2024-05-14 12:38

WASHINGTON, May 14 (Reuters) - President Joe Biden is hiking tariffs on $18 billion in Chinese goods including electric vehicles, batteries, semiconductors, steel, aluminum, critical minerals, solar cells, ship-to-shore cranes, and medical products, while retaining Trump-era tariffs on over $300 billion in goods. The United States Trade Representative's Office told Reuters it anticipates the effective date will be in approximately 90 days. The following products will be targeted: * Certain steel and aluminum products: Tariffs more than triple on some these products, estimated earlier at least $1 billion in goods, from the current range of zero to 7.5% to 25% in 2024. The White House cited "China's non-market overcapacity in steel and aluminum, which are among the world's most carbon intensive." * Semiconductors: Tariffs will increase from 25% to 50% by 2025, the White House said, citing China's huge share in new semiconductor wafers coming online and a spike in prices during the pandemic. "China's policies in the legacy semiconductor sector have led to growing market share and rapid capacity expansion that risks driving out investment by market-driven firms." * Electric Vehicles: Tariffs will increase from 25% to 100% in 2024 (on top of a separate 2.5% tariff), the White House said, citing "extensive subsidies and non-market practices leading to substantial risks of overcapacity." The U.S. Trade Representative's Office said plug-in hybrid electric vehicles will be covered by the new tariffs but not hybrid vehicles. * Batteries, Battery Components and Parts: Tariffs on lithium-ion EV batteries will increase from 7.5% to 25% in 2024, while the tariff rate on lithium-ion non-EV batteries will increase from 7.5% to 25% in 2026. Tariff rates on battery parts will increase from 7.5% to 25% in 2024 * Critical minerals: Tariffs for certain critical minerals will increase from 0 to 25% in 2024. Minerals covered by the new tariffs include: Manganese ores and concentrates including ferruginous manganese ores & concentrates with manganese content over 20% calculated on dry weight; Cobalt ores and concentrates; Aluminum ores and concentrates; Zinc ores and concentrates; Chromium ores and concentrates; Tungsten concentrates, oxides, carbide, powders and Tungstates (wolframates); Tritium and its compounds, alloys, dispersions, ceramic products and mixtures thereof; Actinium, Californium, Curium, Einsteinium, Gadolinium, Polonium, Radium, Uranium & their compounds, alloys, dispersions, ceramic products & mixtures; Other radioactive elements, isotopes, compounds; alloys, dispersions, ceramic products and mixtures; Radioactive residues; Ferronickel; Ferroniobium containing by weight less than 0.02% of phosphorus or sulfur or less than 0.4% of silicon; Zinc (other than alloy), unwrought, containing o/99.99% by weight of zinc; Zinc (o/than alloy); Zinc alloy, unwrought; Tin o/than alloy), unwrought; Tin alloy, unwrought; Tantalum, unwrought; tantalum powders; Chromium, unwrought; chromium powders; Indium, unwrought; indium powders * Natural graphite and permanent magnets for EV batteries: Tariffs will increase from 0% to 25% in 2026; tariffs for certain other critical minerals will also increase from 0% to 25% in 2024. * Solar cells: Tariffs on cells - whether assembled into modules or not - will double to 50% in 2024 to "protect against China’s policy-driven overcapacity that depresses prices and inhibits the development of solar capacity outside of China." * Ship-to-shore cranes: New tariffs of 25% will be added in 2024 to "help protect U.S. manufacturers from China's unfair trade practices that have led to excessive concentration in the market." * Medical Products Syringes and needles: New tariffs of 50% will be imposed in 2024; tariffs for certain personal protective equipment (PPE), including some respirators and face masks, will increase from the current range of 0 to 7.5% to 25% in 2024. Tariffs on rubber medical and surgical gloves will increase from 7.5% to 25% in 2026 to "help support and sustain a strong domestic industrial base for medical supplies that were essential to the COVID-19 pandemic response." PROPOSED EXCLUSIONS The U.S. Trade Representative's (USTR) office said it has proposed exclusions from the tariffs on over 330 categories of industrial machinery to aid U.S. manufacturers, including producers of solar panels. The list, contained in a lengthy USTR review of its Section 301 tariffs, includes 19 categories of equipment used to manufacture solar panels, including silicon crystal growth furnaces, and soldering and lamination machines. USTR said these exclusions will encourage domestic manufacturing of solar products. Other broad categories for industrial exclusions include: * Hydraulic and mechanical metal presses, machine tools for working metal and stone, metal rolling mills. * Offshore oil and gas drilling and production platforms, boring and rock cutting machinery. * Agricultural equipment including seeders, planters, fertilizer distributors. * Brewery and bakery equipment, machinery for preparation of meat and poultry. * Textile machinery including spinning and knitting machines, looms and sewing machines. * Molding machines for rubber and plastics, industrial furnaces for making printed circuit assemblies. Sign up here. https://www.reuters.com/world/what-are-bidens-new-tariffs-china-goods-2024-05-14/

2024-05-14 12:00

NAPERVILLE, Illinois, May 13 (Reuters) - Two months ago, the U.S. Department of Agriculture stopped using Chinese customs data to estimate China’s soybean imports since supplier data indicated much larger volumes, creating a large gap between U.S. and Chinese soy import outlooks. That disparity has now spread to corn as USDA and China hold vastly different views of how much corn China will import in the 2024-25 marketing year starting Oct. 1. The eventual reality could have a large impact on U.S. corn exports, which in the case of business to China, have recently been displaced by Brazilian supply. USDA on Friday pegged 2024-25 Chinese corn imports at 23 million metric tons, unchanged from 2023-24. Earlier that day, China’s agricultural ministry forecast 2024-25 imports at 13 million tons, a five-year low and down from 19.5 million in 2023-24. The outlooks were both agencies’ first cuts at 2024-25. The difference in the two 2024-25 estimates is not driven by customs data discrepancies, though that could become the case once the marketing year begins. USDA expects China’s domestic grain prices will remain higher than the world market, possibly making foreign corn cheaper than domestic supplies. China projects its 2024-25 corn crop at a record 297 million tons, up nearly 3% on the year and thus reducing import needs. USDA has the upcoming corn crop at 292 million tons versus 288.84 million in 2023-24, identical to China’s 2023-24 crop peg. WIDENING TARGETS USDA and China’s understanding of realized Chinese corn imports appears to have diverged in late 2023 as both agencies hold identical estimates of 18.7 million tons for the 2022-23 season ended last September. The two agencies’ final figures for the previous several marketing years also match. But a year ago, the agencies did not see eye-to-eye on 2023-24 potential. USDA’s initial 2023-24 outlook of 23 million tons has not changed, though China’s initial 17.5 million has come up by 2 million. The 10 million-ton gap in the 2024-25 forecast is huge, equivalent to nearly 400 million bushels or about 18% of total anticipated 2024-25 U.S. corn exports. China recently accounted for as much as 31% of annual U.S. corn exports (2020-21), but just 7% went to China in the first seven months of 2023-24. USDA sees 2024-25 U.S. corn exports up 2% on the year to 2.2 billion bushels, and the agency has probably allocated some of that to China given the large import target and the modest 4% increase in Brazil’s projected 2024-25 corn crop. Brazilian corn cargoes first began arriving in Chinese ports in January 2023, and the volume has exploded since then, potentially creating data discrepancies. However, in the case of soybeans, the supplier data variation stemmed from U.S. exports and not the much larger Brazilian ones. China’s latest corn import figures for the four marketing years through 2023-24 are all higher than China initially estimated. USDA’s latest figures are higher than its initial for 2020-21 and 2022-23, lower for 2021-22 and unchanged for 2023-24. SOYBEAN GAP USDA’s March methodology adjustment puts its latest 2022-23 and 2023-24 Chinese soybean import estimates 7% and 9% above China’s ministry, respectively. But the disparity in the initial 2024-25 outlooks is a whopping 15%, with USDA 14.4 million tons (529 million bushels) higher. Just as in corn, the full global picture must be examined before drawing conclusions, and an immediate standout is USDA’s massive 2024-25 Brazilian soy harvest of 169 million tons, up 10% on the year. USDA has already drawn scrutiny in recent months for its relatively high 2023-24 crop targets, but it also has very strong Brazilian soy export estimates to match the lofty crop, creating some offset on the balance sheet. USDA undoubtedly expects China to be the largest U.S. soybean customer in 2024-25, but China has no new-crop U.S. soybeans, corn or wheat on the books thus far. Karen Braun is a market analyst for Reuters. Views expressed above are her own. Sign up here. https://www.reuters.com/markets/commodities/us-china-odds-over-corn-import-ideas-after-soy-divergence-2024-05-14/

2024-05-14 11:55

May 14 (Reuters) - Renewable energy firm Clean Energy Fuels (CLNE.O) New Tab, opens new tab said on Tuesday it will jointly develop renewable natural gas (RNG) production plants at dairy farms across seven states in the U.S. with RNG producer Maas Energy Works. The project will collect manure from dairies with a combined herd size of about 35,000 cows, preventing methane emissions from entering the atmosphere. CONTEXT Farming activities, including livestock, accounted for 10.6% of country's greenhouse gas emissions in 2021, according to data from the U.S. Department of Agriculture. The U.S. Environmental Protection Agency estimated that agriculture emitted 278.4 million metric tons of methane in the year. WHY IT IS IMPORTANT President Joe Biden passed the largest climate change legislation in U.S. history in 2022, meant to kick off a boom in American clean energy development including RNG. As countries are pushing for clean energy, companies are investing in RNG production facilities as it is expected to replace natural gas and reduce emissions. Kinder Morgan (KMI.N) New Tab, opens new tab executives said last year the U.S. funding for clean energy projects will help the energy pipeline operator accelerate its investments in RNG and carbon sequestration. BY THE NUMBERS The nine sites are expected to cost about $130 million and will be financed by Clean Energy. The projects are expected to be completed in 2026 and will produce about 4 million gallons of RNG annually and will be distributed as transportation fuel at Clean Energy's RNG stations. KEY QUOTES "This JV brings together expertise from a seasoned RNG developer and producer and Clean Energy's extensive RNG distribution network and growing RNG customer base." said Clay Corbus, senior vice president at Clean Energy. Sign up here. https://www.reuters.com/sustainability/climate-energy/clean-energy-maas-energy-works-build-rng-dairy-production-plants-2024-05-14/

2024-05-14 11:54

PARIS, May 14 (Reuters) - Violence has erupted in New Caledonia, a French overseas territory in the South Pacific, after lawmakers in Paris discussed a draft constitutional amendment to allow recent arrivals to the territory to vote in provincial elections. The bill, which some local leaders fear will dilute the vote of indigenous Kanak, is the latest flashpoint in decades-long tussle over France's role in the island. The protests prompted authorities to shut the international airport, impose a curfew in the capital Nouméa and call for police reinforcements as businesses and vehicles were set alight. WHERE IS NEW CALEDONIA? Set in the warm waters of the southwest Pacific, some 1,500 km (930 miles) east of Australia, New Caledonia is home to 270,000 people, including 41% Melanesian Kanaks and 24% of European origin, mostly French. The archipelago was given its name by British explorer Captain James Cook in 1774. It was annexed by France in 1853 and was used as a penal colony until shortly before the turn of the 20th century. WHY DOES IT MATTER? New Caledonia, one of five island territories spanning the Indo-Pacific held by France, is central to Macron's plan to increase French influence in the Pacific. The world's No. 3 nickel producer, New Caledonia lies at the heart of an geopolitically complex maritime region, where China and the United States are jostling for power and influence in security and trade. Without naming China, Macron has previously said France's drive to expand its influence in the Pacific was to ensure a "rules-based development." WHAT IS ITS HISTORY WITH FRANCE? New Caledonia became a French overseas territory in 1946. Starting in the 1970s, in the wake of a nickel boom that drew outsiders, tensions rose on the island, with various conflicts between Paris and Kanak independence movements. A 1998 Nouméa Accord helped end the conflict by outlining a path to gradual autonomy and restricting voting to the indigenous Kanak and migrants living in New Caledonia before 1998. The accord allowed for three referendums to determine the future of the country. In all three, independence was rejected. "Tonight, France is more beautiful because New Caledonia has decided to stay part of it," Macron said after the result of the most recent vote in 2021. Nonetheless, the 2021 poll was boycotted by pro-independence parties due to the coronavirus pandemic, and there remains lingering scepticism over the legitimacy of the result. WHY HAVE TENSIONS EXPLODED RECENTLY? Under the terms of the Nouméa Accord, voting in provincial elections was restricted to people who had resided in New Caledonia prior to 1998, and their children. The measure was aimed at giving greater representation to the Kanaks, who had become a minority population. Paris views the current arrangement as undemocratic and wants to open up the electorate to include people who have lived in New Caledonia for at least 10 years. The French Senate passed a proposed constitutional reform along these lines in April, which is now being discussed by lower house lawmakers, with a final vote scheduled later on Tuesday. Macron's office said on Sunday that if lawmakers pass the constitutional amendment, he will delay rubber-stamping it into law. Instead, he would invite representatives of the territory's population to Paris for talks to reach a negotiated settlement. Sign up here. https://www.reuters.com/world/asia-pacific/why-are-there-riots-new-caledonia-against-frances-voting-reform-2024-05-14/

2024-05-14 11:53

WASHINGTON, May 14 (Reuters) - U.S. President Joe Biden on Tuesday unveiled steep tariff increases on an array of Chinese imports including electric vehicle (EV) batteries, computer chips and medical products, risking an election-year standoff with Beijing as he woos American voters who give his economic policies low marks. "American workers can out-work and out-compete anyone as long as the competition is fair, but for too long it hasn't been fair," Biden said during a speech in the White House Rose Garden before unions and companies. "We're not going to let China flood our market." China immediately vowed retaliation. Its commerce ministry said Beijing was opposed to the U.S. tariff hikes and would take measures to defend its interests. Biden will keep tariffs put in place by his Republican predecessor Donald Trump while ratcheting up others, including a quadrupling of EV duties to over 100% and doubling the duties on semiconductor tariffs to 50%. The new measures affect $18 billion in imported Chinese goods including steel and aluminum, semiconductors, electric vehicles, critical minerals, solar cells and cranes, the White House said. The EV figure, while headline-grabbing, may have more political than practical impact in the U.S., which imports very few Chinese EVs. The announcement confirmed earlier Reuters reporting. The United States imported $427 billion in goods from China in 2023 and exported $148 billion to the world's No. 2 economy, according to the U.S. Census Bureau, a trade gap that has persisted for decades and become an ever more sensitive subject in Washington. U.S. Trade Representative Katherine Tai said the revised tariffs were justified because China was stealing U.S. intellectual property. But Tai recommended tariff exclusions New Tab, opens new tab for hundreds of industrial machinery import categories from China, including 19 for solar product manufacturing equipment. FREE TRADE NO MORE Even as Biden's steps fell in line with Trump's premise that tougher trade measures are warranted, the Democrat took aim at his opponent in November's election. Biden cast Trump's 2020 trade deal with China as failing to increase American exports or jobs, and he said a Trump proposal to raise import tariffs 10% across-the-board from any point of origin would raise prices. Trump, who has floated tariffs of 60% or higher on all Chinese goods, said on Tuesday the Biden administration's new tariffs should be applied to other types of vehicles and products "because China's eating our lunch right now." "He's been feeding them a long time," Biden retorted when asked about the comment. Administration officials said their measures are combined with domestic investment in key industries and unlikely to worsen a bout of inflation that has already angered U.S. voters. Biden has struggled to convince voters of the efficacy of his economic policies despite a backdrop of low unemployment and above-trend economic growth. A Reuters/Ipsos poll last month showed Trump had a 7 percentage-point edge over Biden on the economy. Analysts have warned that a trade tiff could raise costs for EVs overall, hurting Biden's climate goals and his aim to create manufacturing jobs. Biden has said he wants to win this era of competition with China but not to launch a trade war. He has worked in recent months to ease tensions in one-on-one talks with Chinese President Xi Jinping. Both 2024 U.S. presidential candidates have departed from the free-trade consensus that once reigned in Washington, a period capped by China's joining the World Trade Organization in 2001. Trump's broader imposition of tariffs during his 2017-2021 presidency kicked off a tariff war with China. As part of the long-awaited tariff update, Biden will increase tariffs this year under Section 301 of the Trade Act of 1974 from 25% to 100% on EVs, bringing total duties to 102.5%, from 7.5% to 25% on lithium-ion EV batteries and other battery parts and from 25% to 50% on photovoltaic cells used to make solar panels. Some critical minerals will have their tariffs raised from nothing to 25%. The tariffs on ship-to-shore cranes will rise to 25% from zero, those on syringes and needles will rise to 50% from nothing now and some personal protective equipment (PPE) used in medical facilities will rise to 25% from as little as 0% now. Shortages in PPE made largely in China hampered the United States' COVID-19 response. More tariffs will follow in 2025 and 2026 on semiconductors, as well as lithium-ion batteries that are not used in electric vehicles, graphite and permanent magnets as well as rubber medical and surgical gloves. A step Biden previously announced to raise tariffs on some steel and aluminum products will take effect this year, the White House said. A number of lawmakers have called for massive hikes on Chinese vehicle tariffs or an outright ban over data privacy concerns. There are relatively few Chinese-made light-duty vehicles being imported now. The United Auto Workers, a politically important union that endorsed Biden, said the tariff moves would ensure that "the transition to electric vehicles is a just transition." Sign up here. https://www.reuters.com/markets/us/biden-sharply-hikes-us-tariffs-billions-chinese-chips-cars-2024-05-14/

2024-05-14 11:40

A look at the day ahead in U.S. and global markets from Mike Dolan Macro markets have basically frozen ahead of this week's big U.S. inflation releases, with sideshow entertainment provided by a fresh burst in activity in so-called 'meme stocks' while earnings updates and deals sagas dominated overseas. With Wednesday's April consumer price report this week's focus, Tuesday's release of the month's producer price index provides the appetizer - with core annual factory gate price readings expected to be steady at 2.4%. Although these critical data inputs likely set the tone for the public rather than the other way around, the backdrop on household inflation expectations has not been great. The New York Federal Reserve's April survey showed Americans project inflation a year from now at 3.3% - up from the 3% level seen in all the first three months of this year - and gloomier jobs outlook and it reinforced similar readings from University of Michigan on Friday. Fed vice-chair Phillip Jefferson was not giving much away but said that "the decline in inflation has attenuated in the first quarter of this year and that, for me, is a source of concern." Still, with so much riding on this week's data blockbusters, U.S. Treasury yields edged lower and the S&P500 (.SPX) New Tab, opens new tab was caught in a narrow range. Stock futures weren't inclined to challenge that pattern early on Tuesday. Optimism that rate cuts are coming this year persists. Bank of America's monthly survey of global fund managers found 82% expect the first Fed cut in the second half and they identified "long U.S. dollar" as the second 'most-crowded trade' in May. Nevertheless, the dollar (.DXY) New Tab, opens new tab was firmer on Tuesday. It got another lift against Japan's yen even as speculation swirled about a possible Bank of Japan pullback from its yield-capping bond-buying program - talk that's lifted 10-year government bond yields there to six-month highs just under 1%. Some market participants believe the yen's excessive weakness may be forcing the BOJ's hand into allowing interest rates and yields to rise more rapidly. The dollar also gained against sterling even after Britain's latest wage inflation data came in above forecasts. Bank of England chief economist Huw Pill remained cautious but said it was "not unreasonable" to expect rate cuts this summer. Much of the rest of the big market moves in Europe were earnings related. Germany's Delivery Hero (DHER.DE) New Tab, opens new tab shares soared 20% after Uber (UBER.N) New Tab, opens new tab announced a $1.25 billion deal to take over its foodpanda business in Taiwan and buy new shares in the German firm. Chinese stocks (.CSI300) New Tab, opens new tab were subdued as U.S. President Joe Biden unveiled a bundle of steep tariff increases on an array of Chinese imports including electric vehicles, computer chips and medical products - suggesting an election-year standoff with Beijing. Back on Wall St, much of the buzz was on the revival of the 'meme stock' craze. Shares of videogame retailer GameStop (GME.N) New Tab, opens new tab surged nearly 75% on Monday after "Roaring Kitty", an account associated with a social media influencer Keith Gill and credited with sparking the 2021 meme stock rally, returned to X.com after a three-year hiatus from the app. The rally was replicated in other meme stocks, such as Theater group AMC (AMC.N) New Tab, opens new tab and extended further ahead of Tuesday's bell. In tech ChatGPT-maker OpenAI said late on Monday it would release a new AI model called GPT-4o, capable of realistic voice conversation and able to interact across text and image. Apple (AAPL.O) New Tab, opens new tab supplier Foxconn (2317.TW) New Tab, opens new tab reported a 72% rise in first-quarter profit, boosted by strong demand for computer servers and coming off a low base from the period a year earlier - but it missed forecasts. In a big week for retail earnings that sees Home Depot report later on Tuesday, Walmart(WMT.N) New Tab, opens new tab was reported to be cutting hundreds of corporate jobs and asking most remote workers to move to offices, the Wall Street Journal said. And in deals, BHP (BHP.AX) New Tab, opens new tab is expected to sweeten its $43 billion takeover offer for Anglo American for a second time and possibly add cash after the London-headquartered target rejected a higher bid. BHP has until May 22 to return with a binding offer or walk away under UK takeover rules. Anglo American (AAL.L) New Tab, opens new tab, meantime, laid out a strategic review that includes a potential break-up of the company by demerging or selling its steelmaking coal, nickel, diamonds and platinum businesses as it tries to fend off the BHP swoop. Key diary items that may provide direction to U.S. markets later on Tuesday: * US April producer price report, US NFIB April small business survey * US corporate earnings: Home Depot * Federal Reserve chair Jerome Powell speaks in Amsterdam; Dutch central bank chief and European Central Bank policymaker Klaus Knot speaks; Fed Governor Lisa Cook speaks; Kansas City Fed President Jeffrey Schmid speaks; ECB board member Isabel Schnabel speaks; Bank of England chief economist Huw Pill speaks * ECOFIN group of European Union finance ministers meets in Brussels, with ECB board member Luis de Guindos attending * US Treasury auctions 12-month bills Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-05-14/