INTERNATIONAL TRADE JUNE 2022

07/06/2022

Alberto Fernández sends to the Argentine Congress a tax ”on unexpected income”

The project seeks to tax with an extra 15% on the income of companies that have a profit of more than 1,000 million dollars, which is about 750,000 euros per year. Those subject to this tax will be above all the companies that have obtained benefits from the collapse of international prices of hydrocarbons and foodstuffs as a result of the conflict in Ukraine. Fernandez expects to collect some 200,000 million pesos which will be directed to social aid.

08/06/2022

Algeria suspends friendship treaty and freezes trade with Spain following government’s turnaround on the Sahara

Algeria suspends ”immediately” the agreement of friendship, good-neighborliness and cooperation signed with Spain on October 8, 2002 as a consequence of the ”unjustifiable turn” made by the government on the Western Sahara crisis.

The Algerian communiqué announcing the suspension of the Treaty refers to ”The announcements of March 18, 2022”, the day when the Moroccan royal palace published part of the letter signed by Pedro Sanchez where he supported Morocco’s proposal regarding the Sahara dispute, qualifying it as ”the most serious, realistic and credible basis” for the resolution of the conflict.

09/06/2022

The Spanish Government is considering filing a complaint against Algeria before the European Union for the unilateral freezing of trade agreements

The Spanish government is considering the possibility of lodging a complaint against Algeria with the European Union. For the Spanish government, the decision to unilaterally freeze trade may violate the 2005 Euro-Mediterranean Agreement.

Foreign Minister José Manuel Albares declared on Thursday, June 9, that a response is being prepared: ”Appropriate, calm and constructive, but firm in defense of Spanish interests and Spanish companies” in the face of the Algerian decision to freeze trade between the two countries.

19/06/2022

United States. Recession is not ”inevitable” but inflation is ”unacceptably high” According to Treasury Secretary Yellen

Recession talk has accelerated this year as inflation continues to rise and the Federal Reserve takes aggressive steps to try to counter it. On Wednesday, June 13, the Fed announced a 75 basis point interest rate hike, the largest since 1994. Fed Chairman Jerome Powell also communicated the Federal Open Market Committee’s intention to continue on its aggressive path of tightening monetary policy to curb inflation.

Although Yellen was optimistic that recession can be avoided, the global economy continues to face serious threats in the coming months with the continuing conflict in Ukraine, sanctions imposed on Russia, rising inflation and the consequences of the pandemic.

20/05/2022

May Chinese oil imports from Russia jump 55% to a record and overtake Saudi supply

Chinese crude imports from Russia soared 55% from a year earlier to a record high in May, displacing Saudi Arabia as the top supplier as refiners took advantage of discounted supplies amid sanctions imposed on Moscow over the war in Ukraine.

Russian oil imports, including supplies pumped through the East Siberian pipeline in the Pacific Ocean and seaborne shipments from Russian ports in Europe and the Far East, totaled nearly 8.42 million tons, according to data from China’s General Administration of Customs. This figure equates to about 1.98 million barrels per day (bpd) and is up from 1.59 million bpd in April. This means that China is now the world’s largest oil importer.

22/06/2022

U.K. inflation hits new 40-year highs

Britain’s inflation rate hit a new high of 9.1% in the 12 months to May, figures showed Wednesday, as the Russia-Ukraine war caused food and fuel prices to go ever higher.

The rise was in line with analysts’ expectations and signals there is no quick end to the falling cost of living faced by millions of Britons. The Bank of England says inflation could reach 11% in October, when the cap on household energy bills is raised.

24/06/2022

Economic consequences of overturning Roe v. Wade will be enormous, experts warn

Friday’s decision to end federal constitutional protection for abortion is seen as ideologically and politically motivated, rather than an attempt to protect women from the worst personal and economic consequences. These include economic hardship, limited ability to obtain higher education and move up the socioeconomic ladder, as well as worse health care for women who rely on clinics for preventive care. All of these would affect the status of the labor force, economic output and increase the need for public subsidies, economists say.

26/06/2022

UK joins the ban on Russian gold imports

Gold exports amounted to £12.6 billion to Russia in 2021, and the UK says its importance has increased since the start of the war as so-called ”oligarchs” rush to buy bullion to avoid sanctions.

The US president suggested that the other G7 nations – Germany, France and Italy would also join the ban. For his part Boris Johnson added: ”We have to deprive Putin’s regime of its funding. The UK and our allies are doing it”.

27/06/2022

China Evergrande faces winding-up petition in Hong Kong

A winding-up petition has been filed against beleaguered property developer China Evergrande Group in Hong Kong’s High Court, according to the judiciary’s website.

The petition was filed by ”Top Shine Global Limited of Intershore Consult (Samoa) Limited,” according to the website, and the hearing will be held on Aug. 31.

Evergrande’s foreign debt of more than $300 billion is considered in default after it defaulted on its payment obligations late last year.

France wants Iran and Venezuela to return to the oil market

France wants those affected by international sanctions Iran and Venezuela to be able to return to the oil markets to alleviate Russian pressure on energy supplies, which has sent prices soaring.

It also wants the mechanism envisaged to limit the price of oil to be as broad as possible and not limited to Russian production.

Russia enters historic default as payment periods expire

Russia has entered its first major foreign debt default in more than a century after two international bond payments expired earlier Sunday.

Interest payments totaling $100 million were due on May 27 with a grace period extending to this Sunday night, May 26. Several media outlets report that bondholders have not received their payments after Russia’s attempts to pay in its currency were blocked by international sanctions.

The Kremlin rejects the idea that Russia is in default, its spokesman, Dmitry Peskov has told a press conference that Russia made payments on bonds due in May, but they have been blocked by Euroclear due to Western sanctions, so the failure to deliver payments ”is not Russia’s problem”.

Although indications are that the payments have indeed been held up by international sanctions, it may take some time to confirm the default.

Iron ore hits one-week high on hopes for Chinese demand and easing Covid-19

Benchmark iron ore futures in Dalian and Singapore hit one-week highs on Monday, supported by hopes that Chinese steelmakers will restart dozens of shuttered blast furnaces due to falling margins and weak demand to replenish inventories.

The relaxation of COVID-19 restrictions in Shanghai and the removal or easing of testing mandates in several Chinese cities also buoyed markets, buffeted last week by concerns over weak steel demand in the world’s largest producer of the manufacturing and construction material.

Analysts at Sinosteel Futures say last week’s market panic has abated. Limited steel production is expected to help reduce inventories eventually, they said, and ”reduced supply will help prices stop falling.”

Construction steel bars on the Shanghai Stock Exchange, which fell on June 20 to a nearly seven-month low, rose 0.9%, while hot-rolled coils rose 1%. Stainless steel fell by 3.2%.

 

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