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Gulf Today
18 hours ago
- Gulf Today
US reaches deal with Japan, tariff cut
The United States, riding a tariff wave launched by President Donald Trump, has concluded a trade agreement with Japan, the fourth largest economy in the world, in Washington on Tuesday. According to the agreement, the US will impose 15 per cent tariff on all goods imported from Japan. This is a much lower rate than the 25 per cent that Trump had threatened Japan with from August 1. Even as the deadline hovered over the talks, the two sides managed to arrive at an agreement much before the dreaded date. Trump had declared on his Truth Social, his personal portal, 'This Deal will create Hundreds and Thousands of Jobs – There has never been anything like it. This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan.' Japanese Prime Minister Shigeru Ishiba said, 'Since February, we have been negotiating with our national interests at stake. Both sides have engaged in all-out, close-to-the-edge negotiations over automobiles and other products. I believe this outcome reflects those efforts.' The trade agreement reflects interesting details. Though it appears that the United States has gained hugely going by the headline figures – Japan will have to invest $550 billion in the United States, open its agricultural sector to American rice – the impact on the Japanese GDP would be a mere 0.55 per cent. Even if the tariff rate had remained at the apparently punitive 25 per cent, the impact on Japanese GDP would have been 0.85 per cent. The US was running a trade deficit of $69.4 billion. And Japan will channel the investments in the US from state-backed institutions like Japan Bank for International Cooperation (JBIC) or through guaranteed loans. The Japanese investments are to be made in semi-conductors, pharmaceuticals, steel, shipbuilding, critical minerals, aviation, energy, automobiles, AI and quantum technology. The sensitive area for Japan is the import of rice. Japan consumes seven million tonnes of rice every year. It maintains a tariff-free quota of 770,000 tonnes. And it will increase the ratio of US rice imports within this range. It is said that there is room for rice imports outside the free tariff quota, with the proviso of 341 yen ($.2.33) per kilogramme of rice. Prime Minister Ishiba referring to the opening of rice imports from the US, said, 'You can think of it as increasing the proportion of rice procured from the United States, under the minimum access arrangement, but this agreement does not include any provisions that would sacrifice agriculture.' Both sides have bargained hard, and each side has claimed victory. The Japanese believe that that they have succeeded in bringing down the reciprocal tariff rate from 25 per cent to 15 per cent, a clear 10 per cent reduction. The US believes that it has managed to force Japan to necessarily invest in the US – according to the deal $550 billion – and that 90 per cent of the profits made from the investments will remain in the United States, and that it has succeeded in prising open the protected agricultural market, especially with regard to rice. It is expected that the US-Japan trade deal will serve as a template for the trade agreements with the European Union (EU) and China. The expectation is that the US will settle for a 15 per cent tariff with these two as well. The US is willing to be reasonably generous with big trade partners like Japan, EU, and China. But with smaller countries and economies like the Philippines and Indonesia it is playing tough. In the deal with the Philippines and Indonesia, the US has brought down the tariff regime from 20 per cent to 19 per cent. The trade balance of the US with these two countries is much lower, $17.9 billion with Indonesia and $4.9 billion with the Philippines.
Gulf Today
a day ago
- Gulf Today
Less selection, More prices
With summer in full swing in the United States, retail executives are sweating a different season. It's less than 22 weeks before Christmas, a time when businesses that make and sell consumer goods usually nail down their holiday orders and prices. But President Donald Trump's vacillating trade policies have complicated those end-of-year plans. Balsam Hill, which sells artificial trees and other decorations online, expects to publish fewer and thinner holiday catalogs because the featured products keep changing with the tariff rates the president sets, postpones and revises. 'The uncertainty has led us to spend all our time trying to rejigger what we're ordering, where we're bringing it in, when it's going to get here,' Mac Harman, CEO of Balsam Hill parent company Balsam Brands, said. 'We don't know which items we're going to have to put in the catalog or not.' Months of confusion over which foreign countries' goods may become more expensive to import has left a question mark over the holiday shopping season. US retailers often begin planning for the winter holidays in January and typically finalize the bulk of their orders by the end of June. The seesawing tariffs already have factored into their calculations. The consequences for consumers? Stores may not have the specific gift items customers want come November and December. Some retail suppliers and buyers scaled back their holiday lines rather than risking a hefty tax bill or expensive imports going unsold. Businesses still are setting prices but say shoppers can expect many things to cost more, though by how much depends partly on whether Trump's latest round of 'reciprocal' tariffs kicks in next month. The lack of clarity has been especially disruptive for the US toy industry, which sources nearly 80% of its products from China. American toy makers usually ramp up production in April, a process delayed until late May this year after the president put a 145% tariff on Chinese goods, according to Greg Ahearn, president and CEO of the Toy Association, an industry trade group. The US tariff rate may have dropped significantly from its spring high - a truce in the US-China trade war is set to expire on Aug. 12 - but continues to shape the forthcoming holiday period. Manufacturing activity is way down from a year ago for small- and medium-sized US toy companies, Ahearn said. The late start to factory work in China means holiday toys are only now arriving at US warehouses, industry experts said. A big unknown is whether tariffs will keep stores from replenishing supplies of any breakout hit toys that emerge in September, said James Zahn, editor-in-chief of the trade publication Toy Book. In the retail world, planning for Christmas in July usually involves mapping out seasonal marketing and promotion strategies. Dean Smith, who co-owns independent toy stores JaZams in Princeton, New Jersey, and Lahaska, Pennsylvania, said he recently spent an hour and a half running through pricing scenarios with a Canadian distributor because the wholesale cost of some products increased by 20%. Increasing his own prices that much might turn off customers, Smith said, so he explored ways to 'maintain a reasonable margin without raising prices beyond what consumers would accept.' He ordered a lower cost Crazy Forts building set so he would have the toy on hand and left out the kids' edition of the Anomia card game because he didn't think customers would pay what he would have to charge. 'In the end, I had to eliminate half of the products that I normally buy,' Smith said. Hilary Key, owner of The Toy Chest in Nashville, Indiana, said she tries to get new games and toys in early most years to see which ones she should stock up on for the winter holidays. This year, she abandoned her product testing for fear any delayed orders would incur high import taxes. Meanwhile, vendors of toys made in China and elsewhere bombarded Key with price increase notices. For example, Schylling, which makes Needoh, Care Bear collectibles and modern versions of nostalgic toys like My Little Pony, increased prices on orders by 20%, according to Key. All the price hikes are subject to change if the tariff situation changes again. Key worries her store won't have as compelling a product assortment as she prides herself on carrying. 'My concern is not that I'll have nothing, because I can bring in more books. I can bring in more gifts, or I can bring in just things that are manufactured in other places,' she said. 'But that doesn't mean I'm going to have the best stock for every developmental age, for every special need.' The retail industry may have to keep taking a whack-a-mole approach to navigating the White House's latest tariff ultimatums and temporary reprieves. Last week, the president again reset the rates on imports from Brazil, the European Union, Mexico, and other major trading partners but said they would not take effect until Aug. 1. The brief pause should extend the window importers have to bring in seasonal merchandise at the current baseline tariff of 10%. The Port of Los Angeles had the busiest June in its 117-year history after companies raced to secure holiday shipments, and July imports look strong so far, according to Gene Seroka, the port's executive director. 'In my view, we're seeing a peak season push right now to bring in goods ahead of potentially higher tariffs later this summer,' Seroka said Monday. The pace of port activity so far this year reflects a 'tariff whipsaw effect' - imports slowing when tariffs kick in and rebounding when they're paused, he said. 'For us consumers, lower inventory levels, fewer selections and higher prices are likely as we head into the holidays.' Smith, who co-owns the two JaZams stores with his partner, Joanne Farrugia, said they started placing holiday orders two months earlier than usual for 'certain items that we felt were essential for us to have at particular pricing.' They doubled their warehouse space to store the stockpile. But some shoppers are trying to get ahead of higher prices just like businesses are, he said. He's noticed customers snapping up items that will likely be popular during the holidays, like Jellycat plush toys and large stuffed unicorns and dogs. Any sales are welcome, but Smith and Farrugia are wary of having to restock at a higher cost. 'We're just trying to be as friendly as we can to the consumer and still have a product portfolio or profile that is gonna meet the needs of all of our various customers, which is getting more and more challenging by the day,' Smith said. Balsam Brands' Harman said he's had to resign himself to not having as robust a selection of ornaments and frosted trees to sell as in years' past. Soon, it will be too late to import meaningful additions to his range of products. 'Our purpose as a company is to create joy together, and we're going to do our very best to do that this year,' Harman said. 'We're just not going to have a bunch of the items that consumers want this year, and that's not a position we want to be in.' Associated Press
Dubai Eye
2 days ago
- Dubai Eye
Trump arrives in Scotland for golf and bilateral talks as EU trade deal nears
US President Donald Trump, dogged by questions about his ties to disgraced financier Jeffrey Epstein, arrived in Scotland on Friday for some golf and bilateral talks that could yield a trade deal with the European Union. Trump told reporters upon his arrival that he will visit his two golf properties in Scotland and meet with British Prime Minister Keir Starmer and European Commission President Ursula von der Leyen, whom he called a "highly respected woman". As hundreds of onlookers cheered his arrival, Trump repeated his earlier comment about a 50-50 chance of securing a deal with the EU, adding it would be his administration's biggest trade agreement thus far, if it came together. However, he said there were still "sticking points" with Brussels on "maybe 20 different things". Trump said his meeting with Starmer would be more of a celebration of the trade deal already reached than continued work on it, adding, "It's a great deal for both." Before he left Washington, Trump said his administration was working hard on a possible trade deal with the EU, and Brussels was keen to make a deal. Von der Leyen said later she would meet Trump in Scotland on Sunday. EU diplomats say a deal could result in a 15 per cent tariff on EU goods, mirroring a framework accord with Japan reached this week and half of the 30 per cent Trump is threatening to impose by August 1. Trump has sought to reorder the global economy after imposing a 10 per cent tariff on nearly all trading partners in April and threatening sharply higher rates for many countries to kick in a week from now. Trump says the moves will reduce the US trade deficit and bring in extra revenue, but economists warn the new trade policies could drive up inflation. 'DON'T TALK ABOUT TRUMP' Trump, facing the biggest domestic political crisis of his second term, expressed frustration about ongoing questions about his administration's handling of investigative files related to Epstein's criminal charges and his 2019 death in prison. "You make it a very big thing over something that's not a big thing," Trump told reporters in Scotland, urging them to focus on other prominent Americans with ties to Epstein, including former President Bill Clinton. "Talk about Clinton. Talk about the former president of Harvard. Talk about all of his friends. Talk about the hedge fund guys that were with him all the time. Don't talk about Trump," he said. "What you should be talking about is the fact that we have the greatest six months in the history of a presidency." The Epstein issue has caused a rare breach with some of Trump's most loyal Make America Great Again supporters, and majorities of Americans and Trump's Republicans say they believe the government is hiding details on the case, according to Reuters/Ipsos polling. White House officials are hoping the controversy dies down while Trump is abroad, two people familiar with the matter said. DEEPEN TIES Trump will stay at his Turnberry property on Scotland's west coast this weekend, before traveling on Monday to a golf property in Aberdeen, where he will open a second 18-hole course named in honour of his mother, Mary Anne MacLeod. MacLeod was born and raised on a Scottish island before emigrating to the US. As he left the White House, Trump said he looked forward to meeting both Starmer and Scottish leader John Swinney, who had publicly backed Democratic candidate Kamala Harris in the 2024 US presidential election. The trip gives Trump and Starmer a chance to deepen their already warm ties, with key issues on the agenda to include ending Russia's war in Ukraine, British and US sources said. The deteriorating situation in Gaza is also likely to come up. Starmer on Thursday said he would hold an emergency call with France and Germany over what he called the "unspeakable and indefensible" suffering and starvation being reported there, and called on Israel to allow aid to enter the Palestinian enclave. Gaza health authorities say more than 100 people have died from starvation, most in recent weeks. Human rights groups have said mass starvation is spreading even as tons of food and other supplies sit untouched just outside the territory. Since being elected last year, Starmer has prioritised good relations with Trump, stressing the importance of Britain's defence and security alliance with the US, while working to clinch the first tariff-reduction deal with the US in May. The framework agreement reaffirmed quotas and tariff rates on British automobiles and eliminated tariffs on the UK's aerospace sector, but left steel tariffs in place. Starmer is expected to press for lower steel tariffs, but sources close to the matter said it was unclear if any breakthrough was possible during Trump's visit. Trump has described Scotland as a "very special place" and made a similar trip there in 2016 during his earlier run for the presidency, but he will not necessarily get a warm welcome. Trump will return to Britain from September 17-19 for a state visit hosted by King Charles. It will make Trump the first world leader in modern times to undertake two state visits to Britain. The late Queen Elizabeth hosted him at Buckingham Palace for a three-day state visit in June 2019.
