26/03/2025

BIZ & FINANCE WEDNESDAY | MAR 26, 2025

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Malaysian Paper

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Trump to hit Venezuelan oil buyers with 25% tariff

India to scrap digital ad tax to ease US concerns NEW DELHI: India plans to scrap a contentious tax of 6% on digital advertisements that primarily affected American tech giants such as Alphabet’s Google, Meta and Amazon, aiming to ease US concerns and advance a trade pact. New Delhi’s move seeks to assuage concerns raised by Washington after President Donald Trump threatened reciprocal tariffs from April 2 on trading partners, including India, that fuelled alarm among exporters. The government proposes to abolish the 6% equalisation levy on online services, including advertising, as part of amendments to the Finance Bill 2025, a government source said yesterday. Parliament is expected to approve the bill this week, making the decision on the levy effective from April 1, the source added. During a visit last month to the United States by Prime Minister Narendra Modi, both nations agreed to work on the first phase of a trade deal by autumn 2025, targeting two-way trade of US$500 billion (RM2.2 trillion) by 2030. India’s 6% equilisation levy, or digital tax, affects online advertising services provided by foreign companies, requiring them to withhold and remit the tax to the government. The United States Trade Representative had criticised the levy targeting US companies as “discriminatory and unreasonable”, arguing that domestic companies were exempt. A US delegation led by Brendan Lynch, the assistant trade representative for South and Central Asia, is visiting India this week for talk. The decision signals an attempt to ease trade tension with the United States, said Amit Maheshwari, tax partner at AKM Global. “However, it remains to be seen whether this step, coupled with ongoing diplomatic efforts, will lead to any softening of the US stance.“ – Reuters Alibaba sees signs of start of AI bubble in US HONG KONG: Alibaba group chairman Joe Tsai said yesterday the tech giant would recommence hiring, emboldened with more confidence following President Xi Jinping’s February meeting with business entrepreneurs. He also expressed concern about some very big investment announcements in AI in the US, saying it could be the start of a bubble. Tsai lauded the rare meeting between Xi and big names in Chinese tech, including Alibaba co-founder Jack Ma, which marked a distinct thawing in Beijing’s approach to the sector. A regulatory clampdown on the industry four years ago sapped corporate appetite for investment and led to widespread layoffs. The meeting was also seen as reflecting policymakers’ concerns about slow growth and US efforts to limit technological development in China. It “was a very, very clear signal to the business community that, go ahead, reinvest in your business and also go out and hire people”, Tsai told HSBC’s Global Investment Summit in Hong Kong. He noted Alibaba’s headcount had declined for the past 12 quarters. “So I think we’ve reached the bottom, and we’re going to start to reboot and rehire.” While Alibaba has been investing heavily in artificial intelligence, Tsai said he was “astounded by the type of numbers that’s being thrown around” in the United States. “People are talking about US$500 billion, several hundred billion dollars. I don’t think that’s entirely necessary. I think in a way, people are investing ahead of the demand that they’re seeing today.” Tsai said he thought it was worrying when people began to talk about building data centers on spec, adding that he was seeing “the beginning of some kind of bubble”.. – Reuters

according to analysts and sources. Trump has made illegal migration one of the top priorities of his administration. The 25% tariff to be imposed on buyers of Venezuelan oil will take effect on April 2 and would be combined with any existing tariffs, according to the executive order. The tariff will expire one year after the country last imported Venezuelan oil, the order said. The tariff would apply to countries that buy Venezuela oil through third parties, the order said. Oil prices rose 1% on Trump’s tariff announcement, although the gains were capped as the US extended the wind down period of the Chevron license. Oil is Venezuela’s main export and China, which is already the subject of US tariffs, is the largest buyer. In February, China received directly and indirectly some 503,000 barrels per day of Venezuelan crude and fuel, some 55% of total exports. India, Spain, Italy and Cuba are other consumers of Venezuelan oil. Goldwyn said the new tariffs could have the ironic effect of increasing global demand for Russian oil. “China and India are unlikely to risk additional tariffs to access Venezuelan heavy oil, when they can buy Russian crude.” – Reuters

The two moves temporarily focus Trump’s pressure on buyers of Venezuelan crude oil other than the United States, such as China, though it is uncertain how his administration will enforce the tariff. “The United States has long abused illegal unilateral sanctions and so-called long-arm jurisdiction to grossly interfere in the internal affairs of other countries,” Chinese Foreign Ministry spokesman Guo Jiakun said yesterday. “China firmly opposes this.” David Goldwyn, president of consultancy Goldwyn Global Strategies, said the moves allow a compromise between those in the Trump administration who were concerned about pushing Western companies out of Venezuela and those, including Secretary of State Marco Rubio, who are concerned about enriching Maduro’s administration. “This potentially provides a sweet spot for both of them,” Goldwyn said. Punishing foreign buyers of Venezuela’s oil with tariffs could hit its crude exports, forcing price discounts, and have a similar effect to secondary sanctions on the country that Trump imposed during his first term in 2020. The extension of Chevron’s wind-down period would secure payments to the company for oil cargoes delivered to US customers, while avoiding a collapse in crude volumes exported from Venezuela in coming weeks, especially to the United States,

WASHINGTON: President Donald Trump on Monday issued an executive order declaring that any country buying oil or gas from Venezuela will pay a 25% tariff on trades with the United States, while his administration extended a deadline for US producer Chevron to wind down operations in the South American country. Trump’s new policy relieves some pressure on Chevron to quickly exit Venezuela after the US Treasury Department on March 4 gave it 30 days to wind down operations. Trump had issued the initial wind-down after he accused President Nicolas Maduro of not making progress on electoral reforms and migrant returns. The Treasury Department said on Monday it would wait seven more weeks until May 27 before terminating a licence that the US has granted to Chevron since 2022 to operate in sanctioned Venezuela and export its oil to the United States. Chevron’s extension came hours after Trump announced the new tariff, saying Venezuela has sent “tens of thousands” of people to the United States who have a “very violent nature”. o PresidentextendsChevron’s wind-downperiodtoMay27

A woman walking past street art posters depicting Musk and Trump on Brick Lane in London. – REUTERSPIC

Tesla’s EU sales plunge 49% year-on-year in first two months of 2025

PARIS: European sales of Tesla electric cars dropped 49% in January-February compared with the same period a year earlier, the ACEA manufacturers’ association said yesterday. Ageing models are one factor behind the plunge so far this year, but e-vehicle clients may also be refusing to buy in protest of Tesla’s billionaire owner Elon Musk since he became a key supporter of US President Donald Trump.

Union fell to 19,046 in the first two months of the year, giving the company a market share of just 1.1%, the ACEA said. In February alone, Tesla registrations were down 47% at 11,743. The sales drop came even as overall electric vehicle sales jumped 28.4% over the first two months of this year to 255,489 – for an EU market share of 15.2%. – AFP

Musk has been leading a vocal and divisive cost-cutting drive at the head of the newly created Department of Government Efficiency (DOGE). Several Tesla dealerships around the United States have been vandalised in recent weeks and the company’s stock price has plummeted over the past month. New Tesla registrations in the European