Trade war weighs on China industrial profits

[Hamartia Antidote]

https://www.ft.com/content/7a7fe228-c208-11e8-95b1-d36dfef1b89a


Profit growth at China’s large industrial companies slowed to a five-month low last month in what analysts say is a sign the US-China trade dispute is hurting the world’s second-largest economy. Industrial profits rose 9.2 per cent year on year in August, according to the National Bureau of Statistics, down sharply from growth of 16.2 per cent in July. That was the slowest pace since March and marked the fourth straight month of slowing growth. Iris Pang, ING economist, said the latest data showed that the trade war between the world’s two largest economies – which escalated this week with the imposition on Monday of a new US 10 per cent tariff on about $200bn of Chinese imports – has started to sting China’s manufacturers.

“It is difficult to find an excuse not to blame the trade war,” she said, adding factories with foreign investment appeared to be among the worst hit. Ms Pang added: Foreign-owned factories have faced slower profit growth (+7.6% YoY) than Chinese-owned private enterprises (+10.0% YoY), and of course more so compared to state-owned enterprises (SOEs) at 26.7% YoY. We believe that the higher profit growth of SOEs come from some projects that could be related to fiscal stimulus, eg, railway infrastructure projects. And those no so profitable infrastructure projects, eg, anti-pollution, could be under local government financial vehicles, which are not considered as local government entities but corporate entities. Analysts at Goldman Sachs said the drop in industrial profit growth also reflected a “high base” from August 2017. While profit growth was slower in some metal manufacturing sectors and chemical and carmaking, earnings from electrical machinery manufacturing accelerated. “Looking ahead, we continue to see headwinds to industrial profit growth in the rest of the year, based on our expectation of gradual moderation in industrial production growth, as well as potentially slower [producer price] inflation,” Goldman Sachs analysts said.

 

[SBUS-CXK]

https://www.ft.com/content/7a7fe228-c208-11e8-95b1-d36dfef1b89a


Profit growth at China’s large industrial companies slowed to a five-month low last month in what analysts say is a sign the US-China trade dispute is hurting the world’s second-largest economy. Industrial profits rose 9.2 per cent year on year in August, according to the National Bureau of Statistics, down sharply from growth of 16.2 per cent in July. That was the slowest pace since March and marked the fourth straight month of slowing growth. Iris Pang, ING economist, said the latest data showed that the trade war between the world’s two largest economies – which escalated this week with the imposition on Monday of a new US 10 per cent tariff on about $200bn of Chinese imports – has started to sting China’s manufacturers.

“It is difficult to find an excuse not to blame the trade war,” she said, adding factories with foreign investment appeared to be among the worst hit. Ms Pang added: Foreign-owned factories have faced slower profit growth (+7.6% YoY) than Chinese-owned private enterprises (+10.0% YoY), and of course more so compared to state-owned enterprises (SOEs) at 26.7% YoY. We believe that the higher profit growth of SOEs come from some projects that could be related to fiscal stimulus, eg, railway infrastructure projects. And those no so profitable infrastructure projects, eg, anti-pollution, could be under local government financial vehicles, which are not considered as local government entities but corporate entities. Analysts at Goldman Sachs said the drop in industrial profit growth also reflected a “high base” from August 2017. While profit growth was slower in some metal manufacturing sectors and chemical and carmaking, earnings from electrical machinery manufacturing accelerated. “Looking ahead, we continue to see headwinds to industrial profit growth in the rest of the year, based on our expectation of gradual moderation in industrial production growth, as well as potentially slower [producer price] inflation,” Goldman Sachs analysts said.

From now on.... I will focus on every American news.

US has most to lose from trade war, China would benefit – ECB study

According to a simulation study conducted by the European Central Bank (ECB) on Wednesday, the US would suffer the most economically if it starts a global trade war while China would emerge better-off, despite retaliation, Reuters reports.

Key Findings:

‘The ECB study simulates a 10 percent U.S. tariff on all imports and an equivalent retaliation from other countries.

Estimation results suggest that the United States’ net export position would deteriorate substantially.

In this model, U.S. firms also invest less and hire fewer workers, which amplifies the negative effect.

The ECB estimates U.S. growth would be cut by more than 2 percentage points.

By contrast, China would gain by exporting more to third countries where U.S. goods are subject to tariffs, although that slight gain would be temporary and partly offset by a negative effect on confidence.”

https://www.fxstreet.com/news/us-ha...ar-china-would-benefit-ecb-study-201809260844

 

[bobsm]

Tariffs cost Ford $1 billion in profit and hurt sales in China

CNBC September 26, 2018

President Donald Trump's tariffs are hitting Ford's (F) finances hard.

The second-largest U.S. automaker has suffered $1 billion in lost profits from tariffs on metals imported to the United States, said Ford CEO Jim Hackett in an interview with Bloomberg TV on Wednesday.

The U.S. has a 25 percent tariff on steel and a 10 percent tariff on aluminum imported from several countries, an early step in an escalating trade war that threatens to raise prices on goods and deal a blow to firms in a wide range of industries, including autos.

The tariffs come at a time when Ford is trying to improve its financial health, raise its share price and sink money into developing new propulsion technologies, such as electric powertrains, autonomous driving technology, cloud computing technology for transportation and other mobility businesses.

Ford shares were down nearly one percent Wednesday morning.

"From Ford's perspective, the metals tariffs took about $1 billion profit from us," he added. "The irony is, we source most of that in the U.S. today anyways. So we are in a good place right now, but if it goes on longer there will be more damage."

The trade war is also creating difficulties for Ford's U.S. factories. Ford exports Lincoln vehicles from a plant in Louisville, Kentucky to China, where Hackett said the brand is popular. China's tit-for-tat 25 percent tariff hike, which raises the total duty to 40 percent on U.S. autos, has raised the price of the Lincoln MKC sport utility vehicle in China.

In July, Ford cut its full-year outlook, citing in part heavy losses in China in the second quarter.

"We have had to move people in that factory to other functions because of that trade problem," he said.

https://finance.yahoo.com/news/tariffs-cost-ford-1-billion-145400805.html

 

[Hamartia Antidote]

From now on.... I will focus on every American news.

You’ll have trouble beating Haidian and a few others to post it first.

Tariffs cost Ford $1 billion in profit and hurt sales in China

CNBC September 26, 2018

President Donald Trump's tariffs are hitting Ford's (F) finances hard.

The second-largest U.S. automaker has suffered $1 billion in lost profits from tariffs on metals imported to the United States, said Ford CEO Jim Hackett in an interview with Bloomberg TV on Wednesday.

The U.S. has a 25 percent tariff on steel and a 10 percent tariff on aluminum imported from several countries, an early step in an escalating trade war that threatens to raise prices on goods and deal a blow to firms in a wide range of industries, including autos.

The tariffs come at a time when Ford is trying to improve its financial health, raise its share price and sink money into developing new propulsion technologies, such as electric powertrains, autonomous driving technology, cloud computing technology for transportation and other mobility businesses.

Ford shares were down nearly one percent Wednesday morning.

"From Ford's perspective, the metals tariffs took about $1 billion profit from us," he added. "The irony is, we source most of that in the U.S. today anyways. So we are in a good place right now, but if it goes on longer there will be more damage."

The trade war is also creating difficulties for Ford's U.S. factories. Ford exports Lincoln vehicles from a plant in Louisville, Kentucky to China, where Hackett said the brand is popular. China's tit-for-tat 25 percent tariff hike, which raises the total duty to 40 percent on U.S. autos, has raised the price of the Lincoln MKC sport utility vehicle in China.

In July, Ford cut its full-year outlook, citing in part heavy losses in China in the second quarter.

"We have had to move people in that factory to other functions because of that trade problem," he said.

https://finance.yahoo.com/news/tariffs-cost-ford-1-billion-145400805.html

Already posted. You are too slow
https://defence.pk/pdf/threads/tariffs-cost-ford-1-billion-in-profit-and-hurt-sales-in-china.579096/