Sensex falls 356 pts amid United States-China trade tension

As the US decided to raise further tariffs on the Chinese goods, global markets took a beating on Friday.

The Sensex and Nifty along with other global markets traded with heavy losses after US President Donald Trump said: “The US will start, on September 1st, putting a small additional tariff of 10 per cent on the remaining 300 billion dollars of goods and products coming from China into our country.”

At 10.04 a.m., the Sensex was trading 356.43 points lower at 36,661.89. It opened at 36,920.11 lower from its previous close of 37,018.32.

The broader Nifty traded 111.25 points lower at 10,868.75.

The Indian markets are going through one of the worst patches ever. A mix of negative news since the budget has eroded massive wealth.

On Thursday, the hawkish comments from the US Federal Reserve had pushed the Nifty below the 11,000 mark.

Besides, the autos sales data and macro-economic data released earlier, has failed to cheer investors.



Lower trade deficit narrows India’s Q4 CAD to $4.6 bn

Lower trade deficit narrowed India’s current account deficit to $4.6 billion in Q4 of 2018-19.

The Reserve Bank of India’s data on India’s Balance of Payments (BoP) showed that CAD narrowed from $13 billion in Q4 of 2017-18 and $17.7 billion in the preceding quarter.

“The contraction of the CAD on a year-on-year (y-o-y) basis was primarily on account of a lower trade deficit at $35.2 billion as compared with $41.6 billion a year ago,” RBI said.

“Net services receipts increased by 5.8 per cent on a y-o-y basis mainly on the back of a rise in net earnings from telecommunications, computer and information services.”

However, remittances declined by 0.9 per cent to $17.9 billion from their level during a year ago period.

In the financial account, net foreign direct investment was stagnant at $6.4 billion in Q4 of 2018-19.

“Foreign portfolio investment recorded net inflow of $9.4 billion in Q4 of 2018-19 – as compared with $2.3 billion in Q4 a year ago – on account of net purchases in both debt and equity market,” the apex bank said.

According to the data, there was an accretion of $14.2 billion in foreign exchange reserves (on BoP basis) during the period under review as compared with $13.2 billion in Q4 of 2017-18.

As per the data, for the full-fiscal 2018-19, India’s CAD increased to 2.1 per cent of GDP in 2018-19 from 1.8 per cent in 2017-18 on the back of wider trade deficit.

“India’s trade deficit increased to $180.3 billion in 2018-19 from $160.0 billion in 2017-18… Net invisible receipts were higher in 2018-19 mainly due to increase in net services earnings and private transfer receipts,” RBI said.

“Net FDI inflows at $30.7 billion in 2018-19 were marginally higher than $30.3 billion in 2017-18. Portfolio investment recorded a net outflow of $2.4 billion in 2018-19 as against an inflow of $22.1 billion a year ago.”

In addition, the data showed that in 2018-19, there was a depletion of $3.3 billion of the foreign exchange reserves (on a BoP basis).




New Delhi, Piyush Goyal called for de-escalating trade tensions

Union Minister Piyush Goyal has called for de-escalating trade tensions and reviving confidence in the rules-based multilateral trading system.

“The slowdown in global trade and investment is of serious concern to all of us as it adversely affects economic growth, development and job creation. The ongoing trade tensions are affecting confidence of businesses around the world,” said Goyal, who holds the commerce and industry and railways portfolios.

He said India joins other nations in calling for de-escalating trade tensions and reviving confidence in the rules-based multilateral trading system which was created so painstakingly.

Goyal spoke at the two-day ‘G20 Ministerial meeting on Trade and Digital Economy’ from June 8 to 9 in Tsukuba city, Japan.

“India urges G20 to provide preferential market access to MSMEs in developing countries to be part of the Global supply chains,” he said in another intervention at the summit.

Over 50 trade and digital economy ministers met for the first time in G20’s history to discuss “how G20 economies can promote trade and investment and maximize benefits from the development of the digital economy and technologies to ensure sustainable growth of the global economy”.



New York, US dollar declines as trade fears linger

The US dollar declined on Friday as investors monitored global trade prospects and digested the manufacturing data.

The seasonally adjusted IHS Markit Flash US Manufacturing Purchasing Managers’ Index (PMI) registered 50.6 in May, down from 52.6 in April, marking the lowest level since September 2009, data from the research firm showed on Thursday.

Disappointing manufacturing data and lingering global trade tensions led to investors’ concerns over the world’s largest economy and its currency’s safe-haven status, the Xinhua news agency reported.

The dollar index, which measures the greenback against six major peers, was down 0.28 per cent at 97.5810 in late trading.

In late New York trading, the Euro was up to 1.1209 dollars from 1.1183 dollars in the previous session and the British pound increased to 1.2713 dollars from 1.2654 US dollars in the previous session. The Australian dollar increased to 0.6930 dollar from 0.6892 dollar.

The US dollar bought 109.33 Japanese Yen, lower than 109.47 Japanese Yen of the previous session. The US dollar was down to 1.0014 Swiss francs from 1.0027 Swiss francs, and it decreased to 1.3440 Canadian dollars from 1.3486 Canadian dollars.



Washington, Nike, Adidas urge Trump to end trade war

Some of the world’s biggest footwear firms are urging US President Donald Trump to end the trade war with China, warning of a “catastrophic” effect on consumers.

In a letter signed by 170 companies, including Nike and Adidas, they said the President’s decision to lift import tariffs to 25 per cent will disproportionately impact the working class, the BBC reported.

They also warn that higher levies threaten the future of some businesses.

“It is time to bring this trade war to an end,” the firms urged.

Trump lifted levies on $200 billion worth of Chinese imports into the US from 10 per cent to 25 per cent more than a week ago after Washington and Beijing failed to reach a deal on trade.

China retaliated by announcing plans to raise levies on $60 billion of the US imports from 1 June.

The footwear companies who signed the letter, including Clarks, Dr Martens and Converse, claim that while the average US tariff on footwear is 11.3 per cent, in some cases it can reach as high as 67.5 per cent.

“Adding a 25 per cent tax increase on top of these tariffs would mean some working American families could pay a nearly 100 per cent duty on their shoes,” the companies wrote.

“This is unfathomable.”

When he lifted tariffs earlier this month, Trump told companies that they could reduce costs by shifting production to the US.

However, the shoe-makers and retailers say that while they have been moving their sourcing away from China: “Footwear is a very capital-intensive industry, with years of planning required to make sourcing decisions, and companies cannot simply move factories to adjust to these changes.”

The US and China are set to meet again to discuss trade at the G20 summit in Japan next month.

In the meantime, however, the US has increased pressure on China by declaring a national emergency to protect US computer networks from “foreign adversaries”, affecting Huawei, the Chinese telecom giant.



Markets crash as US-China trade tension escalates

Mumbai, May 6  Indian markets in line with the Asian markets fell steeply over signs of escalating US-China trade tension on Monday.

On Sunday night, US President Donald Trump threatened to impose fresh trade tariffs worth $200 billion on Chinese goods in an attempt to force additional concessions. The benchmark Sensex fell up to 450 points.The Sensex of the BSE opened at 38,719.33 from its previous close at 38,963.26 on Friday.At 9.25 a.m., the Sensex traded at 38,578.53 lower by 384.73 points or 0.99 per cent.

The Nifty50 of the National Stock Exchange (NSE) opened at 11,605.80 after closing at 11,712.25 on Friday.The Nifty traded at 11,607.75 during the morning trade session, down 104.50 points and 0.89 per cent.

Trump’s threats came right ahead of a critical week of final negotiations between the two country to end the year-long tit-for-tat trade war which has roiled financial markets ever since it started.

He has already imposed tariffs on $250 billion worth of Chinese goods and is now threatening to tax nearly all of the products China exports to the US.



Dark Web has becomes huge market for weapons trade

As the debate over gun regulations rages globally, researchers now report that the Dark Web has become a big market for weapons trade.

Sixty-four per cent of the products advertised were handguns, 17 per cent semi-automatic long guns and fully automatic long guns 4 per cent, said the team from Michigan State University which crept into Tor, a Dark Web browser, to investigate how firearms are anonymously bought and sold around the world.

“We know so little about the distribution of firearms sold on the Dark Web that it’s kind of a black hole, similar to illicit pharmaceuticals and narcotics. We know people buy them online, but we don’t know to what extent,” said Thomas Holt, Professor of criminal justice and co-author of the research.

The research, published in the journal Deviant Behavior, revealed key insights on a trade that undercuts gun laws in the US as well as other countries around the world where regulations are tighter.

“What I found most surprising was that most of what we saw wasn’t rifles of military-grade weapons,” Holt said.

Instead of exotic or rare firearms, the researchers saw handguns – the kinds of weapons someone in the US could buy from stores or vendors with a license.

Holt and partners dug into shops, or single-owner websites hosted on Tor, using a web scraping tool to track vendors anonymously selling firearms, as well as to identity patterns of their operations.

The sellers preferred the use of bitcoin for payment.

“The sellers were very clear about how the transaction would go, which underscored the need for consistent secrecy. Some profile names indicated that they operated out of Europe, but there’s little else to tell about who these people are,” Holt informed.

While the Dark Web masks a user’s identity, location and any traces of persona, the findings revealed the need for further investigations, and potential growth and impact.



Indian, Pakistani armies trade fire on LoC in Poonch

Indian and Pakistani armies traded heavy fire on the Line of Control (LoC) on Wednesday in Jammu and Kashmir’s Poonch district, police said.

The firing exchanges started in Chakan Da Bagh area.

“Mortar shelling and small arms firing continued between the two sides,” a police officer said.

As two shells fired from Pakistan landed near the Chakan Da Bagh trade facilitation centre, its staff and others present there hurriedly took shelter in underground bunkers.

“No damage or casualty was caused due to the Pakistani shelling,” the officer said.

The Pakistani ceasefire violation occurred on a day the cross-LoC trade between the Indian and Pakistan administered parts of Jammu and Kashmir took place between Chakan Da Bagh and Rawalakot.



Trump announces plans to end $5.6 bn preferential trade programme for Ind

US President Donald Trump has announced that he was ending India’s $5.6 billion trade concessions under the Generalised System of Preferences (GSP) programme accusing New Delhi of not providing Washington “equitable and reasonable access” to its markets.

Trump, who is on a mission to expand marker access abroad and end trade deficits, made the announcement on Monday in a letter to House Speaker Nancy Pelosi and Vice President Mike Pence in his capacity as the Senate President.

The US Trade Representative’s Office (USTR) said that the preferences will end in 60 days after the notification to Congress and the Indian government.

Meanwhile, Trump said that he will continue to monitor if India is “providing equitable and reasonable access to its markets” and meet the GSP eligibility criteria.

India had opposed proposals to end the GSP saying that it would be “discriminatory, arbitrary” and hurt the country’s development.

India is the largest beneficiary of the GSP exporting goods worth $5.6 billion to the US under the programme. Congress establishes the conditions of eligibility for GSP, which include “providing the US with equitable and reasonable market access, protecting workers’ rights and combating child labour”.

Trump wrote in his letter: “I am taking this step because, after intensive engagement between the United States and the government of India, I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India.”

The USTR said: “India has implemented a wide array of trade barriers that create serious negative effects on United States commerce”, but did not mention the specifics in its statement.

“Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion”, it added.

The total India-US trade was $126.2 billion in 2017, with a $27.3 billion deficit for the US, according to the USTR. India’s total exports were worth $76.7 billion and the end to GSP affects only a small part of it limited to $5.6 billion.

At a hearing held by the USTR last June on withdrawing India’s GSP, the minister in charge of commerce at the Indian Embassy in Washington, Puneet Roy Kundal, said that withdrawing the GSP benefits “would be discriminatory, arbitrary, and detrimental to the development, finance and trade needs of India, which is a vast and diverse developing country with unique challenges”.

The primary aim of the GSP is to help developing countries, particularly in sectors where the benefits can reach the poor.

Trump also said that he was ending the GSP for Turkey because of its economic success and rising living standards that would no longer make it eligible for the programme that is meant to help developing countries.

The President has been on a warpath against what he said were high tariffs on US imports to India. While pushing for the Reciprocal Trade Act in January, he brought up India’s duty on American whiskey, which he said was 150 per cent and on Harley Davidson motorcycles that he asserted he had gotten reduced from 100 to 50 per cent.

The decision to end the GSP may not entirely be influenced by high tariffs imposed by India on US imports. The two countries have had differences over the restrictions placed on e-commerce by Amazon and on Walmart subsidiary Flipkart and on data housing by Visa and Mastercard.

The decision comes as the US is reported to be making headway in trade negotiations with China aimed mainly at cutting American trade deficits with a deal expected soon.

Ironically, a trade group warned that taking ending GSP for India could end up helping China.

The American Apparel and Footwear Association said in a written testimony that if GSP benefits are withdrawn for India as well as Indonesia and Thailand, “companies will have no choice but to return to sourcing from China”.

It pointed out that Trump has threatened to impose 10 per cent punitive duties on US travel goods imports from China and ending the GSP for India “means that not only will sourcing return from China, but American consumers will pay far higher prices for their travel goods”.

The US dairy industry was a strong advocate of ending the GSP for India citing its difficulties in exporting to India.

Shawna Morris, Vice President of the National Milk Producers Federation and the US Dairy Export Council, at the the June USTR hearing accused India of refusing to provide them equitable and reasonable access to its markets through “unscientific sanitary and phytosanitary requirements”.

These requirements by India were that the exports should not come from cows that have been given cannibalised feed that includes offal or other meat products.

Kundal countered that it was not an issue fo of market access but of “certification given the religious, cultural and moral sensitivities” and India provide unimpeded market access to dairy products from all countries that met the criteria.

Another opposition came from the medical sector based on price controls on medical devices imposed by India. Kundal said that these were necessitated by India’s need to provide affordable health care to its citizens.



Science & Technology

Huawei involved in stealing Apple trade secrets

Chinese tech giant Huawei has been involved in “a pattern of dubious tactics” to steal technology from its rivals, particularly Apple’s China-based suppliers, The Information has claimed.

While the theft of trade secrets is nothing new among technology firms, the new allegations against Huawei represent “a more brazen and elaborate system of seeking out secret information”, said the report on Monday.

According to the report, a Huawei engineer in charge of the smartwatch project tracked down a supplier that makes the heart rate sensor for Apple Watch that has approval from the US Food and Drug Administration (FDA).

The engineer arranged a meeting and questioned the supplier about the Apple Watch.

“The Huawei engineer attended the supplier meeting with four Huawei researchers in tow. The Huawei team spent the time pressing the supplier for details about the Apple Watch.

“They were trying their luck, but we wouldn’t tell them anything,” the supplier was quoted as saying.

According to the US Justice Department, Huawei is said to have a formal programme that rewards employees for stealing information, including bonuses that increase based on the confidential value of the information gathered.

The Department has filed a host of criminal charges, including bank fraud, obstruction of justice and theft of technology against Huawei and its detained Chief Financial Officer Meng Wanzhou. Both Huawei and Meng have denied the allegations.

A Huawei spokesperson replied to the report, saying that “In conducting research and development, Huawei employees must search and use publicly available information and respect third-party intellectual property per our business-conduct guidelines”.

Huawei also reportedly copied a component of the MacBook Pro. The company built a connector for its MateBook Pro that was just like the one used in Apple’s MacBook Pro from 2016.



Indian and Pakistani troops trade fire on Line of Control (LoC)

Indian and Pakistani armies on Monday traded fire on the Line of Control (LoC) in Jammu and Kashmir’s Poonch district.

Defence Ministry sources said the firing exchanges started around 10.30 a.m. after the Pakistanis resorted to unprovoked firing targeting Indian positions.

“Our troops retaliated strongly and effectively after the Pakistan Army used small arms and automatics to target Indian positions in Kerni and some other sectors,” an official said.

“Intermittent firing exchanges were going on between the two sides,” the official said.



Donald Trump won’t meet Xi before trade deal deadline

US President Donald Trump said that he won’t meet his Chinese counterpart Xi Jinping ahead of a trade deal deadline on March 2 when American tariffs on Chinese products are slated to increase.

Trump, who made the comments on Thursday during two days of negotiations between American and Chinese trade officials, suggested a face-to-face meeting could be combined with his trip to Asia later this month for a second meeting with North Korean leader Kim Jong-un, reports The New York Times.

Asked by reporters if the meeting with Xi would take place, Trump said: “Maybe. Probably too soon.”

As to whether the two leaders would meet before the deadline, the President said: “No.”

The US has threatened to increase tariffs on $200 billion worth of Chinese goods to 25 per cent from 10 per cent if a deal is not reached by March 2.

Such an escalation would raise prices for companies and consumers on products imported from China and could incite additional retaliation from China, further ratcheting up a trade war that has already begun to inflict economic damage in both countries.

Trump’s announcement on Thursday was a reversal for the President, who said last week that he planned to meet Xi to resolve any “final issues” before the trade deal.

Both Trump and his top trade negotiator, Robert Lighthizer, have said that the March 2 deadline is a firm date and that the US will not extend the timeline, which the two Presidents agreed upon during the G20 Summit in Argentina last year.

Stocks in the US fell sharply on Thursday after reports that Trump and Xi would not meet.

The Dow Jones industrial average declined 220.77 points, or 0.87 per cent, while the Standard & Poor 500-stock index fell 25.56 points, or 0.94 per cent.

Negotiations between Chinese and US officials are still continuing, The New York Times reported.

Lighthizer and Steven Mnuchin, the Treasury secretary, will lead an American delegation to Beijing next week for more trade talks.

Trump won't meet Xi before trade deal deadline (Lead)