Afp Business Asia

From office lights switched off to out-of-service lifts, Indonesian civil servants are feeling the pinch after President Prabowo Subianto ordered sweeping budget cuts across government that he said will fund his big-ticket campaign pledges.Many government offices in the capital Jakarta are now turning their lights and air conditioners off immediately when the work day ends at 4 pm, leaving some employees trying to finish projects after hours at dimly lit desks, while others are being encouraged to work from home to save on energy costs.The tightening of ministerial belts comes after Prabowo in late January ordered cuts to save 306.7 trillion rupiah ($18.8 billion) on office spending, ceremonies and business trips.The order left ministries scrambling and some officials in the dark, with analysts saying the sudden move was likely to shift funds to programmes like a $4.3 billion free meal plan for schoolkids and a new sovereign wealth fund.”Can you imagine working in the office, only your room is lit, everything else is off?” a 35-year-old civil servant told AFP.”There’s no sound. It’s really dead silent. It makes a different atmosphere.”Patrolling guards have also begun switching off electronic devices after work hours, following an order for employees to leave on time.”There was a circular telling (workers) they must go home at 4 pm. There is an appeal to leave the office soon and turn off the AC and all electronic devices,” said the civil servant, who requested anonymity for fear of professional reprisals.”Before, there were no patrols. Now the conditions are darker, the AC temperatures have been set.”Former general Prabowo, who took office in October, has said he wants to raise around $46 billion from cuts to government spending and by taking from the dividends of state-owned enterprises.”Our children must not be hungry… Our people, our children, must be well-fed,” Prabowo said last week. The budget slashing has left the public works ministry with less than half the initial $6.8 billion it was allocated this year, while the home ministry saw its budget cut more than 50 percent to $128.6 million.As the cuts squeeze workers in many government offices, a presidential spokesman said Wednesday that the government would host a week-long mountain glamping retreat for hundreds of regional officials — costing $808,000 from the home ministry budget.The gathering has prompted criticism from civil society groups, including one which called Prabowo’s cuts “counterproductive and insensitive” to the needs of society.- ‘Counterproductive’ cuts -Government employees now have to chip in for previously covered necessities such as drinking water and premium Zoom accounts, and others can no longer take business trips, bureaucrats said.”We previously could use taxis for meetings outside the office. Now we’re paying out of our own pockets,” said a 33-year-old civil servant who also requested anonymity.A Constitutional Court official told lawmakers last week that the deep cuts meant wages could only be paid until May.In one ministry, long queues have been forming for elevators on a daily basis because fewer were running after orders by top officials to limit energy costs. Workers complained to AFP that the cuts were not just inconvenient but counterproductive to their work, pointing to examples like the internet bandwidth being reduced while being ordered to hold more meetings online.”Our hope is that this efficiency should not be counterproductive and contradictory,” said a 46-year-old worker.The austerity measures have also sparked thousands of student protesters to rally across Indonesian cities this week, underpinned by a social media movement known as “Dark Indonesia”.- Free meals -Economists say the swathe of cuts is also being driven by a need to repay around $49 billion in debt this year, including about $43 billion in government bonds set to mature.”This makes our budget really stretched,” said Yose Rizal Damuri, executive director of the Jakarta-based Centre for Strategic and International Studies.But the cuts are also likely to free up funds for Prabowo’s ambitious campaign pledges.”What we know now is… first, free nutritious meals,” Yose said.”Second, to fund Danantara Indonesia,” he added, referring to a new sovereign wealth fund due to be launched next week modelled after Singapore’s investment arm Temasek. Prabowo last week said $20 billion of the savings would be injected into the fund.A reduction in government and social spending could have wider impacts with much-needed funds for health and education potentially redistributed, said Dedi Dinarto, senior associate at public policy advisory firm Global Counsel.”With the reduced allocation for the health and education sector, this could lower the quality of human resources in the long term,” he said.In some government offices, the cuts are already being felt by breadwinners.”It affects workers financially,” said one of the civil servants.”There is a sense of injustice.”

Asian markets turned negative Thursday amid Federal Reserve concerns that US President Donald Trump’s tariffs and immigration measures could reignite inflation.The losses come despite a second-straight record close on Wall Street and follow a recent rally as traders have rolled with the president’s latest tariff salvos, betting they are being used as negotiating tactics.Minutes from the US central bank’s January meeting suggested officials were not likely to cut interest rates anytime soon — having reduced them at three successive meetings — citing worries about the impact of Trump’s policies.Decision-makers expected that “under appropriate monetary policy, inflation would continue to move toward (their target of) two percent, although progress could remain uneven,” the minutes said.But without referring to Trump by name, the minutes said policymakers raised concerns that “the effects of potential changes in trade and immigration policy” could complicate the disinflation process. The remarks come after a number of economists warned that the Republican’s pledge to ramp up tariffs on trade partners while slashing taxes, regulations and immigration could fan inflation.Traders see a roughly 80 percent likelihood the Fed will make no more than two quarter-point cuts this year, according to CME Group. The minutes also revealed that officials were mindful that the debt ceiling needed to be lifted to prevent the country from defaulting on its obligations, which could deal a hefty blow to the global economy.The government hit its limit in January but the Treasury has managed to keep things ticking over by using so-called extraordinary measures.”The overall tone of the meeting minutes was unsurprising, considering that Fed chair Jerome Powell had said on no less than five separate occasions during the January press conference that the committee did not need to be ‘in a hurry’ to make further adjustments to policy rates,” said Ryan Wang, US economist at HSBC.While all three main indexes in New York rose, with the S&P 500 at another all-time peak, Asia stumbled.Hong Kong, which has climbed around 15 percent so far this year, dropped two percent as the China tech surge came to an end.Tokyo was weighed by a stronger yen as the Bank of Japan eyes more interest rate hikes, while Shanghai, Sydney, Seoul, Wellington, Taipei and Manila also retreated. Dealers are also keeping a nervous eye on developments in Europe after Brussels and Kyiv were excluded from the first high-level talks between the United States and Russia since the start of the war in Ukraine.Trump also raised eyebrows by calling Ukrainian leader Volodymyr Zelensky a “dictator” on Wednesday, widening a personal rift with major implications for efforts to end the conflict triggered by Russia’s invasion three years ago.The United States has provided essential funding and arms to Ukraine, but Trump made an abrupt policy shift by opening talks with Moscow just weeks after he returned to the White House.”A Dictator without Elections, Zelenskyy better move fast or he is not going to have a Country left,” Trump wrote on his Truth Social platform.Zelensky was elected in 2019 for a five-year term and has remained leader under martial law imposed as his country fights for its survival.- Key figures around 0230 GMT -Tokyo – Nikkei 225: DOWN 1.5 percent at 38,579.71 (break)Hong Kong – Hang Seng Index: DOWN 2.1 percent at 22,463.04Shanghai – Composite: DOWN 0.3 percent at 3,340.42Euro/dollar: UP at $1.0430 from $1.0428 on WednesdayPound/dollar: UP at $1.2591 from $1.2582Dollar/yen: DOWN at 150.62 from 151.40 yenEuro/pound: UP at 82.83 pence from 82.81 pence West Texas Intermediate: DOWN 0.4 percent at $71.95 per barrelBrent North Sea Crude: DOWN 0.3 percent at $75.81 per barrelNew York – Dow: UP 0.2 percent at 44,627.59 (close)London – FTSE 100: DOWN 0.6 percent at 8,712.53 (close)

Myanmar on Thursday handed over the first batch of hundreds of Chinese scam centre workers who are set to be repatriated through Thailand in the coming days.Thousands of foreigners are expected to be freed and returned from scam compounds in Myanmar in the coming weeks, starting with 600 Chinese over the next three days.The compounds run by criminal gangs are staffed by foreigners, many of whom say they were trafficked and forced to work running internet scams swindling people around the world.Many of those involved are Chinese and Beijing has stepped up pressure on Myanmar and Thailand to shut the centres down.The Karen Border Guard Force (BGF), a militia allied with the Myanmar junta, has said it is preparing to deport 10,000 people linked to the compounds in areas it controls on the border with Thailand.Two double-decker coaches delivered a first round of returning workers to the border post in the western Thai town of Mae Sot on Thursday morning, AFP journalists at the scene saw. “First group of 50 Chinese have crossed to Thailand and headed to the airport. There will be three more batches (today), each with 50 Chinese,” a local border task force official told AFP.China has put on 16 flights over the next three days to ferry 600 of its nationals home direcly from Mae Sot.Chinese security personnel are expected to accompany the returnees on the planes, and it is not clear what fate awaits them back in China.The release follows several visits by China’s Public Security Assistant Minister Liu Zhongyi to Bangkok and the border in recent weeks to arrange the repatriation.Scam centres have proliferated across Southeast Asia in recent years, including in Cambodia and the Philippines, as the value of the industry has boomed to billions of dollars a year.Many workers say they were lured or tricked into the centres by promises of high-paying jobs before they were effectively held hostage, their passports taken from them while they were forced to commit online fraud.Many have said they suffered beatings and other abuse at the hands of their supervisors, and AFP has interviewed numerous workers freed from centres with severe bruising and burns. 

A failing Australian metals plant will be transformed into a hub for making “green iron and steel”, Prime Minister Anthony Albanese said Thursday as the government stepped in with a billion-dollar rescue package. More than 1,000 workers faced losing their jobs after the Whyalla steelworks in South Australia was swamped by mounting debts. Albanese on Thursday pledged a major overhaul to save the site, which was run by British billionaire Sanjeev Gupta’s GFG Alliance. More than Aus$2 billion (US$1.27 billion) has been set aside to pay off debts and upgrade infrastructure, with a view to using it keep operating but with less polluting methods.”Investment in green iron and steel will secure future demand for Australia’s iron ore as the world moves toward lower emissions iron and steel,” Albanese said. “Green metals are pivotal for global decarbonisation, with iron and steel production responsible for eight percent of global emissions.” Whyalla would receive up to Aus$500 million (US$317 million) from a newly created sovereign Green Iron Fund, Albanese said. Metals such as steel and aluminium are typically produced in hulking factories that rely on polluting coal-fired power. The new push seeks to instead power these factories with renewable electricity, lowering emissions in the process. Whyalla is one of only two Australian steelworks and produces 75 percent of Australian structural steel, government figures show. Australian Workers’ Union secretary Paul Farrow said the country’s economic sovereignty hinged on the Whyalla Steelworks remaining open. “Whyalla supplies three-quarters of Australia’s domestic steel supply. “Without it we would be beholden to foreign nations for the building blocks of our society.”

Global stocks were under pressure Wednesday after US President Donald Trump broadened his tariff threats, leaving European bourses lower even as the S&P 500 notched a fresh record.Trump warned the previous day that he would impose tariffs “in the neighborhood of 25 percent” on auto imports and a similar amount or higher on semiconductors and pharmaceuticals.”Understandably this has helped drive European carmakers lower, with the likes of Mercedes-Benz, BMW and VW losing ground,” said Joshua Mahony, chief market analyst at Scope Markets. European markets all dropped, with London hit by higher-than-expected inflation figures.Tariff threats also knocked auto firms and semiconductor manufacturers in Tokyo, dragging the index into the red.Wall Street indices veered in and out of negative territory throughout the session before finishing higher.The S&P 500 rose 0.2 percent to its second straight closing high.”A new high, even by the narrowest of margins, is still a new high, and all new highs are positive,” said Sam Stovall, chief investment strategist at CFRA Research. “The resilience of the market remains encouraging, adding confidence to the continuation of its upward trajectory.”China — a key target in Trump’s tariffs policy — told the World Trade Organization on Tuesday that the United States risked triggering inflation, market distortions and even a global recession.The tariff threats added to market uncertainty since Europe and Kyiv were excluded from the first high-level talks between the US and Russia since the start of the war in Ukraine.Frankfurt’s DAX 40 index set another record high during morning trading, but broke a two-week winning streak ahead of weekend elections.”The uncertainty surrounding the election is likely to negatively impact short-term price developments,” said CMC Markets analyst Konstantin Oldenburger.Asian markets struggled for direction, with Hong Kong dragged lower by tech firms after Chinese internet giant Baidu’s fourth-quarter earnings saw a fall in revenue and a warning of near-term pressures.The sector has helped the Hang Seng Index surge around 15 percent since the turn of the year, spurred by the emergence of Chinese startup DeepSeek’s new chatbot that has upended the AI universe.President Xi Jinping’s meeting with China’s top business leaders this week — including Alibaba co-founder Jack Ma — added to the optimism amid hopes of a fresh boost for the private sector.The Shanghai stock market rose while Taipei was weighed by a sell-off in chip giant TSMC.In other company news, Swiss mining and commodity trading giant Glencore dropped more than six percent on London’s FTSE 100 after it reported a net loss for 2024.Shares in Dutch medical device maker Philips dropped more than 11 percent on the Amsterdam stock exchange after it posted worse-than-expected losses. – Key figures around 2130 GMT -New York – Dow: UP 0.2 percent at 44,627.59 (close)New York – S&P 500: UP 0.2 percent at 6,144.15 (close)New York – Nasdaq Composite: UP 0.1 percent at 20,056.25 (close)London – FTSE 100: DOWN 0.6 percent at 8,712.53 (close)Paris – CAC 40: DOWN 1.2 percent at 8,110.54 (close)Frankfurt – DAX: DOWN 1.8 percent at 22,433.63 (close)Tokyo – Nikkei 225: DOWN 0.3 percent at 39,164.61 (close)Hong Kong – Hang Seng Index: DOWN 0.1 percent at 22,944.24 (close)Shanghai – Composite: UP 0.8 percent at 3,351.54 (close)Euro/dollar: DOWN at $1.0428 from $1.0446 on TuesdayPound/dollar: DOWN at $1.2582 from $1.2613Dollar/yen: DOWN at 151.40 from 152.06 yenEuro/pound: FLAT at 82.81 pence West Texas Intermediate: UP 0.6 percent at $72.25 per barrelBrent North Sea Crude: UP 0.3 percent at $76.04 per barrelburs-jmb/jgc

Germany’s car lobby on Wednesday warned that tariffs threatened by US President Donald Trump would raise prices for American drivers after Trump said he might hike taxes on imports of cars, pharmaceuticals and semiconductors.Speaking at his Mar-a-Lago resort in Florida on Tuesday, Trump told reporters that tariffs on the automobile industry will “be in the neighbourhood of 25 percent”, with specifics to come around April 2.Asked about threatened tariffs on pharmaceuticals and chips, Trump said: “It’ll be 25 percent and higher, and it’ll go very substantially higher over (the) course of a year.”He added that he wanted to give affected companies time to bring their operations to the United States, saying that he had been contacted by major firms that “want to come back”. The president also said that Washington’s trading partners could avoid being taxed by investing in factories in the United States. “We want to give them time to come in,” he said. “When they come into the United States and they have their plant or factory here, there is no tariff. So we want to give them a little bit of a chance.”Trump has announced a broad range of levies on some of his country’s biggest trading partners since taking office in January, arguing that they will help tackle unfair practices — and in some cases using threats to influence policy.He recently pledged an extra 10 percent duties on all goods coming from China, and 25 percent on steel and aluminium imports.The German VDA auto lobby on Wednesday described Trump’s announcement as a “provocation” and warned that tariffs could rebound on the United States.”Further tariffs would directly hit the American economy and make products for US consumers more expensive,” said VDA chief Hildegard Mueller.- Asia imports -Experts have warned that it is often Americans who end up paying the cost of tariffs on imports, rather than foreign exporters.About 50 percent of the cars sold in the United States are manufactured within the country. Among imports, about half come from Mexico and Canada, with Japan, South Korea and Germany also major suppliers.Trump’s tariff threats were cautiously received in Asia, home to some of the main US suppliers of the potentially affected industries.Yoshimasa Hayashi, Tokyo’s top government spokesman, told reporters: “With regards to automobile tariffs, we have raised the issue with the US government, taking into account the importance of Japan’s auto industry.””Japan will first take appropriate action while carefully examining the specific details of the measures,” he added.Taiwan, a global powerhouse in semiconductor production that Trump has accused of stealing the US chip industry, also remained cautious.”The scope of products subject to tariffs has not yet been clarified. We will continue to monitor the direction of US policies and assist Taiwan’s industries,” Taipei’s economic ministry said in a statement.The island’s government had previously said it would boost investment in the United States as it sought to head off Trump’s duties.- ‘Wrong tool’ -Meanwhile a spokesperson for Malaysia’s semiconductor industry, which accounts for around 13 percent of global back-end manufacturing, on Wednesday told AFP that the United States would be “slapping themselves” with the new tariffs.Malaysia has long been a chip manufacturing hub for many US semiconductor companies.”If we (Malaysia) ship these products back to the US, it will only increase the cost of components back to the US,” Malaysia Semiconductor Industry Association president Datuk Seri Wong Siew Hai said.Speaking on Tuesday, Trump said he was pleased to see the EU “reduce their tariffs on cars to the level we have”.”The EU had 10 percent tax on cars and now they have a 2.5 percent tax, which is the exact same as us… If everybody would do that, then we’d all be on the same playing field,” he said.”The EU has been very unfair to us. We have a trade deficit of $350 billion, they don’t buy our cars, they don’t take our farm products, they don’t take almost anything… and we’ll have to straighten that out,” he added.The VDA said that any differences between specific EU and US tariff rates did not justify Washington hiking tariffs, noting that tariffs on pick-up trucks popular with US consumers were 25 percent.”Tariffs as a negotiating instrument are the wrong tool. The risk of a global trade war with negative consequences for the world economy is high,” Mueller said.

Global stock markets mostly fell Wednesday after US President Donald Trump broadened his tariff threats, stoking wider trade war fears.Trump warned the previous day that he would impose tariffs “in the neighbourhood of 25 percent” on auto imports and a similar amount or higher on semiconductors and pharmaceuticals.”Understandably this has helped drive European carmakers lower, with the likes of Mercedes-Benz, BMW and VW losing ground,” said Joshua Mahony, chief market analyst at Scope Markets. European markets all dropped, with London hit by higher-than-expected inflation figures.Tariff threats also knocked auto firms and semiconductor makers in Tokyo, dragging the index into the red.Shares in US carmaker GM fell but Ford managed a small gain.Trump’s comments widened his trade war, having earlier pledged 25 percent levies on steel and aluminium.While some observers have said that the threats are likely being used as a negotiating tool, it has nonetheless revived worries about the impact on the global economy.”It remains to be seen which of the floated tariffs will be implemented but there are now many tariff spinning plates in play,” said Deutsche Bank’s Jim Reid.Wall Street’s main three indices slid lower, with the S&P 500 hanging just below the all-time high that it set at the close of trading on Tuesday.Concerns that share valuations may be too high may also be part of the reason for the retreat in equities along with a rise in Treasury yields, noted Briefing.com analyst Patrick O’Hare. China — a key target in Trump’s tariffs policy — told the World Trade Organization on Tuesday that the United States risked triggering inflation, market distortions and even a global recession.The tariff threats added to market uncertainty since Europe and Kyiv were excluded from the first high-level talks between the US and Russia since the start of the war in Ukraine.Frankfurt’s DAX 40 index set another record high during morning trading, but broke a two-week winning streak as investors have looked forward to a business-friendly government following Sunday’s election. “The uncertainty surrounding the election is likely to negatively impact short-term price developments,” said CMC Markets analyst Konstantin Oldenburger.Asian markets struggled for direction, with Hong Kong was dragged lower by tech firms after Chinese internet giant Baidu’s fourth-quarter earnings saw a fall in revenue and a warning of near-term pressures.The sector has helped the Hang Seng Index surge around 15 percent since the turn of the year, spurred by the emergence of Chinese startup DeepSeek’s new chatbot that has upended the AI universe.President Xi Jinping’s meeting with China’s top business leaders this week — including Alibaba co-founder Jack Ma — added to the optimism amid hopes of a fresh boost for the private sector.The Shanghai stock market rose while Taipei was weighed by a sell-off in chip giant TSMC.In other company news, Swiss mining and commodity trading giant Glencore dropped more than six percent on London’s FTSE 100 after it reported a net loss for 2024.Shares in Dutch medical device maker Philips dropped more than 11 percent on the Amsterdam stock exchange after it posted worse-than-expected losses. – Key figures around 1630 GMT -New York – Dow: DOWN 0.3 percent at 44,428.59 pointsNew York – S&P 500: DOWN less than 0.1 percent at 6,126.71New York – Nasdaq Composite: DOWN 0.1 percent at 20,016.10London – FTSE 100: DOWN 0.6 percent at 8,712.53 (close)Paris – CAC 40: DOWN 1.2 percent at 8,110.54 (close)Frankfurt – DAX: DOWN 1.8 percent at 22,433.63 (close)Tokyo – Nikkei 225: DOWN 0.3 percent at 39,164.61 (close)Hong Kong – Hang Seng Index: DOWN 0.1 percent at 22,944.24 (close)Shanghai – Composite: UP 0.8 percent at 3,351.54 (close)Euro/dollar: DOWN at $1.0407 from $1.0445 on TuesdayPound/dollar: DOWN at $1.2572 from $1.2608Dollar/yen: DOWN at 151.61 from 152.09 yenEuro/pound: DOWN at 82.78 pence from 82.85 penceWest Texas Intermediate: UP 0.9 percent at $72.47 per barrelBrent North Sea Crude: UP 0.7 percent at $76.40 per barrelburs-rl/cw

US President Donald Trump expanded his offensive against trading partners on Tuesday, threatening 25 percent tariffs on imported cars, and similar or higher duties on pharmaceuticals and semiconductors.Trump has announced a broad range of levies on some of the biggest US trading partners since taking office in January, arguing that they will help tackle unfair practices — and in some cases using the threats to influence policy.He recently pledged 10 percent duties on all goods coming from China, and 25 on steel and aluminum imports.At his Mar-a-Lago resort in Florida, he told reporters that tariffs on the automobile industry will “be in the neighborhood of 25 percent,” with specifics to come around April 2.Asked about threatened tariffs on pharmaceuticals and chips, Trump said: “It’ll be 25 percent and higher, and it’ll go very substantially higher over (the) course of a year.”He added he wanted to give affected companies time to bring their operations to the United States, saying that he had been contacted by major firms that “want to come back”. The president also said that Washington’s trading partners could avoid being taxed by investing in factories in the United States. “We want to give them time to come in,” he said. “When they come into the United States and they have their plant or factory here, there is no tariff. So we want to give them a little bit of a chance.”Experts have warned it is often Americans who end up paying the cost of tariffs on imports, rather than foreign exporters.About 50 percent of the cars sold in the United States are manufactured within the country. Among imports, about half come from Mexico and Canada, with Japan, South Korea and Germany, also major suppliers.- Asia cautious -Trump’s tariffs threats have been cautiously received in Asia, home to some of the main US suppliers of the potentially affected industries. Yoshimasa Hayashi, Tokyo’s top government spokesman, told reporters “with regard to automobile tariffs, we have raised the issue with the US government, taking into account the importance of Japan’s auto industry.”Japan will first take appropriate action while carefully examining the specific details of the measures,” he added.Taiwan, a global powerhouse in semiconductor production that Trump has accused of stealing the US chip industry, also remained cautious.”The scope of products subject to tariffs has not yet been clarified. We will continue to monitor the direction of US policies and assist Taiwan’s industries,” Taipei’s economic ministry said in a statement.The island’s government had previously said it would boost investment in the United States as it sought to head off Trump’s duties.Meanwhile a spokesperson for Malaysia’s semiconductor industry, which accounts for around 13 percent of global back-end manufacturing, told AFP on Wednesday the United States would be “slapping themselves” with the new tariffs.Malaysia has long been a chip manufacturing hub for many US semiconductor companies.”If we (Malaysia) ship these products back to the US, it will only increase the cost of components back to the US,” Malaysia Semiconductor Industry Association president Datuk Seri Wong Siew Hai said.- EU visit -Trump said he was pleased to see the EU “reduce their tariffs on cars to the level we have.””The EU had 10 percent tax on cars and now they have a 2.5 percent tax, which is the exact same as us… If everybody would do that, then we’d all be on the same playing field,” he said.”The EU has been very unfair to us. We have a trade deficit of $350 billion, they don’t buy our cars, they don’t take our farm products, they don’t take almost anything… and we’ll have to straighten that out,” he added.The US trade deficit in goods with the EU was over $235 billion in 2024, according to Commerce Department data. On the other hand, the United States had a trade surplus of $109 billion with the EU in services in 2023, the last year with consolidated data, according to European Commission data. The European Commissioner for Trade and Economic Security, Maros Sefcovic, arrived in Washington on Tuesday and will meet with Trump’s Commerce Secretary Howard Lutnick and US Trade Representative nominee Jamieson Greer.

European and Asian markets mostly fell Wednesday after US President Donald Trump broadened his tariff threats stoking wider trade war fears.Trump warned the previous day that he would impose tariffs “in the neighbourhood of 25 percent” on auto imports and a similar amount or higher on semiconductors and pharmaceuticals.”Understandably this has helped drive European carmakers lower, with the likes of Mercedes-Benz, BMW and VW losing ground,” said Joshua Mahony, chief market analyst at Scope Markets. European markets all dropped, with London hit by higher-than-expected inflation figures.Tariff threats also knocked auto firms and semiconductor makers in Tokyo, dragging the index into the red.Trump’s comments widened his trade war, having earlier pledged 25 percent levies on steel and aluminium.While some observers have said that the threats are likely being used as a negotiating tool, it has nonetheless revived worries about the impact on the global economy.”It remains to be seen which of the floated tariffs will be implemented but there are now many tariff spinning plates in play,” said Deutsche Bank’s Jim Reid. China — a key target in Trump’s tariffs policy — told the World Trade Organization on Tuesday that the US risked triggering inflation, market distortions and even a global recession.The tariff threats added to market uncertainty since Europe and Kyiv were excluded from the first high-level talks between the US and Russia since the start of the war in Ukraine.While all three main indexes on Wall Street rose on Tuesday, with the S&P 500 closing at a record high, Asia struggled to maintain momentum.Hong Kong was dragged lower by tech firms after Chinese internet giant Baidu’s fourth-quarter earnings saw a fall in revenue and a warning of near-term pressures.The sector has helped the Hang Seng Index surge around 15 percent since the turn of the year, spurred by the emergence of Chinese startup DeepSeek’s new chatbot that has upended the AI universe.President Xi Jinping’s meeting with China’s top business leaders this week — including Alibaba co-founder Jack Ma — added to the optimism amid hopes of a fresh boost for the private sector.The Shanghai stock market rose while Taipei was weighed by a sell-off in chip giant TSMC.In other company news, Swiss mining and commodity trading giant Glencore dropped around seven percent on London’s FTSE 100 after it reported a net loss for 2024.Shares in Dutch medical device maker Philips dropped around 11 percent on the Amsterdam stock exchange, after it posted worse-than-expected losses. Meanwhile Britain’s BAE Systems profits, boosted by government defence spending, did not meet analysts’ highest expectations, with shares dipping around one percent. – Key figures around 1100 GMT -London – FTSE 100: DOWN 0.4 percent at 8,733.61 Paris – CAC 40: DOWN 0.8 percent at 8,140.18Frankfurt – DAX: DOWN 0.7 percent at 22,678.58Tokyo – Nikkei 225: DOWN 0.3 percent at 39,164.61 (close)Hong Kong – Hang Seng Index: DOWN 0.1 percent at 22,944.24 (close)Shanghai – Composite: UP 0.8 percent at 3,351.54 (close)New York – Dow: FLAT at 44,556.34 (close)Euro/dollar: DOWN at $1.0432 from $1.0445 on TuesdayPound/dollar: DOWN at $1.2590 from $1.2608Dollar/yen: DOWN at 151.80 from 152.09 yenEuro/pound: UP at 82.87 pence from 82.85 penceWest Texas Intermediate: UP 0.6 percent at $72.29 per barrelBrent North Sea Crude: UP 0.6 percent at $76.28 per barrel

Vietnam’s parliament approved plans on Wednesday for an $8 billion rail link from its largest northern port city to the border with China, boosting links between the two communist-ruled countries and making trade easier.The new rail line will run through some of Vietnam’s key manufacturing hubs, home to Samsung, Foxconn, Pegatron and other global giants, many of whom rely on a regular flow of components from China.The route will stretch 390 kilometres (240 miles) from the port city of Haiphong to the mountainous city of Lao Cai, which borders China’s Yunnan province, and will also run through the capital Hanoi.Construction of the railway was backed in a vote by 95 percent of parliamentarians in Vietnam’s rubber-stamp National Assembly, an AFP journalist in the chamber said.China will provide some funding through loans for the project, which is expected to cost more than $8 billion. It is one of two railway lines to China that Vietnam plans as part of its “Two Corridors, One Belt” initiative, which connects to Beijing’s Belt and Road global infrastructure programme.A spokesperson for China’s foreign ministry said on Wednesday the two countries were “working to expedite the construction of the connection line” between Lao Cai and the Chinese border city of Hekou.Both sides had “held multiple discussions on advancing railway connectivity”, Guo Jiakun told a regular news briefing but referred reporters to “relevant authorities” for details.The approval comes just over a year after the neighbours pledged during a visit to Vietnam by President Xi Jinping to deepen ties as Beijing sought to counter growing US influence with Hanoi.Vietnam’s transport infrastructure is considered relatively weak, with a road network struggling to keep up with demand and an underdeveloped rail system. The country is an increasingly favoured destination for foreign businesses looking for an alternative to China, but low-quality infrastructure is seen as holding back surging investment.Dan Martin, international business adviser of Dezan Shira & Associates, said the new rail link could help smooth out bumps in international supply chains caused by the current reliance on slow and costly trucks that are “prone to border bottlenecks”.”China supplies much of the raw material that fuels Vietnam’s manufacturing sector, and keeping that pipeline steady is critical,” he told AFP.  “A modern rail link cuts through… inefficiencies, ensuring goods move smoothly whether they’re flowing into Vietnam’s factories or heading to global markets via Haiphong’s port,” he said.- 2030 deadline -Vietnam says a feasibility study for the Haiphong-Lao Cai railway will begin this year and it wants the line finished by 2030, although the country has a history of overruns on major infrastructure projects.The line, spanning nine provinces and cities, will follow roughly the route of an existing rail track built during the French colonial period.Trains can currently run on that rail at just 50 kilometres an hour (30 mph), but Vietnam says the new line will accommodate both passenger and freight cars with speeds of up to 160 kph.Pham Thu Hang, spokesperson for the ministry of foreign affairs, said last week the rail link would “promote economic, trade, investment and tourism cooperation between the two countries as well as in the region”.It comes just three months after Vietnam approved plans for a $67 billion high-speed railway from Hanoi to Ho Chi Minh City, another much-needed boost to infrastructure that is expected to drive growth.That railway, which will stretch more than 1,500 kilometres (930 miles) from the capital in the north to Vietnam’s business hub in the south, will reduce the current journey time by rail from 30 hours to around five.The other line to China, which has not yet been approved by parliament, will connect Hanoi to Lang Son province, which borders China’s Guangxi region, travelling through another area packed with global manufacturing facilities.The two countries signed more than 30 agreements, including a pledge to develop rail links, during Xi’s visit to Hanoi.Vietnam has long pursued a “bamboo diplomacy” approach, striving to stay on good terms with both China and the United States.It shares US concerns about Beijing’s increasing assertiveness in the contested South China Sea but also has close economic ties with China.burs-isk-mjw/je/pbt