Farce of new US tariffs on China this time doesn't even match the lines

 

Illustration: Liu Rui/GT

On May 14 local time, the Biden administration announced "severe" new tariffs on $18 billion worth of Chinese imports, including Chinese-made steel and aluminum, semiconductors, electric vehicles (EVs), lithium batteries and components, critical minerals, photovoltaic cells, port cranes, and personal protective equipment. Among these, tariffs on imported Chinese EVs will be quadrupled, rising from 25 percent to 100 percent. The import tax on Chinese solar cells will also double, from 25 percent to 50 percent. Additionally, starting from 2025, tariffs on imported Chinese semiconductors will jump from 25 percent to 50 percent.

In the context of the previous administration's Section 301 tariffs on China still being in place, the US side's use of the so-called "review" process to further increase or impose additional tariffs on Chinese products exported to the US is a serious provocation against China. This approach contradicts President Biden's commitment of not "holding back China's development" and not "seeking decoupling from China." It also goes against the important consensus reached by the leaders of the two countries. To some extent, it can even be understood as the US initiating a new round of tariff friction.

Before announcing the imposition of additional tariffs on China, the US repeatedly spread negative information in an attempt to smear related Chinese technology and products. This is essentially a sign of guilt, trying to manipulate public opinion to cover up the fact that they are politicizing and instrumentalizing economic and trade issues. It must be reiterated that the US has no legitimacy in imposing additional tariffs on China. The World Trade Organization (WTO) expert panel ruled that the Section 301 tariffs violate WTO rules. By continuing to impose additional tariffs on China based on Section 301, the US is further disregarding WTO authority and international trade rules, compounding its mistakes. Suppressing advanced industries of other countries under the banner of "overcapacity" and using "fair competition" as an excuse to promote protectionism are blatant bullying.

The US also uses the so-called "forced technology transfer" and "intellectual property theft" by China, along with the alleged "overcapacity," to justify imposing high tariffs on Chinese goods. These are fragile lies that can easily be exposed. In the fields of the products subjected to additional tariffs, Chinese technology is advanced and does not need to "compel" American companies to engage in "forced technology transfer," nor is there "intellectual property theft." The American political elites' accusations of "forced technology transfer" and "intellectual property theft" as the source of competitiveness for these Chinese products are like grabbing a script and speaking without matching the lines.

As for the accusation of "overcapacity," it is nothing but a lie fabricated by the US. Any product that the US lacks competitiveness in and is important to the US can be arbitrarily labeled as "overcapacity" by the US. In fact, the so-called "overcapacity" of some Chinese products is the result of the US' policy of trade protectionism and market distortion behavior. If the US opens its market, the overall supply and demand of these products in the international market will be more balanced, and the demand for new energy products in the US will also be met.

As mentioned in a previous editorial of the Global Times, considering the "almost zero" number of EVs exported from China to the US, even if the new tariffs are implemented, they are unlikely to immediately impact Chinese electric car companies. The same goes for lithium batteries and photovoltaic products. The Biden administration's exaggerated announcement at this time is of a practical but "not very useful" nature, giving the impression that it is not a careful choice made from genuine economic considerations, but rather a political show aimed at winning voters in an election year. It is a tariff package tailored to meet the political needs of the US. What is absurd is that after news about the White House's plan to impose a 100 percent tariff on Chinese electric vehicles began to circulate, Trump immediately stated that he would slap a 200 percent tariff. It is clear that tariffs on China are being used as a card, and all actions revolve around domestic political interests.

Furthermore, the US imposing high tariffs on personal protective equipment from China is particularly puzzling. During the COVID-19 pandemic, there was a global shortage of personal protective equipment, and China exported these products to the US, effectively helping the US fight the epidemic and protect the health of Americans. The US is now imposing high tariffs on these products, which has a strong sense of burning bridges after crossing them. It is precisely because of this that the US' imposition of tariffs on China this time is more repugnant and disgusting, fully exposing the hypocrisy of US hegemony.

China-US relations should not be used as a scapegoat for domestic US politics, and China will not stay silent in the face of unfounded accusations from anti-China forces. Despite some in the US hoping for China's "understanding," these tariffs greatly harm China's legitimate development rights and seek to limit the development space of related industries in China. China will definitely take resolute measures to defend its own interests. The US should not be arrogant or harbor any illusions.

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US is a ‘monopoly’

 

While the United States plays the role of the banker similar to the game of Monopoly, the rest of us will be happy for now to remain in the game and not go bankrupt. — Bloomberg

WHETHER you are young or old, it is likely that at one time or another, you would have played a board game called Monopoly.

The rules of the game are simple, with the objective of winning the game by beating your opponents and making them bankrupt.

The whole idea is to build up your “assets” in the board game to make it pricey for other players to continuously pay rent whenever they land on your properties. At the same time, in the game of Monopoly, there is also the banker, who never goes broke.

However, if the bank runs out of money, the banker can issue “I Owe You” notes or IOUs to other players and for whatever amounts that are required by writing the amount on a piece of paper.

These IOUs can be exchanged for cash whenever cash is available, or otherwise, counted as an asset of the player holding them. In essence, the banker can print money and the holders have a claim against the banker. Sounds familiar?

Out of control

Welcome to the world of finance. In real life, some central banks, in particular, the US Federal Reserve (Fed) and the US government, are simply printing money.

They may not be playing a game like Monopoly but their actions certainly reflect that.

Today, the United States has a total debt amounting to US$34.6 trillion and with the debt ceiling out of the window, the US debt level will just continue to grow, as the past two trillion dollar increase occurred in a space of just 100 days each.

The pace of increase of every US$1 trillion is expected to accelerate very quickly as there are no plans to curtail the growth or any effort to reduce the government’s twin deficits – trade and budget deficits.

Another interesting point of measurement is the growth of the US debt level since February 2019, which has increased by US$12.5 trillion whilst the US gross domestic product (GDP) itself only expanded by US$7.2 trillion.

In essence, in the last five years or so, for every dollar growth of the US economy, the government created 1.7 units of debt.

Forever deficit

Last year, the US budget deficit hit US$1.7 trillion or 6.2% of GDP and this is expected to be sustained at a relatively high level over the next decade and beyond. The Congressional Budget Office in its March 2024 projection is looking at a budget deficit to GDP to hit 5.6% this year before rising to 6.1%, 7.3% and 8.5% in 2034, 2044 and 2054 respectively.

Astronomical by any standards, and by continuously running budget deficits, it suggests that the US debt level will accelerate further over the next 30 years.

In the words, as commented by the International Monetary Fund (IMF) recently, the United States debt level is simply mind-boggling. With higher debt levels, naturally, cost of servicing the debt too will increase. For the month of March alone, the US government spent US$89bil on interest, which on an annualised basis, suggests a figure of more than a trillion dollars or US$120mil every hour.

With the United States sustaining a higher Fed fund rate for a longer period, how does the country pay for this?

You guessed it, and yes, print more money just like the banker in the Monopoly board game writing IOUs.

In fact, the United States government, which raises approximately US$5 trillion a year uses it mostly for social security, healthcare, and debt servicing.

Expenditures related to defence, space programmes, state departments, or even law enforcement agencies are funded via debt. Even aid that it provides to nations or even wore-torn countries is funded via debt. Fewer dollars

With the rise of China and of course the emergence of the euro as a potential reserve currency, the US dollar has seen its share of global reserves held by the central bank shrinking year after year.

Based on the data from the IMF, the US dollar’s share of global reserves has dropped from 72% in the year 2000 to just 57% currently.

Although not elected yet, former US President, Donald Trump, is said to be considering ways to stop other nations from shifting away from using the US dollar by punishing them in one way or the other.

According to a Bloomberg report, these measures include export controls, currency manipulation charges, and tariffs.

Will this ever work and what would this mean to international trade and relationships if Trump is re-elected as President for the second time?

The ”S” word

With inflation at elevated levels, the Fed is in no hurry to cut rates just yet as the core Personal Consumption Expenditure (PCE) print looks to be sticking out like a sore thumb for longer.

In fact, the concern is that the core PCE, which grew by 2.8% in the latest March 2024 data, is not falling fast enough, while the super-core inflation, which is defined as PCE services inflation minus energy and housing, rose by 3.5% year-on-year (y-o-y).

The first quarter of this year’s 2024 GDP growth, which came in well below expectations at just 1.6% annualised rate against the market estimate of a 3.5% y-o-y growth has re-ignited the fear that the United States economy is headed towards stagflation – defined as a period of slow growth, high inflation and of course, rising unemployment, although the Fed chair is quick to dismiss it.

The latest monthly payroll numbers, which came in below expectations and lifted the unemployment rate to 3.9% have added a bit more pressure to the stagflation narrative.

While the Fed would not ring the alarm bell, the market is still saying that the United States economy is headed towards either a soft landing but could quickly become a hard one if rates are not cut soon enough.

As it is, the risk of recession indicator, as seen in the inverted yield curve, has been flashing “recession” for the past two years, but the United States economy continues to chug along, mainly driven by monopoly money.

At the same time, the yield spread between the US treasuries vis-a-vis other major currencies has caused significant gain on the US dollar itself.

Forget about how much the ringgit has lost ground but look at some of the other major currencies too, especially the yen, which has dropped more than 50% from the low of 102.36 to the US dollar in March 2020.

The drop in the yen is not merely due to the yield spread alone but also the massive debts that the Japanese government is presently carrying to the tune of 1,286 trillion yen or US$8.6 trillion, which is just over 217% of its GDP of about 591.4 trillion yen or US$4.2 trillion.

Will history repeat itself on the US dollar when the time comes just like how the yen is being devalued?

Can the US dollar be dethroned?

Short answer – unlikely!

However, if any country, especially those in emerging markets, were to behave like the United States today – twin deficits, unsustainable debt level, and money printing a.k.a. Monopoly money, that country would be doomed.

The local currency would need to be re-based via a devaluation if the market has not already priced that scenario just yet.

However, this would not happen to the US dollar simply because the greenback, for all intent and purpose, remains the reserve currency of the world and the world has not found an alternative yet and may never even find it.

Every other option, be it the euro, yen, yuan, gold, or cryptocurrencies, has its respective shortcomings.

As long as the US dollar is used as a medium of exchange for commodities, trade, and finance, and as the majority reserves of central banks globally, the US dollar remains relevant.

Hence, while the United States plays the role of the banker similar to the game of Monopoly, the rest of us will be happy for now to remain in the game and not go bankrupt.

But how long can the United States keep writing the IOUs? That’s the real question.

Pankaj C. Kumar is a long-time investment analyst. The views expressed here are the writer’s own.

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Understanding the nervous system

https://www.news-medical.net/health/What-is-the-Nervous-System.aspx#

What is the Nervous System?

YOUR nervous system is the control hub for your body, comprising the brain, spinal cord and nerves. It works by sending messages through a network of nerve cells from different body parts to the brain and back out to the body. These messages regulate your thoughts, memory, movement, emotions and senses.

 Damage to the network of nerve cells can disrupt the flow of signals throughout the body. 

Untreated nerve damage may result in uncomfortable symptoms such as tingling, numbness, pain, loss of sensation and muscle weakness, particularly in the hands and feet. 

The accumulation of abnormal proteins in the brain can trigger the degeneration of nerve cells, culminating in conditions such as Alzheimer’s disease, a progressive form of dementia. Over time, Alzheimer’s manifests as a gradual decline in memory and cognitive functions, and alterations in behaviour and personality. 

Attention-deficit/ hyperactivity disorder (ADHD) arises when the development of the central nervous system is disturbed. Typically emerging in childhood, it manifests as persistent patterns of inattention, hyperactivity, and impulsivity that disrupt daily functioning and development. 

How to protect your nervous system?

To safeguard your nervous system, consider integrating key neuroprotection nutrients into your routine.

Phosphatidylserine (PS), a phospholipid, shields brain cells and has been shown to help enhance memory and cognitive function. It may also alleviate symptoms such as inattention, hyperactivity and impulsivity. 

Acetyl-L-carnitine (ALCAR), a form of carnitine can cross the blood-brain barrier, is believed to help boost brain energy, improve focus and support cognitive function while also enhancing nerve function.

Vitamin B12 (cobalamin), the active form readily used by the body, aids in repairing damaged nerve cells, potentially reducing sensations of tingling and numbness. Moreover, it promotes the regeneration and formation of “Untreated nerve damage may result in uncomfortable symptoms such as tingling, numbness, pain, loss of sensation and muscle weakness, particularly in the hands and feet.” myelin sheaths, essential for rapid nerve-impulse transmission. 

Incorporating these key nutrients into your regimen, alongside a balanced diet and regular exercise, can fortify your nervous system, Eating a balanced diet and staying active can strengthen your nervous system. promoting optimal cognitive function and overall well-being. 

This informational article is brought to you by VitaHealth.

 For enquiries, call 1800 183 288. “

Understanding the nervous system

YOUR nervous system is the control hub for your body, comprising the brain, spinal cord and nerves. It works by sending messages through a network of nerve cells from different body parts to the brain and back out to the body. These messages regulate your thoughts, memory, movement, emotions and senses.

Damage to the network of nerve cells can disrupt the flow of signals throughout the body. Untreated nerve damage may result in uncomfortable symptoms such as tingling, numbness, pain, loss of sensation and muscle weakness, particularly in the hands and feet.

The accumulation of abnormal proteins in the brain can trigger the degeneration of nerve cells, culminating in conditions such as Alzheimer’s disease, a progressive form of dementia. Over time, Alzheimer’s manifests as a gradual decline in memory and cognitive functions, and alterations in behaviour and personality.

Attention-deficit/ hyperactivity disorder (ADHD) arises when the development of the central nervous system is disturbed. Typically emerging in childhood, it manifests as persistent patterns of inattention, hyperactivity, and impulsivity that disrupt daily functioning and development.

How to protect your nervous system?

To safeguard your nervous system, consider integrating key neuroprotection nutrients into your routine.

Phosphatidylserine (PS), a phospholipid, shields brain cells and has been shown to help enhance memory and cognitive function. It may also alleviate symptoms such as inattention, hyperactivity and impulsivity.

Acetyl-l-carnitine (ALCAR), a form of carnitine can cross the blood-brain barrier, is believed to help boost brain energy, improve focus and support cognitive function while also enhancing nerve function.

Vitamin B12 (cobalamin), the active form readily used by the body, aids in repairing damaged nerve cells, potentially reducing sensations of tingling and numbness. Moreover, it promotes the regeneration and formation of myelin sheaths, essential for rapid nerve-impulse transmission.

Incorporating these key nutrients into your regimen, alongside a balanced diet and regular exercise, can fortify your nervous system, promoting optimal cognitive function and overall well-being.

This informational article is brought to you by Vitahealth.

For enquiries, call 1800 183 288.

Keeping the brain active and sharp

Microsoft to spur new era, Data centre - boon or bane?

  

Economic boost: Trade groups foresee Microsoft’s investment opening doors to more career opportunities for the people besides supporting the nation’s digital transformation. — File photo

GEORGE TOWN: Tech giant Microsoft’s RM10.5bil investment to support Malaysia’s digital transformation will not only help local businesses be more efficient but also lead to better wages and higher skills for workers, say trade groups.

The investment, which includes building cloud computing and artificial intelligence (AI) infrastructure as well as creating AI development opportunities for an additional 200,000 people, will definitely boost Penang’s manufacturing sector, said Federation of Malaysian Manufacturers Penang (FMM Penang) chairman Datuk Lee Teong Li.

“Microsoft’s investment has the potential to drive socio-economic progress and enhance Malaysia’s competitiveness in the global tech landscape.

“The investments will definitely benefit our digital infrastructure, and the skills will help Malaysian businesses, communities and developers apply the latest technology to drive inclusive economic growth and innovation across the country.

“AI adoption will spread across key industries and the public sector while ensuring AI governance and regulatory compliance.

“It is also expected to create better-paying jobs for our people as we ride the AI revolution to fast-track Malaysia’s digitally empowered growth journey,” he said yesterday.

Lee said this will lead to more job opportunities and stimulate economic growth by providing people with valuable skills and employment.

“Additionally, it can attract other tech companies and foster a thriving ecosystem to position Malaysia as a hub for innovation in the region,” he added.

Although some manual jobs and clerical work will be made obsolete by AI, these workers could be retrained for other roles, he said.

On May 2, Microsoft announced that it will invest US$2.2bil over the next four years in Malaysia to support the country’s digital transformation.

The company said the investment will include building cloud and AI infrastructure, training 200,000 people in using AI, and supporting the growth of Malaysia’s software developer community.

This will be Microsoft’s single largest investment in its 32-year history in Malaysia, and the firm will work with the Malaysian government to establish a national AI Centre of Excellence and enhance the nation’s cybersecurity capabilities.

Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai pointed out that Microsoft’s investment in Malaysia is the largest in South-East Asia.

“It follows Nvidia’s investment of US$4.3bil in December last year to develop artificial intelligence (AI) infrastructure in Malaysia.

“With Malaysia’s prominence in semiconductor manufacturing and the emergence of generative AI as the next big technology disruptor, AI and semiconductor manufacturing are becoming increasingly intertwined, with AI playing a crucial role in optimising manufacturing processes and enhancing chip design.

“This is in addition to Malaysia’s increasing role in AI chip manufacturing,” he said.

He added that investors are eyeing Malaysia, especially after the government announced that it is crafting the Semiconductor Strategic Plan.

“Intense interest in Malaysia by many companies has resulted in announcements like the ones from Microsoft,” he said.

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Data centre – boon or bane?

https://www.thestar.com.my/business/business-news/2024/05/11/data-centre---boon-or-bane

Data centre - boon or bane?

 https://www.tnb.com.my/assets/newsclip/11052024a.pdf 

Data centre – boon or bane?

 

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Clarion call for quality education, Update of syllabi needed, Time needed to revamp system, say experts

The Implications of Outdated Syllabus: A Call for Education ...

 The national education system needs an urgent overhaul by making changes to irrelevant subjects, says Tunku Ismail Sultan Ibrahim. New and proactive initiatives are needed to equip the country’s youth to face upcoming challenges, the Regent of Johor says in his first state assembly speech. Experts agree on the need to transform the current national education syllabi but reorienting an education system could take time.

Royal presence: Tunku Ismail (left) opening the third term of the 15th state assembly sitting in Kota Iskandar. — Bernama

Update of syllabi needed

ISKANDAR PUTERI: The Regent of Johor has called for a national education reform by making changes to the syllabi of subjects that are no longer relevant to ensure that the next generation will remain competitive.

Tunku Ismail Sultan Ibrahim said the Federal Government should take more proactive measures to improve the quality, system and facilities of education.

“An important change that needs to be made is to update the syllabi of subjects that are no longer relevant.

“If this cannot be done at the national level, let Johor become the first state to change the syllabi in our schools,” he decreed when opening the third term of the 15th state assembly sitting in Kota Iskandar here yesterday.

It is also his first state assembly opening speech as Regent of Johor.

According to Tunku Ismail, he has always stressed the importance of quality education for the people.

“Quality education is the basis of a developed state. It will help to solve various issues and bring more job opportunities to the next generation,” he said.

He also highlighted a recent World Bank report as well as the country’s substandard performance in the Programme for International Student Assessment (Pisa) in his speech.

Malaysia’s achievements in the international assessment “Trends in International Mathematics and Science Study” and Pisa have yet to reach the top three positions as desired in the Malaysia Education Blueprint 2013-2025.

“If we do not face these realities, then we should not complain when our next generation is less competitive compared with their peers.

“New and proactive initiatives are needed to equip youths to face upcoming challenges,” said Tunku Ismail, who is also the Johor Crown Prince.

He hoped that in years to come, every Johorean student would graduate from a higher education institution and not just stop at the secondary school level.

“The state needs more technology-savvy students and those who are exposed to ever-changing technology trends.

“It is my priority to ensure that all the Bangsa Johor people have food on the table, a place to stay, and access to quality education for their children, besides access to basic amenities and good healthcare services,” he told the state legislative assembly.

When Tunku Ismail was a guest on the Keluar Sekejap podcast in October last year, he told hosts Khairy Jamaluddin and Shahril Hamdan that quality education for the next generation is something that is close to his heart.

Tunku Ismail also said the Causeway in Johor Baru and the Second Link near here are important bridges to cross the border into Singapore for work as well as for Singaporeans to visit the state.

“Lately, upgrades have been conducted at the Customs, immigration and quarantine complexes at Bangunan Sultan Iskandar (at the Causeway) and Kompleks Sultan Abu Bakar (Second Link), but there are still many shortcomings that need to be addressed.

“I want to see these issues solved without compromise,” he added.

Tunku Ismail also thanked Prime Minister Datuk Seri Anwar Ibrahim and the Federal Government for selecting Johor to implement the Johor-Singapore Special Economic Zone (JS-SEZ) and Special Financial Zone (SFZ).

Besides significantly boosting Johor’s economic growth, he is confident that Johor and Singapore’s ties would be further strengthened through the initiatives.

He urged the state’s civil servants to do their part in ensuring that the JS-SEZ, SFZ and other related projects are implemented efficiently and on schedule.

He hoped this would help Johor transform into one of the main economic hubs in the region by 2030.

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Time needed to revamp system, say experts

PETALING JAYA: There is a need to transform the current national education syllabi in keeping with the times and global challenges, but reorienting an education system could take time, say experts.

Dr Yeah Kim Leng, director of economic studies programme at the Jeffrey Cheah Institute of Sunway University, said that for a country to move forward, it is important to create quality and skilled students so that they can compete with their peers globally.

He pointed out that there should be greater emphasis on the four disciplines of science, technology, engineering and mathematics (STEM) and the 3Rs of learning.

The 3Rs refer to the skills of reading, writing and arithmetic.

“The current education syllabi in national schools definitely need to be reoriented to include more STEM subjects while emphasising the 3Rs. Language skills must also be given more focus, especially due to the deterioration of language proficiency.

“Language proficiency is important in a borderless economic landscape, and what more with advanced technology? The emphasis should be on the English language, as it is widely used in the business world, and with the rise of China as an economic power, Mandarin, too, is of much importance.

“Malaysian schools need to enhance learning; students need to learn how to learn so that they can be critical thinkers with a broad understanding of world developments.

“The focus should be on financial literacy and cross-cultural acculturation, which will allow students to be flexible in a multicultural setting. It is very important for Malaysians to be inclusive and apply their skills to take the country to greater heights,” said Yeah.

“The education ministry needs to update itself to incorporate and review the education system to ensure that the national education institutions keep up with the times.”

National Union of Teaching Profession president Aminuddin Awang said the current Malaysian National Education Blueprint ends in 2025, and changing it abruptly would be unwise.

“We cannot deny the recent World Bank report on Malaysia’s education standards, as it was done based on data, and we should accept such criticism for our own good. I believe the Education Ministry understands such criticism from the World Bank and has already started to engage the stakeholders in national education to get their inputs for the next blueprint.”

Parent Action Group for Education chairman Datin Noor Azimah Abdul Rahim said teachers are the most important factor in making any national education system a success.

“As long as the teachers cannot deliver, no matter what syllabi you come out with, if the same teachers are going to deliver it the same way, the results will not get any better.

“The authorities overseeing the national education system need to reconsider the training methods for teachers.

“The Education Ministry has obviously been in denial by stating that there is nothing wrong with the education system,” said Azimah.

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