Trump and Putin discuss Ukraine and Iran in phone call, Kremlin says
On the war in Ukraine, Putin's foreign affairs adviser Yuri Ushakov said Trump emphasised his push for a quick halt to the fighting, and Putin voiced Moscow's readiness to pursue talks with Kyiv, noting the previous rounds in Turkey yielded humanitarian results.
At the same time, the Russian leader said Moscow will seek to achieve its goals in Ukraine and remove the "root causes" of the conflict, Ushakov said.
"Russia will not back down from these goals," Ushakov told reporters after the call.
Putin has argued he sent troops into Ukraine in February 2022 to fend off a threat to Russia posed by Ukraine's push to join NATO and protect Russian speakers in Ukraine, arguments rejected by Kyiv and its allies.
He insisted that any prospective peace deal must see Ukraine abandon its NATO bid and recognise Russia's territorial gains.
Thursday's call follows the Pentagon's confirmation that it's pausing shipment of some weapons to Ukraine as it reviews US military stockpiles.
The weapons being held up for Ukraine include air defence missiles, precision-guided artillery and other equipment.
The details on the weapons in some of the paused deliveries were confirmed by a US official and former national security official familiar with the matter.
They both requested anonymity to discuss what is being held up as the Pentagon has yet to provide details.
Ushakov said a suspension of some US weapons shipments to Ukraine wasn't discussed in the Trump-Putin call.
Ukrainian President Volodymyr Zelenskyy said in Denmark after meeting with major European Union backers that he may talk to Trump in the coming days about the suspension of weapons deliveries.
"I hope that maybe tomorrow, or close days, these days, I will speak about it with President Trump," he said.
Asked about his expectations from the Trump-Putin call, he said that "I'm not sure that they have a lot of common ideas, common topics to talk (about), because they are very different people."
The previous publicly known call between Trump and Putin was on 14 June, a day after Israel attacked Iran.
The resumed contacts between Trump and Putin appeared to reflect both leaders' interest in mending ties that have plummeted to their lowest point since the Cold War amid the conflict in Ukraine.
Ushakov said Trump told Putin about his $4.5 trillion (€3.8 trillion) tax breaks and spending cuts bill and the Russian leader wished him success in pursuing his plans and also congratulated the US on the Independence Day holiday.
While discussing the situation around Iran and in the broader Middle East, Putin emphasised the need to resolve all differences "exclusively by political and diplomatic means," said Ushakov.
The leaders agreed that Russian and US officials will maintain contacts on the issue, he added.
The United States struck three nuclear sites in Iran on 22 June, inserting itself into Israel's conflict aimed at destroying Tehran's nuclear programme.
The Kremlin adviser noted the leaders also discussed developments in Syria and expressed interest in pursuing bilateral projects in the energy sector and space exploration, during what he described as "frank, businesslike and concrete conversation."
Ushakov added that Putin even suggested that the US and Russia could exchange movies promoting "traditional values shared by us and the Trump administration."
On Tuesday, Putin and French President Emmanuel Macron held their first direct telephone call in almost three years.
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'A lot will depend on how the 40% tariffs are applied. If the Trump administration keeps it targeted, it should be manageable,' said Roland Rajah, lead economist at the Lowy Institute in Sydney. 'If the approach is too broad and blunt, then it could be quite damaging' for China, Vietnam and for the US, which will have to pay higher import prices, he said. The think tank estimates that 28% of Vietnamese exports to the US were made up of Chinese content in 2022, up from 9% in 2018. Pham Luu Hung, chief economist at SSI Securities Corp. in Hanoi, said a 40% levy on transshipped goods would have limited impact on Vietnam's economy because they aren't of Vietnamese origin in the first place. Re-routed exports accounted for just 16.5% of Vietnam's shipments to the US in 2021, a share that's likely declined over the past couple of years amid stronger enforcement actions by both governments, Hung said. 'An important caveat is that the rules of origin remain under negotiation,' Hung said. 'In practice, these rules may have a greater impact than the tariff rates themselves.' Duncan Wrigley, chief China economist at Pantheon Macroeconomics, said he's skeptical the latest deal will be effective in stamping out Chinese exports via Vietnam to the US. 'The devil is in the details, but I think China's exports will either go via other markets to the US, or some value-added will be done in Vietnam so the product counts as made in Vietnam, rather than a transshipment,' he said. As officials across Asia rushed to negotiate lower US tariff levels with their US counterparts this year, Chinese businesses have been just as quick to ramp up their exports through alternative channels in order to skirt punitive US levies. Shipments from China to Southeast Asia have reached record highs in Indonesia, Malaysia, Thailand and Vietnam this year. And there's been a 'significant increase in correlation' to the region's increase in exports to the US during the same period, Citigroup Inc. economists said in a recent report. Much of that is likely due to the shifting of legitimate production across the region. Goods destined for the US market may be sent from their factories in Southeast Asia, and what they make in their factories in China will be sent to the rest of the world, said Derrick Kam, Asia economist at Morgan Stanley. 'If you try to represent that in the trade data, it will look exactly like rerouting, but it's not,' Kam said. 'It's essentially the supply chain working itself out.' But it's transshipment that's been a major concern for Trump's top trade advisers including Peter Navarro, who described Vietnam as 'essentially a colony of communist China' during an April interview with Fox News. And it's not just been happening in Vietnam. Not long after Trump unveiled his 'Liberation Day' tariffs on April 2, garment makers in Indonesia started receiving offers from Chinese companies to be 'partners in transshipment,' said Redma Gita Wirawasta, chairman of the Indonesian Filament Yarn and Fiber Producers Association. Chinese products would be rerouted to Indonesia, undergo minimal processing like repacking or relabeling, then secure a certification that they were made in the Southeast Asian country, Wirawasta said. When the goods are then exported to the US, they'd be subject to the 10% universal levy that Trump has imposed on nearly all countries, instead of the tariff for China that still equates to an effective level of over 50%, even after a recent 'deal' that lowered levies from a peak of 145%. With the huge scope for arbitrage, coupled with little policing, that process will prove tough to stamp out. 'Chinese exporters and their affiliates and partners in Southeast Asia are highly skilled at adapting to changing rules, identifying loopholes, and sometimes overstating the extent of value-add by non-China countries,' said Gabriel Wildau, managing director at advisory firm Teneo Holdings LLC in New York. Some final assembly or transshipment may shift to rival Southeast Asian transshipment hubs like Cambodia, Thailand and Singapore, or farther afield to Turkey, Hungary or Poland, Wildau said. 'Another possibility is that the definitions and enforcement mechanisms are fuzzy, rendering the latest deal cosmetic and toothless,' he said. 'Rigorous enforcement would also require a significant boost of resources to enable US customs to verify compliance with the tougher rules of origin.' There have been efforts across the region to at least be seen to be making an effort to curb the practice. Indeed, Vietnam has made a big deal about cracking down on trade fraud and illegal activity in recent months. In April, South Korea said it seized more than $20 million worth of goods with falsified origin labels — the majority of which were destined for the US. The Airfreight Forwarders Association of Malaysia issued a warning in May as Chinese brokers promoted illegal rerouting services on social media. Malaysia has centralized the issuance of certificates of origin with its Ministry of Investment, Trade and Industry, while tapping its customs agency to help curb transshipment. Thailand has expanded its watch list for high-risk products, including solar panels, cars and parts, and is mulling stricter penalties for violators. Casey Barnett, the president of the American Chamber of Commerce in Cambodia, is already seeing the changes in action. One factory that exports to major US retailers, including Walmart, Home Depot and Lowe's, said that customs officials were very carefully reviewing their products before being sent to the US, he said. 'It's creating some additional paperwork and a little bit of red tape here,' Barnett said. A senior manager at a logistics company in Cambodia, who asked not to be identified because the matter is sensitive, said export processing time has now stretched to as much as 14 working days — double what it was before. But in Indonesia, getting a certificate of origin is fairly quick and painless when goods are marked for export, often just requiring a product list and a letter to the provincial trade office, according to Wirawasta. Authorities prioritize checking products that enter the country to ensure they pay the right duties and comply with regulations, he explained. It's rare for them to inspect factories where an export good was supposedly made. So much so that sometimes, Chinese companies don't even need to muster up some local processing. 'The T-shirt could be finished in China, with a 'Made in Indonesia' label already sewn on,' Wirawasta said. 'Some traders won't even bother to unload the goods from the shipping container,' he added. 'Unloading costs money.'
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President Donald Trump 's two-tiered trade deal with Vietnam aims squarely at practices China has long used to skirt US tariffs: The widespread legal shifting of production to Southeast Asian factories and the murkier and illegal 'origin washing' of exports through their ports. The agreement slaps a 20% tariff on Vietnamese exports to the US and a 40% levy on goods deemed to be transshipped through the country. With details still scarce, economists said much will hinge on the framework Washington establishes to determine what it sees as 'Made in Vietnam' and what it sees as transshipments. Complicating matters is the fact that Chinese businesses have rushed to set up shop across Southeast Asia since Trump launched his first trade war back in 2018. The lion's share of Vietnam's exports to the US are goods like Airpods, phones or other products assembled with Chinese components in a factory in Vietnam and then shipped to America. That's not illegal. 'A lot will depend on how the 40% tariffs are applied. If the Trump administration keeps it targeted, it should be manageable,' said Roland Rajah, lead economist at the Lowy Institute in Sydney. 'If the approach is too broad and blunt, then it could be quite damaging' for China, Vietnam and for the US, which will have to pay higher import prices, he said. The think tank estimates that 28% of Vietnamese exports to the US were made up of Chinese content in 2022, up from 9% in 2018. Pham Luu Hung, chief economist at SSI Securities Corp. in Hanoi, said a 40% levy on transshipped goods would have limited impact on Vietnam's economy because they aren't of Vietnamese origin in the first place. Re-routed exports accounted for just 16.5% of Vietnam's shipments to the US in 2021, a share that's likely declined over the past couple of years amid stronger enforcement actions by both governments, Hung said. 'An important caveat is that the rules of origin remain under negotiation,' Hung said. 'In practice, these rules may have a greater impact than the tariff rates themselves.' Duncan Wrigley, chief China economist at Pantheon Macroeconomics, said he's skeptical the latest deal will be effective in stamping out Chinese exports via Vietnam to the US. 'The devil is in the details, but I think China's exports will either go via other markets to the US, or some value-added will be done in Vietnam so the product counts as made in Vietnam, rather than a transshipment,' he said. As officials across Asia rushed to negotiate lower US tariff levels with their US counterparts this year, Chinese businesses have been just as quick to ramp up their exports through alternative channels in order to skirt punitive US levies. Shipments from China to Southeast Asia have reached record highs in Indonesia, Malaysia, Thailand and Vietnam this year. And there's been a 'significant increase in correlation' to the region's increase in exports to the US during the same period, Citigroup Inc. economists said in a recent report. Much of that is likely due to the shifting of legitimate production across the region. Goods destined for the US market may be sent from their factories in Southeast Asia, and what they make in their factories in China will be sent to the rest of the world, said Derrick Kam, Asia economist at Morgan Stanley. 'If you try to represent that in the trade data, it will look exactly like rerouting, but it's not,' Kam said. 'It's essentially the supply chain working itself out.' But it's transshipment that's been a major concern for Trump's top trade advisers including Peter Navarro, who described Vietnam as 'essentially a colony of communist China' during an April interview with Fox News. And it's not just been happening in Vietnam. Not long after Trump unveiled his 'Liberation Day' tariffs on April 2, garment makers in Indonesia started receiving offers from Chinese companies to be 'partners in transshipment,' said Redma Gita Wirawasta, chairman of the Indonesian Filament Yarn and Fiber Producers Association. Chinese products would be rerouted to Indonesia, undergo minimal processing like repacking or relabeling, then secure a certification that they were made in the Southeast Asian country, Wirawasta said. When the goods are then exported to the US, they'd be subject to the 10% universal levy that Trump has imposed on nearly all countries, instead of the tariff for China that still equates to an effective level of over 50%, even after a recent 'deal' that lowered levies from a peak of 145%. With the huge scope for arbitrage, coupled with little policing, that process will prove tough to stamp out. 'Chinese exporters and their affiliates and partners in Southeast Asia are highly skilled at adapting to changing rules, identifying loopholes, and sometimes overstating the extent of value-add by non-China countries,' said Gabriel Wildau, managing director at advisory firm Teneo Holdings LLC in New York. Some final assembly or transshipment may shift to rival Southeast Asian transshipment hubs like Cambodia, Thailand and Singapore, or farther afield to Turkey, Hungary or Poland, Wildau said. 'Another possibility is that the definitions and enforcement mechanisms are fuzzy, rendering the latest deal cosmetic and toothless,' he said. 'Rigorous enforcement would also require a significant boost of resources to enable US customs to verify compliance with the tougher rules of origin.' There have been efforts across the region to at least be seen to be making an effort to curb the practice. Indeed, Vietnam has made a big deal about cracking down on trade fraud and illegal activity in recent months. In April, South Korea said it seized more than $20 million worth of goods with falsified origin labels — the majority of which were destined for the US. The Airfreight Forwarders Association of Malaysia issued a warning in May as Chinese brokers promoted illegal rerouting services on social media. Malaysia has centralized the issuance of certificates of origin with its Ministry of Investment, Trade and Industry, while tapping its customs agency to help curb transshipment. Thailand has expanded its watch list for high-risk products, including solar panels, cars and parts, and is mulling stricter penalties for violators. Casey Barnett, the president of the American Chamber of Commerce in Cambodia, is already seeing the changes in action. One factory that exports to major US retailers, including Walmart, Home Depot and Lowe's, said that customs officials were very carefully reviewing their products before being sent to the US, he said. 'It's creating some additional paperwork and a little bit of red tape here,' Barnett said. A senior manager at a logistics company in Cambodia, who asked not to be identified because the matter is sensitive, said export processing time has now stretched to as much as 14 working days — double what it was before. But in Indonesia, getting a certificate of origin is fairly quick and painless when goods are marked for export, often just requiring a product list and a letter to the provincial trade office, according to Wirawasta. Authorities prioritize checking products that enter the country to ensure they pay the right duties and comply with regulations, he explained. It's rare for them to inspect factories where an export good was supposedly made. So much so that sometimes, Chinese companies don't even need to muster up some local processing. 'The T-shirt could be finished in China, with a 'Made in Indonesia' label already sewn on,' Wirawasta said. 'Some traders won't even bother to unload the goods from the shipping container,' he added. 'Unloading costs money.'
Fashion Network
4 hours ago
- Fashion Network
Trump aims to shut trade loopholes China uses to evade tariffs
President Donald Trump 's two-tiered trade deal with Vietnam aims squarely at practices China has long used to skirt US tariffs: The widespread legal shifting of production to Southeast Asian factories and the murkier and illegal 'origin washing' of exports through their ports. The agreement slaps a 20% tariff on Vietnamese exports to the US and a 40% levy on goods deemed to be transshipped through the country. With details still scarce, economists said much will hinge on the framework Washington establishes to determine what it sees as 'Made in Vietnam' and what it sees as transshipments. Complicating matters is the fact that Chinese businesses have rushed to set up shop across Southeast Asia since Trump launched his first trade war back in 2018. The lion's share of Vietnam's exports to the US are goods like Airpods, phones or other products assembled with Chinese components in a factory in Vietnam and then shipped to America. That's not illegal. 'A lot will depend on how the 40% tariffs are applied. If the Trump administration keeps it targeted, it should be manageable,' said Roland Rajah, lead economist at the Lowy Institute in Sydney. 'If the approach is too broad and blunt, then it could be quite damaging' for China, Vietnam and for the US, which will have to pay higher import prices, he said. The think tank estimates that 28% of Vietnamese exports to the US were made up of Chinese content in 2022, up from 9% in 2018. Pham Luu Hung, chief economist at SSI Securities Corp. in Hanoi, said a 40% levy on transshipped goods would have limited impact on Vietnam's economy because they aren't of Vietnamese origin in the first place. Re-routed exports accounted for just 16.5% of Vietnam's shipments to the US in 2021, a share that's likely declined over the past couple of years amid stronger enforcement actions by both governments, Hung said. 'An important caveat is that the rules of origin remain under negotiation,' Hung said. 'In practice, these rules may have a greater impact than the tariff rates themselves.' Duncan Wrigley, chief China economist at Pantheon Macroeconomics, said he's skeptical the latest deal will be effective in stamping out Chinese exports via Vietnam to the US. 'The devil is in the details, but I think China's exports will either go via other markets to the US, or some value-added will be done in Vietnam so the product counts as made in Vietnam, rather than a transshipment,' he said. As officials across Asia rushed to negotiate lower US tariff levels with their US counterparts this year, Chinese businesses have been just as quick to ramp up their exports through alternative channels in order to skirt punitive US levies. Shipments from China to Southeast Asia have reached record highs in Indonesia, Malaysia, Thailand and Vietnam this year. And there's been a 'significant increase in correlation' to the region's increase in exports to the US during the same period, Citigroup Inc. economists said in a recent report. Much of that is likely due to the shifting of legitimate production across the region. Goods destined for the US market may be sent from their factories in Southeast Asia, and what they make in their factories in China will be sent to the rest of the world, said Derrick Kam, Asia economist at Morgan Stanley. 'If you try to represent that in the trade data, it will look exactly like rerouting, but it's not,' Kam said. 'It's essentially the supply chain working itself out.' But it's transshipment that's been a major concern for Trump's top trade advisers including Peter Navarro, who described Vietnam as 'essentially a colony of communist China' during an April interview with Fox News. And it's not just been happening in Vietnam. Not long after Trump unveiled his 'Liberation Day' tariffs on April 2, garment makers in Indonesia started receiving offers from Chinese companies to be 'partners in transshipment,' said Redma Gita Wirawasta, chairman of the Indonesian Filament Yarn and Fiber Producers Association. Chinese products would be rerouted to Indonesia, undergo minimal processing like repacking or relabeling, then secure a certification that they were made in the Southeast Asian country, Wirawasta said. When the goods are then exported to the US, they'd be subject to the 10% universal levy that Trump has imposed on nearly all countries, instead of the tariff for China that still equates to an effective level of over 50%, even after a recent 'deal' that lowered levies from a peak of 145%. With the huge scope for arbitrage, coupled with little policing, that process will prove tough to stamp out. 'Chinese exporters and their affiliates and partners in Southeast Asia are highly skilled at adapting to changing rules, identifying loopholes, and sometimes overstating the extent of value-add by non-China countries,' said Gabriel Wildau, managing director at advisory firm Teneo Holdings LLC in New York. Some final assembly or transshipment may shift to rival Southeast Asian transshipment hubs like Cambodia, Thailand and Singapore, or farther afield to Turkey, Hungary or Poland, Wildau said. 'Another possibility is that the definitions and enforcement mechanisms are fuzzy, rendering the latest deal cosmetic and toothless,' he said. 'Rigorous enforcement would also require a significant boost of resources to enable US customs to verify compliance with the tougher rules of origin.' There have been efforts across the region to at least be seen to be making an effort to curb the practice. Indeed, Vietnam has made a big deal about cracking down on trade fraud and illegal activity in recent months. In April, South Korea said it seized more than $20 million worth of goods with falsified origin labels — the majority of which were destined for the US. The Airfreight Forwarders Association of Malaysia issued a warning in May as Chinese brokers promoted illegal rerouting services on social media. Malaysia has centralized the issuance of certificates of origin with its Ministry of Investment, Trade and Industry, while tapping its customs agency to help curb transshipment. Thailand has expanded its watch list for high-risk products, including solar panels, cars and parts, and is mulling stricter penalties for violators. Casey Barnett, the president of the American Chamber of Commerce in Cambodia, is already seeing the changes in action. One factory that exports to major US retailers, including Walmart, Home Depot and Lowe's, said that customs officials were very carefully reviewing their products before being sent to the US, he said. 'It's creating some additional paperwork and a little bit of red tape here,' Barnett said. A senior manager at a logistics company in Cambodia, who asked not to be identified because the matter is sensitive, said export processing time has now stretched to as much as 14 working days — double what it was before. But in Indonesia, getting a certificate of origin is fairly quick and painless when goods are marked for export, often just requiring a product list and a letter to the provincial trade office, according to Wirawasta. Authorities prioritize checking products that enter the country to ensure they pay the right duties and comply with regulations, he explained. It's rare for them to inspect factories where an export good was supposedly made. So much so that sometimes, Chinese companies don't even need to muster up some local processing. 'The T-shirt could be finished in China, with a 'Made in Indonesia' label already sewn on,' Wirawasta said. 'Some traders won't even bother to unload the goods from the shipping container,' he added. 'Unloading costs money.'
