Export World Champion under Pressure

BERLIN (Own report) – With intense shuttle diplomacy, members of the German government are seeking to avert the impending US punitive tariffs on European goods and the loss of access to the important US market. Following Germany’s Finance Minster Olaf Scholz’s visit to the US capital yesterday, Chancellor Angela Merkel is expected in Washington on Friday. Already in the run up to these visits, Berlin seems ready to envisage a revival of the Transatlantic Trade and Investment Partnership (TTIP). This strategic decision is accompanied by a clear frontline position against China, as was resolutely demanded by the Trump administration. In addition, German-Russian business relations are increasingly under attack in Washington. At the same time, EU criticism of Germany’s unilateral trade policies is growing. Germany’s export oriented economy is particularly vulnerable to the protectionism that is gaining strength on a global scale. Berlin’s Beggar-thy-Neighbor-Policy could prove a strategic disadvantage under these new global economic conditions.

Now, a Trade War — Is a Shooting War Next?

(Shutterstock)

 

A popular thesis since the 1930s is that a natural progression exists from currency wars to trade wars to shooting wars. Both history and analysis support this thesis.

Currency wars do not exist all the time; they arise under certain conditions and persist until there is either systemic reform or systemic collapse. The conditions that give rise to currency wars are too much debt and too little growth.

In those circumstances, countries try to steal growth from trading partners by cheapening their currencies to promote exports and create export-related jobs.

China eyes global economic leadership as U.S. turns inward

In this photo taken Wednesday, Nov. 23, 2016, Kenyan laborers and a Chinese foreman work to finish the construction of an existing bridge that goes across a corner of Nairobi National Park in Nairobi, Kenya. A controversial Chinese-built railway project involving an even larger 6km bridge that would go all the way over the beloved protected area in Kenya’s capital has divided conservationists in this East African country. (Photo: Ben Curtis, AP)

 

This year, a 300-mile railway will begin slicing through Kenya, cutting travel time between the capital, Nairobi, and one of East Africa’s largest ports, Mombasa, from 12 to four hours and breeding hopes of an economic and tourism revival in the region.

The country’s most significant transportation project since its independence in 1963 is being built courtesy of China.  China Road and Bridge, a state-owned enterprise, leads construction of the $13.8 billion project, which is financed nearly 100% by the Export-Import Bank of China.

The railroad is one of a host of infrastructure projects China spearheads around the world in an ambitious quest to reinforce its emergence as the world’s next economic superpower while President Trump turns his back on globalization.

China Readies Itself for Global Trade War with U.S. and WTO

You see, when Beijing negotiated the terms that allowed China to accede to the WTO in 2001, the United States agreed to treat China as a “non-market economy” (NME) in antidumping cases.

At least for the next 15 years, after which China would then get a WTO status upgrade to “market economy.”

The U.S.’ New Trade War with China

China decried a decision by the U.S. Chamber of Commerce yesterday to impose steep duties on the country’s cold-rolled flat steel, which is primarily used for car manufacturing.

The United States imposed a new 522% fee on steel products, reported CNN. New China tariffs also include a 266% anti-dumping duty and a 256% anti-subsidy duty.

Atlas shrugged — and the U.S. economy is feeling the weight

Dimmer global outlook depressing U.S. growth as well

In normal times a steady pace of hiring and consumer spending would mean the economy is doing great. But these are not normal times.

American companies continue to hire workers at a rapid clip — more than 200,000 new jobs a month. All the people now working and earning paychecks helped to boost consumer spending in 2015 to the fastest rate in a decade.

That hasn’t translated into stronger U.S. growth, though. The economy expanded at a measly 1.4% rate in the 2015 fourth quarter and it could do even worse in the first three months of 2016.

Iran’s Rohani Heads to Italy, France to Boost Economic Ties

Iranian President Hassan Rohani flew to Italy on Monday at the start of his first official visit to Europe, looking to sign multi-billion dollar contracts to help modernize Iran’s economy after years of crippling financial sanctions.

Heading a 120-strong delegation of Iranian business leaders and ministers, Rohani will spend two days in Rome before flying to France on Wednesday, hoping to burnish Tehran’s international credentials at a time of turmoil across the Middle East.

China’s currency move will be a global hit, warns Goldman Sachs

Beijing sent tremors through global markets on Tuesday with the devaluation of the state-controlled yuan to pep up its struggling exporters, as well as announcing plans to allow market forces a bigger say in setting its value.

The move hit commodity and oil prices — crude had its worst week since January — amid worries China’s voracious appetite for raw materials will slacken.

Blackwater Founder Advising Chinese Firms On Risk In Africa

Blackwater founder and Navy SEAL Erik Prince is helping Chinese firms “take the drama out of Africa” by consulting on how they should do business on the continent, according to a report in FireDogLake.com.

Formed in 1997 to provide training support to military and law enforcement, Blackwater USA worked with SEAL and SWAT teams. The security firm won its first U.S. government contract after the bombing of the USS Cole off of the coast of Yemen in October 2000. Blackwater subsequently trained more than 100,000 sailors.