President Donald Trump had urged China to offer more at the bargaining table as the two countries prepared for their first major negotiation in more than two months– in an effort to avoid an all-out trade war.

“We’re talking to China, they very much want to talk,” Trump stated Thursday at a cabinet meeting at the White House. “They just are not able to give us an agreement that is acceptable, so we’re not going to do any deal until we get one that’s fair to our country.”

“It’s a good thing that they’re sending a delegation here — we haven’t had that in quite some time,” told Larry Kudlow, National Economic Council Director to the CNBC on Thursday.

“The Chinese government in its totality must not underestimate President Trump’s toughness and willingness to continue this battle to eliminate tariffs and non-tariff barriers and quotas to stop the theft of intellectual property and to stop the forced transfer of technology.” He added.

Kudlow further said the Chinese economy and currency “are slipping, as you all know, but let’s just see what happens.” He emphasised that discussions tend to produce better outcomes than expected—and that talking was always a better option.

This will be fourth round of formal talks since trade tensions flared this year, but the first session since early June.

“This will be ‘talks about trade talks,’” said Gai Xinzhe, an analyst at the Bank of China’s Institute of International Finance in Beijing. “Lower-level officials will meet and haggle and see if there is a possibility for higher-level talks.”

To restart trade negotiations with the U.S., China must offer a package of measures, according to Jacob Parker, the vice president for China operations for the U.S.-China Business Council in Beijing.

He stated that China needs to make a better offer that slashes the bilateral trade surplus, lowers import tariffs, provides better protection for intellectual property and stop forced technology transfers.

The two nations had seemingly appeared to have reached a deal in May after Chinese Vice Premier Liu He — President Xi Jinping’s top economic adviser — led a group of officials to Washington. But Trump backed away from the agreement soon afterward, and ever since the two sides have been locked in a standoff as they slapped tariffs on billions of dollars of each other’s goods.

The Trump administration already imposed duties on $34 bn of Chinese goods last month, a move that prompted immediate retaliation from Beijing. Levies on another $16 bn in goods take effect August 23.

The U.S. Trade Representative’s office stated on Thursday it had extended its public hearings on its proposal to impose tariffs on $200 bn of Chinese goods to six days starting August 20, from four days initially.

As many as 370 people are expected to testify. The tariffs that China has vowed to retaliate against by levying duties on $60 bn of U.S. goods, can take effect after a public comment period closes on September 6.

The post US to push China for better deal as trade talks set to resume appeared first on International Finance.

Al-Falih told reporters during an energy event in the United Arab Emirates capital Abu Dhabi that demand will pick up in the summer and OPEC wants to make sure markets are well-supplied.

“We don’t think it’s necessary, given the level of compliance we have seen and given the expectations of demand,” Al-Falih said on Monday. “The re-balancing, which started slowly in 2016, will have its full impact by the first half. Of course, there are many variables that can come into play between now and June, and at that time we will be able to reassess.”

Oil prices were down early Monday morning after Saudi Arabia signaled that OPEC is unlikely to extend the supply-cut deal beyond June.

Saudi Arabia is the world’s second largest producer of oil. It has cut production to less than 10 million barrels a day, below its targeted level, and is currently producing at a 22-month low, Al-Falih said.

Out of the total cut of 1.758 million barrels per day, which roughly equals 2 percent of overall global crude oil supply, OPEC members will contribute 1.2 million barrels per day.

Despite production cuts after the OPEC deal, many analysts forecast that the move may not be successful due to lack of commitment from all producers.

The post Saudis see no need to extend OPEC deal beyond six months appeared first on International Finance.

Replacing Iran’s civil aviation fleet has been one of the biggest economic opportunities in recent times. Despite Iran’s need for new planes to replace those from the sanctions era, it has entered the market at a time when Boeing, Airbus and other small airplane makers are facing a downturn in orders, and are therefore expected to offer heavy discounts.

“Boeing has announced that its IranAir contract is worth $16.6 billion. However, considering the nature of our order and its choice possibilities, the purchase contract for 80 Boeing aircraft is worth about 50 percent of that amount,” said Deputy Transport Minister Asghar Fakhrieh.

The government of President Hassan Rouhani has pushed to finalise aircraft deals to show results from the end of sanctions. He faces criticism at home from hardliners over the cost of the purchases.

The post Iran sealed Boeing deal at half the price appeared first on International Finance.

IFM Correspondent

November 11, 2016: Iran’s President Hassan Rouhani said that US president-elect Trump will not be able to reverse the nuclear deal. He said there is ‘no possibility’ of the nuclear deal being annulled.

“The US no longer has the capacity to create Iranophobia and to create a consensus against Iran,” Rouhani told his cabinet, according to state television. “Iran’s understanding in the nuclear deal was that the accord was not concluded with one country or government but was approved by a resolution of the UN Security Council and there is no possibility that it can be changed by a single government.”

The agreement led to the lifting of sanctions on Iran in exchange for guarantees that it would not pursue nuclear weapons capability.

During his election campaign, Trump described the nuclear deal as ‘disastrous’ and said it would be his ‘number one priority’ to dismantle it.
Many Arab leaders rushed to welcome Trump’s unexpected victory in the deeply divisive US election.

Egyptian President Abdel Fattah El-Sisi was one of the first to congratulate Trump, saying he hoped his presidency would unleash a new era of closer ties with Washington. “The Egyptian Arab Republic is looking forward to the period of Donald Trump’s presidency to imbue new spirit into the path of Egyptian-American ties with more cooperation and coordination in the interests of both the Egyptian and American people,” he said.

The post Iran says reversal of nuclear deal not possible appeared first on International Finance.

November 4, 2016: Canadian Prime Minister Justin Trudeau flew to Brussels on the weekend to attend an EU-Canada Summit which had been delayed for three days because of opposition in Belgium to the Comprehensive Economic and Trade Agreement (CETA). Belgium came back to the negotiating table after getting added guarantees on GMO crops and protection for certain food products, clearing the way for joining all other EU members in signing the deal.

Trudeau and top EU officials signed the agreement paving the way for most import duties to be removed early next year. However, the treaty needs the approval of at least 38 national and regional parliaments, including the UK’s, to come into force.

Positive implications

Supporters of CETA say it will increase Canadian-EU trade by 20% and boost the EU economy by €12bn (£10.9bn) a year and Canada’s by C$12bn (£7.4bn).

Trudeau said consumers and businesses would immediately feel the benefits. “We will make sure that everybody gets that this is a good thing for our economies and that it is also a good thing for the world,” he said.

Speaking at the end of the 16^th EU-Canada Summit, European Commission President Jean-Claude Juncker said, “Today, the people of Canada and the European Union have opened a new chapter in their relationship. More than half a billion people on both sides of the Atlantic will enjoy new opportunities. For many people, it will mean new jobs and better jobs.”

By removing almost all import duties, CETA will allow European exporters of industrial and agricultural goods to save more than €500 million every year. The agreement protects workers’ rights, environmental standards and consumer safety. Governments will retain all of their powers to legislate, regulate and provide public services.

“CETA promotes all of the things that Canadians and Europeans care about,” said President Juncker, “decency in the workplace, our health and safety, our cultural diversity, the quality of the land, sea and air that surround us.”

With free trade under attack from populist movements and anti-globalisation campaigners, the deal reduces Canada’s reliance on the US and gives the EU a first trade pact with a G7 economy when its credibility has taken a knock from Britain’s decision to leave.

Criticism

Critics of the deal say it would favour big, multinational corporations at the expense of local, smaller businesses. One study by the EU and Canada projected the trade deal would boost total household income for both Europeans and Canadians, but a recent Tufts University study says Canadian and European workers’ income would take a hit, according to a Reuters report.

The post EU and Canada sign historic free trade agreement appeared first on International Finance.

IFM Correspondent

October 25, 2016: The Canadian economy has been facing a serious slump due to a number of reasons. To add to its woes, negotiations over a key trade deal – the Comprehensive Economic and Trade Agreement (CETA) –  are in crisis. The Agreement, which would do away with tariffs on most goods between the EU and Canada, has been in meltdown since October 21.

The Agreement, which has been in the making for seven years, is the EU’s most ambitious free trade deal to date. The breakdown in talks would mean the freezing up of trade worth about $70 billion a year and about $285 billion of direct investment.

Failure of negotiations with Wallonia

Standing between Canada and the trade deal with the EU is the relatively small population – 3.5 million – of Wallonia, a French-speaking region in Belgium, which has refused to favour the deal. The EU, having a population of 510 million people, is a single market and calls for unanimity on trade deals.

Chrystia Freeland, Minister of International Trade, Canada, announced on October 21 the ‘end and the failure’ of talks with the government of Wallonia.

Although Wallonia enjoys some support for its position elsewhere in the EU, of the 28 nations that make up the bloc, Belgium has been the only member state that has not endorsed the CETA.

Why talks derailed

CETA proposes to link the EU market with that of Canada – the world’s tenth largest economy. The trade deal is being opposed by groups that stand against globalisation who claim that that the CETA is a testing of the waters in order to push through an even more contentious EU-US trade agreement by name TTIP, the negotiations surrounding which have also stalled.

The ultimatum to Wallonia

The EU communicated to Belgium that it expected Prime Minister Charles Michel to make its position on CETA clear and had given the Belgian federal government time until October 24 for the same.

The leader of the socialist-run Wallonia region, Paul Magnette, reacted to this mandate by stating that the ‘ultimatum is not compatible with the exercise of democratic rights’. Despite efforts by the EU to reassure his government regarding investment protection, which remains a major obstacle in the negotiations between Brussels and Wallonia, Magnette struck out at the EU, saying, “We will never decide anything under an ultimatum or under pressure.”

Latest developments

If Prime Minister Michel cannot assure European Council president Donald Tusk that Belgium will allow the Agreement to go through, the planned EU-Canada summit to be held on October 27 in order to sign the pact will be indefinitely postponed.

For now, though, things remain hopeful, with Chrystia Freeland, the Canadian Minister of International Trade saying, despite setbacks on October 24, that ‘CETA isn’t dead yet’.

The post Canadian economy at stake over landmark trade deal with EU appeared first on International Finance.

IFM Correspondent

July 25, 2016: Yahoo’s board has agreed to sell the company’s core internet operations and land holdings to Verizon Communications for $4.8 billion. After the sale, Yahoo shareholders will be left with about $41 billion in investments in the Chinese e-commerce company Alibaba, as well as Yahoo Japan and a small portfolio of patents.

Earlier there was speculation of Verizon being the frontrunner for the beleaguered internet company. Yahoo is expected to sell its email service and news, finance and sports websites in addition to its advertising tools. The company has been under pressure from shareholders who are seeing a downturn of the company’s revenue during the past eight years.

Yahoo’s results for April-June quarter, which were announced on July 18 showed that the company’s revenue fell 19 per cent from 2015, while its loss widened to $440 million.

CEO Marissa Mayer, who was hired four years ago, had earlier told investors the company is carefully evaluating bids for sale.

Mayer is not expected to join Verizon but will get a $55 million severance package if she loses her job after the sale. This was revealed in a regulatory by Yahoo in May this year, which gives details of cash, stock awards and other benefits that Mayer would get should she be forced out as CEO within a year after a sale.

Mayer received a compensation package valued at nearly $36 million last year under the SEC’s accounting rules. Yahoo’s board maintained in its filing that it was only worth about $14 million as of April 1.

The post Verizon to buy Yahoo for $4.8 billion appeared first on International Finance.

However, the deal may take time to come through as there are objections from various quarters

June 16, 2016: Iran has finalised a deal with Boeing to buy passenger planes from the US aircraft manufacturer as part of an ongoing effort to upgrade its civil aircraft fleet.

Though the deal has not been officially announced, it is being said that the plan is to buy around 100 aircraft.

Binit Somaia, director (South Asia) at Centre for Asia Pacific Aviation (CAPA), a consulting and research practice firm, says, “The deal appears to be approaching an advanced stage but given the sensitivity around this transaction, its finalisation will only be known once there is an official announcement.”

According to Paul Lyons, strategy director, International Bureau of Aviation (IBA), says that while the announcement of an intention to enter a deal is likely soon, it will probably take longer to finalise an agreement similar to previously announced deals with Airbus for 118 aircraft and ATR for 40 aircraft.

Somaia expects Iran to split its aircraft order fairly between Airbus and Boeing. Since the order with Airbus is for 118 aircraft, Boeing could expect to receive a similar order, subject to a mix of wide body and narrow body aircraft, states Somaia.

If completed, the agreement would potentially be worth billions of dollars to Boeing and amount to the most prominent commercial transaction between an American company and Iran.

The obstacles

However, there are obstacles. Iran’s supreme leader, Ayatollah Ali Khamenei has often described the US as a threat to his country. Even within the US, many lawmakers are opposed to any kind of reconciliation with Iran.

Additionally, there is a ban on use of dollars for trade with Iran. “Although aircraft transactions are generally denominated in US dollars, due to the restrictions which apply to the use of the currency, Boeing may make an exception and contract in Euros,” adds Somaia.

The news has prompted strong objection from Congress. “To say we have national security concerns would be an understatement,” US Rep. Peter J. Roskam said. “Boeing and the Islamic Republic should know the US Congress will not look favourably upon any deal that jeopardises the safety and security of the American people.”

Roskam expressed concerns over an “iconic American company doing business with terrorism’s central bank”.

The post Iran to buy around 100 aircraft from Boeing appeared first on International Finance.

But even after the deal is sealed, LinkedIn will continue to function independently

June 14, 2016: Microsoft on Monday announced a $26.2 billion deal to acquire professional networking platform LinkedIn for $196 per share.

The market gave a mixed reaction to the announcement. While shares of LinkedIn surged 47 percent to near $193, Microsoft’s stock was down 3.2 percent.

After the deal was announced, Moody’s Investors Service placed Microsoft’s “AAA” rating under review for downgrade. Standard & Poor’s though, reaffirmed its “AAA” rating, and said it maintains all other ratings and a “stable outlook” on the company.

Jeff Weiner will continue to serve as CEO of LinkedIn and will report to Microsoft CEO Satya Nadella. The deal is expected to close by the end of the year. The acquisition is subject to approval by LinkedIn shareholders and regulators.

“The LinkedIn team has grown a fantastic business centered on connecting the world’s professionals,” Nadella said in a statement. “Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organisation on the planet.”

LinkedIn is the world’s largest and most valuable professional network and continues to build a strong and growing business. Over the past year, the company has launched a new version of its mobile app that has led to increased member engagement; enhanced the LinkedIn newsfeed to deliver better business insights; acquired a leading online learning platform called Lynda.com to enter a new market; and rolled out a new version of its Recruiter product to its enterprise customers. These innovations have resulted in increased membership, engagement and financial results.

Weiner said little is expected to change as LinkedIn will continue to operate in the same manner and employees will enjoy the same job titles. “The one exception: For those members of the team whose jobs are entirely focused on maintaining LinkedIn’s status as a publicly traded company, we’ll be helping you find your next play,” Weiner said. “In terms of everything else, it should be business as usual. We have the same mission and vision; we have the same culture and values; and I’m still the CEO of LinkedIn.”

This is Microsoft’s first big acquisition since Nadella took over as the CEO two years ago. “This deal brings together the world’s leading professional cloud with world’s leading professional network,” said Nadella. “We are in pursuit of a common mission centred on empowering people and organisations. The deal is key to our bold ambition to reinvent productivity and business processes.”

Experts feel the deal, though inflated at $26.2 billion, will help Microsoft gain a foothold in the social networking space.

Sanchit Vir Gogia, CEO, Greyhound Research, says, “The deal will help Microsoft compete in the enterprise space and go beyond attracting just CIOs. Majority of LinkedIn buyers are chief human resource, chief marketing officers, and the new IT spend is coming from them. So it makes complete sense.”  Additionally, there is no overlap in terms of product portfolio.

“The deal makes sense for both parties – it gets Microsoft into content,” said an analyst from Gartner.

Microsoft will finance the transaction primarily through the issuance of new debt. Upon closing, Microsoft expects LinkedIn’s financials to be reported as part of Microsoft’s Productivity and Business Processes segment.

The post Microsoft to acquire LinkedIn appeared first on International Finance.

IFM Correspondent

January 2, 2017: The year 2016 was filled with action. The Official Monetary and Financial Institutions Forum (OMFIF), a research firm, expects 2017 to be along the same lines. Many lines of political and economic risk intersect the US, China and Donald Trump’s incoming administration. According to OMFIF, there is a spike in US bond market yields and heightened financial volatility disturbing global markets while Trump’s ‘wayward behaviour and rhetoric’ will exacerbate the damage in geopolitics and economics.

OMFIF expects wavering stability in China. Tension between Washington and Beijing could take various forms, ranging from disagreement in the UN Security Council to trade tariffs and even to an armed conflict. Trump’s economic policies will spur major reform in the US tax code and more Federal Reserve tightening. They could also provoke a trade war with China.

There will be challenges in the Middle East, Russia and Europe. OMFIF is anticipating a fallout between US and Iran over the nuclear deal. Also, a deal between Trump and Russian President Vladimir Putin could increase Russian influence in Syria and Eastern Europe.

Domestic forces, too, could cause instability in Europe. Elections are due in Germany, France and the Netherlands, as well as possibly in Italy – the four biggest euro area economies and founding members of the European Community. They will confirm global political influences already visible in Britain’s decision to leave the European Union as well as the Trump victory. Here, immigration will be a key factor. OMFIF thinks that Angela Merkel will most likely remain chancellor after the autumn poll, though no politician in Germany will be a clear winner.

Other elections could enter the narrative. Greece’s prime minister may gamble on a new poll, even though he may lose while the success of Italy’s new government is far from secured but the economy is fundamentally resilient.

The post What to expect in 2017 appeared first on International Finance.