WASHINGTON: A broad cross-section of US businesses has a message for the Trump administration: new tariffs on $200 billion of Chinese imports will force Americans to pay more for items they use throughout their daily lives, from cradles to coffins.
Six days of public hearings on the proposed duties of up to 25 percent will start on Monday in Washington as part of President Donald Trump’s and the US Trade Representative’s efforts to pressure Beijing for sweeping changes to its trade and economic policies.
Unlike previous rounds of US tariffs, which sought to shield consumers by targeting Chinese industrial machinery, electronic components and other intermediate goods, thousands of consumer products could be directly hit with tariffs by late September.
The $200 billion list targets Chinese seafood, furniture and lighting products, tires, chemicals, plastics, bicycles and car seats for babies.
“USTR’s proposed tariffs on an additional $200 billion of Chinese imports dramatically expands the harm to American consumers, workers, businesses, and the economy,” the US Chamber of Commerce said in written testimony for the hearing.
The top US business lobbying group said the Trump administration lacks a “coherent strategy” to address China’s theft of intellectual property and other harmful trade practices and called for “serious discussions” with Beijing.
Mid-level Trump administration officials and their Chinese counterparts are expected to meet later this week in Washington to discuss their trade dispute. But it is unclear whether the talks will have any effect on the implementation of US tariffs and retaliation by China.
In more than 1,400 written comments submitted to USTR that will be echoed in the hearings, most businesses argued that the tariffs will cause harm and higher costs for products ranging from Halloween costumes and Christmas lights to nuclear fuel inputs, while a small number praised them or asked that they be extended to other products.
Graco Children’s Products Inc, a unit of Newell Brands Inc., said tariffs “will have a direct negative impact on our company, American parents and most importantly the safety of American children.”
The company said higher prices may prompt more parents to buy car seats, swings and portable play yards on the second-hand market.
“The proposed tariffs may force parents to use unsafe sleeping environments or let children dangerously co-sleep with parents,” Graco wrote. The tariff “only causes a children safety issue; it will not convince China to change its policies.”
Evenflo Feeding said the tariffs will hit manual breast pumps “and would cause disproportionate economic harm to US interests.”
At the other end of the life cycle, Centennial Casket Corp. President Douglas Chen said his Plano, Texas-based company relies exclusively on Chinese-made caskets and the tariffs would cause “great loss” and raise costs for “grieving families purchasing caskets for their loved ones at one of the worst times of their life.”
The Internet Association, representing companies including Facebook Inc, Amazon.com Inc. and Alphabet Inc., said the tariffs “would cause disproportionate economic harm to American Internet companies. The list includes products that impact how Internet companies function.”
Westinghouse Electric Co., the leading US nuclear fuel producer, said it relies on China for zirconium and zirconium powders — key inputs for tubes used in nuclear fuel assemblies that it uses at plants in Utah, Pennsylvania and South Carolina.
There is no US source of zirconium so the tariff would “raise the cost for Westinghouse to manufacture nuclear fuel for US commercial nuclear power plants” and it ultimately “would increase the cost of electricity to a significant percentage of US electricity consumers,” the company said in a filing.
Huffy Corp, the largest US bicycle brand, with 4 million Chinese-made bikes sold annually, said a 25 percent tariff poses a “serious threat to the company.”
Huffy CEO Bill Smith wrote that the tariffs should have been put in place 20 years ago when Huffy and other US bicycle makers sought to increase the 11 percent US bicycle tariff because of aggressive Chinese imports. When this effort failed, Huffy closed three US plants in 1998 and 1999, terminating 2,000 employees and shifting to Chinese bikes.
“This proposed tariff is too little, too late,” Smith wrote, adding that now, a higher tariff would “only create problems” and cost jobs at independent US bicycle dealers.
“There is no other country in Asia or Europe that can provide the volume Huffy requires as China is the largest bicycle producer in the world,” he said.
US firms warn next China tariffs to cost Americans from cradle to grave
US firms warn next China tariffs to cost Americans from cradle to grave
- Six days of public hearings on the proposed duties of up to 25 percent will start on Monday in Washington
- Most businesses argued that the tariffs will cause harm and higher costs for products ranging from Halloween costumes and Christmas lights to nuclear fuel inputs
IMF hails Oman’s economic policies amid 6.2% budget surplus
RIYADH: Oman achieved a 6.2 percent budget surplus and a 2.4 percent current account gain in 2024, driven by prudent fiscal policies, high oil prices, and nonhydrocarbon export growth.
In its 2024 Article IV consultation, the International Monetary Fund attributed these figures to effective economic management.
Despite higher social spending under a new protection law, the nonhydrocarbon primary deficit as a share of nonhydrocarbon gross domestic product remained stable, highlighting the government’s commitment to financial discipline.
Government debt as a percentage of GDP also declined further, reaching 35 percent in 2024, marking continued improvement in Oman’s economic fundamentals.
The findings align with the broader resilience observed in the Gulf Cooperation Council region, with an IMF report released in December showing GCC economies have successfully weathered recent shocks, supported by strong nonhydrocarbon growth and ongoing reforms.
The latest analysis from the financial agency show that Oman’s economic resilience has been recognized internationally, with its sovereign credit rating recently upgraded to investment grade.
Additionally, the banking sector remains sound, with profitability recovering to pre-pandemic levels, ample capital and liquidity buffers, and strong asset quality.
While overall economic growth was tempered by OPEC+ oil production cuts, the IMF noted that Oman’s economy grew by 1.2 percent in 2023 and accelerated to 1.9 percent year on year in the first half of 2024.
This expansion was primarily supported by a 3.8 percent increase in nonhydrocarbon sectors such as construction, manufacturing, and services during the same period, it added.
Nonhydrocarbon activity is expected to remain a key driver of medium-term growth, supported by significant private sector investments.
The nation predicts a modest 2.7 percent growth in GDP this year, while the IMF projections point to a higher 3.1 percent expansion.
The country’s Inflation has continued to ease, declining to 0.6 percent during the first 10 months of 2024, down from 1.0 percent in 2023. This decrease reflects a contraction in transport prices and a moderation in food inflation.
The IMF noted that Oman’s economic outlook is balanced but faces external and domestic risks. On the downside, global geopolitical tensions and a potential economic slowdown, particularly in China, could impact trade, tourism, and foreign direct investment.
Lower-than-expected oil prices amid a potentially oversupplied energy market in 2025 also pose risks to the fiscal and external positions. It added.
Domestically, delays in reform implementation and uncertainty around the global energy transition could hinder Oman’s diversification efforts.
On the upside, Oman could benefit from higher oil prices, faster-than-expected global economic growth, and accelerated reforms and investments under Oman Vision 2040.
The reform agenda includes initiatives to drive nonhydrocarbon growth, improve fiscal sustainability, and attract foreign investments.
Oman’s reform efforts under Vision 2040 aim to reduce the economy’s reliance on hydrocarbons and foster private sector-led growth.
The government has been executing sizable private sector investments and advancing structural reforms to expand the role of nonhydrocarbon sectors in the economy.
Over the medium term, nonhydrocarbon activity is expected to drive growth, supported by policy measures and a steady inflow of private capital.
The IMF’s report from December claimed regional conflicts had limited spillover effects, meaning the GCC maintained a favorable outlook — with the easing of oil production cuts and expansion in natural gas expected to further bolster the hydrocarbon sector.
It was also noted that inflation across the region remains stable at low levels, and external buffers are sufficient despite narrower current account balances.
Saudi Arabia’s capital markets surge with $274bn raised in 5 years, fueled by Vision 2030 growth: S&P Global
- Saudi issuers have raised more than $130 billion through US dollar-denominated issuances
- Market conditions remain favorable, with falling interest rates providing supportive dynamics, S&P said
RIYADH: Saudi Arabia’s capital markets are experiencing significant growth, with issuers raising over $130 billion in the past five years as the Kingdom accelerates financing for its Vision 2030 plan.
The Capital Market Authority’s 2024-2026 strategy aims to promote investment, attract global interest, and support economic diversification, advancing the nation’s financial sector.
According to a report from S&P Global, Saudi issuers, including the government and private sector, have raised more than $130 billion over the past five years through US dollar-denominated issuances.
“This comes on top of the $144 billion that they raised locally in Saudi riyal during the same period, with the implementation of Saudi Vision 2030 explaining part of this flurry,” the US-based credit rating agency said.
While the government makes up about 60 percent of these issuances, Vision 2030 has also opened significant opportunities in the non-oil economy and banking system.
Despite the rise in external leverage, market conditions remain favorable, with falling interest rates providing supportive dynamics, S&P said.
“We still expect leverage to remain manageable in our base-case scenario, with private-sector debt to GDP (gross domestic product) staying below the 100 percent mark in the next 12-24 months,” the agency added.
The current market environment is favorable for issuers, with declining interest rates and supportive financial conditions providing a conducive backdrop for sustained capital raising. This trend will continue as the Kingdom pushes ahead with large-scale projects and economic diversification efforts.
Residential mortgage-backed securities market on the horizon
One of the key factors to watch over the next one-to-two years is the potential establishment of a residential mortgage-backed securities market in Saudi Arabia.
The credit rating agency said that at the end of September, “banks were sitting on more than $175 billion of mortgages that are predominantly at fixed rates and have short-term funding sources, primarily in the form of domestic deposits.”
If interest rates continue to decline, these mortgages could become more attractive for secondary market transactions. The ability to securitize and sell them would allow banks to move assets off their balance sheets, freeing up capital for further lending and investment in Vision 2030 initiatives.
“This assumes that the legal hurdles relating to the issuance of RMBS are resolved, or at least the risks are floored at a level that would attract local and international investors’ interest,” S&P said.
The Saudi Real Estate Refinance Co., which has an A-/Positive rating, is expected to play a key role in facilitating RMBS market development.
Direct market issuances could emerge as another avenue for mortgage-backed securities, potentially unlocking significant financial capacity for banks.
PIF launches $4bn 2-part bond
RIYADH: Saudi Arabia’s Public Investment Fund has launched a $4 billion two-part bond, Arab News has been told.
The sovereign wealth fund confirmed that it had sold $2.4 billion of five-year debt instruments at 95 basis points over US Treasuries and $1.6 billion of nine-year securities at 110 basis points over the same benchmark.
The move comes just weeks after PIF closed its first Murabaha credit facility, securing $7 billion in funding, in what was a key step in the fund’s plan to raise capital over the next several years.
PIF, widely recognised to be Saudi Arabia’s vibrant economic engine, is currently spearheading the nation’s economic diversification efforts, aligned with the goals outlined in Vision 2030.
PIF manages $925 billion in assets, and is set to increase that to $2 trillion by 2030, a report from monitoring organization Global SWF forecast earlier in January.
Moody’s upgraded the rating of PIF in November, raising it from A1 to Aa3 with a stable outlook, reaffirming the fund’s strong financial position.
The US-based agency gives Aa3 for entities with high quality, low credit risk, and the best ability to repay short-term debts.
According to Moody’s, the upgrade of PIF’s long-term issuer rating from A1 reflects strong credit linkage between the sovereign wealth fund and the Kingdom’s government.
The Murabaha credit facility is supported by a syndicate of 20 international and regional financial institutions.
In a statement at the time of its annoucement, PIF added that the closing of the Murabaha credit facility financing complements the fund’s successful sukuk issuances over the past two years, underscoring the body’s strong financial position and its best-practice approach to debt financing.
In August, PIF obtained a $15 billion revolving credit facility for general corporate purposes from a diverse global syndicate of 23 financial institutions from the US, Europe, and the Middle East as well as Asia.
In a press statement, the wealth fund said that this credit facility is offered for an initial period of three years and is extendable for up to two additional years.
A revolving loan is one that can be drawn, repaid and drawn again during the agreed lending period.
Qatar drafting new laws aimed at boosting foreign investment
- Qatar plans new bankruptcy, PPP, and commercial registration laws
- Qatar aims for $100 billion FDI by 2030
DOHA: Qatar plans to introduce three new laws as part of a sweeping review of legislation designed to make the Gulf Arab state more attractive to foreign investors, the new minister of commerce and economy told Reuters.
Sheikh Faisal bin Thani said in an interview that Qatar plans to introduce new legislation including a bankruptcy law, a public private partnership law and a new commercial registration law.
“We’re looking at 27 laws and regulations across 17 government ministries that affect 500-plus activities,” he said, describing the legislative review.
Sheikh Faisal said he expects the new bankruptcy and public private partnership laws to be drafted before the end of March.
Qatar, one of the world’s top exporters of liquefied natural gas, has set a cumulative target of attracting $100 billion in foreign direct investment (FDI) by 2030, according to the latest version of its national development strategy published last year.
But it has a long way to go to meet that target, and FDI inflows have significantly lagged behind neighboring Saudi Arabia and the U.A.E.
Saudi Arabia, which also has a target to attract $100 billion in FDI by 2030 as part of its national investment strategy, saw FDI inflows of $26 billion in 2023, after a change to how it calculates FDI, while the Emirates, the Gulf region’s commercial and tourism hub, attracted just over $30 billion according to the UN’s trade and development agency.
In contrast, Qatar’s FDI inflows in 2023 were negative $474 million, down from $76.1 million in 2022. Negative FDI inflows indicate that disinvestment was more than new investment.
While Qatar does offer similar incentives to foreign investors as its neighbors, such as a favorable tax environment, free zone facilities and some long term residency schemes, the U.A.E. and Saudi Arabia are considered far ahead in terms of regulatory reforms and business friendly laws.
Qatar’s new laws also come as part of the Gulf Arab state’s efforts to activate its private sector and transition away from government-funded growth.
Sheikh Faisal joined the government in November after serving at Qatar’s $510 billion sovereign wealth fund, the Qatar Investment Authority, most recently as chief investment officer for Asia and Africa.
Saudi Arabia’s non-oil exports surge 19.7%: GASTAT
RIYADH: Saudi Arabia’s non-oil exports surged 19.7 percent year on year in November to reach SR26.92 billion ($7.18 billion), bolstering the Kingdom’s efforts to diversify its economy.
According to the General Authority for Statistics, chemical products led the growth, accounting for 24 percent of total non-oil exports, followed by plastic and rubber products, which made up 21.7 percent of shipments.
Building a robust non-oil sector is a key goal of Saudi Arabia’s Vision 2030 program, which seeks to transform the Kingdom’s economy and reduce its reliance on oil revenues, with Minister of Economy and Planning Faisal Al-Ibrahim revealing in November that these activities now constitute 52 percent of the gross domestic product.
In its latest report, GASTAT said: “The ratio of non-oil exports (including re-exports) to imports increased to 36.6 percent in November 2024 from 34.8 percent in November 2023. This was due to a 19.7 percent increase in non-oil exports and a 13.9 percent increase in imports over that period.”
The Kingdom’s total merchandise exports fell 4.7 percent year on year in November, weighed down by a 12 percent drop in oil exports. This decline reduced the share of oil exports in total shipments to 70.3 percent, down from 76.3 percent a year earlier, signaling progress in Saudi Arabia’s economic diversification.
GASTAT reported that China remained Saudi Arabia’s largest trading partner in November, with exports to the Asian nation totaling SR13.53 billion.
Other key destinations for exports included Japan with SR8.93 billion, the UAE with SR8.75 billion, and India with SR8.74 billion.
Saudi Arabia’s imports rose 13.9 percent year on year in November, reaching SR73.65 billion. However, the merchandise trade surplus declined by 44.3 percent during the same period, falling to SR16.89 billion.
China remained the dominant supplier of goods to the Kingdom, accounting for SR20.11 billion of imports, followed by the US at SR7.52 billion and the UAE at SR3.90 billion.
King Abdulaziz Sea Port in Dammam emerged as the top entry point for imports, handling goods valued at SR18.19 billion, representing 24.7 percent of total inbound shipments.
