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Germany and Canada deepen their critical mineral cooperation in the supply chain
Germany and Canada agreed to intensify their cooperation in the area of critical minerals on Tuesday amid global concerns about China's export restrictions and Berlin's efforts to reduce dependence on a single source. Minerals like copper, tungsten and gallium are essential for Canada's and Germany’s advanced manufacturing, defence technologies and clean energy technologies. China's decision in April to stop exports of rare Earths and magnets related to them has disrupted the global supply chain, causing a major blow to automotive, aerospace, semiconductor, and military contractors. German Economy Minister Katharina Riede and Canada’s Energy and Natural Resources minister Tim Hodgson have signed a Declaration of Intent to Strengthen Cooperation on Critical Minerals, with a focus on midstream technologies, such as processing and refining. They will also coordinate their efforts in the areas of critical minerals, such as rare earth elements, lithium, copper, nickel, tungsten and gallium. The plan is to also encourage more commercial collaboration and research between financial institutions and companies. The agreement does not create any financial obligations and is not legally binding. Funding for activities will be subject to the available funds and domestic laws and regulations of each country. (Reporting and editing by Madeline Chambers.)
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Indonesia: US tariff exemptions for palm oil, cocoa and rubber
The United States agreed to in principle exempt Indonesian cocoa, rubber and palm oil exports from President Donald Trump’s tariff of 19% since August 7, said the Southeast Asian nation’s chief tariff negotiator on Tuesday. Airlangga hartarto, also chief economic minister of Indonesia, said in an interview that the exemption would take effect after both sides reached a final agreement. However, no deadline was given as the U.S. is busy with tariff negotiations with other countries. Airlangga added that the U.S. also discussed a possible investment by its sovereign wealth fund Danantara in Indonesia's fuel storage, along with state energy company Pertamina and Indonesia's state-owned energy firm Pertamina. He added, "We're waiting for their reply, but basically the principle of exemption has been agreed upon for products that are not produced in the U.S. such as cocoa, palm oil, and rubber... It will be zero, or very close to zero." Jakarta, the region's biggest economy, was one of the first countries to reach a deal on tariffs with Trump back in July. However, it ended up paying the same amount as other countries like Thailand and Malaysia and only a little less than Vietnam's 20%. Indonesia made an offer to invest billions of dollars in the United States, and also purchased planes, farm products, LPG and crude oil from the United States. It also promised to impose zero tariffs on nearly all American products entering its market. (Editing Gayatri Suryo; Editing Clarence Fernandez).
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German-Norwegian team is finalist in Canadian submarine deal, Carney says
Mark Carney, the Canadian Prime Minister, announced on Tuesday that Canada had shortlisted two candidates for its new submarine programme. A German-Norwegian consortium was among the finalists. Mark spoke at a Berlin joint press conference with Chancellor Friedrich Merz. "I am looking forward to visiting the Thyssenkrupp facility in Kiel with Melanie Jolie, the Minister of Industry, and the Minister of National Defence later today." Carney announced that Canada and Germany would be collaborating on the supply of critical minerals. Berlin wants to diversify its mineral supply chain away from China and Russia. For example, the partnership between Canadian mining firm Troilus and Hamburg-based Aurubis AG in order to create a rare earth supply chain between Quebec & Germany. Carney stated that Canada is mobilizing almost half a billion dollars in investments to support energy, digital, and port infrastructure. The two countries signed a deal last year to promote commercial-scale trading in clean hydrogen. However, progress is uncertain, as Germany's desire for green fuel remains lagging. (Reporting and editing by Friederike H. Heine, Sarah Marsh, Riham Alkousaa)
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Gold reaches a two-week high after Trump announces he will fire Fed Governor Cook
Gold prices rose to a two-week high after U.S. president Donald Trump announced he would remove Federal Reserve Governor Lisa Cook. This move was seen as undermining the independence of the central bank and eroding confidence in U.S. investments. As of 0803 GMT spot gold rose 0.4% to $3,379.05 an ounce after reaching its highest level since the August 11 session earlier in that session. U.S. Gold Futures for December Delivery rose by 0.3% to $3425.80. Trump fired Cook on Monday, a move that was unprecedented. Investors see Trump's actions as an attempt to gain a majority of dovish Fed members, thereby putting the Fed's autonomy at risk and creating uncertainty in the markets. This leads investors to buy gold, according a Swissquote external analyst, Carlo Alberto De Casa. In times of low interest rates and economic uncertainty, non-yielding gold bullion is a good investment. SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings increased 0.18% on Monday to 958.49 tons from 956.77 tonnes on Friday. Fed Chair Jerome Powell hinted at a possible rate reduction during the Fed meeting next month. He said that the risks for the job market are increasing, but that inflation remains a threat. A decision is not set in stone. Markets are pricing in a 25 basis point rate cut for September. De Casa said that a jumbo rate cut would further boost gold, but this is not likely as Fed members are concerned about the slowdown in the labour market, but still consider inflation risks. Investors will now be looking at the Personal Consumption Expenditures Price Index (PCEPI), the Fed's preferred measure of inflation, which is due on Friday for further clues about the central bank's monetary policies. Silver spot rose 0.4% per ounce to $38.71, while platinum fell 0.4% at $1,336.66. Palladium also increased 0.7%, to $1093.50. (Reporting by Ishaan Arora in Bengaluru; Editing by Janane Venkatraman)
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Indian Foreign Ministry: Quadruple important minerals for India and Japan
India's Foreign Ministry said that the Quad Group of countries was important to India and Japan, especially in relation to critical minerals. The ministry also stated that the two prime ministers would be discussing the grouping during this week. The Indian Prime Minister Narendra Modi will visit Japan from August 29-30 to attend the 15th India Japan Annual Summit. He will also hold discussions with his Japanese counterpart Shigeru ishiba. Modi will fly to Tianjin, a Chinese port city on the coast of the Pacific Ocean for the Shanghai Cooperation Organisation Summit (SCO), which takes place between August 31 and September 1. New Delhi will host this year's summit of the so-called Quad grouping, which includes India, Japan and Australia, amid a deterioration of relations with Washington due to tariffs placed by President Donald Trump on Indian products. The Quad countries have expressed concern about China's increasing power and dominance in critical minerals. They had also announced an agreement to a Critical Minerals Initiative Last month, in an attempt to counter Beijing. Vikram Mihiri, Indian Foreign Secretary, told reporters Tuesday that "Quad" is an important platform to work on and promote peace, stability and prosperity in the Indo-Pacific Region. In recent years, the agenda of India has broadened to include practical cooperation, he added, and India is expecting to launch new initiatives with Japan, including in defence, ship repair, and space. Modi's first visit to China in over seven years will come as neighbours look for Rebuild ties After a deadly clash in the Himalayan border dispute in 2020, relations between India and Pakistan deteriorated dramatically. The Foreign Ministry said that Modi will also hold bilateral meetings during his trip, but gave no details. Twenty world leaders The SCO summit will be attended by many, including Russian president Vladimir Putin. In recent years, the SCO has grown from six Eurasian countries to 10 permanent members as well as 16 countries that participate in dialogues and are observers. The scope of its mandate has expanded from counterterrorism and security to include economic and military co-operation. (Reporting and writing by Krishna Das; editing by YPrajesh).
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Australian police search for gunman who killed two officers in rural area
The Australian Police are searching for a gunman that shot two officers dead and injured another as they attempted to serve a search warrant on a rural property located in Victoria. In a video, Victoria Police Commissioner Mike Bush stated that 10 officers were shot at at around 10.30 am (1230 GMT) at a Porepunkah property, located about 300 km north-east from Melbourne. Bush stated that two officers were killed, and another was seriously injured. He said they are being treated at the hospital. He asked residents to remain at home as police searched for the shooter. "We have sent all our specialist resources to the area in order to arrest the responsible person." "Detectives and special operations groups are looking for the person," said he. The Age reported that the officers were attempting to serve a warrant on historical allegations of sex abuse when they were ambushed. The gunman then fled along with a number of family members including children. Australian Broadcasting Corporation reported that police believed the shooter was a "sovereign" citizen. Sovereigns believe that the government is unlegitimate. Porepunkah, a town with 1,000 residents located at the foot of Australia's mountain ranges, is home to about 1,000 people. Today has been a sad and shocking day for our community. "We extend our sincere condolences and deepest sympathies to the families, colleagues, and friends of the two officers tragically murdered in Porepunkah," said Mayor Sarah Nicholas in a press release. Nicholas said that the local council facilities in the town would be closed until further notice. This includes libraries, information centers and depots. Jill Gillies, principal of Porepunkah primary school in Melbourne, told ABC Radio Melbourne the school had been forced to lockdown. Around 90 students were sheltering inside from 11.30 am local time. ABC reported in the past that the lockdown was lifted. Due to the ongoing response, the local airfield was also closed. Reporting by Christine Chen, Sydney; editing by Michael Perry and Raju Gopikrishnan
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Iron ore demand is sluggish as Trump's tariff threats fuel concerns
The price of iron ore futures was subdued Tuesday as new tariff threats by U.S. president Donald Trump fueled concerns about demand prospects. After touching its highest level since August 14, the most-traded contract for January iron ore on China's Dalian Commodity Exchange closed daytime trading 0.7% lower at 776.5 Yuan ($108.56). As of 0654 GMT, the benchmark September iron ore traded on Singapore Exchange was down by 0.93% to $102.3 per ton. Trump stated on Monday that China must give magnets to the United States or "we will have to charge them a 200% tariff" or something similar, amid a dispute over trade between the two countries. Trump has also threatened to impose "subsequent tariffs" on goods from countries with digital taxes if they do not repeal the legislation. These threats were made after the U.S. concluded trade agreements with several countries and areas after multiple rounds. This eased fears of a recession in the world that would hurt commodity demand. The price of iron ore has fallen in the last year due to a decline in demand from China, its largest consumer. China is struggling with deflation as well as low consumer confidence. The lower iron ore price has squeezed the profits of major miners. Fortescue, a mining company in Australia, reported its lowest annual profit in 6 years. BHP's profit was the lowest it has been in 5 years. Coking coal, coke and other steelmaking components on the DCE have erased their earlier gains, falling by 3.17% and 2.41 %, respectively. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Wire rod, hot-rolled steel coil, and rebar all fell by 0.89%.
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India exports are hit by new US tariffs that will be implemented on Wednesday
Indian exporters should prepare for disruptions following a U.S. Homeland Security confirmed that Washington will impose an extra 25% tariff on all Indian origin goods starting Wednesday, increasing trade pressure against the Asian nation. U.S. exports to India will be subject to duties up 50%, among the highest Washington has imposed. This is in response President Donald Trump's announcement of extra tariffs in punishment for New Delhi purchasing Russian oil. Homeland Security's notice states that the new duties will be applied to goods coming into the U.S. or being withdrawn from storage for consumption as of 12:01 am EDT or 9:31 am IST on Wednesday. In early trading, the Indian rupee fell 0.2% to 87.75 US dollars per dollar, even though the greenback was falling against other currencies. The benchmark equity indices were trading at a 0.7% decline. White House trade advisor Peter Navarro, along with U.S. Treasury Sec. Scott Bessent, have accused India indirectly funding Russia's conflict against Ukraine through increased Russian oil purchases. They said this must stop. Bessent said earlier this month that India profited from its dramatically increased purchases of Russian crude oil. This now accounts for 42 percent of India's overall oil imports. Before the war, it was only 1%. Washington called this shift unacceptable. The Indian Commerce Ministry has not responded to an email asking for comment about the latest notification. The government does not expect any relief in the short term or a delay of U.S. Tariffs, said an official from the Commerce Ministry who spoke under condition of anonymity as they were not authorized to speak with media. The official said that exporters who are hit by tariffs will receive financial assistance, and they will be encouraged to diversify their markets to include China, Latin America, and the Middle East. The government has identified more than 50 countries to increase Indian exports. This includes textiles, food products, leather products, and marine products. EXPORTERS Seek Aid Exporter groups estimate that the hikes will affect 55% of India’s $87 billion worth of merchandise exports to America, but benefit competitors like Vietnam, Bangladesh, and China. The U.S. customer has already stopped placing new orders. Exports could drop by 20-30% with these new tariffs from September, said Pankaj Chadha. Chadha said that the government had promised financial assistance, including increased subsidies for bank loans and support to diversify in the event financial losses. He said that exporters saw limited opportunities to diversify into other markets or sell on the domestic market. India exports Diamond Industry The demand for gems and jewellery has already fallen to its lowest level in two decades due to weak Chinese demand. Now, higher tariffs could cut off access to the largest market that accounts for almost a third (28,5 billion dollars) of the annual shipment. BROADER ECONOMIC IMPACT Private analysts warn of the impact a sustained tariff of 50% could have on India's economic and corporate profits – resulting in the steepest downgrades to earnings in Asia – even if domestic tax reductions are proposed. Capital Economics stated last week that the economic growth of India would be affected by 0.8 percentage points if all U.S. Tariffs were implemented this year and in 2019. Last week, Foreign Minister S. Jaishankar stated that trade negotiations were in progress and that Washington’s concerns over Russian oil purchases did not apply to other major purchasers such as China and Europe. As of yet, the government has not issued any directives regarding the purchase of oil from Russia. Three sources from the refining industry said that companies will continue to purchase oil based on economics. After five rounds of negotiations with the United States, Indian officials expressed confidence that they would be able to reach a favorable deal. They even told the media the tariffs might be limited to 15%. Both sides claimed that a combination of political misjudgment and missed signals, as well as bitterness, led to the collapse of the deal between two world economies with bilateral trade worth more than $190 billion. Narendra Modi, the Indian Prime Minister, has pledged to not compromise the interests and livelihoods of farmers in India even if it means paying a high price. Modi also plans to visit China for the first time in seven years at the end of this month. (Reporting and editing by Lincoln Feast and Sam Holmes; Additional reporting by Nidhi verma.
India's diamond hub is awash with empty offices and lost orders as US tariffs threaten
Surat Diamond Bourse is eerily silent, with just a few traders working. It's billed as being the largest office complex in the world, surpassing the Pentagon.
The business climate is slow and the outlook is dim.
India's diamond exports have already reached a two-decade-low due to weak Chinese demand. Now, higher tariffs under U.S. president Donald Trump threatens to cut off access to the largest market in India, which accounts nearly a quarter of its $28.5billion annual shipments.
The looming U.S. Tariffs have shaken the confidence of buyers in Surat, which is where over 80% of all rough diamonds in the world are cut and polissed.
While smaller exporters are less able to absorb the impact, some larger players plan to move part of their operations into countries such as Botswana which has a 15% lower U.S. duty. India's 25% tariff will double on August 27.
Hitesh Patel, the managing director of Dharmanandan Diamonds said that if tariffs continue, they may increase production. The company expects its annual revenue to be reduced by 20-25%.
Shaunak Parikh said that the industry is also responding to the slower demand by reducing working days and hours.
A bourse official, speaking on condition of anonymity, said that more than 4,700 offices had been sold at the Surat Diamond Bourse. However, less than 250 were actually in use, and several companies have re-evaluated their plans for moving in.
The owner of Mumbai's diamond firm who purchased space on the bourse in last year said that he had put off relocation plans.
"U.S. Tariffs have already shaken up our business and we do not want to add the hassle of moving to Surat from Mumbai," he said. He requested anonymity in order to protect his company's identity.
Narendra Modi, Prime Minister of India, had inaugurated the Surat Diamond Bourse in December 2023. It was built on 6.7 million square foot, which is more than the Pentagon.
The sprawling bourse, which consists of nine interconnected towers with each having 15 floors, boasts gleaming facades and houses banks, vaults and customs offices. It is designed to be a hub for the diamond industry worldwide.
LITTLE SPARKLE AFTER THE HIGH SEASON
Surat workers typically increase production at this time of the year to meet an influx of orders coming from the United States in advance of Christmas and New Year. Many artisans, however, are unsure if they will have any work this year.
"Demand is so low that the diamond packs I sold last year for 25,000 rupees (285.84 dollars) now fetch barely 18,000," said Shailesh Manngukiya who runs a cutting-and-polishing unit in Surat in Gujarat, Modi's native state in India's West.
Mangukiya announced that he has reduced his staff to 125.
GJEPC's Parikh stated that if there is no trade agreement between India and the U.S. for lower tariffs, then 150,000 to 200 000 workers may lose their jobs.
Industry officials say that, as a result of tariffs, U.S. diamond buyers will likely source their diamonds from Israel, Belgium, and Botswana.
Exporters say it is difficult to find new diamond buyers in India to compensate for the loss of sales to the United States.
Exporters say that the industry has reduced its purchases of rough diamonds and is operating with minimal inventory to conserve cash flow. Cash-strapped small units are offering steep discounts to remain afloat.
India's domestic market is the only bright spot.
The demand for diamonds continues to grow in India. This country recently overtook China, the second largest market in the world, according to Hitesh Sha, a partner of Venus Jewel which supplies luxury brands like Tiffany & Co.
Shah explained that the Indian market is compensating for the American demand loss. Reporting by Bansari Mayur kamdar and Rajendra jadhav, Editing by Mayank bhardwaj, Himani sarkar.
(source: Reuters)