India and Bangladesh signaled deepening ties Saturday as New Delhi committed a $4.5-billion line of credit to Dhaka for development projects, and the two countries signed their first-ever pact on defense cooperation. 

Indian Prime Minister Narendra Modi announced an additional $500 million in credit for Bangladesh to buy military equipment from India during the visit to New Delhi by Bangladeshi Prime Minister Sheikh Hasina.

Calling India a “long standing and trusted development partner,” Modi said that the new credit lines “bring our resources allocation to Bangladesh to more than $8 billion over the past six years.” 

Both leaders reaffirmed their close ties during the Bangladeshi prime minister’s first visit to India in seven years, with Modi speaking of a “golden era” in their friendship and Hasina saying their friendly ties would benefit South Asia.

The two countries signed 22 agreements, including one on civil nuclear cooperation that aims to help Bangladesh develop its civilian nuclear program.

Many in New Delhi see the deal for defense cooperation over the next five years as the key breakthrough that will help reduce Bangladesh’s reliance on China for its military needs.

Worried by the growing Chinese influence in its neighborhood, New Delhi has made a concerted push in recent years to grow strategic ties with neighboring countries. Bangladesh’s purchase of two submarines from China last year deepened those concerns in India.

Calling the defense pact a feather in India’s cap, Sukh Deo Muni, a South Asia expert at New Delhi’s Institute of Defense Studies and Analyses, said,“India does not want China to consolidate defense ties just next to its belly, that is true.”

Although the political opposition in Bangladesh has denounced the pact, independent analysts in Dhaka was optimistic that it will help achieve balance.

“Approximately 80 percent dependency at this moment you see on China, so it should be brought down. That actually reduces our vulnerability,” said Abdur Rashid, Executive Director of the Institute of Conflict, Law and Development Studies in Dhaka. “If one is interrupted we can depend on the other.”

 A new rail link between the Indian city of Kolkata and Khulna in Bangladesh, and a bus link between Kolkata and Dhaka also were inaugurated, while another old rail link was restored to coincide with Hasina’s visit. The Bangladeshi leader said the greater connectivity is vital for the region’s development.

A key water-sharing agreement that Dhaka has long pushed for, however, eluded Hasina.

Although New Delhi favors such an arrangement, opposition from West Bengal state in India, through which the Teesta River flows into Bangladesh, has prevented the two countries from clinching a deal.

As Modi assured her of his commitment to conclude a deal, the Bangladeshi leader sounded a note of optimism. “I believe we shall be able to get India’s support in resolving these issues expeditiously,” said Hasina.

The two countries have had a close relationship since 1971, when India helped Bangladesh gain independence from Pakistan following a bloody nine-month war.

 
…

India and Bangladesh signaled deepening ties Saturday as New Delhi committed a $4.5 billion line of credit to Dhaka for development projects, and the two countries signed their first-ever pact on defense cooperation. 

Indian Prime Minister Narendra Modi announced an additional $500 million in credit for Bangladesh to buy military equipment from India during the visit to New Delhi by Bangladeshi Prime Minister Sheikh Hasina.

Calling India a “long standing and trusted development partner,” Modi said that the new credit lines “bring our resources allocation to Bangladesh to more than $8 billion over the past six years.” 

Both leaders reaffirmed their close ties during the Bangladeshi prime minister’s first visit to India in seven years, with Modi speaking of a “golden era” in their friendship and Hasina saying their friendly ties would benefit South Asia.

The two countries signed 22 agreements, including one on civil nuclear cooperation that aims to help Bangladesh develop its civilian nuclear program.

Many in New Delhi see the deal for defense cooperation over the next five years as the key breakthrough that will help reduce Bangladesh’s reliance on China for its military needs.

Worried by the growing Chinese influence in its neighborhood, New Delhi has made a concerted push in recent years to grow strategic ties with neighboring countries. Bangladesh’s purchase of two submarines from China last year deepened those concerns in India.

Calling the defense pact a feather in India’s cap, Sukh Deo Muni, a South Asia expert at New Delhi’s Institute of Defense Studies and Analyses, said,“India does not want China to consolidate defense ties just next to its belly, that is true.”

Although the political opposition in Bangladesh has denounced the pact, independent analysts in Dhaka was optimistic that it will help achieve balance.

“Approximately 80 percent dependency at this moment you see on China, so it should be brought down. That actually reduces our vulnerability,” said Abdur Rashid, Executive Director of the Institute of Conflict, Law and Development Studies in Dhaka. “If one is interrupted we can depend on the other.”

 A new rail link between the Indian city of Kolkata and Khulna in Bangladesh, and a bus link between Kolkata and Dhaka also were inaugurated, while another old rail link was restored to coincide with Hasina’s visit. The Bangladeshi leader said the greater connectivity is vital for the region’s development.

A key water-sharing agreement that Dhaka has long pushed for, however, eluded Hasina.

Although New Delhi favors such an arrangement, opposition from West Bengal state in India, through which the Teesta River flows into Bangladesh, has prevented the two countries from clinching a deal.

As Modi assured her of his commitment to conclude a deal, the Bangladeshi leader sounded a note of optimism. “I believe we shall be able to get India’s support in resolving these issues expeditiously,” said Hasina.

The two countries have had a close relationship since 1971, when India helped Bangladesh gain independence from Pakistan following a bloody nine-month war.

 
…

March was a disappointing month for job seekers, with the U.S. Labor Department reporting that the private sector added only 98,000 jobs last month. But one industry is looking beyond the job numbers and toward distant shores as President Donald Trump meets for the first time with Chinese President Xi Jinping to talk about trade. Mil Arcega reports.
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Kostas Argyros’s unpaid electricity bills are piling up, among a mountain of debt owed to Greece’s biggest power utility.

His family owe 850 euros to the Public Power Corporation (PPC), a tiny fraction of the state-controlled firm’s 2.6 billion euros ($2.8 billion) in unpaid bills.​

Argyros picks up only occasional work as an odd-job man.

“When you only work once a week, what will you pay first?” said the 35-year-old, who lives in a tiny apartment in an Athens suburb with his unemployed wife and four small children.

The Argyros family are emblematic of deepening poverty in Greece following seven years of austerity demanded by the country’s international creditors. They burn wood to heat their home in winter, food is cooked on a small gas stove, and hot water is scarce.

The only evening light is the blue glare of a TV screen, for fear of racking up more debt.

Five-watt lightbulbs provide a dim glow and Argyros worries about the effect on their eyesight. More than 40 percent of Greeks are behind on their utility bills, higher than anywhere else in Europe.

People in poor neighborhoods are also increasingly turning to energy fraud, meaning that the problem for PPC is much higher than the mountain of unpaid bills suggests.

Power theft is costing PPC around 500-600 million euros a year in lost income, an industry official said, requesting anonymity because he was not authorised to divulge the numbers.

PPC declined to comment on the figure. Public disclosures by the Hellenic Electricity Distribution Network Operator HEDNO, which checks meters, show that verified cases of theft climbed to 10,600 last year, up from 8,880 in 2013 and 4,470 in 2012.

Authorities believe theft is far higher than the cases verified by HEDNO, another official said, declining to be named.

Households in the country are equipped with analog meters, which are easy to hack. One of the most common tricks is using magnets, which slow down the rotating coils to show less consumption than the real amount, a HEDNO official said.

Some websites even offer consumers tips and tricks on power fraud.

Burden of Arrears

For households who have had their electricity cut off, a group of activists calling themselves the “I Won’t Pay” movement have taken it upon themselves to reconnect the supply. The group says it has done hundreds this year.

PPC, which has a 90 percent share of the retail market and 60 percent of the wholesale market, is supposed to reduce this dominance to less than 50 percent by 2020 under Greece’s third, 86 billion euro bailout deal.

The lenders also want PPC to sell some of its assets, but the company is toiling under the debt of unpaid bills, a problem opposition lawmakers say will force a fire-sale.

In little over a year from June 2015, overdue bills to the 51-percent state-owned firm grew by nearly a billion euros to 2.6 billion, Chief Executive Manolis Panagiotakis told lawmakers in March.

Analysts estimate PPC’s cash reserves have shrunk to about  00 million euros, forcing it to secure a 200 million euro bank loan to repay a bond due in May.

The tangle has left it with little leeway for new investments or to fund a switch to cleaner forms of energy from coal to improve environmental standards.

“It is often said that PPC is undergoing the most critical phase of its history,” Panagiotakis told lawmakers. “I will not argue with that.” He declined a Reuters request for an interview.

The burden of arrears for PPC is now “so big that some worry it will not be able to lift it for much longer”, said energy expert Constantinos Filis.

The apartment building where the Argyros family live is a testament to that. Many tenants struggle even to pay the 25 euro annual fee to light communal areas such as staircases.

Ground Zero

PPC has tried to recoup unpaid bills with phased repayment plan. A total of 625,000 customers owing a total of 1.3 billion euros had signed up to the plan by January.

The Argyros family have also entered the plan with the help of Theofilos, a local charity, which also contributes towards their monthly bills.

Meanwhile, PPC’s provisions for bad debt remain high. The plans drove the figure down to 453 million euros in the nine months to September last year from 690 million a year earlier.

Analysts expect PPC to swing back to a profit of between 63-109 million euros in 2016, with provisions of below 600 million euros.

Filis, the energy expert, said the more things stayed the same, the closer PPC was to “ground zero” and he drew comparisons with the Greek state’s brushes with near bankruptcy during the debt crisis.

“It’s reasonable to say that PPC is too big to allow it to collapse, particularly regarding energy security,” he said. “On the other hand, a few years ago some argued that no country could fail either.”
…

President Donald Trump on Friday chose Kevin Hassett, an economics adviser to past Republican presidential candidates, to be chair of the White House Council of Economic Advisers. Hassett will play a critical role in analyzing the performance of the economy and impact of policy changes.

Hassett is the research director for domestic policy at the American Enterprise Institute, a conservative think tank that he joined in 1997. He has provided economic advice to the presidential campaigns of John McCain, George W. Bush and Mitt Romney. With a doctorate in economics from the University of Pennsylvania, Hassett has worked as a senior economist at the Federal Reserve and taught at Columbia University’s business school.

Jason Furman, the CEA chair under former President Barack Obama, hailed Hassett as an “excellent pick” on Twitter.

“He is serious about substance, committed to dialogue, & knows how to navigate DC,” Furman wrote.

An expert on taxes and budget policy, Hassett also co-wrote a paper challenging the National Football League conclusions about the New England Patriots using underinflated footballs to gain an advantage against the Indianapolis Colts in a 2015 playoff game.

Not all of Hassett’s analysis has been prescient. He has faced criticism for co-writing the 1999 book “Dow 36,000,” which predicted a rising stock market shortly before the tech bubble burst and the Dow Jones industrial average tumbled.

The CEA has routinely been filled by leading academic economists and was among the most prominent vacant posts during the early months of the Trump presidency.

Formed in 1946, the CEA is responsible for giving the president economic guidance on domestic and international policy. The post has also been a launching pad for leading monetary policy at the Fed. Previous CEA chairs — Janet Yellen, Ben Bernanke and Alan Greenspan — have served as the past three Fed chairs.
…

Голова правління «Нафтогазу України» Андрій Коболєв заявив, що остання інформація зі Стокгольмського арбітражу, який розглядає суперечки між «Нафтогазом» і російським газовим монополістом «Газпромом», оптимістична для української сторони.

«Ми останнім часом отримуємо багато інформації вже від трибуналу щодо можливих термінів і результатів. Ми стаємо більш оптимістичними, ніж ми були до цього. І це все, що я можу сказати. Я надто обмежений у будь-яких інших коментарях, поки я не зможу показати остаточне рішення, а це буде найближчим часом», – сказав він в ефірі телевізійного «5-го каналу».

Крім того, керівник «Нафтогазу» зазначив, що в «Газпромі» на сьогодні вже обговорюються варіанти можливого програшу.

«Газпром» публічно обговорює це питання, і вони також само найближчим часом очікують рішення. Я спостерігаю в публічному домені певну зміну риторики в напрямку того, що можуть бути і варіанти програшу, і різні варіанти. Що це означає? Я не можу сказати, але повторюся – рівень нашого оптимізму потроху зростає», – сказав Коболєв.

«Нафтогаз» і «Газпром» подали одне на одного кілька взаємних позовів стосовно газових контрактів 2009 року про постачання і про транзит газу і стосовно їхнього виконання (чи невиконання, як стверджують сторони) до Арбітражного інституту Торгової палати Стокгольма, як передбачено цими контрактами. Загальна сума позовів – десятки мільярдів доларів.
…

The U.S. economy had a net gain of 98,000 jobs in March, which is much weaker job growth than most economists expected.

Payroll growth was slowed by stormy weather in March after unusually good weather helped growth in January and February, according to economist Jed Kolko, of the job web site “Indeed.”

Friday’s report from the Labor Department also said the unemployment rate fell two-tenths of a percent, to 4.5 percent. Government data show that is the lowest level since April, 2007.  The unemployment rate has been five percent or lower for well over a year.

The slight decline in the jobless rate is due to 145,000 people entering the workforce and nearly half a million Americans finding jobs, according to S&P Global Rating’s economist Beth Ann Bovino. She says this is the latest in a series of mostly positive reports on the job market.   

PNC Bank economist Gus Faucher says the job market “is getting tighter and business are finding it more difficult to hire.”  That may force employers to raise wages to attract and keep workers.  

Job gains were found in professional and business services and mining, while retail continued to lose positions.  Faucher also said problems in retail may reflect a shift from traditional stores to on-line commerce.  That shift is evident in the announcement that several major retail chains are closing a large number of stories, according to economist Dean Baker of the Center for Economic and Policy Research.

While the report shows that the total number of unemployed Americans fell by over 300,000, there are still 7.2 million people out of work across the country.  

 
…

U.S. Commerce Secretary Wilbur Ross held out hope Thursday that the Trump administration will revive the U.S. Export-Import bank’s full lending powers, saying the institution is part of its “trade toolbox” to boost exports.

The U.S. government trade lender has been hobbled for the better part of two years by conservative Republicans in Congress who tried to shut it down in 2015 by revoking its charter, and then limited its lending powers last year by blocking nominations to its board of directors.

Big loans impossible

With only two active members on its five-seat board, the bank cannot make or guarantee loans of more than $10 million, preventing it from financing large exports such as U.S.-built commercial aircraft, nuclear reactors or petrochemical plants.

Thus far, Trump administration officials have not said publicly whether they support reviving EXIM’s full lending powers, but some members of Congress say that Trump has told them privately that he supports the institution.

“The bank is part of a domestically focused trade toolbox that this administration will continue to focus on in the coming months,” Ross said in brief video remarks to EXIM’s annual conference in Washington. “We will use that toolbox to rebalance our trade policy in order to put American workers first.”

Ross did not provide details of how EXIM will be used in his trade strategy or whether the administration has specific plans to nominate new board members.

Trump appears to be an ally

He urged hundreds of U.S. manufacturers, lenders and foreign government and company officials attending the meeting to work toward increasing U.S. exports to create jobs.

U.S. Representative Chris Collins of New York, a Republican Trump ally who headed a small manufacturer that used EXIM working capital loan guarantees in the past, told the conference that Trump told him February 16 at a White House meeting that he was “all in” on supporting EXIM.

“We asked him very directly about the five board seats,” Collins said. “The president looked to his right and to his left and said ‘Can you get me some names? I’m all in.’ There was no hesitation whatsoever.”

Reviving EXIM, however, would anger conservative groups backed by the Koch brothers, the influential billionaire Republican donors. The groups have waged a campaign that has painted EXIM as unnecessary corporate welfare even though it is self-funding through the interest and fees it charges borrowers.
…

When the U.S. president hosts a foreign leader at his home, it can be seen as a sign of hospitality, an indicator of warm relations, and a chance to put American culture on display.

President Franklin Delano Roosevelt famously hosted the king and queen of England at his Hyde Park estate, where he served hot dogs for dinner. President Ronald Reagan hosted Britain’s Prime Minister Margaret Thatcher and Soviet leader Mikhail Gorbachev at his California ranch. President George H.W. Bush hosted a string of international leaders at the family compound in Kennebunkport, Maine, and his son President George W. Bush did the same at his family home in Crawford, Texas.

With so many precedents, why would anyone point fingers at President Donald Trump for hosting foreign dignitaries at Mar-a-Lago, his Palm Beach, Florida, estate?

The answer is money. Mar-a-Lago functions as a vacation home for the Trumps, but it also serves as a resort for paying members — which has not been true of any of the aforementioned properties that played host to presidential guests. It is not clear how much access paying guests have to the visiting diplomats, but during a visit by Japanese Prime Minister Shinzo Abe to Mar-a-Lago earlier this year, Abe and Trump carried on some of their discussions over dinner in a restaurant on the property, in full view of other guests.

Having presidential guests stay at Mar-a-Lago — a commercial property owned by the president — raises questions about whether other guests at the property have extraordinary access to the president and his guests by virtue of their club membership — a membership whose price doubled after Trump was elected to the presidency. Critics refer to the situation as “pay to play” — where money buys access to power.

On the other hand, Mar-a-Lago — with its proximity to the beach, a spa, tennis courts and golf courses — seems an ideal place to host foreign dignitaries, as it can be a more relaxed atmosphere than Washington, D.C. The setting also implies a close, personal relationship between the president and his visitor.

Abe visit ‘well received’ in Japan

“The Mar-a-Lago meeting between Trump and Chinese President Xi Jinping offers a great opportunity for the two leaders to get to know each other in a more relaxed atmosphere,” said Zhiqun Zhu, professor of political science and international relations, and director of The China Institute at Bucknell University in Pennsylvania.

He said Abe’s visit to the Florida estate “was well received in Japan because many Japanese liked the fact that Abe was the first Asian leader to be invited by the Trump administration to the U.S., and Trump and Abe spent several intimate hours playing golf together, highlighting the close alliance between the U.S. and Japan and the strong personal ties between Trump and Abe.”

The Xi meeting, however, lacks one important component of that visit: Xi does not play golf. His government frowns on the sport.

Ely Ratner, a senior fellow in China studies at the Council on Foreign Relations, told The Boston Globe that the Xi visit to Mar-a-Lago provides a “controlled media environment,” a situation prized by the Trump administration and difficult to arrange in Washington. But it also implies a favorable relationship that, in Ratner’s mind, has yet to be achieved.

“They should have had the opening meeting in Washington and said ‘we can do the Mar-a-Lago meeting, but you have to earn it,'” he said.

Property once government-owned

Mar-a-Lago — built in the 1920s by heiress and socialite Marjorie Merriweather Post — was actually planned as a presidential retreat. Post bequeathed the estate to the federal government upon her death in 1973. But then-President Richard Nixon preferred using his own Florida vacation home in Key Biscayne, and successive presidents Gerald Ford and Jimmy Carter were not interested in the estate, either.

Carter preferred the official presidential retreat, Camp David, not far from the nation’s capital and owned by the U.S. military, where he arranged the historic Camp David Accords between the leaders of Israel and Egypt.

In 1980, the government returned Mar-a-Lago to the Post family.

Trump bought the resort five years later, after threatening to buy the land between the home and the beach, spoiling the view and driving down the sales price. When Trump began struggling financially, he converted part of the property into a private club. The initiation fee for Mar-a-Lago membership is $200,000. Yearly dues are $14,000. Overnight guests pay up to $2,000 per night.

Critics say it’s not only the “pay-to-play” problem that worries them. It’s also the cost of the Trump visits and the impact on the community, where roads must be closed when the president is in town, and local law enforcement works overtime to help with security.

Democratic lawmakers are pushing legislation that would mandate that Mar-a-Lago keep a public log of its visitors.

As for the high-security Camp David, hidden in the Maryland mountains, Trump has called the property “very rustic.” He recently told a German reporter, “It’s nice, you’d like it. You know how long you’d like it? For about 30 minutes.”
…

Conservative activist groups that generally support Republicans but oppose a pro-export, anti-import Republican tax proposal released a study on Thursday estimating its impact on individual U.S. states, underscoring the party’s division over taxes.

The two activist groups, backed by billionaire industrialists Charles and David Koch, reported that seven states won by President Donald Trump in November’s election would be among the 10 hardest hit by the proposal.

Freedom Partners and Americans for Prosperity, both based in the Washington area, said the “border adjustment tax,” or BAT, would harm all 50 states, but that those heavily dependent on imports could suffer most.

The report predicted economic harm to Georgia, Kentucky, Louisiana, Michigan, South Carolina, Tennessee and Texas — all states Trump won in the 2016 presidential election. The list of hard-hit states also includes California, New Jersey and Illinois, which Democrat Hillary Clinton carried.

House Ways and Means Committee Chairman Kevin Brady, a Texas Republican who intends to include the BAT in tax reform legislation this spring, sharply criticized the study.

‘Fantasy figures’

“That so-called study will be easily discredited and probably fits the definition of fake news,” Brady told reporters. “It takes one provision, pretends the economy freezes … applies it in our current tax code and comes up with fantasy figures.”

BAT, billed as a way to boost U.S. manufacturing, would exempt export revenues from federal tax, while ending the deductibility of import costs by corporations, making imports for production or resale costlier.

The plan is part of a tax reform blueprint supported by House Speaker Paul Ryan. Trump is also working on a tax plan.

The proposal is also opposed by a number of Senate Republicans who could prevent its passage, should the House approve a tax reform bill that contains it.

Koch organizations, including the brothers’ privately held conglomerate, Koch Industries, have warned that BAT could devastate the U.S. economy by raising prices on consumer goods, including gasoline. Refineries owned by Koch Industries rely on oil imports from Canada.

The Koch groups say they support tax reform but oppose BAT.
…

Речник Міжнародного валютного фонду Джеррі Райс заявив, що ще цього року Україна може отримати від МВФ іще три транші позики на загальну суму близько 4,4 мільярда доларів, але наголосив, що це обумовлене виконанням реформ, передбачених програмою співпраці.

Як сказав він на прес-конференції у Вашингтоні, головними цілями програми на наступні кілька місяців є, зокрема, всеосяжна пенсійна реформа, поступ у приватизації, створення ринку продажу сільськогосподарських земель, також важливим елементом цієї програми є рішуча боротьба з корупцією.

«У принципі, ми можемо завершити цього року ще три перегляди (програми співпраці з Україною – ред.) – якщо, наголошую, все буде відбуватися за планом. Це залежить від здатності влади вчасно виконати зобов’язання щодо реформ за цією програмою. Це майже самозрозуміло, але це дуже важливе застереження. Ці три перегляди, якщо вони будуть завершені, можуть привести до надання ще приблизно 4,4 мільярда доларів цього року – але, знову ж таки, це залежить від поступу за програмою і здійснення реформ», – сказав речник. За його словами, залежно від дій Києва ці плани МВФ іще можуть змінитися.

У Національному банку України у вівторок заявляли, що до кінця року Україна очікує надходження від МВФ 4,5 мільярдів доларів.

У понеділок, 3 квітня, Міжнародний валютний фонд за результатами завершення третього перегляду виконання програми співпраці ухвалив рішення надати Україні четвертий транш позики за програмою розширеного фінансування в розмірі близько 1 мільярда доларів.

Цього рішення очікували ще 20 березня, але Рада директорів МВФ перенесла його. В Міністерстві фінансів України тоді це пояснили необхідністю уточнення розрахунків, зокрема, наслідків від заходів, застосованих Україною у відповідь на блокаду на Донбасі. У МВФ теж повідомили, що засідання щодо України перенесли для «оцінки наслідків останніх подій в Україні».

У березні 2015 року між МВФ і Україною була затверджена чотирирічна програма розширеного фінансування на суму близько 17,5 мільярдів доларів США. Наразі, разом із нинішнім траншем, МВФ надав Україні за цією програмою близько 8 мільярдів 400 мільйонів доларів. Метою програми є відновлення економіки України, відновлення її незалежності від зовнішніх джерел, зміцнення державних фінансів, утримання фінансової стабільності і підтримка економічного зростання шляхом структурних і управлінських реформ за одночасного захисту найменш вразливих верств.
…

Strong trade ties between the United States and nations in Southeast Asia are under a cloud as a U.S. investigation into trade imbalances gets underway. Regional governments say the apparent policy shift has spurred concern and anxiety.

A 90-day investigation by the U.S. Commerce Department of countries with large trade surpluses with the United States follows President Donald Trump’s call for a crackdown on “foreign importers that cheat.” Trump said the shift will result in a “historic reversal” in U.S. trade policy.

“While we’ve seen an improvement in the trade figures between January and February, we continue to be very focused on eliminating our nation’s trade imbalance,” said Commerce Secretary Wilbur Ross. “This administration is determined to achieve free and fair trade, to protect hard working Americans, and to grow our economy.”

Among the Asian economies singled out by Trump were those of China, Japan, Thailand, South Korea, Malaysia, India, Taiwan, Indonesia and Vietnam.

Analysts say the review may mark a major change in Asia’s trading relationship with the United States.

Campaign rhetoric

After World War II, Southeast Asia’s emerging economies, beginning with Japan, looked to the U.S. economy to spur export led growth — key to the region’s progress in lifting millions out of poverty.

But charges that some trade policies, particularly China’s, had damaged the U.S. economy were a prominent feature of Trump campaign rallies.

Krystal Tan, an economist with the Singapore-based Capital Economics, said the trade investigation has led to concerns and uncertainties across the region.

“At this stage it’s still quite difficult to see what kind of measures the U.S. might want to take. It does look like countries that are probably most nervous about potentially being named currency manipulators are [South] Korea and Taiwan,” Tan told VOA.

The United States argues that currency manipulators deliberately keep their currency low in value against the U.S. dollar in order to boost their exports.

Taiwan trade officials say the trading relationship with the U.S. is not a hostile one, as over 80 percent of Taiwan’s exports to the U.S. are intermediate goods — those sent to the U.S. for final assembly.

David Hsu, deputy director general of Taiwan’s Bureau of Foreign Trade (BOFT) told local media the trading relationship with the U.S. was “mutually beneficial.”

Taiwan’s main concern is the potential imposition of sanctions following the review.

Tan says South Korea and Taiwan, to avoid sanctions, will need to open their markets to more U.S. products.

Malaysia’s International Trade and Industry Minister, Ong Ka Chuan, told local media Malaysia was neither responsible for, nor taking advantage of, the U.S. trade deficit.

Ong said any sanctions could impact American manufacturers in Malaysia, such as Intel and Western Digital.

“If Trump were to punish us for this [trade surplus] the American firms will be ones dealt a severe blow,” he said.

Kuala Lumpur-based RHB Research chief economist Peck Boon Soon said the U.S. policy revision left Malaysian business cautious on the outlook.

“Yes, certainly it remains very uncertain until [Trump] really implements those policies and whether those policies would be able to be implemented. We are watching these things quite closely and we would be waiting for more developments before we decide what to do with our forecasts on exports,” Peck told VOA.

In late 2016, export growth boosted Malaysia’s economic growth rate to 4.5 percent — “the strongest in the four quarters.”

The United States is Thailand’s third largest trading partner after China and Japan. Two-way trade reached $36.5 billion in 2016, with $24.49 billion from Thai exports. The trade surplus with the U.S was $12.4 billion.

Major exports to the United States include machinery, electrical appliances, electronics and parts, rubber products and gems and jewelry.

Both Malaysia and Vietnam were key participants to the 12 nation Trans Pacific Partnership (TPP), a key component of President Barack Obama’s “pivot to Asia” policy intended to counter China’s growing political and economic influence.

TPP withdrawal

Trump withdrew the United States from the TPP soon after taking office.

This week, Vietnam’s Prime Minister, Nguyen Xuan Phuc, criticized the U.S. policy shift, saying the trade policies would have a “huge impact” on Vietnam’s export driven economy.

Carl Thayer, a political scientist with the University of New South Wales, says Phuc’s comments were “guarded”, but with Hanoi looking to build trading ties under China’s Regional Comprehensive Economic Partnership (RCEP).

“Vietnam had its heart and soul on the TPP. They have a massive surplus with the U.S. It almost equals their massive deficit with China. But there’s not very much they can do, they’re being pragmatic and looking at the RCEP – the Regional Comprehensive Economic Partnership,” Thayer said.

Thayer said Vietnam has banked on a strong U.S. presence in Asia as a counterweight to China’s regional influence, especially in the South China Sea.

“The more Trump goes his own way Vietnam has got to do a five power balance with India, Russia, Japan, as well as China and the U.S. weakness; the U.S. side. So Vietnam has a harder time preventing being sucked into China’s orbit — in all of this — it needs a strong U.S. action,” he said.

He says bilateral relations with Vietnam, built up over the past two decades, are a casualty of the trade policy shift.

“Yes, it gets worse for Vietnam because they can’t rely on the U.S. They have no idea what [the U.S.] is going to do,” he said.
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Struggling U.S. farmers are pressing their luck with soybeans this spring, sowing record acreage even though the world is awash with the oilseed, as demand from China offers a potential lifeline.

Soybean plantings could surpass corn for the first time this year, with rising exports holding up prices and providing a narrow path to profitability for U.S. farmers facing their fourth straight year of declining incomes.

But fierce competition to supply China threatens the bottom line for U.S. growers, and 2017 prices, while seen as up slightly from 2016, are still projected to be 50 cents per bushel lower than three years ago.

Diplomatic concerns also weigh heavily as the market eyes tense relations between the two countries. U.S. President Donald Trump and China’s leader Xi Jinping meet this week in Florida.

Trump has said he wants U.S. companies to stop investing in China and instead create jobs at home. He has also  accused China of manipulating its currency to boost exports.

Mike Jordan, a farmer from Beloit in north-central Kansas, plans to boost soy acreage by 10 percent after success both on the yield and price fronts for his crop in 2016.

“The general sentiment is … even though Kansas is a wheat state, beans look pretty good,” Jordan said. “If you told me five years ago beans were going to produce more than half the total income on my farm, I would have wondered where you were coming from.”

Planting records

The U.S. Department of Agriculture (USDA) forecasts farmers will sow 89.482 million acres of soybeans this year, up 7.2 percent from the record 83.433 million acres in 2016. Corn acreage was seen falling to 89.996 million acres, just 514,000 greater than soybean intentions.

During the past decade, final soybean acreage has topped the March forecast by more than 500,000 acres five times, with the biggest gain in 2012, when plantings beat initial projections by 3.296 million acres. A year ago, final soybean plantings came in 1.197 million acres above March intentions.

Soybeans also are taking acreage from wheat, which has struggled on the export market. U.S. wheat plantings were seen falling to 46.059 million acres — the lowest since the government started tracking them in 1919.

The soybean crop is planted to be exported, part of its allure to farmers who see demand for wheat and corn declining on both the export and domestic fronts.

On average, 45 percent of the soybean crop has been exported during the past 10 years and the USDA projects that will rise above 50 percent in 2017/18. Corn is typically used for domestic feed or ethanol, with only about 14 percent exported.

The rising soy acreage is seeded with China in mind.

“With China, if we can keep them as a good customer … I am hoping that they can soak up the extra supplies and keep the price from collapsing,” said Dave Newby, a farmer in Bondurant, Iowa, who plans to boost his soybean acreage by 50 percent this year.

China’s soybean imports have grown for 13 years in a row and the USDA expects them to hit 87 million tonnes in the year ending Sept. 1. That would soak up one-fourth of the world crop and represent a 130 percent surge in demand in the last decade.

The next-biggest importer is the European Union — set to bring in just 13.80 million tonnes in the 2016/17 crop year.

The United States sold 62 percent of its exports to China in 2016, worth more than $14 billion, according to the American Soybean Association. Soybean exports helped spur the U.S. economy to its biggest gains in two years during the third quarter of 2016.

South America steps up

But growing Chinese demand does not guarantee a profit as stocks should be huge even after China satisfies its needs.

Chicago Board of Trade November soybean futures, which track the crop to be harvested this autumn, have fallen 1.0 percent since the USDA issued its acreage outlook on March 31. CBOT December corn has risen 2.1 percent.

Additionally, massive crops in Brazil and Argentina provide China with purchasing options, and the competition is likely to persist as South American farmers also have the export market at the forefront of planting decisions.

“We plant soy in Brazil because there is global demand for the grain,” said Elso Pozzobon, a farmer in Mato Grosso, Brazil’s largest soy producing state. “This crop gives producers a sense of security.”

In Argentina, soybean acreage looks set to rise as an export tax that held back seedings is expected to decrease.

“Considering that world demand is still strong and prices are better than the alternatives,” said David Hughes, who farms thousands of hectares in Argentina’s bread basket Buenos Aires province. “I would guess we are probably at a low level of acreage limit.”
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