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US lawmakers have urged the government to rethink banking ties with Hong Kong, citing its “increasing role” in money laundering, sanctions evasions and reported funneling of banned technology to Russia.The bipartisan US Select Committee on the Chinese Communist Party called Monday on outgoing President Joe Biden’s treasury secretary to reevaluate Hong Kong’s unique trade privileges, which treat the financial hub as distinct from the rest of China.Since Beijing imposed a sweeping national security law on the semi-autonomous Chinese city in 2020, “Hong Kong has shifted from a trusted global financial center to a critical player in the deepening authoritarian axis of the People’s Republic of China (PRC), Iran, Russia, and North Korea,” the committee said in a letter to Janet Yellen.The security law — put in place after huge democracy protests roiled the city — “effectively subjects Hong Kong to PRC control,” the lawmakers said.”We must now question whether longstanding US policy towards Hong Kong, particularly towards its financial and banking sector, is appropriate,” the letter said.According to the committee, Hong Kong has become a leading player in shifting banned Western technology to Russia, creating front companies for purchasing barred Iranian oil, facilitating the trade of Russian-sourced gold and managing “ghost ships” that engage in illegal trade with North Korea.It cited “recent research” estimating that “nearly 40 percent of goods shipped from Hong Kong to Russia in 2023″ were on US and EU lists of banned goods, including semiconductors and other technology Moscow needs for its war in Ukraine.Hong Kong authorities on Tuesday said the letter had no factual basis and defended the city’s financial institutions and rights protections.”(The Hong Kong) government strongly disapproves of and firmly rejects malicious slander of Hong Kong’s reputation as an international financial centre in the letter,” a spokesman said.”The letter is a crude and reprehensible attempt to spread lies and misinformation about Hong Kong for personal political gain.”The city has been enforcing sanctions imposed by the United Nations Security Council but does not enforce unilateral sanctions, the spokesman added.After the British handover of Hong Kong to China in 1997, the city was promised semi-autonomy, including judicial independence, for 50 years under the “One Country, Two Systems” agreement. But Washington has repeatedly warned the national security law — as well as a subsequent security law known as Article 23 — eroded that firewall, effectively silencing dissent in the city and curtailing the freedoms that allowed it to operate as a global financial center.In September, the US State Department issued an advisory warning about “new and heightened risks” for businesses operating in Hong Kong because of Article 23.China and Hong Kong have, however, maintained the laws were needed to restore order and protect the financial hub’s economy after the massive and at times violent democracy protests in 2019.

Choppy trading hit stock markets on Tuesday as investors digested Donald Trump’s warning that he would impose huge new tariffs on China, Mexico and Canada when he takes over as US president in January.Trump said on his Truth Social account that he would hammer the United States’ largest trading partners with tariffs in a bid to force them to curb the illegal drug trade and immigration.Wall Street was mixed at the open, following gains a day earlier on Trump’s nomination for Treasury secretary, while European markets broadly fell.”While his warnings appear to be negotiation tactics ahead of his January 20 inauguration, markets remain highly reactive to headlines, creating volatile trading conditions,” said Fawad Razaqzada, market analyst at City Index, in a note.The news dampened earlier market optimism that Trump’s pick to lead the Treasury, Scott Bessent, could temper the tycoon’s assertiveness.It fanned fears of a trade war with China and warnings that the tariffs — along with promised tax cuts — would reignite US inflation.”These are his first direct comments on tariffs and tariff levels since becoming president-elect, and they have roiled markets,” said Kathleen Brooks, research director at XTB trading group, in a note ahead of the Wall Street open.European stocks followed losses in Asia on Tuesday despite Trump excluding Europe as an immediate target for tariffs.”It is early days, and there are plenty of opportunities for Trump to direct his attention to Europe down the line,” Brooks added.The US dollar rallied against its Canadian equivalent, Mexico’s peso and the yuan.However, it dropped against the euro, pound and yen, with the latter benefiting from its status as a haven investment, analysts said.Ahead of Wall Street’s reopening, the administration of outgoing US President Joe Biden said it had finalised a $7.9 billion award to Intel, cementing part of his legacy in bringing semiconductor production to the United States.The world’s largest economy is scrambling to ease its dependence on China and other countries in Asia for these devices essential for everything from refrigerators to weapons systems.Elsewhere on Tuesday, bitcoin held above $93,000 despite falling further.A Trump-fuelled rally that had seen the world’s largest cryptocurrency surge about 50 percent to within a whisker of $100,000 has run out of steam.Oil prices rebounded slightly after Monday’s losses of around three percent, as Israel’s security cabinet prepared to vote on a proposed ceasefire in its war with Hezbollah in Lebanon.- Key figures around 1440 GMT -London – FTSE 100: DOWN 0.38 percent at 8,260.53 pointsParis – CAC 40: DOWN 0.42 percent at 7,227.01Frankfurt – DAX: DOWN 0.35 percent at 19,338.20Tokyo – Nikkei 225: DOWN 0.9 percent at 38,442.00 (close)Hong Kong – Hang Seng Index: FLAT at 19,159.20 (close)Shanghai – Composite: DOWN 0.1 percent at 3,259.76 (close)New York – Dow: DOWN 0.47 percent at 44,528.14New York – S&P 500: UP 0.24 percent at 6,001.57New York – Nasdaq: UP 0.53 percent at 19,154.92Euro/dollar: UP at $1.0497 from $1.0495 on MondayPound/dollar: UP at $1.2572 from $1.2564Dollar/yen: DOWN at 153.58 yen from 154.23 yenEuro/pound: DOWN at 83.50 pence from 83.51 penceBrent North Sea Crude: UP 0.61 percent at $72.92 per barrelWest Texas Intermediate: UP 0.71 percent at $69.43 per barrel

Chinese tech giant Huawei on Tuesday unveiled its first smartphone equipped with a fully homegrown operating system, a key test in the firm’s fight to challenge the dominance of Western juggernauts.Apple’s iOS and Google’s Android are currently used in the vast majority of mobile phones, but Huawei is looking to change that with its newest Mate 70 devices, which run on the company’s own HarmonyOS Next.The launch caps a major turnaround in the fortunes of Huawei, which saw its wings clipped by gruelling US sanctions in recent years but has since bounced back with soaring sales.”Today, the long-awaited Mate 70, the most powerful one ever, is here,” Richard Yu, chairman of Huawei’s Consumer Business Group, told a raucous launch event Tuesday at the firm’s Shenzhen headquarters.The risks are high — unlike a previous iteration, based on Android’s open-source code, HarmonyOS Next requires a complete rewiring of all apps on the smartphones it powers.”HarmonyOS Next is the first home-grown operating system, a milestone for China to move away from reliance on Western technologies for software with performance improvement,” Gary Ng, a senior economist at Natixis, told AFP.More than three million have been pre-ordered, according to Huawei’s online shopping platform, though that does not require them to be purchased.It went on sale just after 6:00 pm (1000 GMT) on Tuesday.Around 100 people queued outside a Huawei store in central Beijing an hour before orders opened.- ‘Innovate on our own’ -Second in line was 28-year-old Zhang Nannan, who switched to a Huawei phone from Apple last year.Huawei phones take clearer photos and get better signal, he said, while “supporting domestic products” was another draw.”We must innovate on our own, and cannot let ourselves be disrupted by foreign countries,” he said.Huawei was once China’s largest domestic smartphone maker before it became embroiled in a tech war between Washington and Beijing.The company shipped more than 10.8 million smartphones in the third quarter — capturing just 16 percent of the Chinese market, according to a recent report by technology research firm Canalys.In September the firm unveiled the world’s first triple-folding phone, the Mate XT, priced at an eye-watering $2,800 which made it three times the cost of the newest iPhone.The Mate 70 has a much lower starting price of $758, the firm announced Tuesday.Those who purchase a Mate 70 smartphone will be given the choice to opt out of the fully self-developed operating system, the firm said.Yu said that there are “many application updates” taking place on a daily basis.”We expect that in two or three months, the application user experience of our HarmonyOS ecosystem will be more mature and more perfect,” he added.- ‘High expectations’ -Huawei found itself at the centre of an intense tech rivalry between Beijing and Washington, with US officials warning its equipment could be used to spy on behalf of Chinese authorities — allegations they deny.Since 2019, US sanctions have cut Huawei off from global supply chains for technology and US-made components, a move that initially hammered its production of smartphones.That is only set to intensify under US President-elect Donald Trump, who has promised huge tariffs on Chinese imports in response to what he says are Beijing’s unfair trade practices.”Rather than Huawei inspiring the tech industry as a whole, it is the self-reliance trend of the Chinese tech industry that has made Huawei’s progress possible,” Toby Zhu, a senior analyst at Canalys, told AFP.The success of Huawei’s new generation of smartphone products will be a key gauge of whether that drive has worked, said Zhu.”This generation of products cannot afford to miss the mark because everyone has high expectations for them,” he added.But it is unclear whether developers overseas will be willing to spend the money needed to build a completely new version of their apps for the latest smartphones, said Rich Bishop, co-founder and CEO of AppInChina, a publisher of international software in China.One third-party agency in China quoted a price of two million yuan ($275,500) to custom-fit a foreign app for HarmonyOS Next, he told AFP.To convince them, “Huawei needs to continuously improve the software, provide better support for developers, and convince the developer community that it is committed to the long-term development of the Harmony ecosystem”, Paul Triolo, a partner at consulting firm Albright Stonebridge Group, told AFP.

Stock markets retreated and the dollar was mixed Tuesday after Donald Trump warned he would impose huge new tariffs on China, Mexico and Canada immediately on taking over as US president in January.Trump said on his Truth Social account that he would hammer the United States’ largest trading partners in response to the illegal drug trade and immigration.The news dampened optimism that his pick to lead the Treasury, Scott Bessent, could temper the tycoon’s assertiveness, with fears that a trade war with China and warnings that the tariffs — along with promised tax cuts — will reignite US inflation.”This was Trump’s most direct assertion about his tariffs plan since winning the election” in early November, noted Kathleen Brooks, research director at XTB trading group.European stocks followed losses in Asia on Tuesday despite Trump excluding Europe as an immediate target for tariffs.”It is early days, and there are plenty of opportunities for Trump to direct his attention to Europe down the line,” Brooks added.The dollar rallied against its Canadian equivalent, Mexico’s peso and yuan.However, it dropped against the euro, pound and yen, with the latter benefiting from its status as a haven investment, analysts said.Ahead of Wall Street’s reopening, the administration of outgoing US President Joe Biden’s said it has finalised a $7.9-billion award to Intel, cementing part of his legacy in bringing semiconductor production to the United States.The world’s biggest economy is scrambling to ease its dependence on China and other countries in Asia for these devices essential for everything from refrigerators to weapons systems.Elsewhere Tuesday, bitcoin held above $92,000 despite falling further.A Trump-fuelled rally that had seen the world’s biggest cryptocurrency surge about 50 percent to within a whisker of $100,000 has run out of steam.Oil prices rebounded slightly after Monday’s losses of around three percent, as Israel’s security cabinet prepared to vote on a proposed ceasefire in its war with Hezbollah in Lebanon.- Key figures around 1045 GMT -London – FTSE 100: DOWN 0.4 percent at 8,258.44 pointsParis – CAC 40: DOWN 0.7 percent at 7,208.51Frankfurt – DAX: DOWN 0.6 percent at 19,294.30Tokyo – Nikkei 225: DOWN 0.9 percent at 38,442.00 (close)Hong Kong – Hang Seng Index: FLAT at 19,159.20 (close)Shanghai – Composite: DOWN 0.1 percent at 3,259.76 (close)New York – Dow: UP 1.0 percent at 44,736.57 (close)Euro/dollar: UP at $1.0516 from $1.0495 on MondayPound/dollar: UP at $1.2587 from $1.2564Dollar/yen: DOWN at 153.82 yen from 154.23 yenEuro/pound: UP at 83.57 pence from 83.51 penceBrent North Sea Crude: UP 0.8 percent at $73.09 per barrelWest Texas Intermediate: UP 0.9 percent at $69.56 per barrel

A Vietnamese property tycoon sentenced to death for multi-billion-dollar fraud begged a court to spare her life Tuesday, saying she was trying to repay the stolen funds.Property developer Truong My Lan, 68, was convicted earlier this year of embezzling money from Saigon Commercial Bank (SCB) — which prosecutors said she controlled — and condemned to die for fraud totalling $27 billion in one of the biggest corruption cases in history. She is appealing against her sentence at a court in Ho Chi Minh City, with the ruling expected in the coming days.In her final remarks before the court, Lan said: “My only thought is on how to repay the debt to the SBV (State Bank of Vietnam) and the people. I don’t think about the damage to myself and my family. “I feel pained due to the waste of national resources,” Lan said, adding she felt “very embarrassed to be charged with this crime”. “Please reconsider and reduce my sentence,” she asked the court.According to Vietnamese law, Lan could escape the death penalty if she proactively returns three-quarters of the embezzled assets and is judged to have co-operated sufficiently with authorities.But prosecutors argued Monday that she had not met the conditions, and emphasised her crime’s consequences were “huge and without precedent”.Among key points being debated in court is an estimate of Lan’s personal wealth.Lan, who founded real estate development group Van Thinh Phat, told the court that “the quickest way” to repay the stolen funds would be “to liquidate SCB, and sell our assets to repay SBV and the people”.Tens of thousands of people who had invested their savings in SCB lost money, shocking the communist nation and prompting rare protests from the victims — who demonstrated again on Tuesday outside the State Bank of Vietnam in Hanoi.  The State Bank said in April that it pumped funds into SCB to stabilise it, without revealing how much.During her first trial in April, Lan was found guilty of embezzling $12.5 billion, but prosecutors said the total damages caused by the scam amounted to $27 billion — equivalent to around six percent of the country’s 2023 GDP.A total of 47 other defendants have requested reduced sentences at the appeal, which began in early November.Last month, Lan was convicted of money laundering and jailed for life in a separate case. 

Stock markets fell and the dollar rallied Tuesday after Donald Trump warned he would impose huge new tariffs on China, Mexico and Canada on his first day in office, dealing a blow to hopes of a more moderate approach to trade policy.The former and next president said on his Truth Social account that he would hammer the United States’ largest trading partners in response to the illegal drug trade and immigration.The news dampened optimism that his pick to lead the Treasury, Scott Bessent, could temper the tycoon’s assertiveness, with fears now of another trade war with China and warnings that the move — along with promised tax cuts — will reignite US inflation.”On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25 percent tariff on ALL products coming into the United States, and its ridiculous Open Borders,” he wrote. In another post, he added that he would hit China with a 10 percent tariff “above any additional Tariffs” on all of its products entering the US, citing Beijing’s failure to tackle fentanyl smuggling.  Liu Pengyu, a spokesman for China’s embassy in the United States, told AFP that “no one will win a trade war”, while the foreign ministry later said it would be “open to dialogue” with Washington.Trump’s announcement fuelled a sell-off across Asian markets, while London, Paris and Frankfurt opened on the back foot. The dollar surged around one percent against its Canadian equivalent and Mexico’s peso as well as the Chinese yuan. However, the yen strengthened thanks to its safe haven status.”In a striking return to hardline policies, President-elect Trump has dramatically escalated tensions with a brash promise to impose a sweeping 25 percent tariff on all imports from Canada and Mexico the moment he reassumes office,” said SPI Asset Management’s Stephen Innes. He said the declaration “shatters any lingering hopes that… Scott Bessent might usher in an era of moderation”.”Initially hailed as a beacon of stability, Bessent’s influence now seems overshadowed by a resurgence of Trump’s uncompromising ‘America First’ doctrine, which starkly excludes even the closest of allies from its protective embrace.”- Bitcoin struggles -Still, Hong Kong edged up marginally and losses in Shanghai were limited, with Heron Lim, assistant director-economist at Moody’s Analytics, saying the 10 percent levy on China was well short of the 60 percent Trump flagged on the campaign.”An added 10 percent extra in response to a non-economic driver with opioids seems light compared to what they have been expecting,” he told AFP.”And with Trump hitting two of its key importers, Canada and Mexico, harder with the proposed 25 percent tariffs, it actually makes China’s goods relatively cheaper,” he said. “China will likely be cautious in its response, not wanting to spark another tit-for-tat trade war — particularly given its substantially weaker economic outlook compared to when Trump first took office.”Asia’s struggles came after another up day on Wall Street, where the Dow ended on a second successive record, helped by the choice of Bessent, though US futures were down Tuesday.Bitcoin struggled just above $94,200 after dropping to a six-day low of around $92,600 Monday as the Trump-fuelled rally that had seen it surge around 50 percent to within a whisker of $100,000 ran out of steam.Oil prices were barely moved after Monday’s losses of around three percent that came after an official said Israel’s security cabinet was to decide Tuesday whether to accept a ceasefire in its war with Hezbollah in Lebanon. The stronger dollar was also depressing the commodity.US, European Union and United Nations officials have all pushed in recent days for a truce in the long-running hostilities between Israel and Hezbollah, which flared into all-out war in late September.- Key figures around 0710 GMT -Tokyo – Nikkei 225: DOWN 0.9 percent at 38,442.00 (close)Hong Kong – Hang Seng Index: FLAT at 19,159.20 (close)Shanghai – Composite: DOWN 0.1 percent at 3,259.76 (close)London – FTSE 100: DOWN 0.2 percent at 8,271.56Euro/dollar: DOWN at $1.0474 from $1.0495 on MondayPound/dollar: DOWN at $1.2546 from $1.2564Dollar/yen: DOWN at 154.00 yen from 154.23 yenEuro/pound: DOWN at 83.50 pence from 83.51 penceWest Texas Intermediate: FLAT at $68.94 per barrelBrent North Sea Crude: UP 0.1 percent at $73.07 per barrelNew York – Dow: UP 1.0 percent at 44,736.57 (close)

Indonesia has rejected an Apple $100 million investment proposal aimed at lifting a ban on iPhone 16 sales, saying it lacks the “fairness” required by the government. Indonesia last month prohibited the marketing and sale of the iPhone 16 model over Apple’s failure to meet local investment regulations requiring that 40 percent of phones be made from local parts as the country seeks to boost investments from giant tech companies. Following the ban, Apple offered to increase its investments in Indonesia by $100 million to allow the new phone to be sold domestically.But Industry Minister Agus Gumiwang Kartasasmita said Apple had not met the government’s requirements, especially when compared with the tech giant’s investments in other countries. “Currently, Apple still has not invested in production facilities or factories in Indonesia,” he said in a statement released late Monday.He said the ministry urged Apple to immediately set up a production facility or factory in Indonesia “based on the fairness principles” so the company does not have to file an investment scheme proposal every three years. Despite the sales ban, the Indonesian government still allows iPhone 16 to be carried into Indonesia if they are not being traded commercially. The government estimates about 9,000 units of the new model have entered the country that way. Indonesia also banned the sale of Google Pixel phones for failing to meet the 40 percent parts requirement.About 22,000 Google Pixel phones entered the country this year despite the ban.

Chinese tech giant Huawei will on Tuesday launch its first smartphone equipped with a fully homegrown operating system, a key test in the firm’s fight to challenge the dominance of Western juggernauts.Apple’s iOS and Google’s Android are currently used in the vast majority of mobile phones, but Huawei is looking to change that with its newest Mate 70 devices, which run on the company’s own HarmonyOS Next.The launch caps a major turnaround in the fortunes of Huawei, which saw its wings clipped by gruelling US sanctions in recent years but has since bounced back with soaring sales.”The search for a viable, scaleable mobile operating system largely free of Western company control has been a lengthy one in China,” Paul Triolo, a Partner for China and Technology Policy Lead at consulting firm Albright Stonebridge Group, told AFP.But the new smartphone — also powered by an advanced domestically produced chip — shows Chinese tech firms can “persevere”, he said.The Mate 70 is set to be unveiled at a company launch event on Tuesday afternoon at its Shenzhen headquarters.More than three million have been pre-ordered, according to Huawei’s online shopping platform, though that does not require them to be purchased.The risks are high — unlike a previous iteration, based on Android’s open-source code, HarmonyOS Next requires a complete rewiring of all apps on the smartphones it powers.”HarmonyOS Next is the first home-grown operating system, a milestone for China to move away from reliance on Western technologies for software with performance improvement,” Gary Ng, a senior economist at Natixis, told AFP.But, “while Chinese firms may be willing to allocate resources to contribute to Huawei’s ecosystem, there are challenges to whether HarmonyOS Next can offer the same number of apps and functionalities to global consumers”, Ng said.- ‘High expectations’ -Huawei found itself at the centre of an intense tech rivalry between Beijing and Washington, with US officials warning its equipment could be used to spy on behalf of Chinese authorities — allegations they deny.Since 2019, US sanctions have cut Huawei off from global supply chains for technology and US-made components, a move that initially hammered its production of smartphones.That fight is only set to intensify under US President-elect Donald Trump, who has promised huge tariffs on Chinese imports in response to what he says are Beijing’s unfair trade practices.”Rather than Huawei inspiring the tech industry as a whole, it is the self-reliance trend of the Chinese tech industry that has made Huawei’s progress possible,” Toby Zhu, a senior analyst at technology research firm Canalys, told AFP.The success of Huawei’s new generation of smartphone products will be a key gauge of whether that drive has worked, said Zhu.”This generation of products cannot afford to miss the mark because everyone has high expectations for them,” he added.Huawei was once China’s largest domestic smartphone maker before it became embroiled in a tech war between Washington and Beijing.The company shipped more than 10.8 million smartphone units in the third quarter — capturing just 16 percent of the Chinese market, according to a recent Canalys report.In September the firm unveiled the world’s first triple-folding phone at more than three times the price of the newest iPhone, the Mate XT, priced at an eye-watering $2,800.The Mate 70 is unlikely to cost that much — while its price is not yet public, its predecessor launched with a starting price of $750.And it’s unclear whether developers overseas will be willing to spend the money needed to build a completely new version of their apps for the latest smartphones, Rich Bishop, co-founder and CEO of AppInChina, a publisher of international software in China, told AFP.One third-party agency in China quoted a price of two million yuan ($275,500) to custom-fit a foreign app for HarmonyOS Next, he said.To convince them, “Huawei needs to continuously improve the software, provide better support for developers, and convince the developer community that it is committed to the long-term development of the Harmony ecosystem”, said Triolo.

US President-elect Donald Trump said Monday he intends to impose sweeping tariffs on goods from Mexico, Canada and China, prompting a swift warning from Beijing that “no one will win a trade war.”In a series of posts to his Truth Social account, Trump vowed to hit some of the United States’ largest trading partners with duties on all goods entering the country.”On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25 percent tariff on ALL products coming into the United States,” he wrote. In another post, Trump said he would also be slapping China with a 10 percent tariff, “above any additional Tariffs,” in response to what he said was its failure to tackle fentanyl smuggling.  Tariffs are a key part of Trump’s economic agenda, with the Republican vowing wide-ranging duties on allies and adversaries alike while he was on the campaign trail.Both China and Canada issued swift responses, each calling their trade relationships with the United States “mutually beneficial.” “No one will win a trade war,” Liu Pengyu, a spokesman for China’s embassy in the United States, told AFP by email, defending Beijing’s efforts to curb fentanyl smuggling.”China believes that China-US economic and trade cooperation is mutually beneficial in nature,” Liu added.Canada said it was “essential” to US energy supplies, and insisted the relationship benefits American workers.”We will of course continue to discuss these issues with the incoming administration,” said the statement from Deputy Prime Minister Chrystia Freeland.Trump’s first term in the White House was marked by an aggressive and protectionist trade agenda that also targeted China, Mexico and Canada, as well as Europe.While in the White House, Trump launched an all-out trade war with China, imposing significant tariffs on hundreds of billions of dollars of Chinese goods. At the time he cited unfair trade practices, intellectual property theft, and the trade deficit as justifications. China responded with retaliatory tariffs on American products, particularly affecting US farmers.The US, Mexico and Canada are tied to a three-decade-old free trade agreement, now called the USMCA, that was renegotiated under Trump after he complained that the US businesses, especially automakers, were losing out.”Mexico and Canada remain heavily dependent on the US market so their ability to walk away from President-elect Trump’s threats remains limited,” Wendy Cutler, vice president at the Asia Society Policy Institute, and former US trade official, told AFP.By citing the fentanyl crisis and illegal immigration, Trump appeared to be using national security concerns as a means to break that deal, something that is usually allowed under the rules set by the World Trade Organization or in trade deals.But most countries and the WTO treat national security exceptions as something to be used sparingly, not as a routine tool of trade policy.Trump in 2018 cited national security justifications to impose tariffs on steel and aluminum imports that targeted close allies like Canada, Mexico, and the European Union. This led to retaliatory measures from the trading partners.- ‘Bet on China tariffs’ -Many economists have warned that tariffs would hurt growth and push up inflation, since they are primarily paid by importers bringing the goods into the US, who often pass those costs on to consumers.But those in Trump’s inner circle have insisted that the tariffs are a useful bargaining chip for the US to push its trading partners to agree to more favorable terms, and to bring back manufacturing jobs from overseas.Trump has said he will put his commerce secretary designate Howard Lutnick, a China hawk, in charge of trade policy.Lutnick has expressed support for a tariff level of 60 percent on Chinese goods alongside a 10 percent tariff on all other imports.William Reinsch, senior adviser at the Center for Strategic and International Studies, said that that move was classic Trump: “threaten, and then negotiate.””In terms of what might actually happen, I’d bet on some China tariffs going into effect. That’s legally easier and politically more palatable,” he said.”On Canada and Mexico there was going to be a renegotiation of their trade deal (the USMCA) anyway in 2026.” da-bys-arp-st/jgc

Asian markets fell and the dollar rallied Tuesday after Donald Trump warned he would impose huge new tariffs on China, Mexico and Canada on his first day in office, dealing a blow to hopes of a more moderate approach to trade policy.The former and next president said on his Truth Social account that he would hammer the United States’ largest trading partners in response to the illegal drug trade and immigration.The news dampened optimism that his pick to lead the Treasury, Scott Bessent, could temper the tycoon’s assertiveness, with fears now of another trade war with China and warnings that the move — along with promised tax cuts — will reignite US inflation.”On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25 percent tariff on ALL products coming into the United States, and its ridiculous Open Borders,” he wrote. In another post, he added that he would hit China with a 10 percent tariff “above any additional Tariffs” on all of its products entering the US, citing Beijing’s failure to tackle fentanyl smuggling.  The announcement fuelled a sell-off across most Asian markets, though Hong Kong and Shanghai advanced in early exchanges. The dollar surged more than one percent against its Canadian equivalent and Mexico’s peso as well as the Chinese yuan. However, the yen strengthened thanks to its safe haven status.”In a striking return to hardline policies, President-elect Trump has dramatically escalated tensions with a brash promise to impose a sweeping 25 percent tariff on all imports from Canada and Mexico the moment he reassumes office,” said SPI Asset Management’s Stephen Innes. He said the declaration “shatters any lingering hopes that… Scott Bessent might usher in an era of moderation”.”Initially hailed as a beacon of stability, Bessent’s influence now seems overshadowed by a resurgence of Trump’s uncompromising ‘America First’ doctrine, which starkly excludes even the closest of allies from its protective embrace.”Asia’s struggles came after another up day on Wall Street, where the Dow ended at a second successive record, helped by the choice of Bessent, though US futures were down Tuesday.Bitcoin struggled below $95,000 after dropping to a six-day low of around $92,600 Monday as the Trump-fuelled rally that had seen it surge around 50 percent to within a whisker of $100,000 ran out of steam.Oil prices extended Monday’s losses of around three percent that came after an official said Israel’s security cabinet was to decide Tuesday on whether to accept a ceasefire in its war with Hezbollah in Lebanon. The stronger dollar was also depressing the commodity.The United States, European Union and United Nations have all pushed in recent days for a truce in the long-running hostilities between Israel and Hezbollah, which flared into all-out war in late September.- Key figures around 0230 GMT -Tokyo – Nikkei 225: DOWN 1.3 percent at 38,260.38 (break)Hong Kong – Hang Seng Index: UP 0.7 percent at 19,276.74Shanghai – Composite: UP 0.4 percent at 3,266.88Euro/dollar: DOWN at $1.0454 from $1.0495 on MondayPound/dollar: DOWN at $1.2527 from $1.2564Dollar/yen: DOWN at 154.07 yen from 154.23 yenEuro/pound: DOWN at 83.46 pence from 83.51 penceWest Texas Intermediate: DOWN 0.1 percent at $68.85 per barrelBrent North Sea Crude: DOWN 0.1 percent at $72.95 per barrelNew York – Dow: UP 1.0 percent at 44,736.57 (close)London – FTSE 100: UP 0.4 percent at 8,291.68 (close)