JAPAN
August exports fell 8.2%
Exports dropped the most since January, as China’s slowdown, the trade conflict between Washington and Beijing, and softness in the global tech sector continued to weigh on overseas demand. The value of shipments abroad fell 8.2 percent last month from a year earlier, the Ministry of Finance said. Economists surveyed by Bloomberg had estimated a 10 percent drop. Shipments to China suffered the second-largest decline in the past three years, with sharp falls in chipmaking equipment continuing. The trade balance showed a deficit of ¥136.3 billion (US$1.26 billion). Imports fell 12 percent last month, versus economists’ median estimate of a 10.7 percent drop.
ENERGY
Oil prices stabilize
Oil prices stabilized on signs Saudi Arabia is quickly restoring production following a debilitating drone attack on Saturday last week. Saudi Arabian Oil Co (Aramco) said it had revived 41 percent of capacity at its Abqaiq facility. Abqaiq is now processing about 2 million barrels a day and should return to pre-attack levels of about 4.9 million barrels by the end of this month, chief executive officer Amin Nasser said on Tuesday. Two-thirds of production have been restored and the kingdom expects a full recovery in 10 days, Crown Prince Mohammed bin Salman said. Brent futures, the global crude benchmark, were back to about US$64 a barrel in early London trading yesterday after jumping to near US$72 in reaction to the disruptions.
AUTOMOTIVE
European sales dip 8.4%
European vehicle registrations fell sharply last month, deepening the woes of an industry battling sluggish demand in key markets and the challenge of rolling out electric vehicles. Sales dropped 8.4 percent, the steepest decline this year, the European Automobile Manufacturers Association said. The fall was partly due to exceptionally high growth in Augut last year, as manufacturers rushed out models ahead of tough new emissions-testing rules. The continent’s five biggest markets all contracted last month, with Spain and France posting the biggest declines.
LOGISTICS
FedEx cuts profit forecast
FedEx Corp cut its fiscal 2020 profit forecast, citing worsening trade tensions and a weaker global economy. Adjusted earnings this year would be US$11 to US$13 a share in the fiscal year ending in May next year, FedEx said in a statement on Tuesday. That implied at least a 16 percent drop from the previous year. FedEx in June predicted a “mid-single-digit percentage point” drop from last year’s level of US$15.52 a share. “Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty,” chief executive officer Fred Smith said in the statement.
NETHERLANDS
GDP to rise 1.5% next year
The economy is set to grow by 1.5 percent next year, Minister of Finance Wopke Hoekstra said on Tuesday, as officials warned of a slowdown due to Brexit and the ongoing US-China trade dispute. Hoekstra added that the government was loosening its purse strings to spend more on stimulating the economy, including the sluggish housing market, childcare and defense. For the fifth year in a row a budget surplus was expected, with revenue totaling 305.5 billion euros (US$337 billion) as opposed to 302 billion euros in spending, official documents said.
CHIP WAR: Tariffs on Taiwanese chips would prompt companies to move their factories, but not necessarily to the US, unleashing a ‘global cross-sector tariff war’ US President Donald Trump would “shoot himself in the foot” if he follows through on his recent pledge to impose higher tariffs on Taiwanese and other foreign semiconductors entering the US, analysts said. Trump’s plans to raise tariffs on chips manufactured in Taiwan to as high as 100 percent would backfire, macroeconomist Henry Wu (吳嘉隆) said. He would “shoot himself in the foot,” Wu said on Saturday, as such economic measures would lead Taiwanese chip suppliers to pass on additional costs to their US clients and consumers, and ultimately cause another wave of inflation. Trump has claimed that Taiwan took up to
A start-up in Mexico is trying to help get a handle on one coastal city’s plastic waste problem by converting it into gasoline, diesel and other fuels. With less than 10 percent of the world’s plastics being recycled, Petgas’ idea is that rather than letting discarded plastic become waste, it can become productive again as fuel. Petgas developed a machine in the port city of Boca del Rio that uses pyrolysis, a thermodynamic process that heats plastics in the absence of oxygen, breaking it down to produce gasoline, diesel, kerosene, paraffin and coke. Petgas chief technology officer Carlos Parraguirre Diaz said that in
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
Japan intends to closely monitor the impact on its currency of US President Donald Trump’s new tariffs and is worried about the international fallout from the trade imposts, Japanese Minister of Finance Katsunobu Kato said. “We need to carefully see how the exchange rate and other factors will be affected and what form US monetary policy will take in the future,” Kato said yesterday in an interview with Fuji Television. Japan is very concerned about how the tariffs might impact the global economy, he added. Kato spoke as nations and firms brace for potential repercussions after Trump unleashed the first salvo of