The Week in Numbers: Trade Conflict Escalates
United States President, Donald Trump, in a bid to pressure China for trade concessions, has proposed imposing a higher 25% tariff on US$200 billion (S$270 billion) worth of Chinese imports. The increase from the previously proposed 10% duty is because China refused to meet US demands and imposed its own retaliatory tariffs on US imports. The list of goods affected will hit American consumers more than previous tariffs, with targeted goods including dog food, furniture, lighting products, printed circuit boards and building material.
However, China is unwavering, with Chinese Foreign Ministry spokesman, Geng Shuang, saying that China will take countermeasures to protects its legitimate rights. In early July, the US government imposed 25% on an initial US$34 billion of Chinese imports. Beijing retaliated in kind with matching tariffs on the same amount of US exports to China. The US is preparing to impose tariffs on another US$16 billion of goods in the coming weeks.
Meanwhile, Grab has raised another US$1 billion from investors, just over a month since it secured its last US$1 billion funding. This brings its additional funding to US$2 billion, with much of it targeted to be invested in Indonesia. This will help finance Grab’s battle with Jakarta-based rival Go-Jek, which has secured large amounts of funding in recent times itself.
Grab currently handles more than 7 million drivers, agents and merchants across 225 cities in eight countries and its app has been downloaded on more than 100 million mobile devices. The Straits Times reported that Grab was valued at just over US$10 billion at the latest transaction.
Facebook has said that it plans to monetise Whatsapp after purchasing the messenger app nearly five years ago for US$19 billion. Facebook said, “We’re introducing a solution for businesses that require more powerful tools to chat on WhatsApp and a new way for people to quickly start a WhatsApp conversation from an ad on Facebook.”
Tesla shares soared more than 12% on Wednesday after-hours trading as CEO Elon Musk said that his goal is to be profitable and cash flow positive every quarter going forward. In the quarter ended 30 June, the company reported losses of US$3.06 per share on the back of US$4 billion in revenue. Investors were also upbeat by the fact that Tesla had US$2.2 billion in cash on hand and expects it to grow in the second half of the year. The company also plans to spend less than US$2.5 billion in capital expenditures this year, compared to US$3.4 billion in 2017, marking a possible turnaround in its financial health.
Notably, Musk also started the earnings call by apologising for being rude to analysts in the prior call. Then, he called an analyst’s question “boring, bonehead” and said another question was “so dry”.
Google is building a third data centre in Singapore to meet the rapidly increasing user base in the region. The US$350 million facility in Jurong West will bring its total long-term investment here to US$850 million. Google, which employs about 1,000 people here, said that in the last three years, more than 70 million people in Southeast Asia have started getting online for the first time. The region now has more than 330 million online users, more than the entire US population (325 million).
Bank lending in Singapore rose at its fastest pace in seven months, due to an increase in business loans. Loans in the domestic banking unit stood at S$675 billion in June, up 5.9% from a year ago. Business lending rose 7% year-on-year to S$408 billion, while consumer lending rose 4.3% to S$265 billion.