Connect with us

Business

Trump hints at ‘big’ trade offer if Britain breaks free from EU

Published

on

Donald Trump waded into the UK’s fraught politics on the first day of a state visit, urging his hosts to proceed with Brexit and dangling the promise of a U.S. trade deal he said would swiftly follow.

With the country preparing for the appointment of a new prime minister, Trump called on the British to throw off the “shackles” of European Union membership in a tweet before a banquet hosted by Queen Elizabeth II.

The White House issued a statement saying that the president supports a Brexit “being accomplished in a way that will not affect global economic and financial stability while also securing independence to the United Kingdom.”

Trump will meet Tuesday with Premier Theresa May, likely for the last time. May, who became the Conservative government’s leader in the wake of the 2016 Brexit referendum, is resigning after failing to persuade Parliament to approve the divorce deal she negotiated with the EU, leaving the issue in the hands of her successor.

The American president has suggested that person should be Boris Johnson, the former foreign secretary who quit May’s cabinet in protest over her Brexit proposal.

In the lead-up to his trip to London, Trump said the U.K. should walk away from tortured talks with the EU if Brussels refuses to negotiate better terms, and said Nigel Farage – who’s campaigning for a no-deal Brexit – should be put in charge of the process.

A hard split with the EU would give maximum scope for a new trade accord with the US If the UK remained bound to the bloc’s regulations, it would narrow the options for a future agreement.

It’s a sensitive issue in the UK Rivals jockeying to replace May are putting forward their own Brexit plans, with the favorite, Johnson, pledging to take Britain out of the EU – with no deal, if necessary – at the end of October.

‘Powerful Deal’

Trump criticized May’s compromise agreement with the EU last November, saying Britain “may not be able to trade with us” as a result. His comments dashed hopes stoked by his comments made before an earlier meeting with May, when he said “a very big deal, a very powerful deal” would be completed between the two countries “very very quickly.”

Opponents of Brexit say a trade deal with the US risks imperiling the National Health Service, by increasing the involvement of private US companies in the public sector. May’s office was forced to reiterate Monday that the state-funded health-care system would not be up for discussion in trade talks.

The statement potentially put her government at odds with Trump after his ambassador in London, Woody Johnson, told the BBC that the “entire” UK economy would be on the table.

Trump and May will meet American and British business leaders on Tuesday at the start of the second day of his visit, which could throw up more controversy than Monday’s schedule of royal visits and pageantry.

‘Greater Still’

May, who will co-host the talks at St. James’s Palace, will call for governments on both sides of the Atlantic to embrace the opportunity of Brexit to seal a bilateral free-trade deal, and work together to keep global markets “free, fair and open.”

Before the talks, the prime minister’s office called for greater cooperation in a statement that appeared to acknowledge the potential differences of opinion.

The partnership between the US and UK “can be greater still” if they continue “to work together to underpin, shape and influence the global economy and its rules and institutions,” May will say, according to extracts of her remarks released by her office.

Trump has clashed with global economic institutions including the International Monetary Fund and the World Bank, and his use of tariffs in trade conflicts with China, Europe and Mexico has alarmed markets, adding to uncertainty around Brexit for companies investing in the UK.

The talks will include executives from BAE Systems Plc, GlaxoSmithKline Plc, National Grid Plc, Barclays Bank Plc, Reckitt Benckiser Group Plc, JPMorgan Chase & Co, Lockheed Martin Corp, Goldman Sachs International, Bechtel Corp and Splunk Inc.

Johnson, Farage

Small and elite by design, the event is timed to put Trump in control of the message at the start of the day, before talks with May’s team at 10 Downing Street.

He is expected to pressure the UK over Huawei Technologies Co., which the US wants to see shut out of 5G broadband networks across Europe.

A joint news conference with the prime minister will then give Trump – if he chooses – a further chance to intervene in British politics.

The president is all but certain to be asked about his views on Boris Johnson and Farage, whose fledgling Brexit Party inflicted a heavy defeat on May’s Tories in European elections last month.

While Trump had held out the possibility that he could meet with the two men, no plans had been announced by Monday evening. If the meetings are to take place, the most likely timing is Tuesday afternoon.

Trump’s first day in London was largely free from controversy – once he’d actually landed. Minutes before Air Force One touched down at Stansted Airport, he renewed his long-running spat with Mayor of London Sadiq Khan, calling him a “stone cold loser.”

It was an apparent response to a newspaper column by Khan – the first Muslim mayor of a major Western capital – in which he called Trump “one of the most egregious examples” of the global rise of the far right.

Trump and the Queen

At the Buckingham Palace banquet, the president and the British monarch exchanged toasts.

The queen hailed the “assembly of international institutions” created after World War II “to ensure that the horrors of conflict would never be repeated.”

“While the world has changed, we are forever mindful of the original purpose of these structures: nations working together to safeguard a hard-won peace,” she said.

Trump has frequently questioned the continued utility of such institutions, including the United Nations and NATO.

He toasted “the common values that will unite us long into the future: freedom, sovereignty, self-determination, the rule of law, and reverence for the rights given to us by almighty God.”

Thousands of anti-Trump protesters are expected to take to the streets on Tuesday, with Labour Party leader Jeremy Corbyn planning to address the crowds about the time of the Trump-May news conference.

Source

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

India’s fuel demand dips to lowest in over two years

Published

on

India’s fuel demand slipped to its lowest in over two years in September after a fall in diesel and industrial fuel consumption negated the rise in petrol and LPG consumption.

Consumption of petroleum products in September dropped to 16.01 million tonnes, its lowest since July 2017, from 16.06 million tonnes in the same month last year, according to data from the Petroleum Planning and Analysis Cell (PPAC).

Diesel, the most used fuel in the country, saw demand drop by 3.2 per cent to 5.8 million tonnes, while naphtha sales were down by a quarter to 844,000 tonnes.

Bitumen, used in road construction, too saw consumption drop by 7.3 per cent to 343,000 tonnes. Fuel oil sales edged 3.8 per cent lower in September to 525,000 tonnes.

These downward trends negated the rise in cooking gas (LPG) and petrol demand.

The sale of petrol rose 6.2 per cent to 2.37 million tonnes, but sale of jet fuel or ATF fell 1.6 per cent to 666,000 tonnes.

LPG consumption surged 6 per cent to 2.18 million tonnes on the back of government’s push for the use of cleaner fuel in household kitchens in rural areas in place of firewood to check pollution and safeguard the health of women.

Kerosene, which is fast being replaced by LPG and natural gas as a cooking medium, saw demand fall almost 38 per cent to 176,000 tonnes.

Petroleum coke consumption was however 18 per cent higher at 1.73 million tonnes.

Meanwhile, Fitch Solutions revised downward its India oil demand forecast, reflecting a deteriorating macroeconomic backdrop and rising risks to growth.

“We now forecast demand growth to average 3.8 per cent y-o-y over the three years to 2021, down from 4.6 per cent previously,” it said, adding softening of Indian fuel demand adds to an increasingly bearish outlook for fuel demand globally.

“We had previously flagged India as the outperformer, forecast to overtake China as the global engine for growth. While the view still holds in the longer term, the near-term prospects have weakened,” it said.

More diversified demand growth will offer a level of resilience moving forward, but structurally lower demand growth in China and common Asian emerging markets’ exposure to a weaker external environment will drag to the downside.

“We have revised down our India oil demand forecast, reflecting a deteriorating macroeconomic backdrop and rising risks to growth. In part this reflects the downward revision to the country’s GDP growth forecast,” Fitch said.

“Growth has disappointed expectations, dragged down by slowing private consumption, weakened investment and underperformance in the services sector,” it added.

In response, the government has unleashed a raft of stimulus measures, including tax cuts, a liquidity boost for the banking sector and higher spending on autos.

“Our Country Risk analysts are relatively bullish on the prospects for headline economic growth from 2020 onwards, forecasting a rebound from 6.4 per cent in real terms in 2019, to 6.9 per cent and 7.3 per cent in 2020 and 2021, respectively,” it said.

Auto sales growth is also set to recover next year, supported by low base effects and improved policy support, which will, in turn, offer a lift to oil demand, it said.

“That said, we do not expect demand growth to return to its 2018 highs, as a challenging external environment, stresses in the banking and shadow banking sectors and tight fiscal constraints on the government mar performance in several of the more energy-intensive segments of the domestic economy,” it added.

source

Continue Reading

Business

Oil refiners face dilemma as surging freight costs kill margins

Published

on

Oil refiners hoping for some fourth-quarter gravy are facing disappointment as surging freight rates inflate the cost of buying crude.

US sanctions on Chinese shipping companies and Friday’s attack on an Iranian tanker have turbo-charged transport costs, with rates on the Persian Gulf to China route at almost six times this year’s average. That’s slashing the margins of refiners, who had been anticipating a boost in profitability due to cleaner ship-fuel rules set to take effect next year.

Complex refining profits in Singapore tumbled to $2.91 per barrel on Friday from as high as $10.28 on Sept. 17, according to data from Oil Analytics. Margins are near the lowest for this time of year over the past five years, based on assessments against Dubai benchmark crude, after being above the highest level last month.

Crude processors are now faced with a dilemma: to buy and ship crude at much higher prices and risk low or no profits, or to cut operating rates and jeopardize supply of fuels over winter.

“Overall, refinery margins aren’t terrible when considered against oil benchmarks such as Dubai or Brent, but I can see why some refiners may consider run cuts once you add physical oil premiums and freight costs,” said Nevyn Nah, an oil analyst at Energy Aspects Ltd.

Refiners are more likely to tap their existing inventories for feedstock, rather than reduce run rates as we approach the year-end when fuel demand peaks, Nah said. Using up stockpiled oil has the added benefit of lowering taxes that are typically slapped on crude hoards at the turn of the year, he said.

When calculated against Saudi Arabia’s Arab Medium oil, Singapore complex margins fell to a deficit of $1.58 a barrel on Friday, the lowest in data going back to 2008. On a seasonal basis, processing returns are about $1.80 below the lowest level over the last five years.

Returns from breaking down crude into products such as plastics, gasoline and diesel typically peak in the last three months of each year due to consumption over winter, prompting processors to increase operating rates. The cleaner ship-fuel rules, known as IMO 2020, were expected to benefit refiners by causing a shift toward more high-quality fuels that fetch higher prices.

“The second half of this year was supposed to look better for refiners, especially with seasonal demand,” said Will Sungchil Yun, a commodities analyst at HI Investment & Futures Corp. in Seoul. “But the sudden spike in freight rates is definitely a burden” and discussions on potential run-rate reductions may start to take place, he said.

source

Continue Reading

Business

Government readies next round of measures to boost economy

Published

on

The Prime Minister’s Office (PMO) and top officials of the finance ministry are working on administrative measures and incentive packages to boost the sluggish economy as the government is “deeply” concerned about the steep fall in key economic parameters besides dwindling revenue collections, three officials aware of the developments have said.

The PMO and the North Block have been conducting a series of meetings with central and state government officials to boost revenue generation, which is a necessary condition for prospective stimulus packages to create demand and induce consumption to boost the economy, they said.

One of the officials said that liquidity is no longer a major concern and the government has addressed investors’ sentiments by announcing unprecedented cuts in corporate tax rates by sacrificing Rs1.45 lakh crore. The government could now shift its focus to fuelling demand and stoking consumption, he said on condition of anonymity.

On the demand side, discussions are centred around reducing income tax rates sans exemptions, prodding banks to offer attractive EMIs for auto and housing loans, rejigging real estate laws and tax structure and reducing compliance cost for builders on the condition that the same could be passed on to consumers, the official said.

The government is also exploring some incentive to perk up automobile sales, the official added. It is, however, finding it difficult to cut Goods and Services Tax (GST) on automobiles because states are unwilling to take about Rs 60,000-crore revenue hit, he said. Other proposals being discussed include raising public investments in infrastructure, particularly in rural areas, and asking state-run firms to front-load their budgeted expenditure, he added.

The government is expecting demand to pick up because of some recent decisions. The cabinet on October 9 raised dearness allowance (DA) of five million central government employees and 6.5 million retired employees by 5 percentage points, hoping that the Rs 10,600 crore-package will boost consumption in the ongoing festive season. “More such measures are expected, depending on the availability of funds,” another official said, asking not to be named.

According to a third official, intensive meetings on these issues took place at the PMO on Saturday and some of the meetings were also attended by finance minister Nirmala Sitharaman. The PMO met senior officials of various states on Friday, prodding them to share the responsibility of Goods and Services Tax (GST) collection, which dropped alarmingly in September, they said. The GST collection in September was Rs 91,916 crore, lowest in 19 months and below Rs1 lakh crore consecutively for the second month.

The officials said the decline in GST collections also indicates a slowdown in the demand of goods and services, which has a direct bearing on the economic growth. India’s annual GDP growth in the quarter ending June 2019 was 5%, the lowest in 25 quarters. It also marked the fifth consecutive quarter of slowing growth in the Indian economy.

The government is concerned about the declining GDP growth, particularly after the Reserve Bank of India (RBI) cut the country’s growth projection by 80 basis points (one hundredth of a percentage point) to 6.1% for 2019-20 on October 4. As per the latest official data, India’s factory output contracted 1.1% in August, the worst performance in about seven years, signalling a deepening economic downturn. The auto sector, a weathervane of economic sentiment and also industrial health, has been hit hard, with passenger car sales in September falling 24% compared to a year ago. It was the eleventh straight month of decline in the segment.

On the issue of resource generation, the government is relying on efficiency in public expenditure, augmenting tax collection and maximising disinvestment proceeds. The government may also deviate marginally from the fiscal deficit roadmap and borrow resources to boost the economy and make up for it in subsequent financial years, the officials said.

In an interview with Karan Thapar for The Wire on Thursday, Bibek Debroy, the chairperson of the Prime Minister’s Economic Advisory Council, said that the government could miss the fiscal deficit target of 3.3% of GDP set in the budget.

“The government needs resources to offer more stimulus as it is committed to bring the economy again at the higher growth trajectory. A series of announcements in this regard is expected,” the first official said.

The finance minister has already announced five rounds of fiscal, administrative and policy measures to stimulate the economy since August 23 and the biggest one was on September 20, when corporate tax rates were slashed.

“More stimulus means more money, hence the government is making efforts to augment revenue collections,” the second official said, adding that the government may also reduce personal income tax rate to boost consumption. But the move will depend on its implication on the overall revenue, the official added. Hindustan Times had on October 1 reported about the possible move.

In the interview, Debroy said “it (a personal tax rate cut) is inevitable” with elimination of exemptions. “When it will happen, it is for the finance minister to announce,” he said. A similar view was expressed by NITI Aayog vice-chairman Rajiv Kumar, as reported by NDTV on October 4. “I have heard that there are demands of personal income tax rate cuts and I am fully confident that the government is holding consultations and discussions on this matter,” NDTV quoted Kumar as saying.

The Prime Minister’s Office is constantly monitoring the country’s growth revival efforts and, on Friday, it cautioned states to share the responsibility of GST administration failing which they might face troubles after the compensation period is over in 2022, the third official said. It expressed concerns over falling GST revenue at a meeting with senior officials of states on Friday.

“It is also essential that GST revenues stabilise to ensure not only that states do not face fiscal stress when the compensation period is over in 2022, but also provide adequate revenues to finance development expenditure of states and centres,” an office memorandum of the GST Council Secretariat, issued on Thursday, said. Concerned about the fall in GST collection, the government on Thursday appointed a committee of central and state government officials to ascertain the reasons for the decline.

source

Continue Reading

Newsletters

Enter your email address to get latest updates

Advertisement

Trending

Copyright © 2018 - 2019 Delhi Wire.