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India-US trade negotiations go off the rails over a dispute over farm markets
Donald Trump announced on Wednesday that the United States will impose a 25 percent tariff on Indian products starting August 1. He cited New Delhi's high taxes and non-monetary trade barriers. Here are some of the issues that have appeared to have stalled the trade negotiations between the U.S. and India, the fifth-largest economy in the world: CONTENTIOUS ISSUES India has refused to comply with U.S. requests for the opening of its dairy and agricultural markets, claiming that such a move would harm millions of farmers. New Delhi has excluded agriculture from its free trade agreements to protect the livelihoods of domestic farmers. Indian officials have cited the risks of subsidised U.S. agricultural products as a reason to not reduce tariffs on corn, soybeans, wheat, and ethanol. Automakers, pharmaceutical firms, and small businesses in India have all lobbied to only open the market gradually, for fear of disruptions from U.S. imported products. High Tariffs A White House fact sheet states that India has an average MFN tariff (Most Favored Nation) of 39% for imported farm products, compared with 5% in the U.S. and some as high as 50 %. Trump's administration repeatedly cited these tariffs to be a major obstacle in establishing deeper trade relations with India. U.S. DEMANDS Washington wants better access to India’s markets in agriculture, ethanol and dairy products, alcohol beverages, automobiles, pharmaceuticals and medical devices. Washington also wants India's non-tariff trade barriers to be reduced, as well as the rules for digital trade, data flows, and patents. Lack of Reciprocity India is waiting for clear proposals from Washington despite offering limited tariff reductions and increasing imports of U.S. defence and energy goods. Trump's unpredictable trading moves are cited by officials as a cause for concern. Indian exporters are still concerned about the rising U.S. tariffs on imports. Tensions over Pakistan New Delhi has expressed concern over Trump's repeated claims that he helped broker the ceasefire between India & Pakistan in early this year. Indian officials see the remarks as a strategic shift toward Pakistan that complicates bilateral relations. Overconfidence in a Deal Indian officials initially believed that a deal would be reached, as they expected the U.S. government to favor deeper trade with India's largest commercial partner. Modi and Trump aimed to sign the first phase of a pact in autumn 2025. They hoped that bilateral trade would reach $500 billion by 2030. This was up from $191 million in 2024. India is still hopeful that its exports such as pharmaceuticals, electronics and engineering goods, garments and other items, will remain competitive despite the tariff setback. In 2024, Indian exports of goods to the U.S. will reach $87 billion. Gems and jewellery (8.5 billion dollars), pharma (8 billion dollars) and petrochemicals (4 billion dollars) are the top three. Services exports were valued at $33 billion, mostly IT and professional services. With $68 billion cumulatively in FDI from 2002, the United States is India’s third largest investor. US Exports to India U.S. manufacturing exported to India will be worth nearly $42 billion by 2024. However, there are high tariffs on these products. These range from 7% for wood products and machinery, to 15% to 20% for footwear and transport equipment and up to 68% on foods.
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Tata Steel India beats its quarterly profit forecasts on lower costs
Tata Steel, India's second largest steelmaker in terms of market capitalization, reported an increase in profit that was higher than expected on Wednesday. Lower raw material costs helped boost margins. LSEG data shows that its consolidated net income more than doubled in the last quarter to 20,78 billion rupees (US$236,8 million), exceeding analysts' expectations of 18,13 billion rupees. Steel producers' profitability was expected to increase with lower iron ore and coal prices, which are essential raw materials. The total expenditures of the company fell by about 4%, to 503.47 billion rupies, due mainly to a decrease of 12.7% in materials purchased, which accounted for more than 30%. Although domestic steel prices are still lower than they were a year earlier, there has been a significant improvement quarter-on-quarter since the government implemented a temporary 12% safety duty in April in order to combat a surge of low-cost imports from China. Analysts expected that the measure would boost local prices and help protect margins. Tata Steel’s net profit margin increased to 3.77%, from 1.68% one year earlier. According to data compiled and analyzed by LSEG, Tata Group reported a drop of about 3% in its total revenue. Analysts had expected a revenue of 515.18 bn rupees. Tata Steel's production and delivery volumes have decreased by 8.4% and 3.7% respectively, year-on-year due to maintenance-related shutdowns at its Jamshedpur blast-furnace and Neelachal Ispat Ngam. The company expects that production and deliveries will normalise over the next few quarters. In the same month, JSW Steel, a larger competitor in India, also beat profit expectations for the first quarter on lower raw material costs. However they raised concerns about cheaper steel imports. ($1 = 87.7620 Indian rupees) (Reporting by Anuran Sadhu in Bengaluru; Editing by Nivedita Bhattacharjee)
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Trump announces 25% tariffs on India starting August 1.
On Wednesday, President Donald Trump announced that the United States would impose a 25 percent tariff on all goods imported from India beginning August 1. He did not specify the amount of the penalty or the reason for it. Trump said in a Truth Social article that "India is our friend but we have done very little business over the years because their Tariffs were far too high. They are among the highest in World and they had the most obnoxious and strenuous non-monetary trade barriers of any Country." "They've always bought a large amount of their military gear from Russia and are Russia’s largest buyer for ENERGY along with China at a moment when everyone wants Russia STOP the killing in Ukraine -- All Things Not Good!" The Indian commerce ministry which leads the trade negotiations between India and the United States did not respond immediately to a comment request. Trump's announcement dashes any hopes for a limited trading agreement between the United States and Canada, which has been in negotiation since several months. U.S.-Indian trade negotiators held several rounds of talks to resolve controversial issues, including market access for American dairy and agricultural products. Indian officials, despite progress in certain areas, refused to open the Indian market to imports such as wheat, corn and rice, or genetically modified soy beans, citing the risks they posed to the livelihoods of millions of Indian farmers. India's exports of goods to the U.S. are estimated to be around $87 billion by 2024. This includes labour-intensive products like garments, pharmaceuticals. gems and jewelry, and petrochemicals. The United States has a current trade deficit of $45.7 billion with India. India has joined a list of countries that will face higher tariffs as a result of Trump's "Liberation Day", a trade policy designed to reshape U.S.-Indian trade relations through greater reciprocity. The White House warned India previously about the high tariffs it applied to agricultural products -- almost 39%, and rates as high as 45% for vegetable oils and 50% on corn and apples. The failure comes despite previous commitments made by Trump and Prime Minister Narendra modi to complete the first phase in a trade agreement by autumn 2025, and to expand bilateral trade from $191 billion to $500 billion dollars by 2030. If India decides to retaliate, U.S. manufacturing and energy exports, such as crude oil, liquefied gas, and coal could also be subject to retaliatory actions. Indian officials have indicated in the past that they see the U.S. a strategic partner of great importance, especially to counterbalance China. They have stressed the need to maintain policy space in agriculture, data governance and state subsidies. Reporting by Susan Heavey in Washington, Katharine Jackson in New Delhi, Manoj Kumar and Aftab Ahmad in New Delhi, and editing by Doina Schiacu and Mark Heinrich
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Russia is worried about the threat of new attacks on Iranian nuclear facilities
Russia expressed concern on Wednesday about the possibility of new attacks on Iran's nucleonic facilities. It said that a deal regarding Tehran's program could be reached by dialogue. Israel and the United States bombarded Iranian nuclear facilities in June, with the stated goal of preventing Tehran acquiring a nuke weapon. Iran denies that it has any such intentions. "Regular threats against Iran to launch new bomb and missile strikes on its nuclear facility cannot help but cause serious concern." Such statements are cynical, especially when they are made in the name of an imaginary concern about the non-proliferation nuclear weapons," Russian Foreign Ministry spokesperson Maria Zakharova said to reporters. Bombing nuclear installations should not be a routine, international practice. "The catastrophic risks of this practice cannot be ignored or justified. Since the beginning of the war in Ukraine, Russia has developed closer ties with Iran. This year it signed a treaty for strategic partnership with the Islamic Republic. Zakharova stated that a lasting peace agreement and a commitment not to launch new attacks on Iran are prerequisites for normalising the cooperation between Tehran and U.N.'s nuclear watchdog agency. (Reporting and editing by Mark Trevelyan, Andrew Heavens, and Dmitry Antonov)
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Demand worries, tariffs cause copper to fall more than a week's low
The copper price fell to its lowest level in over a week Wednesday, as inventories rose and investors were worried that looming U.S. Tariffs would hit demand. In open-outcry official trading, three-month copper at the London Metal Exchange fell 0.6% to $9,736 per kilogram, after reaching its lowest since July 18, at $9720.50. Analysts said that investors are waiting for details on planned U.S. copper tariffs of 50 percent and whether or not they will be implemented on August 1, as previously announced. U.S. Comex Copper Futures dropped 0.2% to $5.64 a lb. This brings the premium of Comex Copper over LME Copper to $2,694 a tonne. After the U.S. agreed to extend their 90-day trade truce, there was uncertainty over a possible trade war with China, the largest metal consumer in the world. Tom Price, Panmure Liberum's head of commodities strategy said: "I believe investors' engagement is at a standstill." Investors in other countries are actually pricing the demand risk associated with these tariffs, because metal suddenly becomes more expensive without any change in demand. "A 50% tariff is an astonishingly large number." The Shanghai Futures Exchange's most traded copper contract fell 0.1%, to 78.930 yuan per ton ($10,999.47). Stocks in LME warehouses were surging due to excess supply on the market LME data shows that. Market participants also awaited the announcement of the U.S. Central Bank's policy later that day, where rates are expected to remain unchanged. Price said that if they do not cut rates, commodities will be under pressure. LME aluminium increased 0.3% to $2.614 per ton in official activity, while zinc fell 0.5% to 2,792, lead dropped 0.6% to $2,000, nickel declined 1.5% to $16,080, and tin slipped 0.1% to $33,650. Click here to see the latest news in metals.
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Helion Energy begins construction of nuclear fusion power plant for Microsoft data centers
Helion Energy, an OpenAI-backed startup, and SoftBank Venture Capital's venture arm have begun construction at a site where a nuclear fusion plant will be built. The power plant is expected to supply Microsoft data centers with electricity by 2028. Helion Energy hopes to use the grid infrastructure already in place at the Rock Island Dam hydroelectric power plant near Malaga, Washington. The startup has yet to receive final permits from Washington, but it said that the work it's done puts it on course to sell electricity to Microsoft in accordance with a 2023 deal. Fusion is the process of ramming together atoms to release energy. It does not emit significant amounts of greenhouse gases, nor create large quantities radioactive waste. Scientists and engineers have yet to find a reliable way to generate more energy from fusion than is required to sustain and create the reaction. Helion has been working on this with its current prototype called Polaris. It is located in Everett Washington where it will build components for Orion, the machine that will be built at Malaga. David Kirtley (co-founder and CEO of Helion) said that Orion would connect to Washington's main power delivery networks. Kirtley stated that "we'll be able connect to the same grid upstream from the Microsoft datacenters." Microsoft has been saying for years that nuclear energy is a part of the mix of carbon-free sources of energy. They have also signed agreements to purchase power from conventional fission nuclear power. Melanie Nakagawa is Microsoft's chief sustainable officer. She believes that fusion is a long-term investment. Nakagawa said that "over the past three to four years you have seen different types of milestones be met by other companies, including Helion, in the fusion area." There's a lot optimism that this is the moment when fusion comes to fruition within this decade or soon after. (Reporting and editing by Christian Schmollinger in San Francisco, with Stephen Nellis reporting from San Francisco)
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Italy creates AI assistant that helps Italians assess landslide risk
A public research organization announced on Wednesday that climate change will likely lead to an increase in landslides. They also announced a new AI assistant which can help assess the risk. The environmental research and protection organization ISPRA stated that climate change increases the frequency of stronger thunderstorms, amplifies risks of landslides, and floods, and spreads them to areas which were previously less exposed. It said that the share of land at risk of serious landslides rose from 8.7% to 9.5% in 2021. About 2.2% or 1.3 million people live in this area. The institute stated that Italy remains one of the European countries with the highest risk of landslides. It cited recent natural disasters, such as the landslide in 2022 on the island Ischia near Naples and the flooding in Emilia-Romagna 2023. The institute stated that the new AI assistant will help users navigate through the IdroGEO platform, which is a public platform with maps and data updates on instabilities, and provide information and answer questions.
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AEP exceeds profit expectations, anticipates new capital plan of $70 Billion over five years
American Electric Power beat Wall Street expectations for the second quarter profit on Wednesday. The company said it plans to announce in the fall a new five-year capital program of approximately $70 billion, to meet U.S. energy demand growth. In premarket trading, shares were up 1% to $110.34. The U.S. Energy Information Administration said in April that U.S. electricity consumption would reach new records in 2025 and '26 due to data centers dedicated for artificial intelligence and cryptocurrency. This encouraged power producers to increase their investments. The company announced earlier this year that it would consider adding $10 billion to the $54 billion capital plan for the next five years as the demand for data centres increased in the service areas of the U.S. Electric Utility. The company's quarterly profits were boosted by higher electricity rates. Utility firms can obtain these increases through rate cases, where they appeal for power price hikes based on their investment or expenses in providing services. According to LSEG data, the Colombus, Ohio, based company reported a profit adjusted of $1.43 for the quarter ending June 30 compared with an average analyst estimate of $1.27. AEP provides service to 5.6 million customers across 11 states, including Texas and Ohio. It has the largest transmission system of electric power in the U.S. (Reporting by Tanay Dhumal in Bengaluru; Editing by Shailesh Kuber) The utility has reaffirmed that its adjusted profit for the full year is expected to be in the upper half. (Reporting and editing by Shailesh Kuber in Bengaluru)
BRICS leaders condemn Gaza attacks and Iran attacks; urge global reforms
Leaders of BRICS, a group of developing countries, condemned the attacks on Gaza and Iran on Sunday. They also called for reforms to global institutions. The bloc was portrayed as a safe haven for multilateral diplomatic efforts amid violent conflicts and wars.
The expansion of BRICS is a response to the divisions in the G7 and G20 group of major economies and the "America First" policy of U.S. president Donald Trump.
Brazil's Luiz Inacio Lula Da Silva, in his opening remarks at the Rio de Janeiro summit, drew an analogy with the Cold War Non-Aligned Movement. This was a grouping of developing countries that refused to join either side of the polarized world order.
Lula said to leaders that "BRICS was the heir of the Non-Aligned Movement." "Multilateralism is under attack and our autonomy has been weakened once more."
Lula warned business leaders on Saturday of the rise of protectionism by pointing out that BRICS countries now account for more than half of the world's total population and 40% its economic output.
In 2009, the first BRICS summit brought together leaders from Brazil and India, as well as China. In 2009, the bloc was expanded to include South Africa, and in 2012, Egypt, Ethiopia and Indonesia. Indonesia is the first country to be included in this summit.
The BRICS fill the vacuum that others leave almost immediately, said a Brazilian who requested anonymity. The diplomat said that although the G7 still has a lot of power, it doesn't hold the same dominance as before.
There are still questions regarding the goals shared by a BRICS group that has become more heterogeneous, as it now includes regional rivals and major emerging economies.
Chinese President Xi Jinping sent his premier to the summit in lieu of himself, stealing some thunder. Due to an international criminal court arrest warrant, Russian President Vladimir Putin will be attending the summit online.
Several heads of state, including Indian PM Narendra Modi, and South African president Cyril Ramaphosa, gathered at Rio's Museum of Modern Art for discussion on Sunday and Monday.
Over 30 countries have expressed an interest in joining the BRICS either as full members, or as partners.
GROWING COMPLEXITY AND CLOUT
The expansion of the BRICS group has given it more diplomatic weight. It aims to represent developing nations in the Global South and strengthens calls for reforming institutions like the United Nations Security Council, the International Monetary Fund, etc.
Lula's remarks highlighted the failures of U.S. led wars in the Middle East.
Lula urged the BRICS countries to lead reforms. He reflected on the G20 Summit held in the same location last November. "In a very short time, the world has deteriorated so much that many of the initiatives approved back then are no longer possible."
In a statement issued on Sunday afternoon by the assembled leaders, they called attacks against Iran’s “civil infrastructure” and peaceful nuclear installations a “violation of international laws.”
The group expressed its "grave concern" over Israeli attacks in Gaza and condemned a "terrorist" attack that was described as a "terrorist act" by the Indian-administrated Kashmir.
The joint statement on trade warned that the increase in tariffs threatened global trade. This continued the group's veiled critique of Trump's U.S. Tariff policies.
The group expressed its support for Ethiopian and Iranian to join the World Trade Organization while calling to restore urgently its ability to settle trade disputes.
As first reported last week, the leaders' statement endorsed plans to pilot a BRICS Multilateral Guarantees Initiative within the group's New Development Bank in order to lower financing costs for member states and boost their investment.
In a separate press release following a discussion on artificial intelligence, leaders called for the protection against unauthorized AI use to avoid excessive data gathering and to allow mechanisms for fair payments.
Brazil, which is also hosting the United Nations Climate Summit in November, has used both events to show how serious developing nations are about tackling climate changes, while Trump has put the brakes on U.S. initiatives.
According to two sources familiar with the discussions regarding funding the conservation of endangered forest around the globe, China and the UAE indicated in their meetings with Brazilian Finance minister Fernando Haddad that they intend to invest in the proposed Tropical Forests Forever Facility. (Reporting and editing by Lisandra Paraguassu, Manuela Andreoni and Bill Berkrot)
(source: Reuters)