Trump says tariffs on China could remain in place
The tariffs imposed by the US on imports from China could remain in place even after the two countries sign a comprehensive trade agreement, President Donald Trump said today.
"We are not talking about removing (tariffs), we are talking about leaving them for a substantial period of time," Trump told reporters at the White House today. "We have to make sure that if we do a deal with China, China lives by the deal. Because they had a lot of problems living by the previous deals."
Trump's remarks appear to drive a harder bargain for a potential deal to end the ongoing trade war than what US officials have suggested they would seek. US trade representative Robert Lighthizer has told members of Congress the terms of the agreement would include lifting the tariffs in exchange for extensive changes in China's trade policies, with the possibility of reimposing tariffs later if Washington believes its concerns are not addressed.
Trump is proposing a different sequence, keeping the tariffs in place unless China is shown to adhere to its end of the trade deal.
The terms of the agreement outlined by Lighthizer would include an inspection mechanism to ensure Beijing's compliance on the so-called "structural issues" — protecting intellectual property, ending forced technology transfer and lifting restrictions on US companies' participation in banking and other sectors. The US administration holds that the large US trade deficit with China — $419bn last year — reflects Beijing's protectionist measures that it is working to overturn.
The enforcement mechanism will include monthly meetings between the US Trade Representative's (USTR) office and the Chinese Commerce Ministry, quarterly meetings at the deputy ministerial level, and a semi-annual meeting between Lighthizer and his Chinese counterpart to review complaints from companies.
While public remarks by Trump and his senior Cabinet members in recent weeks provide an outline of what Washington expects, Beijing's position is less clear. Both sides insist that negotiations are going well and making progress, even though the timeline for a meeting between Trump and Chinese president Xi Jinping that was expected to seal the deal is starting to slide.
Chinese market participants expect the US to lift all tariffs imposed last year once the agreement is signed, paving the way for Beijing to lift the retaliatory taxes on imports of energy, agricultural and other commodities from the US. The trade war cut off China's imports of crude and LNG from the US for most of the second half of 2018.
Trump last month he wanted a "grand deal" covering all bilateral issues — preferably agreed to in a one-on-one session with Xi. A meeting between the two leaders was tentatively scheduled to take place this month at Trump's Mar-a-Lago property in Florida. But it is delayed until April, US officials said. Lighthizer and treasury secretary Steven Mnuchin are expected to travel to Beijing next week to continue negotiations. Lighthizer last week said the two sides remain apart on major issues.
The bargain offered by the US may be a hard one for Beijing to accept, especially the enforcement mechanism. Beijing has offered to buy more US energy and agricultural products, in addition to addressing structural issues. Chinese negotiators likely would prefer to finalize terms of the agreement before committing to Xi's meeting with Trump.
Existing US tariffs affect about half of the $539bn/yr in imports from China, including many chemical and industrial products. USTR has indefinitely postponed a further escalation in tariffs. Reciprocal tariffs imposed by Beijing cover 90pc of the $120bn/yr of China's imports from the US, including most energy commodities.
"We have our representatives going there this weekend to further the deal. We are taking in billions and billions of dollars in tariff money, and for a period of time that will stay," Trump said.
"Recent consultations between the economic and trade teams of China and the US have made substantial progress," the Chinese foreign ministry said. "We believe the two teams will follow the instructions of the two heads of state and reach a mutually beneficial and win-win agreement on the basis of mutual respect."
Related news posts
APLNG's Jan-Mar output higher: Origin
APLNG's Jan-Mar output higher: Origin
Sydney, 30 April (Argus) — The 9mn t/yr Australia Pacific LNG (APLNG) project in Queensland state produced and sold more LNG than the previous quarter and year earlier, Australian independent Origin Energy said in its January-March results. Output rose from the final quarter of 2023 because of the power failure of a vessel docked at APLNG's terminal in Gladstone harbour in late November , which prompted upstream operator Origin to cut flows to the liquefaction plant and APLNG to defer three cargoes to 2024. APLNG exported 134PJ (2.4mn t) of LNG through 34 cargoes for January-March, 8pc up from 124PJ and 32 cargoes the previous quarter and 4pc up on the 129PJ and 33 cargoes shipped in January-March 2023. Total APLNG production for July 2023-March 2024, the first three quarters of Origin's fiscal year to 30 June, was 519PJ, 4pc higher than 498PJ a year earlier, because of effective well and field optimisation activities, fewer maintenance disruptions and the continuing benefit of reducing workover backlog resulting in more wells being on line, Origin said. The terminal will take half a train of capacity off line for 12 days in June , following a two-day maintenance period in January. APLNG's domestic gas sales were 36PJ, steady on the previous quarter but higher by 24pc from the 29PJ sold a year earlier. Gas sales volumes for Origin's energy markets business fell by 5pc to 36PJ from 38PJ in January-March 2023. Origin said it continues to negotiate a deal with the government of New South Wales (NSW) regarding the 2,880MW Eraring coal-fired power station's future . The power plant had been due to close in 2025 but insufficient new generation capacity has been completed in NSW for this to occur. "We continue to progress large-scale batteries under development at Eraring and Mortlake power stations and recently announced our first storage offtake agreement from the Supernode battery in Queensland, taking Origin's storage portfolio to around 1GW of capacity once these batteries come on line," chief executive Frank Calabria said on 30 April. By Tom Major APLNG results Jan-Mar '24 Oct-Dec '23 Jan-Mar '23 y-o-y % ± q-o-q % ± Production (PJ) 176 167 165 7 5 Sales (PJ) 168 160 158 6 4 Commodity revenue (A$mn) 2,303 2,149 2,583 -11 7 Average realised LNG price ($/mn Btu) 12.17 11.88 14.50 -15 3 Average realised domestic gas price (A$/GJ) 6.90 6.39 6.17 12 8 Source: Origin Energy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Taiwan's scrap imports fall in March as demand slows
Taiwan's scrap imports fall in March as demand slows
Singapore, 30 April (Argus) — Taiwan's ferrous scrap imports fell on a year-on-year basis in March, as a slight rise in spot prices in January combined with slow domestic steel demand to discourage purchases. Taiwanese steel demand has weakened since the beginning of the year, market participants said. "Market fundamentals in 2023 were still okay, but slowed down in January as scrap buyers were unsure about the market post-Chinese new year," a trader said. Marginally higher spot scrap prices in January also suppressed buying appetite. The spot price for HMS 1/2 80:20 containerised scrap from the US west coast was as high as $380t/t on 17 January and was assessed at $375/t cfr by the end of that month. The higher spot prices encouraged steel mills and scrap buyers to take a wait-and-see approach. Loadings and delivery of containerised scrap bookings are usually made 8-10 weeks after an agreement is signed. Import volumes for the second quarter of 2024 are expected at steady-to-lower levels on seasonal weakness, market participants said. Production is likely to fall in the upcoming summer season because of electricity restrictions set by local authorities. A rise in electricity rates in April will also cap any upside in imported scrap prices and volumes, as mills are likely to reduce output by 20-40pc to curb their electricity use. Taiwan ferrous scrap imports t Country Mar % ± vs Feb % ± vs Mar'23 Jan-Mar % ± y-o-y US 121,298 49.29% 12.2% 323,030 5.74% Japan 44,316 -20.17% -56.7% 161,710 -23.04% Australia 15,942 60.69% -58.8% 37,850 -45.67% Dominican Republic 14,920 -15.05% 0.4% 48,878 -0.81% Others 76,671 40.31% 29.1% 198,780 25.86% Total 273,148 24.79% -15.6% 770,249 -2.81% Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US commends China's Middle East mediation
US commends China's Middle East mediation
Washington, 29 April (Argus) — The US hopes China will continue using its diplomatic influence in the Middle East after the two countries cooperated earlier this month to de-escalate tensions between Israel and Iran, US secretary of state Tony Blinken said today. "We did come very close to an escalation, a spread of the conflict," after Israel and Iran exchanged aerial attacks on each other's territory, Blinken said at a special meeting of the World Economic Forum in the Saudi Arabia capital Riyadh. The US saw that China used its influence in Iran to prevent an outbreak of a broader regional conflict "and that's a positive thing," Blinken said. Beijing stepped in last year to mediate an agreement between Tehran and Riyadh to normalize relations, playing a mediation role that the US could not carry out on its own. The US supported Chinese efforts to normalize Saudi-Iranian relations "because, if we can find through diplomacy ways to ease tensions and to avoid any conflict, that's a good thing," Blinken said. China has "a clear, obvious interest in stability in the Middle East," he said. "They obviously depend on the region for energy resources. There are many vital trading partners here." China provides a critical economic lifeline to Iran by absorbing nearly all of Iranian crude exports, "which is another challenge," Blinken said. But the US sees China as acting in its self-interest to help bolster stability in the Middle East. Finding some common ground on Iran was a rare positive spot during Blinken's visit to China last week. Blinken pushed his Chinese counterparts to put an end to private Chinese companies' supplies for Russia's military industry, while President Xi Jinping accused the US of undermining China's economic growth. "China and the US should be partners rather than rivals," Xi told Blinken during their meeting in Beijing on 26 April. The two countries should find common ground "rather than engage in vicious competition," Xi said. The US contends that Chinese companies supply 70pc of the machine tools and 90pc of the microelectronics for the Russian military industry, allowing Moscow to significantly increase weapons output in the past year. It remains to be seen whether the US threat of sanctions against Chinese companies accused of helping Russia's military industry will work, Blinken said. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Yara first-quarter gas consumption higher on year
Yara first-quarter gas consumption higher on year
London, 29 April (Argus) — Europe's largest fertiliser producer Yara's European gas consumption in the first quarter was up by 26pc on the year, but remained far lower than in the second half of last year. Norway-based Yara's gas consumption across Europe in January-March totalled 29.2 trillion Btu, well above the 23.1 trillion Btu a year earlier, but drastically down from 37.5 trillion Btu in the fourth quarter last year, the company's latest quarterly report shows. Yara did not report its European ammonia production for the first quarter, but the company's global output totalled 1.74mn t, up from 1.38mn t a year earlier. Yara's first-quarter European gas consumption fell from the preceding three months, despite its average European gas costs falling to $11.70/mn Btu from $13/mn Btu. The firm's European gas costs have declined sharply since peaking at $34.50/mn Btu in the third-quarter 2022, when European wholesale prices hit all-time highs ( see price graph ). Yara's quarterly spending on European gas supplies fell to $343mn in January-March, the lowest since at least summer 2021 when the company began reporting this data, and around one third the $1.08bn peak in April-June 2022. Yara's European gas consumption also fell despite a 37pc annual increase in total fertiliser deliveries in Europe . Lower curtailments, improved production economics and "volume catch-up" had supported output, Yara said. But while European deliveries improved on the year, they remained "below normal" — particularly for nitrates — and Yara sourced a larger share of its European deliveries from its global plants, the company's chief financial officer Thor Giaever said. Yara had hinted earlier this year its ammonia assets might run at 90pc or more of capacity as the company expected to boost production this year . But one explanation for the lower gas demand compared to the previous quarter is Yara may be maximising production at more efficient plants like Sluiskil in the Netherlands and Brunsbuttel in Germany, while ramping down less efficient plants, allowing the company to maintain or increase production while consuming less gas. Yara last year curtailed 19pc of its European ammonia capacity , turning towards greater imports of ammonia to replace the lower production. And that remains key to Yara's business plans , which the company said last week focused on "further strengthening operational resilience and flexibility". Argus assessed European ammonia production prices based on the TTF front-month price at roughly a $100/t discount to northwest European import prices in its last weekly assessment on 25 April, suggesting a still-significant financial incentive to produce ammonia domestically. The European fertiliser market remains under pressure by large volumes from Russia, meaning Europe has swapped an energy dependency on Russia for a food dependency, chief executive Svein Tore Holsether said, echoing previous statements . Comparing global assets Yara consumed 54.4 trillion Btu of gas globally in January-March, down from a multi-year high of 61.9 trillion Btu in October-December ( see consumption graph ). European consumption accounted for roughly 54pc of Yara's global gas demand in January-March, well down from 61pc in the previous quarter. And Yara spent $485mn on gas worldwide in January-March, 71pc for European supply, a lower proportion than at any other point since 2021. Yara's global average gas cost was $8.90/mn Btu in January-March, 24pc below its reported European cost. That discount has been a significant driver for Yara and others to increase production abroad rather than in Europe over the past two years. Yara forecasts its European gas costs at $9.70/mn Btu and $10.50/mn Btu in the second and third quarters of this year, respectively, holding well above its global average gas costs of $7.70/mn Btu and $8.40/mn Btu during those same periods. Globally, the firm aims to produce 8.6mn t of ammonia in 2025, significantly up from 7.8mn t in 2023, it said. By Brendan A'Hearn Yara European vs global gas costs $/MMBtu Yara European vs global gas consumption million MMBtu Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more