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North American companies prepare for the fallout of Trump tariffs
The "wait and watch" period for North American businesses is over. U.S. president Donald Trump imposed a 25% tax on goods coming from Canada and Mexico along with a tariff of 10% on China. This could be the beginning stages of a full scale trade war that will cause new headaches to executives who have already been dealing with rising costs for years. Tariffs on imports from the U.S.’s three biggest trade partners could disrupt industries ranging from consumer goods to autos. Before Saturday's announcement of tariffs, executives were able to dodge questions regarding the issue. Many wanted to avoid angering Trump's White House once he became president. This non-response is no longer possible. Jeffrey Sonnenfeld is a professor at Yale School of Management, New Haven, Conn. "All CEOs have been bewildered by the non-strategic trade tantrums that are being directed towards our closest allies rather than adversaries," he said. This week, many global companies, such as Amazon, Ford Motors, Mondelez International, and Owens-Illinois, will release their results. These companies will be asked a lot of questions about how they intend to reduce these costs. We contacted a number of companies but none would give a comment about tariffs. Some industry associations have commented, but some were harsher than others. The U.S. Steelworkers Union, the largest union in North America and the world, has criticized Trump’s tariffs against Canada, citing the $1.3 trillion worth of trade between Canada and the United States. These tariffs are not just bad for Canada. "They threaten the stability industries on both side of the border," said union president David McCall in a press release. Companies like Alcoa, the global aluminum giant, have suggested rerouting shipments in order to reduce tariffs. Many companies increased shipments during the fourth quarter in anticipation of Trump's re-election. Smaller companies that do not have global operations and rely on foreign parts will find it difficult to offset tariffs. Many aerospace and automotive companies are located near the U.S./Canada border. Meanwhile, U.S. refiners based in the Midwest heavily rely on Canadian crude oil. Trump is wrong when he says that tariffs are paid by importers, not by foreign countries. He acknowledged this week that tariffs could cause short-term problems, as costs are often passed onto consumers. Trump has used tariffs to force companies to relocate to the United States. This is frustrating for firms who moved production from the United States to Canada or Mexico as a result of Trump's tariffs against China during his first term. Now they are going to be penalized even though they "near-shored" back to their home country. Matt Blunt is the president of the American Automotive Policy Council which represents Ford Motors, General Motors, and Stellantis. Research The exact impact of higher tariffs on checkout prices is not known. Experts said that businesses could absorb all or part of the tax burden. Tom Madrecki is the vice president for supply chain resilience at Consumer Brands Association. In a statement, he said that "the consumer packaged good industry supports an America First Trade Policy" which protects American jobs, and keeps household, personal care, and food products affordable. He also warned that tariffs would increase prices, and called on Mexico and Canada work with President Trump. Walmart and Target may not be able withstand increased supply chain costs. They have been trying to keep their prices low due to inflation. The White House should look at other ways to achieve their policy goals, according to the National Retail Federation. David French, NRF executive Vice President of Government Relations, said: "As long these universal tariffs remain in place, Americans are forced to pay more for everyday consumer goods." Church & Dwight - which produces Arm & Hammer Detergent and Trojan Condoms - said that it would focus on improving local manufacturing and productivity to offset any effects. In an earnings call held on Friday, CFO Rick Dierker stated that "these are volatile situations." He added that the company has the capability to "be responsive when needed." (Reporting and editing by Christopher Cushing; Additional reporting and writing by Kalea Eckert and Nora Eckert, in Detroit; and Andrea Shalal, in Washington.)
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Shein returns to India with Reliance after 2020 ban
Reliance Retail launched an app to sell fashionwear in India from China's Shein, under a license deal. This comes almost five years after Shein's App was banned in India following a diplomatic dispute. Reliance is owned by Mukesh Ambani. A person who has direct knowledge of Reliance’s launch plans said that the app was launched on Saturday morning. The launch was not announced by the firm. Shein nor its parent company Reliance Industries did not respond to any requests for comments made outside of normal business hours. Shein India Fast Fashion is a departure from Reliance’s strategy to add brands to its flagship Fashion App Ajio, which includes Superdry and Gap. It competes with competitors such as Myntra on Walmart’s Flipkart. Shein offers an extensive selection of affordable Western clothing. Shein was founded in China and moved to Singapore in 2012. In 2020, its app was blocked in India along with other Chinese apps like ByteDance’s TikTok because of data security concerns. This followed a border dispute that soured Indo-Chinese relationships. The Indian government revealed to the parliament last year that Reliance and Shein had signed an agreement under which Indian manufacturers will supply products under Shein's brand. The government did not disclose any further details. The message that appeared when you opened the app said, "The original fashion is back." It said that deliveries will be initially limited to New Delhi and Mumbai, and then expanded across the country. Dresses as low as 400 rupees (4 dollars) are available. Reliance is going to pay Shein a license fee for the use of its brand name. This was confirmed by a person who has direct knowledge. The person who spoke on behalf of the partner said that there is no equity in the partnership. They did not elaborate on the financial arrangements. A second person who has direct knowledge of this matter confirmed that all Shein-branded goods sold via the app were designed and manufactured in India. The person did not give a specific timeframe for when the clothing would be available on Ajio. Shein plans to list in London during the first half year. Reports say that it ended its attempts to list in the U.S. after lawmakers objected to China's requirement that businesses seek approval before listing abroad. Reporting by Dhwani Paandya, Editing by Aditya K. Kalra, and Christopher Cushing
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Floods in Australia's north-east have killed one and urged thousands to evacuate
Authorities in Australia said that one person died in the heavy flooding in north Queensland on Sunday. They urged thousands of people to seek higher ground because of torrential rainfall. Queensland authorities reported that major flooding had begun in Hinchinbrook Shire. This coastal locality, which has around 11,000 residents and is located 500 km north of the state capital Brisbane, was experiencing significant flooding. Authorities said that several suburbs of the nearby town of Townsville were also affected. North Queensland is home to large deposits of zinc, as well as silver, lead and copper. Townsville is a major centre for processing the region's metals. In 2019, flooding in the region disrupted rail shipments of lead and zinc concentrators and damaged thousands properties. Residents in low-lying areas should gather their evacuation kit and go to a higher place that is safe. The situation could pose a danger to property and life," regional emergency management officials said on Sunday morning. Australia's weather forecaster stated on its website that the flooding was caused by heavy rains from a low-pressure system rich in tropical moist. The total rainfall for 24 hours could be up to 300mm (11.8inches). It said that "the potential for heavy rainfall, localized intense rain and damaging wind may continue well into the first week of next year depending on the position and strength of the low and trough." In recent years, Australia's east has been hit by frequent flooding. This includes "once in a lifetime" floods which inundated the Northern Territory neighbouring state in January 2023 as a result of a multi-year La Nina event. (Reporting from Sydney by Sam McKeith; Editing by Daniel Wallis, Sonali Paul).
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Trump's oil-tariffs boost European and Asian refiners
Analysts and market participants said that Donald Trump's tariffs on Canadian oil and Mexican oil will give European and Asian refineries an advantage over their U.S. competitors. White House officials confirmed that Trump ordered tariffs of 25% on Canadian and Mexican imports, and 10% on Chinese goods starting Tuesday in response to a national crisis over fentanyl. They said that energy products imported from Canada would be subject to a duty of only 10%, while Mexican energy imports would be subject to a full 25%. Sources in the industry said that the tariffs on two of the biggest sources of U.S. imported crude will increase costs for the heavier crude grades U.S. refining plants need to produce at optimum levels. This could reduce their profitability, and force them to cut production. This gives refiners on other markets the opportunity to compensate for this difference. The U.S. currently exports diesel but imports gasoline. David Wech, chief economist at consultancy Vortexa, said that fewer U.S. exports of diesel would help to support European margins. However, there may be more opportunities for exports in the gasoline market which is under pressure. "Overall, a positive outcome for European refiners but not likely for European consumers," said he. An executive from a brokerage firm said that "European margins could improve" because the U.S. Northeast would have to import additional gasoline. "I believe European and Asian refiners will be the biggest winners." Matias Teogni, the founder of Next Barrel, an analytics firm, says that tariffs will also force crude sellers to lower their prices in order to attract buyers. He said that Asian refiners would be able to absorb the discounted Mexican and Canadian crude. This could boost their profit margins. The Asian refiners have the advantage of running heavy crudes, and they are in the process of increasing their production rates. Randy Hurburun is the head of refining for Energy Aspects. Trans Mountain Pipeline (TMX), which was launched in Canada last May, can now transport an additional 590,000 barrels of oil per day along the Canadian Pacific Coast. Trading sources stated that higher TMX shipments from China could replace imports from Venezuela or Saudi Arabia. Wech, Vortexa, said that refiners in Asia-Pacific could also take advantage of fuel arbitrage opportunities with the U.S. West Coast. The West Coast might be affected by higher feedstock prices incurred when sourcing crudes from afar. Midwest refiners are expected to continue buying Canadian crude, despite the tariff. They could then pass on the cost to their customers. Stewart Glickman is an equity research analyst with CFRA Research. US FEEDSTOCK Conundrum Energy Information Administration (EIA), a government agency, reported that crude oil from Canada and Mexico will account for 28% of the crude consumed by U.S. refineries in 2023. Midwest refineries are particularly reliant on Canadian barrels. Analysts said that the different qualities of Canadian and Mexican crude oil will limit U.S. refiners ability to use more WTI light crude instead of Canadian or Mexican oil. Neil Crosby, analyst at Sparta Commodities, said that the use of WTI by domestic refiners was likely limited. They really needed residual fuels. Energy Aspects Hurburun said that although some U.S. refining plants have upgraded to process more lighter crudes, it would result in a underloading of secondary unit, which would impact both efficiency and economics. John England, Deloitte’s global leader in oil, gas, and chemicals sector, said that friction can lead to higher costs. According to the EIA report, U.S. crude imports from Canada reached their highest level ever in the week ending Jan. 3. This could be a sign that refiners are stocking up as tariffs are looming. Imports are down slightly, with the last import being 3.72 million barrels per day in the week ending Jan. 24. However, they remain high for the year. While U.S. refining companies have seen their earnings fall from record levels of 2022, they are still a long way off. The oil major Chevron reported earnings that were below Wall Street expectations in the fourth quarter, after its refining division suffered a first-time loss since 2020 due to weak margins. Tariffs, and the subsequent price hikes, could also impact on U.S. refiners’ ability to make a profit. Crosby said that the mechanics of imposing tariffs on Mexico or Canada would be very difficult for the competitiveness of U.S. systems. Reporting by Robert Harvey, Georgina Mccartney, Shariq Khalifa, Nicole Jao, Jarrett Renshaw, Trixie Yap, and Alex Lawler in London. Editing by Nia Williams and Alex Lawler.
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Trump tariffs on Canadian and Mexican oil will increase pump prices
Analysts and fuel traders predict that U.S. gas prices will increase after President Donald Trump's Saturday decision to apply tariffs to Canadian and Mexican oil. Fuel prices are likely to rise due to Trump's double-edged trade protections. They will not only undermine his promise to combat inflation, but also pressure U.S. neighbours to stop illegal immigration and drug trafficking. The U.S. imports about 4 million barrels of Canadian oil per day, of which 70% is refined in the Midwest. The U.S. imports more than 450,000 barrels per day of Mexican oil for refiners based around the U.S. Gulf Coast. Tariffs on these imports will likely result in higher costs to make finished fuels such as gasoline. This cost increase is likely to be passed onto U.S. customers. GasBuddy analyst Patrick De Haan wrote in a social media post that "fuel prices are likely to rise significantly if oil products and refined products do not receive an exemption." In a phone interview, he said that the impact on consumers would get worse as the tariffs continue to drag out. The American Fuel and Petrochemical Manufacturers Association (AFPMA), which represents U.S. refineries, expressed on Saturday its hope that tariffs will be lifted before the consumers begin to feel their impact. White House officials reported that Trump ordered tariffs of 25% on Canadian and Mexican imports, and 10% on Chinese goods starting Tuesday in response to a national crisis over fentanyl. The officials informed reporters that energy products imported from Canada would only be subject to a duty of 10%, while imports from Mexico will be assessed the full 25%. Officials said that Trump initially planned to impose a 25% tariff for all goods coming from Canada and Mexico, but he reduced the tariff on Canadian oil in order to reduce the impact of the tariff on energy prices. The development is set to upset a symbiotic trade in oil between the U.S. John LaForge, Wells Fargo Investment Institute, said that "someone will get hurt here." He said that the oil from Alberta has little choice as to where it is shipped, and the Midwest refiners have no say in where they obtain their feedstock. Gulf Coast refiners who, unlike Midwest refiners, have access to seaborne shipments, are likely to find it easier to replace the Mexican crude grades. The wholesale fuel market has little choice but pass the cost on to the consumer, as the post COVID surge of fuel margins is fading away due to oversupply and a weakening growth in demand. "We are in a situation where we have to live hand-to-mouth," said Alex Ryan. He is the energy director for Oasis, a Kansas company that operates a travel shop and partly owns a convenience store which sells fuel. Ryan stated that his team, who also supplies fuel to markets in other countries, is still awaiting feedback from refiners about the estimated cost increases. Ryan stated that "whatever the cost, it ultimately ends up on the consumer's shoulders and we have nothing to do about it." Prices on the East Coast may also rise East Coast drivers also felt the pinch. About half of the region's daily fuel needs are met by its refining capacity, with the remainder being met by the Colonial Pipeline which pumps more than 100 million barrels daily from the Gulf Coast. This pipeline is almost never empty. During periods of high demand Irving Oil's St. John's Refinery in New Brunswick is the main swing supply to the East Coast. These imports are subject to a 10% tax. De Haan stated that the East Coast would either be forced to pay an additional price for fuel imported from Canada or import European fuel to cover any shortfalls. Analysts said that the impact of tariffs at Midwestern gas pumps could be delayed because refiners in the region have been producing fuels at high rates, and also stockpiling Canadian crude oil over the past few months. Tariffs will still increase costs. LaForge, a Wells Fargo representative, said: "No matter how you slice it, the price will be higher." (Reporting and editing by Alistair Bell in New York, with Shariq Khan reporting from New York)
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Trump tariffs on Canadian and Mexican oil will increase pump prices
Analysts and fuel traders predict that U.S. gas prices will increase after President Donald Trump's Saturday decision to impose tariffs on Canadian oil and Mexican oil. Fuel prices are likely to rise due to Trump's double-edged trade protections. They will not only undermine his promise to combat inflation, but also pressure U.S. neighbours to stop illegal immigration and drug trafficking. The U.S. imports about 4 million barrels of Canadian oil per day, of which 70% is refined in the Midwest. The U.S. imports more than 450,000 barrels per day of Mexican oil - primarily for refiners around the U.S. Gulf Coast. Tariffs on these imports will likely result in higher costs to make finished fuels such as gasoline. This cost increase is likely to be passed onto U.S. customers. GasBuddy analyst Patrick De Haan wrote in a social media post that "fuel prices are likely to rise noticeably" if oil products and refined products were not exempted. In a phone interview, he said that the impact on consumers would get worse as the tariffs continue to drag out. The American Fuel and Petrochemical Manufacturers Association (AFPMA), which represents U.S. refineries, expressed on Saturday its hope that tariffs will be lifted before the consumers begin to feel their impact. White House officials reported that Trump ordered tariffs of 25% on Canadian and Mexican imports, and 10% on Chinese goods starting Tuesday in response to a national crisis over fentanyl. The officials informed reporters that energy products imported from Canada would only be subject to a duty of 10%, while imports from Mexico will be assessed the full 25%. Officials said that Trump initially planned to impose a 25% tariff for all goods coming from Canada and Mexico, but he reduced the tariff on Canadian oil in order to reduce the impact of the tariff on energy prices. The development is set to upset a symbiotic trade in oil between the U.S. John LaForge, Wells Fargo Investment Institute, said that "someone will get hurt here." He said that the oil from Alberta has little choice as to where it is shipped, and that the Midwest refiners have no option in terms of where they obtain their feedstock. Gulf Coast refiners who, unlike Midwest refiners, have access to seaborne shipments, are likely to find it easier to replace the Mexican crude grades. The wholesale fuel market has little choice but pass the cost on to the consumer, as the post COVID surge of fuel margins is fading away due to oversupply and weaker demand growth. "We are in a situation where we have to live hand-to-mouth," said Alex Ryan. He is the energy director for Oasis, a Kansas company that operates a travel shop and partly owns a convenience store which sells fuel. Ryan stated that his team, who also supplies fuel to markets in other countries, is still waiting on feedback from refiners about the estimated cost increases. Ryan stated that "whatever the cost, it ultimately ends up on the consumer's shoulders and we have nothing to do about it." Prices on the East Coast may also rise East Coast drivers also felt the pinch. About half of the region's daily fuel needs are met by its refining capacity, with the remainder being met primarily by the Colonial Pipeline which pumps more than 100 million barrels daily from the Gulf Coast. This pipeline is almost never empty. During periods of high demand Irving Oil's St. John's Refinery in New Brunswick is the main swing supply to the East Coast. These imports are subject to a 10% tax. De Haan stated that the East Coast would either be forced to pay an additional price for fuel imported from Canada or import European fuel to cover any shortfalls. Analysts said that the impact of tariffs at Midwestern gas pumps could be delayed because refiners in the region have been producing fuels at high rates, and also stockpiling Canadian crude oil over the past few months. Tariffs will still increase costs. LaForge, a Wells Fargo representative, said: "Anyway you slice it, the prices are going to be higher." (Reporting and editing by Alistair Bell in New York, with Shariq Khan reporting from New York)
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Ukraine's military confirms four deaths in Russian attack on Kursk region boarding school
Ukraine's military announced on Saturday that Russian troops had attacked a boarding-school housing people preparing to evacuate in a part held by Ukrainian forces of Russia's Kursk Region, killing at least 4 people. Volodymyr Zelenskiy, the president of Ukraine, said that the attack destroyed the Sudzha boarding school "even though there were dozens of civilians present." According to a statement from the Ukrainian General Staff, rescue efforts were underway as of 10:00 pm (2000 GMT). The statement stated that four people were killed, and 84 others had been rescued. Four of the injured are in serious condition. Could not independently verify the Ukrainian story. The Russian Defence Ministry didn't immediately respond to our request for comment. Zelenskiy wrote in English about the incident on X. He said that it exposed Russia as a "state devoid of civility". Zelenskiy wrote: "This is the way Russia waged war--Sudzha and Kursk region in Russian territory. A boarding school where civilians were preparing to leave. "A Russian aerial bombardment. The building was destroyed despite the presence of dozens civilians. It was the same way Russia waged its war on Chechnya in decades past. The same thing happened to Syrians. "Russian bombs also destroy Ukrainian homes in the same manner." A general staff announcement earlier said that a Russian glide bomb or guided bomb had struck the boarding-school in the late afternoon. The strike was planned. "At the time of strike, local residents were preparing to evacuate the building," the report said. Oleksiy Dmytrashkivskyi was a military spokesperson who had said earlier in a Facebook video that there were nearly 100 people under the rubble. He said they had been mostly elderly or infirm people. According to at least one unofficial Russian blogger, the attack was carried out by Ukrainian forces. Since August, when Ukrainian forces launched a major invasion across the border, they have controlled large parts of the Kursk area. (Reporting and editing by Nick Zieminski, Diane Craft and Oleksandr Kozoukhar)
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Pensioner waiting at missile attack site for bodies of presumed dead family members
Ihor Yavorskyi, a Ukrainian pensioner who served in the military, spent the entire day on Saturday at the scene of a Russian missile strike to find out what he assumed was inevitable -- the bodies of his three family members that he believed were killed. Yavorskyi (61), along with other worried residents, stood alongside rubble, in Poltava, a city located in central Ukraine. The residents of Poltava waited patiently while emergency crews removed the bodies of the victims from a part of the apartment block that was reduced to rubble by the attack. He would rush over to the crews bringing bodies on stretchers and examine them. The bodies recovered to date do not include those of Dmytro (37), Alyona (38), or Sofia (9 years old). Yavorskyi stated, "My son and daughter-in law are both here." They've all been killed, the three of them. "Within a second." Yavorskyi assumed the worst. Yavorskyi, a veteran of the military, was assuming the worst. He quickly checked a new victim that was being brought out. "No, it's not this one," he replied. "That's a senior citizen." It's him." Crews scrambled up and down huge piles of smouldering debris and twisted metal to reach him. The cranes moved slabs of concrete to make it easier for rescuers. Yavorskyi lost his patience, dressed in a simple raincoat of green and a woollen cap to protect him from the cold and damp. He said that Russian President Vladimir Putin had one goal since the collapse of the Soviet Union, in 1991: to destroy Ukraine, his great country. "I want Putin and all of Russia to die together." All of them will be hated for the next 100 years. He will not stop. "Not until he destroys the entire Ukraine." (Reporting and Editing by Serhiy Karzy, Ron Popeski, Diane Craft, and Diane Craft.)
Denmark to permit conservation work on harmed Nord Stream 2 pipeline
Denmark's energy agency on Tuesday said it had actually approved Nord Stream 2 AG, a system of Russia's. Gazprom, consent to carry out preservation deal with. the Nord Stream 2 gas pipeline in the Baltic Sea, which was. harmed in a series of blasts in 2022.
The upkeep work is necessary to decrease ecological. and security threats coming from the pipeline being filled with. seawater and staying gas, the agency stated in a. declaration.
The work intends to protect the damaged pipeline by. installing customised plugs at each of the open pipeline ends to. avoid even more gas blow-out and the intro of oxygenated. seawater, it said.
Nord Stream 2 AG completed the $11 billion pipeline task. in 2021 to pump gas from Russia to Germany. However Germany halted. the plan as relations with Moscow broke down ahead of Russia's. war in Ukraine, while the United States enforced sanctions.
In September 2022, among the 2 lines of the Nord Stream 2. pipeline was damaged by mysterious blasts, along with both lines. of Nord Stream 1. No one has taken responsibility for causing. the damage.
The damaged line of NS2 is approximated to still include. around 9-10 million cubic metres of gas, while. the intact line stays filled with gas, the Danish firm stated.
The United States in December
provided further sanctions
on the operator and other Russian entities stating it. thinks about Nord Stream 2 a Russian geopolitical task and. opposes efforts to revive it.
Both the United States and Ukraine have actually rejected having. anything to do with the attacks as has Russia. Moscow, without. offering evidence, has blamed Western sabotage for the blasts,. which mainly cut Russian gas off from the financially rewarding European. market.
(source: Reuters)