SHANGHAI/BEIJING: Bilateral talks aimed at reducing the US trade deficit with China have yielded some initial deals, but US firms say much more needs to be done as a deadline for a 100-day action plan expired on Sunday.
The negotiations, which began in April, have reopened China’s market to US beef after 14 years and prompted Chinese pledges to buy US liquefied natural gas (LNG). American firms have also been given access to some parts of China’s financial services sector.
More details on the 100-day plan are expected to be announced in the coming week as senior US and Chinese officials gather in Washington for annual bilateral economic talks, rebranded this year as the “US-China Comprehensive Economic Dialogue.”
“We hope to report further progress on the 100-day deliverables next week,” a US Commerce Department spokesman said on Saturday. “That will be the basis for judging the extent of progress.”
The spokesman declined to discuss potential areas for new agreements since a May 11 announcement on beef, chicken, financial services and LNG.
Earlier in April, when Chinese President Xi Jinping met US President Donald Trump for the first time at his Florida resort, Xi agreed to a 100-day plan for trade talks aimed at boosting US exports and trimming the US trade deficit with China.
The US goods trade deficit with China reached $347 billion last year. The gap in the first five months of 2017 widened about 5.3 percent from a year earlier, according to US Census Bureau data.
“It is an excellent momentum builder, but much more needs to be done for US-China commercial negotiations to be considered a success,” said Jacob Parker, vice president of China operations at the US-China Business Council (USCBC) in Beijing.
There has been little sign of progress in soothing the biggest trade irritants, such as the US demands that China cut excess capacity in steel and aluminum production, lack of access for US firms to China’s services market, and US national security curbs on high-tech exports to China.
The Trump administration is considering broad tariffs or quotas on steel and aluminum on national security grounds, partly in response to what it views as a glut of Chinese production that is flooding international markets and driving down prices.
North Korea has cast a long shadow over the relationship, after Pyongyang tested what some experts have described as an intercontinental ballistic missile on July 4.
Trump has linked progress in trade to China’s ability to rein in North Korea, which counts on Beijing as its chief friend and ally.
“Trade between China and North Korea grew almost 40 percent in the first quarter. So much for China working with us — but we had to give it a try!” Trump said on Twitter after the North Korean missile test.
American beef is now available in Chinese shops for the first time since a 2003 US case of “mad cow” disease, giving US ranchers access to a rapidly growing market worth around $2.6 billion last year.
More beef deals were signed during an overseas buying mission by the Chinese last week.
“There are hopes there will be even more concrete results,” Chinese Foreign Ministry spokesman Geng Shuang told a daily news briefing in Beijing on Friday. He did not elaborate.
Critics of the 100-day process said China had already agreed to lift its ban on US beef last September, with officials just needing to finalize details on quarantine requirements.
China, meanwhile, has delivered its first batch of cooked chicken to US ports after years of negotiating for access to the market. But unlike the rush by Chinese consumers for the first taste of American beef, Chinese poultry processors have not had a flurry of orders for cooked chicken.
Demand should improve once China is allowed to ship Chinese grown, processed and cooked chicken to the US, said Li Wei, export manager at Qingdao Nine Alliance Group, China’s top exporter of processed poultry.
Other sectors in China under US pressure to open up have moved more slowly. US industry officials had signaled they were expecting more approvals. US executives say the review process still lacks transparency.
Financial services is another area where little progress has been made, US officials say.
USCBC’s Parker said it is unclear how long it will take for foreign credit rating agencies to be approved, or whether US-owned suppliers of electronic payment services will be able to secure licenses.
The bilateral talks have also not addressed restrictions on foreign investment in life insurance and securities trading, or “the many challenges foreign companies face in China’s cybersecurity enforcement environment,” Parker said.
In an annual report released Thursday, the American Chamber of Commerce in Shanghai said China remained a “difficult market.”
US-China trade talks sputtering at 100-day deadline
US-China trade talks sputtering at 100-day deadline
Egypt Suez Canal monthly revenue losses at around $800m, El-Sisi says
CAIRO: Egypt’s President Abdel Fattah El-Sisi has announced that the monthly losses of the Suez Canal revenues reached around $800 million due to the regional “situation,” as Yemen’s Houthis have been attacking vessels in the Red Sea.
The Iran-backed Houthis have attacked vessels in the Red Sea area since November 2023 in support of Palestinians in Gaza during the war with Israel, disrupting global shipping by forcing vessels to avoid the nearby Suez Canal and reroute trade around Africa, raising shipping costs.
The Egyptian presidency statement did not directly refer to the Houthis, but El-Sisi said in December the disruption cost Egypt around $7 billion in less revenue from the Suez Canal in 2024.
The Yemeni group recently vowed to resume attacking US vessels in the Red Sea, in response to deadly US strikes on Yemen that killed at least 53 people on Saturday, in the biggest US military operation in the Middle East since President Donald Trump took office in January.
They also said last week they would resume attacks on Israeli ships passing through the Red Sea if Israel did not lift a block on aid entering Gaza.
Oil Updates — crude gains on Mideast risks, China stimulus plan and data
BEIJING/SINGAPORE: Oil prices rose slightly on Tuesday, supported by instability in the Middle East as well as China’s stimulus plans and data, although global growth concerns, US tariffs and Russia-Ukraine ceasefire talks curbed gains.
Brent futures rose 36 cents, or 0.5 percent, to $71.43 a barrel by 10:00 a.m Saudi time, while US West Texas Intermediate crude futures rose 32 cents, or 0.5 percent, to $67.90
“Along with US strikes on the Houthis in Yemen, several factors provided support to the market,” ING analysts said in a research note.
“China unveiled plans to revive consumption, while Chinese retail sales and fixed asset investment growth came in stronger than expected.”
The state council, or cabinet, unveiled on Sunday a special action plan to boost domestic consumption, with measures such as boosting incomes and offering childcare subsidies.
On Monday, Chinese economic data showing that retail sales growth quickened in January-February also gave investors reasons for optimism, although factory output fell and the urban jobless rate reached its highest in two years.
Crude oil throughput in China, the world’s biggest crude importer, rose 2.1 percent in January and February from a year earlier, supported by a new refinery and holiday travel, official data showed on Monday.
Prices also gained support from President Donald Trump’s vow to continue the US assault on Yemen’s Houthis unless they end their attacks on ships in the Red Sea.
On the Israel-Palestinian conflict, Israeli air strikes in Gaza killed at least 200 people, Palestinian health authorities said, as attacks on Tuesday ended a weeks-long standoff over extending a ceasefire that halted fighting in January.
Highlighting persistent concerns about demand, a key downside risk for oil, the OECD said on Monday that Trump’s tariffs would drag down growth in the US, Canada and Mexico, which would weigh on global energy demand.
“With global supply surging and tariffs and trade wars set to hit global demand, we remain of the view that prices will head lower and eventually reach the mid $60s,” said Robert Rennie, head of commodity and carbon strategy at Westpac.
Further adding to global supply, Venezuela’s state-run PDVSA has put together three operational scenarios indicating it plans to continue producing and exporting oil from its joint venture with Chevron after the
US major’s license expires next month, according to a company document reviewed by Reuters on Monday.
Talks on Tuesday between Trump and Russian President Vladimir Putin about ending the Ukraine war were also in focus.
Markets believe a potential peace negotiation would involve the easing of sanctions on Russia and the return of its crude supply to global markets, weighing on prices.
MSC launches service to boost Saudi-East Asia trade
JEDDAH: A new shipping service by Mediterranean Shipping Co. is set to strengthen trade links between Saudi Arabia and key ports in East Asia, bolstering the Kingdom’s global logistics network.
Saudi Ports Authority, known as Mawani, announced that MSC will launch the new “Clanga” line at the Jubail Commercial Port, adding that it will strengthen the Kingdom’s position in investment and logistics, according to the country’s official press agency.
The service will connect Jubail Commercial Port with King Abdulaziz Port in Dammam, Port of Singapore, and Port of Shanghai in China, as well as Port of Colombo in Sri Lanka, with a handling capacity of up to 6,000 twenty-foot equivalent units.
This move is expected to boost foreign investment and improve supply chain efficiency. It also aligns with Mawani’s efforts to enhance the competitiveness of Saudi ports and support national exports, as well as the National Transport and Logistics Strategy’s goal of establishing the Kingdom as a global logistics hub connecting three continents.
Mawani said in a statement that the addition of the service to the Jubail port highlights its strategic role in enhancing maritime transport and logistics while supporting economic activities in the Eastern Province.
The authority added that the port’s proximity to production hubs, coupled with advanced infrastructure, allows it to accommodate vessels of various types and sizes, further strengthening Saudi Arabia’s connectivity with global terminals.
As a key facilitator of national exports, particularly industrial and petrochemical products from Jubail Industrial City, the port plays a crucial role in boosting the Kingdom’s global trade competitiveness, Mawani emphasized.
In August, MSC introduced the service at the King Abdulaziz Port, connecting the city with major terminals in China, including Ningbo, Shanghai, and Shekou, as well as Singapore.
Mawani announced at that time that the service would operate weekly voyages with a capacity of up to 15,000 TEU.
In a statement, MSC said the service was designed to address terminal congestion issues in the Middle East and enhance connectivity for Asia-Middle East cargo.
The shipping company, which won the “Best Shipping Line – Asia-Africa” award at the 2024 Asian Freight, Logistics, and Supply Chain Awards, further said that Clanga would offer a unique and competitive service for Saudi exports to the Far East through its direct call in Shanghai from Dammam.
Closing Bell: Saudi main index closes higher as key stocks gain
RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Monday, gaining 29.26 points, or 0.25 percent, to close at 11,883.04.
The total trading turnover of the benchmark index was SR5.4 billion ($1.4 billion), as 100 of the stocks advanced and 142 retreated.
Conversely, the Kingdom’s parallel market Nomu dropped 240.58 points, or 0.77 percent, to close at 31,034.69. This comes as 33 stocks advanced while 45 retreated.
The MSCI Tadawul Index increased 9.09 points, or 0.61 percent, to close at 1,503.88.
TASI’s top performer was Arabian Company for Agricultural and Industrial Investment, which surged by the 30 percent daily limit in its market debut on Monday.
Its share price jumped to SR65, significantly surpassing its initial price of SR50, which was set at the upper end of the offering range.
Other top performers included Retal Urban Development Co., whose share price rose 7.18 percent to SR15.82, as well as Astra Industrial Group, whose share price surged 4.45 percent to SR169.
Alkhorayef Water and Power Technologies Co. was also among the top performers, increasing 4.38 percent to SR166.80.
Naqi Water Co. was the worst performer with its stock price falling 4.33 percent to SR57.40.
Arabian Shield Cooperative Insurance Co. also saw its stock prices decline 3.94 percent to SR17.56. Arriyadh Development Co. also dropped to SR34.65, a 3.88 percent decrease.
On the announcements front, several major Saudi companies released their annual financial results for the period ending Dec. 31, 2024, showcasing mixed performances across industries.
Arabian Mills for Food Products Co. reported a 12.98 percent increase in revenue, reaching SR973.94 million, compared to SR862.08 million in the previous year.
This growth was primarily driven by a 39.75 percent surge in feed sales following the company’s entry into the poultry feed segment and reinforced production efforts.
Bran sales also grew by 17.91 percent, and flour revenues saw a modest rise of 4.02 percent, supported by business-to-business revenue growth of 3.19 percent and incentives in the modern trade segment.
Net profit increased by 5.93 percent to SR212.15 million, supported by improved product cost efficiency, administrative streamlining, and reduced financing costs.
Despite the growth, the company saw a 1.03 percent drop in its share price to settle at SR47.90.
The United International Transportation Co., also known as Budget Saudi, posted a significant 43.03 percent increase in revenue, reaching SR1.97 billion, up from SR1.38 billion in the prior year.
This surge was fueled by the expansion of both long-term and short-term rental fleets, alongside contributions from the acquisition of AutoWorld and the integration of revenue from the Overseas Development Co.
Net profit climbed 12.44 percent to SR311.69 million, benefiting from improved rental rates, fleet expansion, and operational synergies post-acquisition.
Budget Saudi’s share price saw a 0.26 increase to reach SR76.40.
Meanwhile, the Kingdom Holding Co. saw an 11.57 percent decline in revenue to SR2.39 billion, down from SR2.70 billion in the previous year.
The decline was primarily attributed to reduced dividend income and lower gains on investments at fair value through profit or loss.
Despite the revenue drop, net profit rose by 22.08 percent to SR1.24 billion, supported by lower financial charges, gains from the reversal of impairments, increased share of profits from equity-accounted investees, and higher income from hotel operations.
Kingdom Holding’s stock price increased by 1.64 percent to reach SR8.06.
BinDawood Holding Co. reported a modest 1.33 percent increase in revenue, reaching SR5.68 billion, compared to SR5.60 billion in the previous year.
The growth was driven by contributions from new store openings, increased sales from Jumeirah Trading Co. and Future Retail Tech, and improved point-of-sale performance.
However, this was partially offset by store closures during the year. Net profit grew by 1.88 percent to SR280.25 million, supported by stronger supplier terms, operational efficiencies, and a better product mix, though higher operating expenses related to talent acquisition and business expansion limited the increase.
BinDawood’s stock price grew 0.63 percent on Monday to reach SR6.42.
OECD predicts 3.8% economic growth for Saudi Arabia in 2025
RIYADH: Saudi Arabia’s economy is poised for substantial growth, with its gross domestic product projected to increase from 1.2 percent in 2024 to 3.8 percent in 2025.
The projection by the Organisation for Economic Cooperation and Development comes amid global economic uncertainties, as many advanced economies are expected to face sluggish growth due to escalating trade tensions, geopolitical instability, and inflationary pressures.
This forecast signals a turnaround for the Kingdom, positioning it as one of the fastest-growing economies within the G20 in the coming years. While Saudi Arabia’s GDP growth is expected to moderate slightly to 3.6 percent in 2026, global GDP growth is projected to slow to 3.1 percent in 2025 and 3 percent in 2026.
Stable inflation
The OECD report also forecasts that Saudi Arabia’s inflation will remain low and stable, projected at 1.9 percent in 2025 and 2 percent in 2026. This stands in contrast to the higher inflation rates seen in many major economies, particularly those facing trade-related disruptions and rising labor costs.
The Kingdom’s inflation stability is noteworthy, especially within the context of the OECD’s broader inflation projections. The report highlights that G20 headline inflation is expected to stay at 3.8 percent in 2025 and 3.2 percent in 2026, with core inflation remaining above target in several advanced economies, including the US.
Oil market and OPEC+ production strategy
A key factor driving Saudi Arabia’s economic performance is its oil sector, which continues to be a vital growth pillar despite the country’s ongoing efforts to diversify its economy under Vision 2030.
The OECD report noted that OPEC+ plans to gradually “unwind production curbs” starting in April 2025, a move that could have significant implications for global oil prices.
At the same time, Saudi Arabia’s efforts to boost non-oil revenue sources under Vision 2030—through investments in technology, tourism, and infrastructure—are helping to strengthen economic resilience amid market volatility. However, the OECD also cautioned that geopolitical risks and rising protectionist policies in global trade could disrupt energy markets, potentially leading to price fluctuations.
Global economic outlook
Beyond Saudi Arabia, the OECD painted a complex outlook for the global economy. “The global economy has shown real resilience, with growth remaining steady and inflation trending downward. However, signs of weakness have emerged, driven by heightened policy uncertainty,” said OECD Secretary-General Mathias Cormann.
Global GDP growth is projected to slow from 3.2 percent in 2024 to 3.1 percent in 2025 and 3 percent in 2026, with many advanced economies experiencing lower-than-expected growth due to increased trade barriers, inflationary pressures, and policy uncertainty.
The US economy is expected to see growth slow from 2.8 percent in 2024 to 2.2 percent in 2025 and 1.6 percent in 2026, as higher interest rates and trade tensions dampen investment and consumer spending. Similarly, the eurozone’s economy is projected to grow by just 1 percent in 2025 and 1.2 percent in 2026. China’s economy is also expected to decelerate, with growth slowing from 4.8 percent in 2025 to 4.4 percent in 2026.
Trade fragmentation and geopolitical risks
A key concern highlighted by the OECD is the growing rise of trade barriers and their potential impact on global economic stability. “Increasing trade restrictions will contribute to higher costs for both production and consumption. It remains essential to maintain a well-functioning, rules-based international trading system and keep markets open,” Cormann added.
The US has raised tariffs on imports from China by 20 percentage points, prompting retaliatory actions from China. In addition, higher tariffs on steel, aluminum, and other goods are expected to disrupt supply chains and increase production costs globally.
The OECD warned that such trade fragmentation could slow global growth and push inflation higher, particularly in economies heavily dependent on international trade. The report also noted that if trade tensions escalate further, global GDP could decline by an additional 0.3 percent over the next three years, with particularly severe effects on Canada, Mexico, and key European economies.
Monetary policy and inflation pressures
The OECD’s outlook also indicated that inflation remains a significant concern in many economies. While inflation is expected to moderate, it is likely to stay above central bank targets in key economies like the US, the eurozone, and the UK through 2026.
“Central banks should remain vigilant given heightened uncertainty and the potential for higher trade costs to push up wage and price pressures. Provided inflation expectations remain well-anchored, and trade tensions do not intensify further, policy rate reductions should continue in economies where underlying inflation is projected to moderate or remain subdued,” the report stated.
For emerging markets, inflation presents a mixed picture. Brazil and South Africa are expected to face persistent inflationary pressures, while India and Indonesia may see inflation remain relatively contained. Countries like Turkiye and Argentina, which have dealt with extreme inflation in recent years, are projected to see a sharp decline in inflation rates as fiscal and monetary tightening measures take effect.
The role of AI, structural reforms
Beyond trade and monetary policy, the OECD report emphasized the importance of structural reforms and digital transformation in enhancing long-term economic resilience.
“Governments can help by ensuring the availability of high-speed digital infrastructure, maintaining open and competitive markets, and providing opportunities for workers to enhance their skills,” the report noted.
OECD Chief Economist Alvaro Santos Pereira highlighted that AI is poised to drive significant labor productivity growth over the next decade, with even greater potential when combined with advancements in robotics.
“Yet, the gains from AI may diminish if policies do not facilitate higher adoption rates and support labor reallocation,” Pereira warned.
Navigating uncertainty
The OECD called for stronger international cooperation to prevent further trade fragmentation and urged governments to adopt a balanced approach to fiscal and monetary policies. It cautioned that excessive tightening of monetary policy could unnecessarily slow growth, while failing to manage inflation could lead to additional economic disruptions.
The report’s key policy recommendations emphasized the importance of avoiding further tariff escalations and seeking diplomatic trade solutions. It also highlighted the need for investments in AI and digital transformation to boost productivity, while maintaining cautious monetary policies to ensure inflation remains under control. Additionally, the report stressed the importance of encouraging structural reforms to build more resilient and dynamic labor markets.
