China State Media Warn Trump against Mutually Destructive Tariff War

A shopper walks with his purchases at Plaza Las Americas Mall near the US-Mexico border in San Ysidro, California, on November 26, 2024. (AFP)
A shopper walks with his purchases at Plaza Las Americas Mall near the US-Mexico border in San Ysidro, California, on November 26, 2024. (AFP)
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China State Media Warn Trump against Mutually Destructive Tariff War

A shopper walks with his purchases at Plaza Las Americas Mall near the US-Mexico border in San Ysidro, California, on November 26, 2024. (AFP)
A shopper walks with his purchases at Plaza Las Americas Mall near the US-Mexico border in San Ysidro, California, on November 26, 2024. (AFP)

China's state media warned US President-elect Donald Trump his pledge to slap additional tariffs on Chinese goods over fentanyl flows could drag the world's top two economies into a mutually destructive tariff war.

Trump, who takes office on Jan. 20, said on Monday he would impose "an additional 10% tariff, above any additional tariffs" on imports from China until Beijing clamped down on trafficking of the chemical precursors used to make the deadly drug.

The two superpowers are setting out their positions ahead of the former president's return to the White House. Trump's first term resulted in a trade war that uprooted global supply chains and hurt every economy as inflation and borrowing costs shot up.

Editorials in Chinese communist party mouthpieces China Daily and the Global Times late on Tuesday warned the next occupant of 1600 Pennsylvania Avenue to not make China a "scapegoat" for the US' fentanyl crisis or "take China's goodwill for granted regarding anti-drug cooperation."

"The excuse the president-elect has given to justify his threat of additional tariffs on imports from China is farfetched," China Daily said.

"There are no winners in tariff wars. If the US continues to politicize economic and trade issues by weaponizing tariffs, it will leave no party unscathed."

Economists have begun downgrading their growth targets for China's $19 trillion economy for 2025 and 2026 in anticipation of further tariffs promised by Trump during the election campaign, and are warning Americans to brace for an increase in the cost of living.

"For now, the only thing we know for sure is that the risks in this area are high," said Louis Kuijs, chief Asia economist at S&P Global Ratings, which on Sunday lowered its China growth forecast for 2025 and 2026 to 4.1% and 3.8%, respectively.

"What we assumed in our baseline is an across-the-board (tariff) increase from around 14% now to 25%. Thus, what we assumed is a bit more than the 10% on all imports from China."

Trump is threatening Beijing with far higher tariffs than the 7.5%-25% levied on Chinese goods during his first term.

"China already has a template for dealing with the previous US tariff policy," the Global Times quoted Gao Lingyun, an analyst at the Chinese Academy of Social Sciences in Beijing, as saying.

"Using counternarcotics issues to increase tariffs on Chinese goods is untenable and unpersuasive," Gao added.

Chinese President Xi Jinping told former Singaporean Prime Minister Lee Hsien Loong that China's economy would continue to grow and develop in the long-term during a meeting in Beijing on Tuesday after Trump's comments, state news agency Xinhua said.

Lee reportedly told Xi "no one should underestimate the Chinese people's determination for their nation to succeed and stand tall in the world," a remark which a separate Global Times piece said was "also meant for some people in (the) international community."

Profits at Chinese firms fell 10% year-on-year in October, data showed on Wednesday, showing how companies are struggling to remain profitable in an economy that is far more vulnerable to trade shocks this time around.

Economists in a Reuters poll last week expected additional US tariffs ranging from 15% to 60%. Most said Beijing will need to inject more stimulus to boost economic growth and offset pressure on exports.

TRADE WAR TWO

Trump previously said he would introduce tariffs in excess of 60% on Chinese goods.

The threat is rattling China's industrial complex, which sells goods worth more than $400 billion annually to the US and hundreds of billions more in components for products Americans buy from elsewhere.

His pick of trade lawyer Jamieson Greer as new US trade representative elevates a key veteran of Trump's first term trade war against China and points to a bruising four years for trade negotiators the world over.

Greer served as chief of staff to Trump's former US Trade Robert Lighthizer, the architect of Trump's original tariffs on some $370 billion worth of Chinese imports and the renegotiation of the North American free trade deal with Canada and Mexico.

The president-elect looks set to tear up that agreement on his first day in office.

Trump on Monday also pledged 25% tariffs on goods from Mexico and Canada, saying the US' neighbors were not doing enough to stop drugs and migrants crossing their borders.

But China can expect to bear the brunt of Trump's efforts to bring down the US' trade deficit and bring about the "manufacturing renaissance" he promised on the campaign trail.

"What the future will bring on this front is hard to say," S&P Global's Kuijs said. "There are many uncertainties. There is still a large increase to go to get to 60%."



Oil Drops 1% as US, Iran Pledge to Continue Talks

The sun rises behind the Tishrin oil field in the eastern Hasakah countryside, northeastern Syria (AP)
The sun rises behind the Tishrin oil field in the eastern Hasakah countryside, northeastern Syria (AP)
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Oil Drops 1% as US, Iran Pledge to Continue Talks

The sun rises behind the Tishrin oil field in the eastern Hasakah countryside, northeastern Syria (AP)
The sun rises behind the Tishrin oil field in the eastern Hasakah countryside, northeastern Syria (AP)

Oil prices fell 1% on Monday as immediate fears of a conflict in the Middle East eased after the US and Iran pledged to continue talks about Tehran's nuclear program over the weekend, calming investors anxious about supply disruptions.

Brent crude futures fell 67 cents, or 1%, to $67.38 a barrel on Monday by 0444 GMT, while US West Texas Intermediate crude was at $62.94 a barrel, down 61 cents, or 1%.

"With more talks on the horizon the immediate ‌fear of supply disruptions ‌in the Middle East has eased ‌quite ⁠a bit," IG ‌market analyst Tony Sycamore said.

Iran and the US pledged to continue the indirect nuclear talks following what both sides described as positive discussions on Friday in Oman despite differences. That allayed fears that failure to reach a deal might nudge the Middle East closer to war, as the US has positioned more military forces in the area.

Investors are also worried about possible disruptions to supply ⁠from Iran and other regional producers as exports equal to about a fifth of the world's ‌total oil consumption pass through the Strait of ‍Hormuz between Oman and Iran.

Both ‍benchmarks fell more than 2% last week on the easing tensions, their ‍first decline in seven weeks.

However, Iran's foreign minister said on Saturday Tehran will strike US bases in the Middle East if it is attacked by US forces, showing the threat of conflict is still alive.

"Volatility remains elevated as conflicting rhetoric persists. Any negative headlines could quickly reignite risk premiums in oil prices this week," said Priyanka Sachdeva, senior market analyst at ⁠Phillip Nova.

Investors are also continuing to grapple with efforts to curb Russian income from its oil exports for its war in Ukraine. The European Commission on Friday proposed a sweeping ban on any services that support Russia's seaborne crude oil exports.

Refiners in India, once the biggest buyer of Russia's seaborne crude, are avoiding purchases for delivery in April and are expected to stay away from such trades for longer, refining and trade sources said, which could help New Delhi seal a trade pact with Washington.

"Oil markets will remain sensitive to how broadly this pivot away from Russian crude unfolds, whether ‌India’s reduced purchases persist beyond April, and how quickly alternative flows can be brought online," Sachdeva said.


Indian Refiners Avoid Russian Oil in Push for US Trade Deal

An employee walks inside the premises of an oil refinery of Essar Oil in Vadinar in the western state of Gujarat, India, October 4, 2016. REUTERS/Amit Dave/File Photo
An employee walks inside the premises of an oil refinery of Essar Oil in Vadinar in the western state of Gujarat, India, October 4, 2016. REUTERS/Amit Dave/File Photo
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Indian Refiners Avoid Russian Oil in Push for US Trade Deal

An employee walks inside the premises of an oil refinery of Essar Oil in Vadinar in the western state of Gujarat, India, October 4, 2016. REUTERS/Amit Dave/File Photo
An employee walks inside the premises of an oil refinery of Essar Oil in Vadinar in the western state of Gujarat, India, October 4, 2016. REUTERS/Amit Dave/File Photo

Indian refiners are avoiding Russian oil purchases for delivery in April and are expected to stay away from such trades for longer, refining and trade sources said, a move that could help New Delhi seal a trade pact with Washington, according to Reuters.

The US and India moved closer to a trade pact on Friday, announcing a framework for a deal they hope to conclude by March that would lower tariffs and deepen economic cooperation.

Indian Oil, Bharat Petroleum and Reliance Industries are not accepting offers from traders for Russian oil loading in March and April, said a trader who approached the refiners.

These refiners, however, had already scheduled some deliveries of Russian oil in March, refining sources said. Most other refiners have stopped buying Russian crude.

A foreign ministry spokesperson said: “Diversifying our energy sourcing in keeping with objective market conditions and evolving international dynamics is at the core of our strategy” to ensure energy security for the world's most-populous nation.

Although a US-India statement on the trade framework did not mention Russian oil, President Donald Trump rescinded his 25% tariffs on Indian goods, imposed over Russian oil purchases, because, he said, New Delhi had “committed to stop directly or indirectly” importing Russian oil.

New Delhi has not announced plans to halt Russian oil imports.

India became the top buyer of discounted Russian seaborne crude after Russia invaded Ukraine in 2022, spurring a backlash from Western nations that had targeted Russia's energy sector with sanctions aimed at curtailing Moscow's revenue and making it harder to fund the war.

One regular Indian buyer is Russia-backed private refiner Nayara, which relies solely on Russian oil for its 400,000-barrel-per-day refinery. Sources said Nayara may be allowed to keep buying Russian oil because other crude sellers pulled back after the European Union sanctioned the refiner in July.

Nayara also does not plan to import Russian crude in April due to a month-long refinery maintenance shutdown, a source familiar with its operations said.

Nayara did not respond to an email seeking comment.

Indian refiners may change their plan and place orders for Russian oil only if advised by the government, sources said.

Trump's order said US officials would monitor and recommend reinstating the tariffs if India resumed oil procurement from Russia.

Sources said last month that India was preparing to cut Russian oil imports below 1 million bpd by March, with volumes eventually falling to 500,000–600,000 bpd, compared with an average 1.7 million bpd last year. India's Russian oil imports topped 2 million bpd in mid-2025.

The intake of Russian oil by India, the world's third-biggest oil consumer and importer, declined to its lowest level in two years in December, data from trade and industry sources show.

 


IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.