Monthly Archives: August 2019

This Time, Trump’s Tariffs Will Hit US Consumers

WASHINGTON – President Donald Trump’s trade war with China, until now mainly an abstraction for American consumers, is about to hit home.

Beginning Sunday, the U.S. government will begin collecting 15% tariffs on $112 billion in Chinese imports � items ranging from smartwatches and TVs to shoes, diapers, sporting goods, and meat and dairy products. For the first time since Trump launched his trade war, American households face price increases because many U.S. companies say they’ll be forced to pass on to customers the higher prices they’ll pay on Chinese imports.

For more than a year, the world’s two largest economies have been locked in a high-stakes duel marked by Trump’s escalating import taxes on Chinese goods and Beijing’s retaliatory tariffs.

The two sides have held periodic talks that seem to have made little progress despite glimmers of potential breakthroughs. All the while, they’ve imposed tariffs on billions of dollars’ worth of each other’s products in a rift over what analysts say is Beijing’s predatory tactics in its drive to become the supreme high-tech superpower.

American consumers have so far been spared the worst of it: The Trump administration had left most everyday household items off its tariff list (valued at $250 billion in Chinese products so far) and instead targeted industrial goods. That’s about to change. When Trump’s new tariffs kick in at 12:01 a.m. Sunday, 69% of the consumer goods Americans buy from China will face his import taxes, up from 29% now.

More in December

That isn’t all. Higher tariffs are set to kick in for another batch of Chinese products � $160 billion worth � on Dec. 15. By then, roughly 99% of made-in-China consumer goods imported to the United States will be taxed, according to calculations by Chad Bown of the Peterson Institute for International Economics.

Overall, Trump’s trade war will have raised the average tariff on Chinese imports from 3.1% in 2017, before the hostilities began, to 24.3%.

“The bottom line is that, for the first time, Trump’s trade war is likely to directly raise prices for a lot of household budget items like clothing, shoes, toys and consumer electronics,” Bown wrote in an report.

For months, Trump � who famously declared that trade wars are “easy to win” � falsely claimed that China itself paid the tariffs and that they left Americans unscathed. In fact, U.S. importers pay the tariffs. They must make a high-risk decision: whether to absorb the higher costs themselves and accept lower profits or pass on their higher costs to their customers and risk losing business.

This has become an ever more difficult decision. After years of ultra-low inflation, consumers have grown more resistant to price hikes, especially when they can easily compare prices online for household products and choose the lowest-price options. For that reason, many retailers may choose not to impose the cost of Trump’s higher tariffs on their customers.

And the higher costs U.S. importers face could be offset somewhat by the declining value of China’s currency, which has the effect of making its products somewhat less expensive in the United States.

Still, certain goods will cost Americans more. Trump tacitly acknowledged this a few weeks ago by announcing a delay in his higher tariffs on $160 billion in imports until Dec. 15 � to keep them from squeezing holiday shoppers.

$1,000 per household

Even before the December tariffs, though, 52% of shoes and 87% of textiles and clothing imported from China were to be hit by Trump’s tariffs, according to Peterson’s Bown. And not even counting the increase � from 10% to 15% � that Trump announced for his new tariffs a week ago, J.P. Morgan had estimated that his import taxes would cost the average household roughly $1,000 a year.

“The story that holiday goods [were] given a reprieve is fake news,” said Stephen Lamar of the American Apparel and Footwear Association. Overall, the 15% September and December tariffs will force Americans to pay an extra $4 billion a year for shoes and boots, according to a footwear trade group.

Retailers, engaged for a battle for survival with Amazon and other e-commerce rivals, are bracing for the worst. Macy’s raised an alarm when it reported earnings in August: In May, Trump had raised separate tariffs on $250 billion in Chinese goods from 10% to 25%. In response, Macy’s tried to raise prices of some items on the hit list � luggage, housewares, furniture. But according to CEO Jeff Gennette, customers just said no.

Some retailers are trying to force their suppliers to eat the higher costs so they won’t have to raise prices for shoppers. Target confirmed to The Associated Press that it warned suppliers that it wouldn’t accept cost increases arising from the China tariffs. Some small retailers are even more vulnerable.

“Any cost increase puts us in a tough place,” said Jennifer Lee, whose family owns the Footprint shoe store in San Francisco. “It makes it tough for business owners because we will have to take a hit on our margins, but it will also be difficult for us to pass it on to our shoppers.”

Albert Chow, who owns Great Wall Hardware in San Francisco, said he’s already raised prices on some Chinese-made products because an earlier round of tariffs led his suppliers to raise prices 10% to 20%.

“I will try to keep the prices down for as long as I can,” Chow said. “But at some point, when the tariffs are just too much, we have to eventually raise the prices, and then it goes down to the end user � the customer.”

Otherwise upbeat

What’s frustrating for retailers is that consumers might otherwise be in an exuberant mood this holiday season: For most Americans, their jobs are safe and their wages are rising. Unemployment is near a half-century low.

Yet the economy itself looks increasingly fragile. Growth is slowing as the global economy weakens. And Trump’s mercurial approach to trade policy � imposing, delaying, reimposing import taxes via tweet � makes it nearly impossible for companies to decide on suppliers, factory sites and new markets. So they delay investments, further straining the economy.

“We worry about the average family in this country paying $500, $600, even $1,000 more annually because of the impact of tariffs,” said Myron Brilliant, head of international affairs at the U.S. Chamber of Commerce. “We worry about what it means for business confidence, business certainty and investment.”

Source: Voice of America

MAS Sets Up Steering Committee to Drive the Interest Rate Benchmark Transition from SGD Swap Offer Rate (SOR) to Singapore Overnight Rate Average (SORA)

Singapore, The Monetary Authority of Singapore (MAS) announced today the establishment of the Steering Committee for SOR Transition to SORA (SC-STS). This committee will oversee an industry-wide interest rate benchmark transition from SOR to SORA. [1]

2 SOR is a key interest rate benchmark in Singapore that is used in the pricing of SGD interest rate derivatives, commercial and retail loans, and other financial products. As the likely discontinuation of USD LIBOR [2] will impact the sustainability of SOR, the Association of Banks in Singapore (ABS) and the Singapore Foreign Exchange Market Committee (ABS-SFEMC) have concluded that financial contracts that reference SOR, particularly SGD interest rate derivatives, should transition to reference SORA. SORA has been published since 2005, and is based on transactions in a deep and liquid overnight funding market. ABS-SFEMC have released a consultation report today detailing the roadmap.

3 As the transition involves many industry participants, as well as commercial and retail customers, it is critical to have adequate stakeholder engagement and a well-managed transition. MAS has thus established an industry-led steering committee, chaired by Mr Samuel Tsien, Group CEO of OCBC Bank and ABS Chairman, to oversee the transition. The committee will be responsible for providing strategic direction on industry proposals to develop new products and markets based on SORA. The SC-STS will also engage with stakeholders to seek feedback and raise awareness on issues related to the transition from SOR to SORA. The committee will comprise senior representatives from key banks in Singapore, relevant industry associations, and MAS. The list of SC-STS members is in Annex A.

1. [1] SOR is the Singapore Dollar (SGD) Swap Offer Rate published by the ABS Benchmarks Administration Co Pte Ltd. SORA is the Singapore Overnight Rate Average published by MAS, and reflects the volume-weighted average rate of all SGD overnight cash transactions brokered in Singapore between 9:00 am to 6:15 pm.

1. [2] USD LIBOR, which is used in the computation of SOR, would likely be discontinued following the announcement by the UK authorities that the benchmark will not be sustained by regulatory powers after end-2021.

Source: Monetary Authority of Singapore

MAS Sets Up Steering Committee to Drive the Interest Rate Benchmark Transition from SGD Swap Offer Rate (SOR) to Singapore Overnight Rate Average (SORA)

Singapore, The Monetary Authority of Singapore (MAS) announced today the establishment of the Steering Committee for SOR Transition to SORA (SC-STS). This committee will oversee an industry-wide interest rate benchmark transition from SOR to SORA. [1]

2 SOR is a key interest rate benchmark in Singapore that is used in the pricing of SGD interest rate derivatives, commercial and retail loans, and other financial products. As the likely discontinuation of USD LIBOR [2] will impact the sustainability of SOR, the Association of Banks in Singapore (ABS) and the Singapore Foreign Exchange Market Committee (ABS-SFEMC) have concluded that financial contracts that reference SOR, particularly SGD interest rate derivatives, should transition to reference SORA. SORA has been published since 2005, and is based on transactions in a deep and liquid overnight funding market. ABS-SFEMC have released a consultation report today detailing the roadmap.

3 As the transition involves many industry participants, as well as commercial and retail customers, it is critical to have adequate stakeholder engagement and a well-managed transition. MAS has thus established an industry-led steering committee, chaired by Mr Samuel Tsien, Group CEO of OCBC Bank and ABS Chairman, to oversee the transition. The committee will be responsible for providing strategic direction on industry proposals to develop new products and markets based on SORA. The SC-STS will also engage with stakeholders to seek feedback and raise awareness on issues related to the transition from SOR to SORA. The committee will comprise senior representatives from key banks in Singapore, relevant industry associations, and MAS. The list of SC-STS members is in Annex A.

1. [1] SOR is the Singapore Dollar (SGD) Swap Offer Rate published by the ABS Benchmarks Administration Co Pte Ltd. SORA is the Singapore Overnight Rate Average published by MAS, and reflects the volume-weighted average rate of all SGD overnight cash transactions brokered in Singapore between 9:00 am to 6:15 pm.

1. [2] USD LIBOR, which is used in the computation of SOR, would likely be discontinued following the announcement by the UK authorities that the benchmark will not be sustained by regulatory powers after end-2021.

Source: Monetary Authority of Singapore

Dr Mahathir Urges Malaysians to Refrain from Stoking Racial Sensitivities

The prime minister said the people should be mindful that whatever they say and do should not affect the sensitivities of any racial group in the country.

We have to be careful when we say something so that we do not touch on racial sensitivities.

What we do, what we say must not evoke racist feelings, he said in a four-minute video clip entitled Apabila Dr Mahathir Ditanya Mengenai Merdeka (When Dr Mahathir is asked about Merdeka) which was uploaded onto the Chedet Official YouTube.

Dr Mahathir gave the reply to a question on what’s the most difficult thing he has to face as the prime minister that was asked when he interacted with a group of seven youths of various races by the Putrajaya Lake.

Dr Mahathir shared with them that the fact that the country is multiracial makes it a challenge for him as the prime minister in governing it.

In this context, he emphasised the importance of youths being aware of the situation in their own country.

Realise, especially, that this country of ours is multiracial and that we have to have close ties among the races, and we should not intentionally incite any race, he said.

On the question of the importance of celebrating independence, Dr Mahathir said that with independence, the people can determine their own destiny.

We are those who govern, we strive to develop our country (now) we can choose our government, he said and shared the difference in colonial times when the people did not have any say at all in the administration of the country.

Reflecting on independence, Dr Mahathir said it was most exciting when the people were finally free from the clutches of the colonialists and were able to celebrate all over the country.

Asked whether Malaysia is truly independent, Dr Mahathir, who is helming the country for the second time, said: Yes, we are truly independent but, nowadays, we are influenced by the information that we get.

Malaysia celebrates National Day on Aug 31.

Source: Office of the Prime Minster Malaysia

Keep up Spirit of Goodwill, Nationhood – Dr Mahathir

PUTRAJAYA, As the country celebrates its 62nd National Day, Tun Dr Mahathir Mohamad has urged the people regardless of their religion, race and culture to reflect on how the spirit of goodwill and nationhood has helped Malaysia achieve independence and develop into a successful country.

In his message in conjunction with National Day tomorrow, the prime minister said Malaysia was built on the values of tolerance, strong character, mutual respect, the willingness to give and share, selfless attitude and readiness to sacrifice for the sake of the country.

Without these values, he said, Malaysia would not grow into a developed country capable of giving its people comfort and progress.

In fact, as we make further progress and success, we should have greater realisation on the need for these values. If these values which were adopted by our parents and grandparents have succeeded in developing this country, surely they are more crucial for us in managing the progress achieved.

Unfortunately, if we look around us, as we bask in the progress in communications and digitalisation, these noble values have been sidelined and replaced by bad characteristics which are ugly and disgusting, he said in his message which was broadcast on national television and radio tonight.

Stressing that good values should not be neglected although the country has gained independence and the current level of progress, Dr Mahathir said such negative character would usually rear its ugly head in the face of sensitive issues on race and religion.

He said that in defending their own race and religion, people hurled insults against other races and religions with the use of abusive and harsh words, which would definitely cause anger and anxiety.

This is very surprising because if we want to uphold our religion and race, we should be displaying good character and use of cultured language. But what has happened is the opposite, he said.

Dr Mahathir also wondered if the people no longer cared about the future of the country when defending the narrow interests of their respective race and religion.

The prime minister said the people should realise how blessed the country is and should do their level best to safeguard the country’s prosperity.

Tracing the country’s history, Dr Mahathir said like other countries, Malaysia was built on the sweat, tears and blood of the people who had to endure cruelty, oppression, betrayal and insult against race and country.

Maybe we should look at countries which not too long ago were enjoying riches and prosperity dreamed of by other nations. Today, these countries have been destroyed and their people have become refugees in other countries.

This is why we should realise that when we demand for the rights and interests of our group and the other side does not want to tolerate, be considerate or forgive, it can lead to conflict, he said.

Themed Sayangi Malaysiaku: Malaysia Bersih, the 2019 National Day celebration will be held at Dataran Putrajaya tomorrow with the highlight being a parade and procession, and a human formation display.

Source: Office of the Prime Minster Malaysia

Shared Prosperity Vision, Policies to Make Malaysia Great – Dr Mahathir

PUTRAJAYA, Tun Dr Mahathir Mohamad said tonight the Shared Prosperity Vision and other government policies are to make Malaysia a prosperous, dignified and independent nation.

In his National Day 2019 message in conjunction with the 62nd anniversary of independence, the prime minister said the government is focusing on the implementation of the Shared Prosperity Vision with the aim of providing a proper standard of living for all Malaysians in the effort to develop the country.

It is being done with the objective of making Malaysia greater and one of the important economic axes in Asia, he said, adding that efforts are also being intensified to increase the people’s purchasing power and eliminate the income and wealth gaps between the classes, races and regions.

Dr Mahathir said the vision is to make Malaysia develop in a sustainable manner along with equitable and inclusive economic distribution at every level of the value chain, class, race and geography to create a sense of harmony and stability among the people by 2030.

He also emphasised that the vision and policies will not be successful unless the administrative system upholds and supports these efforts.

The prime minister said corruption is one of the biggest disasters the nation faces and it also involves the civil service.

To ensure that those who abuse authority and accept bribes do not sabotage government policies, the government has made combating corruption as one of its main objectives, he said.

In line with this year’s National Day theme of Sayangi Malaysiaku: Malaysia Bersih, Dr Mahathir said it is his hope to cleanse the country of corrupt practices that can thwart efforts to bring shared prosperity to all the people.

Source: Office of the Prime Minster Malaysia

Perdana Botanical Gardens Now a Complete Recreational Park

KUALA LUMPUR, Tun Dr Mahathir Mohamad today opened two facilities at the 131-year-old Perdana Botanical Gardens, making it a complete recreational park with elements of research, education and conservation.

The prime minister planted an evergreen Kembang Semangkuk (Scaphium linearicarpum) sapling as a symbolic gesture of the opening of the Visitors Complex and Ethnobotany Park as the added attractions of the gardens.

Dr Mahathir, accompanied by Deputy Federal Territories Minister Datuk Dr Shahruddin Md Salleh and Kuala Lumpur mayor Datuk Nor Hisham Ahmad Dahlan, went on a tour of the facilities and was given a briefing on the transformation of the park that was opened in 1888.

The two facilities are the final elements of the second-phase upgrading of the botanical gardens, and were completed last April.

The Visitors Complex houses a herbarium as a research centre; an interpretation centre as an information centre; a briefing room and a souvenir shop.

The Ethnobotany Park was developed as part of the conservation programme of the gardens and showcases over 100 species of trees which have many uses, including as food, medicines and beauty products.

Nor Hisham, when approached by reporters, said the third and final phase of upgrading � the setting up of the bunga raya (hibiscus) and orchid gardens � is expected to be completed in 2022.

We hope that this park will provide a better quality of life to the people here, he said.

He said the total cost of upgrading the park, including the first phase which was completed in 2010, is about RM80 million.

The Perdana Botanical Gardens, the brainchild of British Resident A.R. Venning, started as the Sydney Lake in 1888.

It was upgraded in 1975 by the second prime minister, the late Tun Abdul Razak Hussein, and renamed the Perdana Lake Gardens. In 2011, it was again renamed � this time to Perdana Botanical Gardens.

Source: Office of the Prime Minster Malaysia