plan to cut costs and source half of all sales outside the United States by 2027.

The new bike would have an engine displacement of 338 cubic centimetres, one of the smallest in the company's 116-year old history, and would be sold in China from the end of 2020.

Harley's existing range of motorcycles are generally far larger and come with high price tags and engine capacities of more than 601 cubic centimetres.

That has made the company a niche seller in Asia's big markets, where lightweight bikes and scooters dominate and left it struggling to win over consumers globally to replace a traditional US customer base which is ageing.

Harley declined to reveal a price range for the new motorbike, but Qianjiang said it would be "affordable" and Harley said it would be introduced elsewhere in Asia after the initial launch in China.

"The international motorcycle market is huge, but Harley-Davidson has not been able to penetrate it with large/expensive bikes," said Craig Kennison, an analyst with brokerage Baird.

"Our recent dealer survey work reinforces the need for Harley-Davidson to add more first-time riders. For many, affordability is an issue."

Harley's sales in China grew 27 per cent in 2018 compared to 2017, and the company has already boosted investment at its Thailand plant to serve that market and avoid additional import duty.

Harley said it had picked Qianjiang, owned by Chinese Volvo brand operator Geely, based on its experience developing upscale smaller motorcycles, supply base and knowledge of emerging markets.

The company said in 2018 that it planned to launch lightweight motorcycles in Asia and electric bikes globally. It expects to launch its first electric motorcycle without the traditional clutch and gear-shift controls later this year.

As part of a plan it calls "More Roads to Harley-Davidson", the company expects to spend $675 million-$825 million over the next four years, cutting costs and generating $5.9 billion-$6.4 billion in revenue in 2022.

Harley-Davidson Inc will partner with China's Qianjiang Motorcycle Co to build a new smaller motorcycle than its trademark "big hogs", making good on promises to move more production outside the United States that have angered President Donald Trump.

Harley-Davidson Inc will partner with China's Qianjiang Motorcycle Co to build a new smaller motorcycle than its trademark "big hogs", making good on promises to move more production outside the United States that have angered President Donald Trump. Trump last year threatened to impose higher taxes on Harley after it made plans to move production for European customers overseas, part of a longer-term strategy for dealing with lower sales in the US and higher costs because of trade tariffs. The partnership Harley outlined on Wednesday is aimed both at taking a bigger chunk of China's huge bike and moped market, while also fitting in with a plan to cut costs and source half of all sales outside the United States by 2027. The new bike would have an engine displacement of 338 cubic centimetres, one of the smallest in the company's 116-year old history, and would be sold in China from the end of 2020. Harley's existing range of motorcycles are generally far larger and come with high price tags and engine capacities of more than 601 cubic centimetres. That has made the company a niche seller in Asia's big markets, where lightweight bikes and scooters dominate and left it struggling to win over consumers globally to replace a traditional US customer base which is ageing. Harley declined to reveal a price range for the new motorbike, but Qianjiang said it would be "affordable" and Harley said it would be introduced elsewhere in Asia after the initial launch in China. "The international motorcycle market is huge, but Harley-Davidson has not been able to penetrate it with large/expensive bikes," said Craig Kennison, an analyst with brokerage Baird. "Our recent dealer survey work reinforces the need for Harley-Davidson to add more first-time riders. For many, affordability is an issue." Harley's sales in China grew 27 per cent in 2018 compared to 2017, and the company has already boosted investment at its Thailand plant to serve that market and avoid additional import duty. Harley said it had picked Qianjiang, owned by Chinese Volvo brand operator Geely, based on its experience developing upscale smaller motorcycles, supply base and knowledge of emerging markets. The company said in 2018 that it planned to launch lightweight motorcycles in Asia and electric bikes globally. It expects to launch its first electric motorcycle without the traditional clutch and gear-shift controls later this year. As part of a plan it calls "More Roads to Harley-Davidson", the company expects to spend $675 million-$825 million over the next four years, cutting costs and generating $5.9 billion-$6.4 billion in revenue in 2022.

Harley-Davidson strikes deal to build smaller bike in China

<a href="https://www.wionews.com/business-economy/oil-gains-amid-middle-east-tensions-us-china-trade-deal-hopes-228566">Oil prices</a> ticked down on Wednesday as data suggesting a smaller-than-expected fall in US crude inventories countered support from hopes for a US-China trade deal.

Brent crude futures were down 46 cents at $61.68 a barrel by 1042 GMT.

US West Texas Intermediate crude fell 3 cents to $53.87 a barrel. On Tuesday, it had recorded its biggest daily rise since early January.

After weeks of swelling, US <a href="https://www.wionews.com/business-economy/rupee-drops-18-paise-to-6946-vs-us-dollar-as-crude-oil-rebounds-225272">crude</a> stocks fell by 812,000 barrels last week to 482 million, industry group the American Petroleum Institute said on Tuesday, a smaller fall than the 1.1 million barrel drop analysts had expected.

PVM said a price rally had run out of steam "as concerns over bulging US oil stockpiles return to the fore."

Estimates on US crude stockpiles from the US Energy Information Administration are due on Wednesday.

US President Donald Trump offered some support, by saying preparations were starting for him to meet Chinese President Xi Jinping next week at the G20 summit in Osaka, Japan.

Talks between the United States and China broke down last month after Washington accused the Chinese of backing away from previously agreed commitments.

Interaction between the two sides has been limited since then. Trump has repeatedly threatened to slap more tariffs on Chinese goods.

European Central Bank President Mario Draghi also offered a boost, saying on Tuesday that the central bank would ease policy again if inflation failed to accelerate.

Elsewhere, tensions in the Middle East after last week's tanker attacks remain high. Fears of a confrontation between Iran and the United States have mounted since last Thursday's attacks. Washington blamed Tehran, which has denied any role.

Trump said he was prepared to take military action to stop Iran from having a nuclear bomb but left open whether he would approve the use of force to protect Gulf oil supplies.

The United States is deploying about 1,000 more troops to the Middle East, saying it was a defensive move in response to what Washington says is concerns about a threat from Iran.

Members of the Organization of the Petroleum Exporting Countries have agreed to meet on July 1, followed by a meeting with non-OPEC allies on July 2, after weeks of wrangling over dates.

OPEC and its allies will discuss whether to extend a deal on cutting 1.2 million barrels per day of production that runs out this month.

Oil prices ticked down on Wednesday as data suggesting a smaller-than-expected fall in US crude inventories countered support from hopes for a US-China trade deal.

Oil prices ticked down on Wednesday as data suggesting a smaller-than-expected fall in US crude inventories countered support from hopes for a US-China trade deal. Brent crude futures were down 46 cents at $61.68 a barrel by 1042 GMT. US West Texas Intermediate crude fell 3 cents to $53.87 a barrel. On Tuesday, it had recorded its biggest daily rise since early January. After weeks of swelling, US crude stocks fell by 812,000 barrels last week to 482 million, industry group the American Petroleum Institute said on Tuesday, a smaller fall than the 1.1 million barrel drop analysts had expected. PVM said a price rally had run out of steam "as concerns over bulging US oil stockpiles return to the fore." Estimates on US crude stockpiles from the US Energy Information Administration are due on Wednesday. US President Donald Trump offered some support, by saying preparations were starting for him to meet Chinese President Xi Jinping next week at the G20 summit in Osaka, Japan. Talks between the United States and China broke down last month after Washington accused the Chinese of backing away from previously agreed commitments. Interaction between the two sides has been limited since then. Trump has repeatedly threatened to slap more tariffs on Chinese goods. European Central Bank President Mario Draghi also offered a boost, saying on Tuesday that the central bank would ease policy again if inflation failed to accelerate. Elsewhere, tensions in the Middle East after last week's tanker attacks remain high. Fears of a confrontation between Iran and the United States have mounted since last Thursday's attacks. Washington blamed Tehran, which has denied any role. Trump said he was prepared to take military action to stop Iran from having a nuclear bomb but left open whether he would approve the use of force to protect Gulf oil supplies. The United States is deploying about 1,000 more troops to the Middle East, saying it was a defensive move in response to what Washington says is concerns about a threat from Iran. Members of the Organization of the Petroleum Exporting Countries have agreed to meet on July 1, followed by a meeting with non-OPEC allies on July 2, after weeks of wrangling over dates. OPEC and its allies will discuss whether to extend a deal on cutting 1.2 million barrels per day of production that runs out this month.

Oil inches down as inventory data counters trade deal hopes

<a href="https://www.wionews.com/photos/game-of-tech-apple-google-facebook-who-will-win-392">Apple</a> Inc has asked its major suppliers to assess the cost implications of moving 15%-30% of their production capacity from China to Southeast Asia as it prepares for a restructuring of its supply chain, according to a Nikkei Asian Review report on Wednesday.

<a href="https://www.wionews.com/business-economy/will-apples-roots-in-china-hold-fast-amid-political-storm-222619">Apple</a>'s request was a result of the extended <a href="https://www.wionews.com/world/explaining-the-us-china-trade-war-which-grabbed-spotlight-in-2018-185043">Sino-US trade dispute</a>, but a trade resolution will not lead to a change in the company's decision, Nikkei said, citing multiple sources.

The iPhone maker has decided the risks of depending heavily on manufacturing in China are too great and even rising, it said.

Key iPhone assemblers Foxconn, Pegatron Corp, Wistron Corp, major MacBook maker Quanta Computer Inc, iPad maker Compal Electronics Inc, and AirPods makers Inventec Corp, Luxshare-ICT and Goertek have been asked to evaluate options outside of China, Nikkei reported.

The countries being considered include Mexico, India, Vietnam, Indonesia and Malaysia. India and Vietnam are among the favourites for smartphones, Nikkei said, citing sources who did not want to be identified as the discussions are private.

Last week, Foxconn said it had enough capacity outside China to meet Apple's demand in the American market if the company needed to adjust its production lines, as US President Donald Trump threatened to slap further $300 billion tariffs on Chinese goods.

China is a key market for Apple as well as a major production center for its devices.

A group of more than 30 people from Apple's capital expense studies team have been negotiating production plans with suppliers and governments over monetary incentives that could be offered to lure Apple manufacturing, the report said.

A deadline has not been set for the suppliers to finalise their business proposals, Nikkei said, adding that it would take at least 18 months to begin production after choosing a location.

Apple and Foxconn did not immediately respond to a request for comment on the report.

Apple Inc has asked its major suppliers to assess the cost implications of moving 15%-30% of their production capacity from China to Southeast Asia as it prepares for a restructuring of its supply chain, according to a Nikkei Asian Review report on Wednesday.

Apple Inc has asked its major suppliers to assess the cost implications of moving 15%-30% of their production capacity from China to Southeast Asia as it prepares for a restructuring of its supply chain, according to a Nikkei Asian Review report on Wednesday. Apple's request was a result of the extended Sino-US trade dispute, but a trade resolution will not lead to a change in the company's decision, Nikkei said, citing multiple sources. The iPhone maker has decided the risks of depending heavily on manufacturing in China are too great and even rising, it said. Key iPhone assemblers Foxconn, Pegatron Corp, Wistron Corp, major MacBook maker Quanta Computer Inc, iPad maker Compal Electronics Inc, and AirPods makers Inventec Corp, Luxshare-ICT and Goertek have been asked to evaluate options outside of China, Nikkei reported. The countries being considered include Mexico, India, Vietnam, Indonesia and Malaysia. India and Vietnam are among the favourites for smartphones, Nikkei said, citing sources who did not want to be identified as the discussions are private. Last week, Foxconn said it had enough capacity outside China to meet Apple's demand in the American market if the company needed to adjust its production lines, as US President Donald Trump threatened to slap further $300 billion tariffs on Chinese goods. China is a key market for Apple as well as a major production center for its devices. A group of more than 30 people from Apple's capital expense studies team have been negotiating production plans with suppliers and governments over monetary incentives that could be offered to lure Apple manufacturing, the report said. A deadline has not been set for the suppliers to finalise their business proposals, Nikkei said, adding that it would take at least 18 months to begin production after choosing a location. Apple and Foxconn did not immediately respond to a request for comment on the report.

Apple explores moving 15-30% production from China; India, Vietnam to benefit: Report

Investor caution ahead of the Federal Reserve's interest rate meeting capped Asian stocks on Tuesday, while crude oil prices retreated as global growth worries overshadowed supply concerns stemming from recent Middle East tensions.

MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.05%.

Australian stocks added 0.1% while Japan's Nikkei dipped 0.05%.

The Fed, facing fresh demands by US President Donald Trump to cut interest rates, begins a two-day meeting later on Tuesday. The central bank is expected to leave borrowing costs unchanged this time but possibly lay the groundwork for a rate cut later this year.

Fresh hopes for looser US monetary policy have been a tonic for risk assets markets, which were buffeted last month by an escalation in the trade conflict between Washington and Beijing. The S&amp;P 500 has gained 5% this month after sliding in May on trade war fears.

Focus is now on how close the Fed could be to cutting interest rates amid the raging US-China trade war, signs of the economy losing steam and pressure by President Trump to ease policy.

"The FOMC (Federal Open Market Committee) meeting is the week's biggest event so there will be a degree of caution prevailing in the markets," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

"Expectations for a rate cut in July have increased significantly, so the markets could experience disappointment if the Fed does not send strong signals of impending easing."

US Treasury yields dipped on Monday after the New York Fed's "Empire" gauge of business growth in the state showed a fall this month to its weakest in more than 2-1/2-years, fanning rate cut expectations.

The dollar index against a basket of six major currencies stood little changed at 97.507 after pulling back from a two-week high on the decline in Treasury yields.

The pound traded at $1.2542 after retreating overnight to a six-month low of $1.2532 on Monday on concerns that arch-Brexiteer Boris Johnson will replace Theresa May as prime minister.

The euro was a shade higher at $1.1224 after spending the previous day confined to a narrow range.

US crude oil futures shed 0.08% to $51.89 per barrel after retreating 1.1% the previous day.

Oil prices had slipped on Monday as weak Chinese economic data released at the end of last week led to fears of lower global demand for the commodity.

Concerns over weakening demand overshadowed tensions in the Middle East, which remained high following last week's attacks on two oil tankers in the Gulf of Oman.

Investor caution ahead of the Federal Reserve's interest rate meeting capped Asian stocks on Tuesday, while crude oil prices retreated as global growth worries overshadowed supply concerns stemming from recent Middle East tensions.

Investor caution ahead of the Federal Reserve's interest rate meeting capped Asian stocks on Tuesday, while crude oil prices retreated as global growth worries overshadowed supply concerns stemming from recent Middle East tensions. MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.05%. Australian stocks added 0.1% while Japan's Nikkei dipped 0.05%. The Fed, facing fresh demands by US President Donald Trump to cut interest rates, begins a two-day meeting later on Tuesday. The central bank is expected to leave borrowing costs unchanged this time but possibly lay the groundwork for a rate cut later this year. Fresh hopes for looser US monetary policy have been a tonic for risk assets markets, which were buffeted last month by an escalation in the trade conflict between Washington and Beijing. The S&P 500 has gained 5% this month after sliding in May on trade war fears. Focus is now on how close the Fed could be to cutting interest rates amid the raging US-China trade war, signs of the economy losing steam and pressure by President Trump to ease policy. "The FOMC (Federal Open Market Committee) meeting is the week's biggest event so there will be a degree of caution prevailing in the markets," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management. "Expectations for a rate cut in July have increased significantly, so the markets could experience disappointment if the Fed does not send strong signals of impending easing." US Treasury yields dipped on Monday after the New York Fed's "Empire" gauge of business growth in the state showed a fall this month to its weakest in more than 2-1/2-years, fanning rate cut expectations. The dollar index against a basket of six major currencies stood little changed at 97.507 after pulling back from a two-week high on the decline in Treasury yields. The pound traded at $1.2542 after retreating overnight to a six-month low of $1.2532 on Monday on concerns that arch-Brexiteer Boris Johnson will replace Theresa May as prime minister. The euro was a shade higher at $1.1224 after spending the previous day confined to a narrow range. US crude oil futures shed 0.08% to $51.89 per barrel after retreating 1.1% the previous day. Oil prices had slipped on Monday as weak Chinese economic data released at the end of last week led to fears of lower global demand for the commodity. Concerns over weakening demand overshadowed tensions in the Middle East, which remained high following last week's attacks on two oil tankers in the Gulf of Oman.

Asia stocks capped ahead of Fed, oil on defensive

<a href="https://www.wionews.com/business-economy/oil-prices-fall-on-weak-demand-growth-rise-in-us-crude-stocks-226381">Oil&nbsp;prices&nbsp;fell</a> for a&nbsp;second&nbsp;day&nbsp;on Tuesday&nbsp;on signs that global economic growth is being hit by the <a href="https://www.wionews.com/business-economy/amid-us-china-trade-war-india-can-boost-exports-of-300-products-to-both-countries-report-227511">US-China trade war</a>, though losses were capped by Middle East tensions after last week's tanker attacks.

Brent crude futures were trading 42 cents down at $60.52 a barrel by 0932 GMT. US West Texas Intermediate crude futures lost 26 cents to $51.67.

The New York Federal Reserve on Monday&nbsp;said that its gauge of business growth in New York state posted a record fall this month to its weakest level in more than 2-1/2 years, suggesting an abrupt contraction in regional activity.

US business sentiment has sagged as trade tensions have escalated between China and the United States and on signs of softness in the labour market.

<a href="https://www.wionews.com/world/oil-prices-fall-on-surging-us-crude-stockpiles-economic-concerns-220779">Oil&nbsp;prices&nbsp;have fallen</a> by about 20% from April's 2019 highs, partly because of concerns over the US-China trade war and disappointing economic data.

US President Donald Trump and China's President Xi Jinping could meet at the G20 summit in Japan this month. Trump has said he would meet Xi at the event, though China has not confirmed the meeting.

Putting further pressure on&nbsp;oil, the US energy department on Monday&nbsp;said that shale&nbsp;oil&nbsp;output is expected to reach a record high in July.

Fears of a confrontation between Iran and the United States have mounted since last Thursday's&nbsp;oil&nbsp;tanker attacks, which Washington has blamed on Tehran. Iran has denied involvement.

"Oil&nbsp;prices&nbsp;appear unperturbed by the further escalation of the Iran crisis," said Commerzbank's Carsten Fritsch.

Iran on Monday&nbsp;said it would breach internationally agreed curbs on its stock of low-enriched uranium within 10&nbsp;days, adding that European nations still had time to save a landmark nuclear deal.

Acting US Defense Secretary Patrick Shanahan announced on Monday&nbsp;the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.

Saudi Arabian Energy Minister Khalid al-Falih on Monday&nbsp;said that countries need to cooperate on keeping shipping lanes open for&nbsp;oil&nbsp;and other energy supplies to ensure stable supplies.

He also said that Saudi exports and production are expected to remain at "about the same level" as the past few months.

Market participants are also awaiting a meeting between the Organisation of the Petroleum Exporting Countries and other producers including Russia, a group known as OPEC+, to decide whether to extend a production cut agreement that ends this month.

Oil prices fell for a second day on Tuesday on signs that global economic growth is being hit by the US-China trade war, though losses were capped by Middle East tensions after last week's tanker attacks.

Oil prices fell for a second day on Tuesday on signs that global economic growth is being hit by the US-China trade war, though losses were capped by Middle East tensions after last week's tanker attacks. Brent crude futures were trading 42 cents down at $60.52 a barrel by 0932 GMT. US West Texas Intermediate crude futures lost 26 cents to $51.67. The New York Federal Reserve on Monday said that its gauge of business growth in New York state posted a record fall this month to its weakest level in more than 2-1/2 years, suggesting an abrupt contraction in regional activity. US business sentiment has sagged as trade tensions have escalated between China and the United States and on signs of softness in the labour market. Oil prices have fallen by about 20% from April's 2019 highs, partly because of concerns over the US-China trade war and disappointing economic data. US President Donald Trump and China's President Xi Jinping could meet at the G20 summit in Japan this month. Trump has said he would meet Xi at the event, though China has not confirmed the meeting. Putting further pressure on oil, the US energy department on Monday said that shale oil output is expected to reach a record high in July. Fears of a confrontation between Iran and the United States have mounted since last Thursday's oil tanker attacks, which Washington has blamed on Tehran. Iran has denied involvement. "Oil prices appear unperturbed by the further escalation of the Iran crisis," said Commerzbank's Carsten Fritsch. Iran on Monday said it would breach internationally agreed curbs on its stock of low-enriched uranium within 10 days, adding that European nations still had time to save a landmark nuclear deal. Acting US Defense Secretary Patrick Shanahan announced on Monday the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran. Saudi Arabian Energy Minister Khalid al-Falih on Monday said that countries need to cooperate on keeping shipping lanes open for oil and other energy supplies to ensure stable supplies. He also said that Saudi exports and production are expected to remain at "about the same level" as the past few months. Market participants are also awaiting a meeting between the Organisation of the Petroleum Exporting Countries and other producers including Russia, a group known as OPEC+, to decide whether to extend a production cut agreement that ends this month.

Oil prices slip for second day on global growth fears

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