21/04/2025

BIZ & FINANCE MONDAY | APR 21, 2025

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Boeing jet returns to Seattle from China, victim of Trump’s tariff war

SEATTLE: A Boeing jet intended for use by a Chinese airline landed back at the planemaker’s American production hub yesterday, a victim of the tit-for-tat bilateral tariffs launched by President Donald Trump in his global trade offensive. The 737 MAX, which was meant for China’s Xiamen Airlines, landed at Seattle’s Boeing Field at 6.11pm (9.11am in Malaysia), according to a Reuters witness. It was painted with Xiamen livery. The jet, which made refueling stops in Guam and Hawaii on its 8,000km return journey, was one of several 737 MAX jets waiting at Boeing’s Zhoushan completion centre for final work and delivery to a Chinese carrier. Trump this month raised baseline tariffs on Chinese imports to 145%. In retaliation, China has imposed a 125% tariff on US goods. A Chinese airline taking delivery of a Boeing jet could be crippled by the tariffs, given that a new 737 MAX has a market value of around US$55 million (RM243 million), according to IBA, an aviation consultancy. It is not clear which party made the decision for the aircraft to return to the US.

The Boeing 737 MAX plane arrives at King County International Airport in Seattle after returning from China. – REUTERSPIC

Xiamen did not respond to request for comment.

from a breakdown in the aerospace industry’s decades-old duty-free status.

been recovering from an almost five-year import freeze on 737 MAX jets and a previous round of trade tensions. Confusion over changing tariffs

India central banker warns of dwindling money market liquidity MUMBAI: India’s call money market faces risks of dwindling liquidity, posing challenges for monetary policy transmission, its central bank chief said. Reserve Bank of India Governor Sanjay Malhotra expressed concern about “asymmetries which arise on occasions between different money market rates – the rate at which RBI provides liquidity, the call money rate, the market repo rate and TREPS (tri-party repo dealing system) rate”. Banks – the entities with sole access to the RBI’s liquidity facilities, the call money market and the repo markets – must be proactive to ensure that the central bank’s liquidity measures are “promptly and seamlessly” transmitted to the broader market, Malhotra said in a speech at a conference in India on Friday that was uploaded to the RBI website on Saturday. The call money rate is an overnight interest rate at which banks and other financial institutions lend and borrow from each other. When the RBI cuts interest rates or injects liquidity, it can push down the call money rate, transmitting the central bank’s policy move to the system. Surplus liquidity in India’s has averaged 1.7 trillion rupees (RM88 billion) a day this month, reversing a four-month deficit, as the RBI stepped up its liquidity infusions to support growth. The governor also called for deepening of India’s government securities market and improving liquidity and pricing by increasing participation from various stakeholders. He said there is also a need for more proactive management of risks by different stakeholders in the derivatives market, enhancing market depth, increasing the diversity of views and fostering greater competition and efficiency. – Reuters could leave many aircraft deliveries in limbo, with some airline CEOs saying they would defer delivery of planes rather than pay duties, analysts say. – Reuters

Boeing did not immediately respond to request for comment while Japan seeks ‘fairness’ in currency talks with US The return of the 737 MAX, Boeing’s best-selling model, is the latest sign of disruption to new aircraft deliveries The tariff war and apparent U-turn over deliveries comes as Boeing has

Trump’s levies, they have been paused until early July. A 10% universal rate remains in place, as does a 25% duty on cars, a mainstay of Japan’s export-reliant economy. Nikkei Asia reported yesterday that Japan is considering relaxing auto safety rules for imports as part of its tariff negotiations with the US. Washington has long complained that Japanese safety rules are a non-tariff barrier, while Japan and many experts say Detroit automakers do not make cars suited to Japan’s roads and drivers. Asked about such accusations, Ishiba said there were differences in US and Japanese traffic and safety rules that must be taken into account. “But we also need to ensure we’re not told our (safety) rules are unfair.” He signalled a readiness to pledge bigger Japanese investment in the US, particularly in the area of energy. “As for liquefied natural gas, Australia is the biggest exporter to Japan. I believe the US is in fourth place. It’s possible we could have this increase. The question is whether the US can deliver (energy) stably.” – Reuters

o Tokyo mulls relaxing auto safety rules for imports: Report

TOKYO: Japan will emphasise “fairness” in any discussions with the US on exchange rates, Prime Minister Shigeru Ishiba said yesterday, as bilateral trade talks grab global attention in President Donald Trump’s tariff offensive. Ishiba, in a talk show on public broadcaster NHK, indicated Tokyo could buy more US energy and suggested flexibility on American accusations of non-tariff barriers to the Japanese automobile market. Trump – who unexpectedly joined the first round of US-Japan talks on Wednesday and touted “big progress” – has indicated he wants the negotiations to include his accusations that Tokyo intentionally weakens its currency to give its exporters an unfair advantage. Ishiba said specific discussions on currency policy will be made between Finance Minister Katsunobu Kato and Treasury Secretary Scott Bessent. “We’ll have to deal with this issue from the standpoint of fairness,” Ishiba said, when asked how Japan would respond if the US asked for cooperation in boosting the yen.

He did not elaborate. Japan, which denies manipulating the yen, has over the years typically fought to keep a strong yen from hurting its export-reliant economy, but it last intervened in the foreign-exchange market last year to boost its currency. Kato plans to visit Washington this week for a meeting of the Group of 20 finance chiefs on the sidelines of the spring meeting of the International Monetary Fund. He is widely expected to meet Bessent for bilateral trade talks. Some analysts say Japan could use its huge US Treasury holdings – the largest in the world at over US$1 trillion (RM4.4 trillion) – as trade leverage, but Kato this month ruled out using them as a bargaining tool. “This is something that’s based on trust between the two sides, global economic stability, as well the two countries’ economic stability,” Ishiba said when asked whether Japan would refer to its US debt holdings during the talks. Trump has hit Japan with 24% tariffs on its exports to the US although, like most of

Foreign investors increase Chinese bond holdings by 270 billion yuan SHANGHAI: Foreign institutions have increased holdings in China’s onshore bonds by more than 270 billion yuan (RM163 billion) so far this year, highlighting the appeal of the world’s second-biggest bond market, the official Xinhua news agency reported on Saturday. Foreign institutional holdings in Chinese bonds totalled 4.5 trillion yuan as of April 15, Xinhua reported, citing central bank data. But foreigners account for just around 2.4% of China’s bond market, suggesting a big potential to grow, according to the article. The People’s Bank of China will unswervingly promote bond market opening, and attract more foreign investors, as ties deepen between regions such as the Middle East, Latin America, Europe and Africa, Xinhua said. China’s efforts to lure foreign investment comes as US President Donald Trump’s global tariffs threaten to dent investor confidence in American assets. Prices of US Treasuries and the dollar index are down sharply in recent weeks, driven by concerns about recession and growing grievance against Trump’s tariff and diplomatic policies. – Reuters