Posts Tagged ‘US Commerce Secretary Wilbur Ross’

China lowers tariffs, rejects US trade war escalation — Afraid of Trump?

May 31, 2018

China said Thursday it wanted to avoid an escalation of trade tensions with the United States, as the two sides held new talks and Beijing decided to lower some tariffs.

The overture came two days after the White House said its planned trade sanctions against China were still in the works despite the announcement of a truce following a previous round of talks earlier in May.

China has threatened to hit back with tit-for-tat tariffs on tens of billions of dollars in US goods.

© AFP/File | China has said it wants to avoid an escalation of trade tensions with the United States

A 50-strong US delegation arrived in Beijing on Wednesday for follow-up meetings, Chinese commerce ministry spokesman Gao Feng said, without proving more details.

“We hope that China and US economic and trade cooperation can benefit people in both countries, and we are not willing to see trade frictions escalate,” Gao told a regular press briefing.

The delegation is laying the groundwork for a weekend visit by US Commerce Secretary Wilbur Ross.

The Trump administration said Tuesday that US sanctions announced in March — including restrictions on Chinese investment, export controls and 25 percent tariffs on as much as $50 billion in Chinese tech exports — remain under development.

Gao slammed the proposal, saying US measures to implement investment restrictions and export controls against China “do not conform with the basic principles and spirits of the WTO (World Trade Organization)”.

“China will carefully evaluate the US measures and relevant impact and retain its rights to adopt relative measures.”

Separately, the Chinese government announced in a statement late Wednesday that it would further cut import tariffs on daily consumer goods from July 1.

The average tariff on clothing, shoes and hats, kitchenware, and sports and fitness supplies will be reduced from 15.9 percent to 7.1 percent.

The rate for home appliances such as washing machines and refrigerators will be lowered from 20.5 percent to eight percent.

– ‘No forced tech transfers’ –

Gao said China will also publish a “negative list” of foreign investment by June 30 to ease restrictions in fields including energy, resources, infrastructure and transportation. A negative list includes all the industries with foreign investment restrictions.

Beijing previously said it would relax restrictions on foreign investment in automobiles, shipbuilding and aircraft firms.

At a meeting Wednesday chaired by Premier Li Keqiang, the State Council — or cabinet — also decided that China would widen market access through more foreign investor-friendly measures, according to the official Xinhua news agency.

“We should raise our innovation capacity in the new round of opening up and see that all intellectual property be fully protected,” Li said.

“No forced technology transfer will ever be imposed on foreign-invested enterprises and IPR (intellectual property rights) infringements will be penalised to the full extent of the law.”

Donald Trump has accused China of forcing US firms to hand over their industrial secrets to Chinese firms in order to do business in the country, a charge that Beijing has rejected.

In other measures announced by Xinhua, overseas traders will be encouraged to participate in crude oil and iron ore futures trading.

Severe measures will be taken to punish infringements, counterfeiting, commercial secret violators and trademark squatters.

AFP

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China Cuts Tariffs on Wide Range of Consumer Goods From July

 Updated on 

China will reduce tariffs on a wide range of consumer goods from July 1, the State Council said in a statement.

The tariff cuts will apply to products including clothes, washing machines and makeup. The reduction was decided at the state council on Wednesday which was chaired by Premier Li Keqiang.

The announcement came after President Donald Trump decided to move ahead with additional tariffs on $50 billion of imports from China, a move that could potentially derail the truce reached last week between the world’s two biggest economies. China hit back at that, with a foreign ministry spokeswoman saying on Wednesday that China would respond accordingly if the U.S. insisted on unilateral measures.

Read the rest:

https://www.bloomberg.com/news/articles/2018-05-30/china-cuts-tariffs-on-wide-range-of-consumer-goods-from-july-1

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German carmakers denounce Trump’s new imports threat

May 24, 2018

Volkswagen has warned the US against imposing “one-sided protectionism” after a threat of taxes on imported cars. Washington is to probe whether the dominance of foreign carmakers is a threat to US national security.

    
BMW factory in South Carolina (BMW AG)

Volkswagen on Thursday cautioned US President Donald Trump against imposing taxes on imported cars, saying that barrier-free market access was a key driver of growth, prosperity and jobs around the world.

A spokesman for the German auto giant was responding to Washington’s announcement of a new investigation into the auto trade, to see whether the dominance of foreign players is a threat to national security.

Volkswagen said “unilateral protectionism has not helped anyone in the long term,” and that “only free and fair trade ensures prosperity gains.”

Read more:  Miracle or mirage? Bosch’s diesel ‘breakthrough’

‘Avoid trade barriers’

The comments were backed up by Germany’s auto industry association VDA, who said any increase in trade barriers should be avoided.

US Commerce Secretary Wilbur Ross promised the probe would be “thorough, fair, and transparent” and would focus on “whether (auto) imports are weakening our internal economy, and may impair the national security.”

If investigators can prove that foreign car makers are harming the prospects of US car makers, it could provide the legal basis to impose tariffs on car imports.

The Wall Street Journal reported on Thursday that the tax could be as high at 25 percent. Currently the US imposes a tariff of just 2.5 percent on foreign cars, while the European Union levies a 10 percent duty on US cars.

Read more:  BMW increases R&D spending on e-cars, autonomous vehicles

Trump roars again

Trump has repeatedly vowed to impose tariffs to protect the US auto industry, having been elected in 2016 on a promise to bring back millions of lost American jobs from abroad.

The US president told his core supporters on Twitter that the hard times for US autoworkers would soon be over.

Donald J. Trump

@realDonaldTrump

There will be big news coming soon for our great American Autoworkers. After many decades of losing your jobs to other countries, you have waited long enough!

VDA noted that actual trade flows in the auto industry are different to the impression given in policy statements by Trump.

It said German car exports to the US have been falling for many years, whereas German automakers have moved production for more of their vehicles to US plants, where they are exported all over the world.

Read more:  Scandal-hit VW doubles profits in 2017

Daimler mit chinesischem Partner BAIC (picture-alliance/dpa)While the US remains a key market for Germany’s auto players, Asia is fast becoming the new priority

Germany’s factories in US

Germany’s US factories employ some 36,500 American workers, and since 2013 have ramped up production by 180,000 to more than 800,000 vehicles.

At the same time VDA admitted that some vehicle production had moved to Mexico over the past 12 months.

BMW, which along with Mercedes has expanded production capacity in the US, said in its own statement that “barrier-free access to markets is therefore a key factor not only for our business model, but also for growth, welfare and employment throughout the global economy.”

BMW’s 10,000-employee plant in Spartanburg, South Carolina, is its biggest worldwide.

The US investigation contrasts with positive trade talks between German Chancellor Angela Merkel and Chinese premier Li Keqiang during her visit to Beijing this week.

“China and Germany are on the path of promoting multilateralism and bolstering free trade,” Merkel said on Thursday.

China recently said it would cut tariffs on foreign vehicles from 25 to 15 percent.

Read more: German carmakers welcome lower import tariffs

Asia the new priority

Germany’s Center for Automotive Research (CAR) said the US auto market was already saturated, and that its importance to German carmakers would continue to shrink due to a lack of growth potential.

It said China, India and Russia were countries with great future potential.

VW already sells 40 percent of its vehicles in China, while BMW and Daimler sell just under 30 percent.

CAR restated its earlier prediction that tariffs would be massive own goal for Trump, as they would hurt the US auto industry the most.

American car manufacturers, General Motors and Fiat Chrysler, import between a quarter and half of their cars sold in the US from plants in Mexico and Canada.

Shares in BMW, Daimler and Volkswagen each slid by more than two percent in value on the Frankfurt Stock Exchange on Thursday, on news of the US probe.

Includes videos:

http://www.dw.com/en/german-carmakers-denounce-trumps-new-imports-threat/a-43912894

China prepares tech sector for battle as US trade team arrives

May 2, 2018

The first salvos in the budding US-China trade conflict struck old-school sectors like steel and agriculture, but Beijing is now bracing for moves against its strategic ambitions in hi-tech.

© GETTY IMAGES NORTH AMERICA/AFP / by Ryan MCMORROW | Microchips are among China’s biggest imports, rivalling oil, and have become a stark reminder of its dependence on US technology

AFP

As a US trade delegation heads to Beijing for talks starting Thursday, China’s race to catch up to the United States in technology looms large.

The skirmish is taking place upstream of the consumer applications made by tech giants like Google and Facebook or Alibaba and Tencent, and focusing on semiconductors, the critical building blocks of electronics.

Semiconductors, or computer chips, are the brains of electronic devices, enabling them to run programmes and store memory.

Most are made by US giants such as Intel, Qualcomm and Micron, which have decades of experience developing the integrated circuits, as well as manufacturers in US allies South Korea and Taiwan.

Chips are among China’s biggest imports, rivalling oil, and have become a stark reminder of its dependence on American technology.

Last month, Washington banned Chinese telecom and smartphone giant ZTE from purchasing crucial US components for seven years, threatening its survival, as punishment for breaking US export controls.

The US has also reportedly opened a similar probe into another Chinese telecom major, Huawei.

Both companies depend on US chips to build their gadgets and equipment, reinforcing for Beijing the need to control every piece of the technological supply chain.

China must rely on itself for core technologies, President Xi Jinping told scientists when visiting an IT firm last week.

– China can do ‘big things’ –

“In the past we had no choice but to rely on our own efforts. Back then we even created two atomic bombs and launched a satellite while tightening our belt and gritting our teeth,” he said.

China’s advantages, he said, include being able to “gather our strength to do big things”.

And that is what concerns Washington.

China’s marshalling of industrial policy to catch up in semiconductors and other technologies figures prominently in the Trump Administration’s findings against Beijing in an investigation that has led to proposed tariffs on tens of billions of dollars in Chinese goods.

The Trade Representative probe looked at Beijing’s intellectual property practices and innovation policies, with a subsequent report taking aim at its “Made in China 2025” programme, which is designed to spring China from a maker of sports shoes and denims into high-tech goods.

China relies on foreign imports for 80 percent of its chips, which Beijing intends to change.

To get there, central and local governments have sunk roughly $100 billion into building its semiconductor industry since 2014, the US report said.

About $20 billion has been funnelled through the China Integrated Circuit Industry Investment Fund. After the export ban against ZTE was announced, officials in Beijing confirmed they were mustering investment for a second national fund.

One firm to benefit recently was Hua Hong Semiconductor, a state-controlled company listed in Hong Kong that in January received a major investment from the state chip fund, with which building a $2.5 billion chip factory in the eastern city of Wuxi.

– Long way to go –

Hua Hong benefits from a lower tax rate and said in filings it expects its Wuxi venture to receive plentiful debt financing from Chinese banks, along with land subsidies and help recruiting talent from the city.

The project is just one of the fund’s more than 50 investments, with cash pouring into chip designers, new factories, and testing and materials firms across China, according to corporate records.

Before boarding a plane for talks in China, US Commerce Secretary Wilbur Ross called the plan “frightening”, and noted the trade deficit was in part “inspired by evil practices”.

Washington has blocked several attempts by Chinese firms to buy up American semiconductor companies.

But even with the large outlays, China remains behind in the semiconductor race, analysts say.

“It will take many, many years for those kinds of investments to make progress,” said Cao Cong, an expert in China’s science policy at the University of Nottingham’s campus in Ningbo, noting state-led efforts may be less effective for semiconductors.

China can direct state-owned enterprises to make purchases of the large aircraft and high-speed trains it builds, Cao said, but the consumer is the end user for semiconductors.

“They don’t want to use second-rate technology,” he said.

State-led investment can also push funds the wrong way.

A decade ago, Beijing lavished funding on a breakthrough in domestic chip production called the “China chip”.

The project came crashing down when a whistleblower alerted authorities that the professor behind the programme was buying imports, etching off their markings and stamping on those of his own company.

by Ryan MCMORROW

China Retaliates Against Trump Tariffs With Duties on American Meat and Fruit — “Beijing’s response is designed to be limited and doesn’t seek to escalate tensions.”

April 2, 2018

Penalties range from 25% on American pork and eight other kinds of goods to 15% on fruit and 120 types of commodities

President Donald Trump speaking about the new steel and aluminum tariffs during a meeting with industry leaders last month. China has now responded.
President Donald Trump speaking about the new steel and aluminum tariffs during a meeting with industry leaders last month. China has now responded. PHOTO: MANDEL NGAN/AGENCE FRANCE-PRESSE/GETTY IMAGES

BEIJING—China imposed tariffs on a range of U.S. goods, following through on a promise to retaliate against the Trump administration’s penalties on imports of Chinese steel and aluminum.

The Chinese Finance Ministry said in a statement dated Sunday that the previously announced tariffs on the imports of American goods would take effect Monday.

Penalties range from 25% on American pork and eight other kinds of goods to 15% on fruit and 120 types of commodities, the ministry said.

The Finance Ministry renewed China’s criticisms of the Trump administration’s 25% tariffs on steel and 10% tariffs on aluminum under Section 232 of the Trade Act as violating global trading rules.

At the same time, the ministry suggested that Beijing’s response is designed to be limited and doesn’t seek to escalate tensions.

The tariffs on Chinese steel and aluminum “produced severe damage to our country’s interests,” the ministry statement said.

It said the Chinese penalties were being imposed “to protect our country’s interests and balance the damage created by the U.S. 232 measures.”

The Trump administration didn’t immediately comment on the Chinese action.

The back-and-forth over the U.S. steel and aluminum tariffs are part of a broader effort by the Trump administration to punish Beijing for what it sees as unfair trade practices and rally broader international support for it.

President Donald Trump has also ordered a series of actions to penalize Beijing under Section 301 of the Trade Act for the use of intimidation and other unfair practices to acquire American technology. Those actions include tariffs on as much as $60 billion in Chinese imports and filing a complaint with the World Trade Organization against Chinese technological licensing practices as well as considering other limits on Chinese investment in U.S. technology.

Chinese penalties range from 25% on American pork and eight other kinds of goods to 15% on fruit and 120 types of commodities, the Chinese Finance Ministry said.
Chinese penalties range from 25% on American pork and eight other kinds of goods to 15% on fruit and 120 types of commodities, the Chinese Finance Ministry said. PHOTO: GERRY BROOME/ASSOCIATED PRESS/FILE

U.S. and Chinese officials are engaged with one another to try to resolve the disputes, or at least prevent tensions from escalating. U.S. Treasury Secretary Steven Mnuchin is considering a trip to Beijing in the next several weeks to continue conversations with China’s economic czar, Liu He, on potential U.S. investment restrictions.

Beijing has promised retaliatory measures in response to specific actions by the Trump administration. Soybeans and other products from American farm states are high on the list of potential targets, as well as other big-ticket U.S. goods like Boeing Co. aircraft.

“It’s nothing we like to see,” said David Salmonsen, senior director of the American Farm Bureau Federation, of potential tariffs. “We know it will have some impact.”

On steel and aluminum, the U.S. has granted temporary exceptions to most every exporter to the U.S. other than China and Japan—and Tokyo is negotiating for exceptions.

To keep their access to the U.S. market, the Trump administration hopes those nations will limit their own imports of Chinese-made steel and aluminum, which is often further processed and then exported to the U.S. In doing so, the Trump administration hopes to bring broad-based pressure against Beijing to rein in excess production.

This week, the Trump administration is expected to release a list of potentially targeted products for China’s alleged intellectual-property violations. Senior administration officials have said they are looking at 1,300 different product categories, including such high-tech areas as semiconductors, communications and aerospace.

U.S. industry will have 30 days to comment. After that, the U.S. has at least 180 days to decide which products—if any—to hit with tariffs.

Write to Charles Hutzler at charles.hutzler@wsj.com

Appeared in the April 2, 2018, print edition as ‘China Retaliates With Own Tariffs.’

https://www.wsj.com/articles/china-retaliates-with-new-tariffs-on-u-s-meat-and-other-products-1522618533

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China’s Ministry of Commerce: tariffs of up to 25 per cent on 128 US products including frozen pork

April 2, 2018

Image result for pig, photos

BEIJING (REUTERS, AFP) – China has slapped extra tariffs of up to 25 per cent on 128 US products including frozen pork, as well as on wine and certain fruits and nuts, in response to US duties on imports of aluminium and steel, China’s finance ministry said.

The tariffs, to take effect on Monday (April 2), was released late on Sunday and matches a list of potential tariffs on up to US$3 billion (S$4 billion) in US goods published by China on March 23 .

China’s Ministry of Commerce (MOFCOM) said it was suspending its obligations to the World Trade Organization (WTO) to reduce tariffs on 120 US goods, including fruit. The tariff on the products will be raised to 15 per cent.

Another eight products, including pork, will now be subject to tariffs of 25 per cent, it said, with the measures effective from April 2.

China has imposed the tariffs amid escalating trade tensions between Beijing and Washington.

US President Donald Trump is preparing to impose tariffs of more than US$50 billion on Chinese goods intended to punish Beijing over US accusations that China systematically misappropriated American intellectual property – allegations Beijing denies.

China has repeatedly promised to open its economy further, but many foreign companies continue to complain of unfair treatment. China warned the United States on Thursday not to open a Pandora’s Box and spark a flurry of protectionist practices across the globe.

In a statement published on Monday morning, MOFCOM said the United States had “seriously violated” the principles of non-discrimination enshrined in World Trade Organization rules, and had also damaged China’s interests.

“China’s suspension of some of its obligations to the United States is its legitimate right as a member of the World Trade Organisation,” it said, adding that differences between the world’s two largest economies should be resolved through dialogue and negotiation.

“We hope that the United States can withdraw measures that violate WTO rules as soon as possible to put trade in the relevant products between China and the US back on a normal track,” the Commerce Ministry statement said.

“Cooperation between China and the United States, the world’s two largest economies, is the only correct choice.”

Mr Trump has temporarily suspended the tariffs for the European Union as well as Argentina, Australia, Brazil, Canada, Mexico and South Korea.

Beijing has so far held fire against major US imports such as soybeans or Boeing aircraft – items that state-run daily the Global Times suggested should be targeted.

The nationalistic newspaper said in an editorial last week that China has “nearly completed its list of retaliatory tariffs on US products and will release it soon”.

“The list will involve major Chinese imports from the US,” the newspaper wrote, without saying which items were included.

“This will deal a heavy blow to Washington that aggressively wields the stick of trade war and will make the US pay a price for its radical trade policy toward China,” the Global Times wrote.

Despite the rhetoric, US Commerce Secretary Wilbur Ross on Thursday suggested the new measures on intellectual property were a “prelude to a set of negotiations”.

The United States ran a US$375.2 billion deficit with China last year.

ECB minutes highlight policymakers’ fears over currency wars — Is the Trump administration was deliberately trying to engage in currency wars?

February 22, 2018

Image may contain: skyscraper, sky and outdoor

Claire Jones in Frankfurt
Financial Times (FT)

The extent of European officials’ concerns over the weakness of the dollar was laid bare on Thursday in a set of European Central Bank accounts that highlighted fears that the US administration was deliberately trying to engage in currency wars.
The accounts of the ECB’s January monetary policy vote also reveal that the governing council’s hawks pushed for a change in the bank’s communications, saying economic conditions were now strong enough to drop a commitment to boost the quantitative easing programme in the event of a slowdown.Mario Draghi, ECB president, last month hit out at US Treasury secretary Steven Mnuchin’s claim that a weak dollar was good for the American economy, saying Washington needed to uphold the rules of the international monetary system, which forbid nations from deliberately devaluing their currencies.

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Image result for Mario Draghi, photos

Mario Draghi

The remarks were seen as a signal that the US could ditch its strong dollar policy — and in so doing damage euro exports and lower imported inflation. US President Trump has since reaffirmed the strong dollar policy.

The accounts of the January ECB meeting, published on Thursday, show Mr Draghi’s fears were widely shared among the bank’s decision makers. “Concerns were . . . expressed about recent statements in the international arena about exchange rate developments and, more broadly, the overall state of international relations,” the account said. “The importance of adhering to agreed statements on the exchange rate was emphasised.” Those agreements explicitly rule out competitive devaluations.

The volatility in the euro was, the account said, “a source of uncertainty which required monitoring”.

The decline in the greenback following Mr Mnuchin’s remarks led the euro to soar to $1.25 in the days following the January 25 meeting of the ECB. The euro is now trading below $1.23.

The minutes highlighted dissent over the bank’s communications on its policy intentions, an element of what policymakers dub “forward guidance”.

The dissent was over the ECB’s promise to boost QE should economic conditions disappoint or financial conditions worsen.

“Some members expressed a preference for dropping the easing bias regarding the [QE programme] from the governing council’s communication as a tangible reflection of reinforced confidence in a sustained adjustment in the path of inflation,” the account said. “However it was concluded that such an adjustment was premature and not yet justified by the stronger confidence.”

The central bank is now buying €30bn of bonds a month under the €2.5tn QE programme.

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https://www.ft.com/content/40eecbfa-17cc-11e8-9376-4a6390addb44

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US ‘not concerned’ with short term dollar value: Mnuchin — “We are not looking to get into trade wars, on the other hand we are looking to defend America’s interests.”

January 25, 2018

AFP

© AFP/File | US Secretary of Treasury Steven Mnuchin speaks during the daily press briefing at the White House in Washington, DC, January 11, 2018

DAVOS (SWITZERLAND) (AFP) – US Treasury Secretary Steven Mnuchin on Thursday said he had no particular worry about the dollar’s value “in the short term”, a day after he sent the US currency plummeting by appearing to back a weaker greenback.”I thought my comment on the dollar was actually quite clear yesterday… we are not concerned with where the dollar is in the short term, it is a very liquid market,” Mnuchin told journalists at the World Economic Forum in Davos.

“We believe in free currencies and that there are advantages and disadvantages where the dollar is in the short term. So I thought that was clear,” the former Goldman Sachs banker said.

He added that over time for dollar, “the long term reflects the strength in the US economy?”.

The dollar was relatively stable in European trading Thursday morning after taking a battering on the back of Mnuchin’s comments Wednesday, with analysts suggesting it looked part of the Trump administration’s “America First” policy to help US exporters.

Mnuchin also defended the White House’s tough talk on trade, which he said was consistent with its long-term agenda.

“We are not looking to get into trade wars, on the other hand we are looking to defend America’s interests,” he said.

This came after US Commerce Secretary Wilbur Ross defended new tariffs and warned Washington would be prepared to fight back in the future against countries it felt had flouted the rules.

Minutes after latest Mnuchin’s comments, at 0845 GMT, the euro was stable at $1.2402.

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US, Chinese firms sign $9bn in deals during Trump visit

November 8, 2017

AFP

© AFP | US President Donald Trump plans to use the three-day trip to press Chinese President Xi Jinping on China’s massive trade surplus with the United States

BEIJING (AFP) – US and Chinese companies signed nearly 20 deals worth a total $9 billion on Wednesday at the start of President Donald Trump’s state visit to Beijing.

US Commerce Secretary Wilbur Ross and Chinese Vice Premier Wang Yang oversaw a signing ceremony at the Great Hall of the People but they did not immediately give details about the 19 deals.

Wang said the agreements were merely a “warmup” before Trump and Chinese President Xi Jinping oversee their own ceremony on Thursday involving bigger deals, including in exports of natural gas and soybeans.

Trump plans to use the three-day trip to press Xi on China’s massive trade surplus with the United States, which slightly fell in October to $26.6 billion, according to official Chinese data released on Wednesday.

“Addressing the imbalance in China trade has been the central focus of collaborative discussions between President Trump and President Xi,” Ross said.

“Achieving fair and reciprocal treatment for the companies is a shared objective,” he said.

For his part, Wang said: Economic deals are “an important ballast for the overall bilateral relationship”, adding he believed they would contribute to its “stabilisation”.

Rich and famous in the Paradise Papers

November 7, 2017

AFP

© AFP/File | Bono from U2 has said he is “distressed” after being caught up in the Paradise Papers leaks

PARIS (AFP) – Apple, Bono and Queen Elizabeth II are just a few of the big names and companies revealed in the Paradise Papers leak to have shifted money across the globe to cut tax.

The spotlight on the tax affairs of the rich and powerful comes after a trove of documents was released by the US-based International Consortium of Investigative Journalists (ICIJ), detailing secretive offshore deals that, while not illegal, are embarrassing for those concerned.

Here are some of the most well-known names caught up in the controversy:

– Politics –

– Britain’s Queen Elizabeth II has, through the Duchy of Lancaster which provides her income and handles her investments, placed around £10 million ($13 million, ?11.3 million) of her private money in funds held in the Cayman Islands and Bermuda.

The funds were reinvested in an array of businesses, including controversial rent-to-own retailer BrightHouse which has been accused of exploiting the poor.

– US Commerce Secretary Wilbur Ross holds a 31 percent stake in maritime transport company Navigator Holdings through a complex web of offshore investments.

Navigator Holdings runs a lucrative partnership with Russian energy giant Sibur, linked to President Vladimir Putin’s inner circle. Russia is subject to US sanctions.

– In Canada, Prime Minister Justin Trudeau’s top fundraiser and senior advisor Stephen Bronfman, heir to the Seagram fortune, moved some $60 million to an offshore haven in the Cayman Islands.

– Brazil’s economy and agriculture ministers, Henrique Meirelles and Blairo Maggi, are also cited in offshore companies in tax havens.

– Celebrities –

– U2 frontman Bono is shown in the leak to own a stake in a Maltese company that bought in 2007 a Lithuanian shopping mall via a Lithuanian holding company, which may have broken tax rules by using an unlawful accounting technique.

– Britain’s four-time Formula One champion Lewis Hamilton avoided paying taxes on a private jet, receiving a £3.3 million VAT refund in 2013 after it was imported into the Isle of Man, a low-tax British Crown Dependency.

– Multinationals –

– Technology giant Apple shifted much of its offshore wealth from Ireland to the Jersey tax haven in the British Isles to adapt to the tightening of Irish tax laws in 2015.

– US sportswear giant Nike used a loophole in Dutch fiscal law to reduce, via two companies based in the Netherlands, its tax rate in Europe to just two percent compared to the 25 percent average for European companies.

– The taxi-hailing ap Uber and the manufacturer of Botox, the Allergan pharmaceutical laboratory, allegedly used similar methods to Nike.

– The Paradise Papers also reveal that Russian companies with links to the Kremlin invested hundreds of millions of dollars in Twitter and Facebook.

The Internet giants are under fire, notably in the US Congress, for the use of their platforms to spread Russian rumours during the 2016 US presidential election.

Paradise Papers: Wilbur Ross on reported Russia links — ‘There is nothing whatsoever improper’

November 7, 2017

BBC News

US Commerce Secretary Wilbur Ross: ‘There is nothing whatsoever improper’

Donald Trump’s commerce secretary says there is “nothing improper” about his business links to Russian figures who are currently under US sanctions.

Wilbur Ross was accused of misleading senators after leaked documents showed his interests in a firm in which some shareholders have ties to the Kremlin.

He told the BBC that the US had not sanctioned the company, Sibur, so “there’s nothing wrong with that”.

Mr Ross also denied he had failed to disclose the information.

Earlier, Democratic Senator Richard Blumenthal called the revelations of the Kremlin links “inexcusable”.

They come as part of a huge leak of financial documents, dubbed the Paradise Papers, revealing how the powerful and ultra-wealthy, including the Queen’s private estate, secretly invest vast amounts of cash in offshore tax havens.

What did Wilbur Ross do, according to the leaks?

The leaks show he has investments in shipping firm Navigator Holdings, which earns millions a year transporting oil and gas for Sibur. Two major Sibur shareholders have been sanctioned by the US:

  • Russian billionaire Gennady Timchenko, who has at least 12 companies connected to him
  • The Russian natural gas company, Novatek, belonging to Leonid Mikhelson

Another key Sibur shareholder is President Vladimir Putin’s son-in-law, Kirill Shamalov, who holds a 3.9% stake in the firm. While he is not subject to sanctions, his father, Nikolai, is.

Graphic showing Wilbur Ross: The Russian connection?
Presentational white space

Mr Ross has not disputed the revelations, telling the BBC: “There’s nothing whatsoever improper about Navigator having a relationship with Sibur.”

“If our government decided to sanction them, that would be a different story,” he continued.

He said he had disclosed the business links to the office of government ethics, and denied misleading the confirmation hearing committee when he took office.

He said he had never met any of the figures concerned.

The US imposed some sanctions after Russia annexed Crimea in 2014. Others were imposed last year for alleged interference in the US presidential election.

The commerce department earlier said Mr Ross had “been generally supportive of the administration’s sanctions of Russian and other entities”.

What’s the problem then?

Prior to being confirmed in office as commerce secretary, Wilbur Ross did not reveal to Congress the full details of his company holdings.

According to the leaks, he retains a financial interest in Navigator Holdings via a number of companies in the Cayman Islands, some of which he did disclose at the time of his confirmation.

However, under the disclosure rules he did not have to declare his interest in Navigator Holdings.

Ex-US sanctions policy co-ordinator Daniel Fried says it would be a mistake for any US official to do business with Sibur

But questions will be raised about Mr Ross’s potential conflicts of interest and whether his ties undermine US sanctions against Russia.

“Our committee was misled, the American people were misled by the concealment of those companies,” Democratic Senator Richard Blumenthal told NBC Newsafter the revelations came to light.

Mr Blumenthal has called for an investigation into the treasury secretary’s links to President Putin’s son-in-law.

The leaks come as an investigation led by special counsel Robert Mueller into Russian connections to Donald Trump’s 2016 campaign team continues.

Mr Trump’s presidency has been dogged by allegations that Russians colluded to try to influence the outcome of the election. He has called the allegations “fake news”.

How close is Ross to Trump?

They have known each other for more than a quarter of a century. Mr Ross played a key part in a pre-packaged bankruptcy deal – an agreement between a company and its creditors – for Mr Trump’s Atlantic City casino, the Taj Mahal, in the 1990s.

He stepped in to represent the angry bondholders but liked Donald Trump’s style.

Mr Ross, according to Trump biographer David Cay Johnston, was the key negotiator preventing Donald Trump from “being swept into the dustbin of history because he saw the value in the Trump name”.

“If it hadn’t been for Wilbur Ross, Donald Trump would not be in the White House.”

How close is Ross to Navigator Holdings?

WL Ross & Co, which was founded by Wilbur Ross, appears to have maintained a close relationship with the shipping company.

On the night that he was nominated as commerce secretary, Mr Ross was congratulated on his promotion by the senior management of Navigator Holdings at a New York restaurant, Bloomberg reports.

Mr Ross reportedly told the CEO of Navigator: “Your interest is aligned to mine. The US economy will grow, and Navigator will be a beneficiary.”

Another key Navigator customer has been PDVSA, the Venezuelan state oil company. It was targeted by US sanctions this year.

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Timeline: Wilbur Ross’s links with Sibur

November 2012: Navigator sign charter deal with Sibur. Mr Ross becomes Navigator board member

March – November 2014: He remains a board member as the US sanctions Russia for annexing Crimea

November 2014: Mr Ross leaves Navigator’s board with Ross group partner Wendy Teramoto taking his place until 2017

2015: Navigator increases business with Sibur, with energy firm accounting for 9.1% of its total revenues (compared to 5.3% in 2014)

2016: Figures show Sibur remains among Navigator’s top five clients, predominantly exporting Russian gas to Europe and potentially providing significant income to sanctioned Putin allies

2017: Navigator doubles the fleet it uses on Sibur exports to four

What else do the Paradise Papers reveal?

Paradise Papers explainer box
  • About £10m ($13m) of the Queen’s private money was invested into offshore accounts in the Cayman Islands and Bermuda. Read more here
  • A key aide of Canada’s PM has been linked to offshore schemes that may have cost the nation millions of dollars in taxes, threatening to embarrass Justin Trudeau, who has campaigned to shut tax havens. Read more here
  • A former UK Conservative party deputy chairman and a significant donor, Lord Ashcroft, may have ignored rules around how his offshore investments were managed. Read more here
  • How questions were raised about the funding of a major shareholding in Everton FC. Read more here
  • An oligarch with close links to the Kremlin, Alisher Usmanov, may have secretly taken ownership of a company responsible for anti-money laundering checks on Russian cash. Read more here
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What are the Paradise papers?

They are a huge batch of leaked documents mostly from offshore law firm Appleby, along with corporate registries in 19 tax jurisdictions, which reveal the financial dealings of politicians, celebrities, corporate giants and business leaders.

The 13.4 million records were passed to German newspaper Süddeutsche Zeitung and then shared with the International Consortium of Investigative Journalists (ICIJ). Panorama has led research for the BBC as part of a global investigation involving nearly 100 other media organisations, including the Guardian, in 67 countries. The BBC does not know the identity of the source.

Paradise Papers: Full coverage; follow reaction on Twitter using #ParadisePapers; in the BBC News app, follow the tag “Paradise Papers”

Watch Panorama on the BBC iPlayer (UK viewers only)

http://www.bbc.com/news/world-us-canada-41883392