Baltic Dry Index. 1156 +66 Brent Crude 76.48
"I
never get too attached to one deal or one approach. For starters, I keep a lot
of balls in the air, because most deals fall out, no matter how promising they
seem at first."
Donald
Trump. Art of the Deal.
It is day four in the
“America First” trade war attack on the Rest of the World, and if the aim is US
isolation from friend and foe alike, it is going perfectly.
A shocked, and
increasingly angry large block of the ROW, are complaining bluntly, looking to
form new alliances, and looking ahead to probably the most acrimonious G6 plus
1 meeting ever held, later this week in Canada. If it were any other summit, it
would probably be cancelled.
We open with China
firming up its response to “America First.”
The
final key to the way I promote is bravado. I play to people's fantasies. People
may not always think big themselves, but they can still get very excited by
those who do. That's why a little hyperbole never hurts. People want to believe
that something is the biggest and the greatest and the most spectacular. I call
it truthful hyperbole. It's an innocent form of exaggeration, and a very
effective form of promotion."
Donald
Trump. Art of the Deal.
June 3, 2018 / 2:21 AM
Talks end with China warning trade benefits at risk if U.S. imposes tariffs
BEIJING (Reuters) - China warned the United States on Sunday that any agreements reached on trade and business between the two countries will be void if Washington implements tariffs and other trade measures, as the two ended their latest round of talks in Beijing.
A short statement, carried by the official Xinhua news agency, made no
mention of any specific new agreements after U.S. Commerce Secretary Wilbur
Ross met Chinese Vice Premier Liu He.
It referred instead to a consensus they reached last month in
Washington, when China agreed to significantly increase its purchases of U.S.
goods and services.
“To implement the consensus reached in Washington, the two sides have
had good communication in various areas such as agriculture and energy, and
have made positive and concrete progress,” the state news agency said, adding
details would be subject to “final confirmation by both parties”.
The United States and China have threatened tit-for-tat tariffs on goods
worth up to $150 billion each.
Xinhua said China’s attitude had been consistent, that it was willing to
increase imports from all countries, including the United States.
“Reform and opening up and expanding domestic demand are China’s
national strategies. Our established rhythm will not change,” it added.
“The achievements reached by China and the United States should be based
on the premise that the two sides should meet each other halfway and not fight
a trade war,” Xinhua said.
“If the United States introduces trade sanctions including raising
tariffs, all the economic and trade achievements negotiated by the two parties
will be void.”
There was no immediate comment or statement from the U.S. delegation or
from Ross himself.
----State-run
Chinese newspaper the Global Times said in an editorial on its website that
China needed to prepare for the long haul due to the U.S. propensity for
changing its mind and coming up with new demands.
“Tariffs and expanding exports - the United States can’t have both,” it
said. “China-U.S. trade negotiations have to dig up the two sides’ greatest
number of common interests, and cannot be tilted towards unilateral U.S.
interests.”
Xinhua said in a separate commentary that the United States should not
test China with any further flip-flops or provocations.
More
China Opens Europe Charm Offensive as Trump Stokes Trade Dispute
Keith Zhai and Peter Martin
China is reaching out to Europe with pledges to improve market access for
companies in a charm offensive that contrasts with President Donald Trump’s
escalation of trade disputes worldwide.
China’s ambassador to the European Union, Zhang Ming, has been touring
EU institutions to promote President Xi Jinping’s message delivered to the Boao
Forum in April of a “new phase of opening up.” That translates into new
opportunities for European companies in finance, clean energy and environmental
cooperation, Zhang said.
“Some European friends say that though the current system works, it is
not fair enough,” Zhang told the European Parliament’s International Trade
Committee on April 23. “China is always ready to listen to the EU’s suggestions
on how to make the system better.”
China
has been pledging to open up since Xi addressed the World Economic Forum in
Davos last year, with few signs of action. However, it now appears to be making
a broader push to counter Trump by mending ties with powers from India
to Japan and Indonesia.
The conciliatory tone toward Europe is all the more striking as the Trump administration sets a deliberate course of confrontation with some of its closest allies and trading partners. A Chinese official told Bloomberg News in April that the government was considering offering major concessions on trade and investment to the EU and countries such as Japan and Mexico -- all now subject to punitive U.S. tariffs.
Global Realignment
Traditional U.S. alliances are giving way under the pressure of Trump’s America First policies, according to Feng Zhongping, vice president of the China Institutes of Contemporary International Relations (CICIR).
More
June 2, 2018 / 8:01 PM
G7 finance chiefs kick trade dispute to leaders' summit in Quebec
WHISTLER,
British Columbia (Reuters) - Finance leaders of the closest U.S. allies vented
anger over the Trump administration’s metal import tariffs on Saturday, ending
a three-day meeting with a stern rebuke of Washington and setting up a heated
fight at a G7 summit next week in Quebec.
In a rare show of division among the normally harmonious club of wealthy
nations, the six other G7 member countries issued a statement asking U.S.
Treasury Secretary Steven Mnuchin to convey their “unanimous concern and
disappointment” about the tariffs to President Donald Trump.
The 25 percent steel and 10 percent aluminium tariffs were imposed this
week on Mexico, Canada and the European Union after temporary exemptions
expired.
“We’re concerned that these actions are actually not conducive to helping
our economy, they actually are destructive, and that is consistently held
across the six countries that expressed their point of view to Secretary
Mnuchin,” Canadian Finance Minister Bill Morneau said at a news conference
after the meeting ended in the Canadian mountain resort town of Whistler,
British Columbia.
The statement, written by Canada, also called for “decisive action” to
resolve the tariff dispute at a G7 leaders’ summit starting on Friday in
Charlevoix, Quebec.
Japanese Finance Minister Taro Aso said that direct discussions between
Prime Minister Shinzo Abe and Trump may help resolve the issue, though Japan
has refused to accept import quotas.
“I’ve been to these meetings for a long time. But this is a very rare
case where opposition against the United States was unanimous,” Aso told
reporters.
Speaking separately after the meeting, frequently referred to as the “G6
plus one,” Mnuchin told reporters that he was not part of the six-country
consensus on trade and said Trump was focussed on “rebalancing our trade
relationships.”
Mnuchin rejected comments from some G7 officials that the United States
was circumventing international trade rules with the tariffs or ceding
leadership of a global economic and trading system it largely built after World
War Two.
----French Finance Minister Bruno Le Maire said the United States has only a few days to avoid sparking a trade war with its allies and it was up to Washington to make a move to de-escalate the tensions.
Speaking after the meeting, Le Maire said the EU was poised to take
counter-measures against the new U.S. tariffs.
----German Finance Minister Olaf Scholz said G7 countries also told Mnuchin about their opposition to new U.S. sanctions on Iran, which will affect European companies. Trump announced last month that he was pulling the United States out of an international nuclear agreement with Tehran.
“There were several issues discussed at the G7 over which there was no
agreement,” Scholz told reporters. “That’s really quite unusual in the history
of the G7.”
More
Trade Tensions Intensify With Trump and Allies Set For Showdown
By Andrew Mayeda, Yuko Takeo, and Justin Sink
Updated on 4 June 2018, 03:17 GMT+1
President Donald Trump is headed for a showdown with America’s allies at a
Group of Seven summit this week in Quebec, with the European Union and Canada
threatening retaliatory measures unless he reverses course on new steel and
aluminum levies.China, meanwhile, is warning it will withdraw commitments it made on trade if the president carries out a separate threat to impose tariffs on the Asian country. While China doesn’t want an escalation in trade tensions, it has the confidence, competence and experience to defend its core interests, according to a commentary published Monday by state-run Economic Daily.
Trump changes his mind often enough that U.S. allies and rivals alike
hope he’ll do just that on tariffs in the next few days. An all-out trade war
may become unavoidable if he doesn’t.
“We still have a few days to
avoid an escalation. We still have a few days to take the necessary steps to
avoid a trade war between the EU and the U.S.,” French Finance Minister Bruno
Le Maire said after a meeting of G-7 finance ministers and central bank
governors in Whistler, British Columbia.
The White House appeared unfazed by threats from allies. Top economic
adviser Larry Kudlow said Canadian Prime Minister Justin Trudeau was
“overreacting” in response to the tariffs, and said the blame for any
escalation lies with the U.S.’s trading partners. He said Trump is simply
responding to decades of trade abuse.
More
Canadian aluminum shows its mettle in face of Trump's tariff
Industry analyst says Trump just wrote the Canadian aluminum industry 'a cheque for $600 million'
Evan Dyer · CBC News · Posted: Jun
01, 2018 4:00 AM ET
Trade actions like the ones taken by the Trump administration this week
are intended to inflict pain, and the steel and aluminum tariffs levied by the
Trump administration are unwelcome developments for both industries in Canada.
But the harm will fall disproportionately on producers of steel, rather
than aluminum — and not only because the tariff on steel (25 per cent) is
higher than the one on aluminum (10 per cent).
The United States is in a much weaker position to hurt Canadian aluminum
producers than it is to punish Canadian steelmakers. Indeed, the likely reason
for the lower tariff on aluminum is that the Trump administration realizes it's
American consumers, not Canadian producers, who will end up paying for it.
In fact, the top U.S. aluminum industry consultant says the tariff has,
so far, actually enriched Canadian aluminum producers.
That's because they responded to the announcement in March by factoring
the tariff into their prices, and then essentially pocketed that 10 per cent
surcharge during the two months that Canada enjoyed a tariff exemption.
"Trump wrote a cheque for $600 million to Canadian aluminum
producers," said Jorge Vasquez of Harbor Aluminum in Austin, Tex., who has
served as an adviser to both the U.S. International Trade Commission and the
Canadian Trade Tribunal.
In effect, Trump's actions transferred more than half a billion dollars
from the U.S. economy to Canada's since March.
The economic folly of the aluminum tariff doesn't stop there.
Key to understanding the counterproductive nature of this move, say
industry watchers, is the inherent Canadian advantage bestowed by its abundant
hydroelectric resources.
Aluminum is made from bauxite, a raw material Canada has very little of
(almost half of the world's reserves are in Guinea or Australia).
The other main input is electricity. Canada — especially Quebec
— produces a lot of cheap hydro. The mighty rivers of Quebec are the
foundation of Canada's aluminum industry.
U.S. electricity rates are much higher. The price differential for this
critical input far outweighs the cost of a 10 per cent tariff.
That's why U.S. industry buys half of its aluminum from Canada —
nearly four times as much as it buys from its own producers.
The 14 U.S. aluminum smelters are typically older, smaller, and less
cost-efficient than their counterparts in Canada, not to mention the ones in
China and Russia. More than half of them are either closed or operating well
below capacity.
Just one Canadian smelter — Aluminerie Alouette Inc. in
Sept-Iles, Que. — comes close to equalling the entire output of the U.S.
aluminum industry.
More
In other news, the west’s fraying gets worse with
each passing month. If it wasn’t for bad news, Brussels wouldn’t have any news
at all.
June 3, 2018 / 9:24 AM
Austrian far-right leader wants EU's Russian sanctions ended
ZURICH (Reuters) - Austria’s vice chancellor and
leader of the country’s far-right Freedom Party called for ending the European
Union’s sanctions against Russia, days before he meets Russian President
Vladimir Putin during a trip to Vienna.
Heinz-Christian Strache, whose pro-Moscow party is junior partner to
Chancellor Sebastian Kurz’s conservatives, has said in the past he did not
favour EU sanctions against Moscow over its backing of rebels in Ukraine.
In an interview with the newspaper Oesterreich printed on Sunday, he
sharpened his tone.
“It is high time to put an end to these exasperating sanctions and
normalise political and economic relations with Russia,” he was quoted as
saying.
The United States, the EU and other countries imposed sanctions on
Russia after it annexed Crimea from Ukraine in 2014. But unlike most western
European countries, Austria did not expel Russian diplomats over the poisoning
in Britain of former Russian spy Sergei Skripal and his daughter.
Austria’s coalition government says it wants to act as a bridge between
east and west, while Kurz has stressed its pro-EU stance is secure.
Strache’s remarks come as a European diplomatic push to address the
conflict in eastern Ukraine gain pace.
German Foreign Minister Heiko Maas has invited his counterparts from
France, Russia and Ukraine for a meeting in Berlin on June 11 to discuss the
conflict. Maas said last week he was unaware of any discussion within the EU on
lifting the sanctions.
Germany, France, Russia and Ukraine have previously held talks in an
effort to end the fighting in Ukraine, which has killed more than 10,000 people
despite a notional ceasefire.
June 2, 2018 / 11:06 PM
Anti-immigration party wins Slovenia elections
LJUBLJANA
(Reuters) - An anti-immigration opposition party won Slovenia’s parliamentary
election on Sunday, taking 25 percent of the vote, according to preliminary
results.
However, the centre-right Slovenia Democratic Party (SDS) of former
prime minister Janez Jansa may struggle to pull together a government as its
hardline stance on immigration has left it short of potential coalition
partners.
Jansa acknowledged any post-election negotiations would be difficult.
“We will probably have to wait for some time ... before serious talks on a new
government will be possible,” he told reporters after he cast his own vote.
Voters in a number of eastern members of the European Union - notably
Hungary and Poland - have turned to parties which oppose the bloc’s plans under
which countries would accept asylum seekers under a quota system.
The SDS, supported by Hungary’s nationalist Prime Minister Viktor Orban,
is firmly opposed to such quotas and says most of the money used to support
them should be diverted to the security forces.
“(Our) party puts Slovenia, Slovenians first,” Jansa said after
preliminary results came out, adding that the SDS is ready for coalition talks
with all other parliamentary parties. “We are open for cooperation, Slovenia is
facing times which need cooperation,” he said.
----In
a highly fragmented ballot, the Adriatic state’s 1.7 million-strong electorate
was choosing between 25 parties of which nine made it to the parliament.
----President Borut Pahor has said he plans to give the first chance to form a government to the party with most seats in parliament after the election. However, the SDS would need to link up with at least two other parties to gain a majority.
Turnout was around 51.5 percent compared with 51.7 percent four years
ago.
"When
people treat me badly or unfairly or try to take advantage of me, my general
attitude, all my life, has been to fight back very hard. The risk is you'll
make a bad situation worse, and I certainly don't recommend this approach to
everyone. But my experience is that if you're fighting for something you believe
in — even if it means alienating some people along the way — things usually
work out for the best in the end."
Donald
Trump. Art of the Deal.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
With a trade war starting between the USA and China, is a naval war act
2?
June 3, 2018 / 5:37 AM
U.S. weighs more South China Sea patrols to confront 'new reality' of China
SINGAPORE (Reuters) - The United States is considering
intensified naval patrols in the South China Sea in a bid to challenge China’s
growing militarisation of the waterway, actions that could further raise the
stakes in one of the world’s most volatile areas.
The Pentagon is weighing a more assertive programme of so-called
freedom-of-navigation operations close to Chinese installations on disputed
reefs, two U.S. officials and Western and Asian diplomats close to discussions
said.
The officials declined to say how close they were to finalising a
decision.
Such moves could involve longer patrols, ones involving larger numbers
of ships or operations involving closer surveillance of Chinese facilities in
the area, which now include electronic jamming equipment and advanced military
radars.
U.S. officials are also pushing international allies and partners to
increase their own naval deployments through the vital trade route as China
strengthens its military capabilities on both the Paracel and Spratly islands,
the diplomats said, even if they stopped short of directly challenging Chinese
holdings.
“What we have seen in the last few weeks is just the start,
significantly more is being planned,” said one Western diplomat, referring to a
freedom of navigation patrol late last month that used two U.S. ships for the
first time.
“There is a real sense more needs to be done.”
The Pentagon does not comment on future operations but a spokesman,
Lieutenant Colonel Christopher Logan, said “we will continue to work with our
friends, partners, and allies to ensure a free and open Indo-Pacific”.
----U.S. Defence Secretary Jim Mattis warned in Singapore on Saturday that China’s militarisation of the South China Sea was now a “reality” but that Beijing would face unspecified consequences.
Questioned during the Shangri-La Dialogue security conference over
whether it was too late to stop China, Mattis said: “Eventually these (actions)
do not pay off.”
Last month, China’s air force landed bombers on Woody Island in the
disputed Paracel archipelago as part of a training exercise, triggering concern
from Vietnam and the Philippines.
Satellite photographs taken on May 12 showed China appeared to have
deployed truck-mounted surface-to-air missiles or anti-ship cruise missiles at
Woody, while anti-ship cruise missiles and anti-air missiles were also placed
on its largest bases in the Spratlys.
Speaking on the sidelines of the Singapore conference, He Lei, of the
PLA’s Academy of Military Sciences, said China had every right to continue to
militarise its South China Sea holdings.
“It is China’s sovereign and legal right for China to place our army and
military weapons there. We see any other country that tries to make noise about
this as interfering in our internal affairs,” He said.
More
“I'm the first to admit
that I am very competitive and that I'll do nearly anything within legal bounds
to win. Sometimes, part of making a deal is denigrating your competition."
Donald
Trump. Art of the Deal.
Technology Update.
With events happening fast in the
development of solar power and graphene, I’ve added this section. Updates as
they get reported. Is converting sunlight to usable cheap AC or DC energy mankind’s
future from the 21st century onwards?
No update today,
normal service resumes tomorrow.
The monthly Coppock Indicators finished May.
DJIA: 24,416 +201 Down. NASDAQ:
7,442 +276 Down. SP500: 2,705 +180 Down.
All
three slow indicators moved down in March and have continued down in April and
May. For some a new bear signal, for others a take profits and get back to cash
signal.
ICICI Bank offers clarification on Chanda Kochhar news; Stock up 2%
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