Displaying items by tag: Trade
Taiwanese electronic colossus Foxconn has now admitted that it is currently reassessing its plans to invest in a new $10bn factory in Wisconsin.
When first announced it was hailed as a significant win for US President Donald Trump who had promised rust-belt states that he would breathe new life into the manufacturing sector and create millions of jobs.
However, that deal now may be dead in the water due to the ongoing dispute between Beijing and Washington that is becoming increasingly toxic.
Foxconn manufactures devices and components for a host of the world’s leading technology leaders including Apple, and had previously unveiled its plans to build the $10 billion plant to make LCD flat screen televisions which would also in turn create around 13,000 new jobs.
The investment was vetoed by $4bn in controversial tax concessions which were embraced by Trump who said the deal was another illustration of his campaign promise which was to put America ‘first’ again. Trump has also tried to strong arm other tech giants like Apple offering them tax breaks if they move manufacturing back to the United States.
Trump appeared with Foxconn CEO Terry Gou at a groundbreaking ceremony proclaiming and stated that, "This is just the beginning. This is one of the largest plants in the world."
However, the global economic climate roiled by Trump's trade war with China where Foxconn has most of its assembly lines -- has led officials at the Taiwanese company to look again at the plans.
"The global market environment that existed when the project was first announced has changed. As our plans are driven by those of our customers, this has necessitated the adjustment of plans for all projects, including Wisconsin," Foxconn said in a statement Thursday.
However, Foxconn has moved swiftly to deny it’s pulling out of the proposed investment and released an official statement saying it is remained committed to building its science park in Wisconsin and wants to help create 13,000 jobs".
Woo told Bloomberg, "We’re not scrapping our plans at all. However, given the global economic conditions and the trade tensions between China and the US, its’ impossible to say that we can always stay committed to our original plan without any change."
Chinese telecommunications vendor ZTE has announced that it has reached a deal with the US Commerce Department over the trade sanctions that threatened to put the powerful conglomerate out of business.
ZTE has vowed to clean up its act in light of the decision by the US after weeks of protracted talks between officials in Beijing and Washington. In April, the US Commerce Department prohibited the sale of crucial US components to ZTE for a period of seven years. It had found that the Chinese telecommunications colossus had failed to take the appropriate actions against its staff in relation to the trade violation it engaged in with Iran and North Korea.
ZTE chairman Yin Yimin said the company had to start holding the relevant people to account for the trade violations in 2016, and said the ban imposed in April highlighted the issues within its internal management systems.
In a statement released to Bloomberg, the chairman said, “We must deeply realize that this issue in essence mirrored problems in our compliance culture and management. We should hold relevant people accountable and avoid similar issues in the future."
It has been disclosed that part of the deal agreed between the US and ZTE will see the Chinese vendor pay a $1bn penalty, with another $400m in escrow to cover possible future violations. In addition to this, ZTE will also be forced to overhaul its entire board of directors and must hire outside legal compliance specialists who will in turn report directly to the Commerce Department for 10 years.
Once ZTE has executed these changes Washington will strike the company from a sanctions list. China's foreign ministry on Friday offered a muted response to the ZTE deal, but a spokeswoman added the following statement, "We also hope the US can provide a fair, equal and friendly atmosphere for Chinese enterprises' investments and operations there.”
Facebook launched its ‘Marketplace’ feature in October last year – a place where users can trade and sell goods to one another without leaving the social media platform. The feature is now expanding to 17 countries across Europe, having already launched in the US, Australia, Canada, Chile, Mexico, New Zealand and the UK.
Marketplace will be introduced to Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden and Switzerland. Facebook said the feature will “give more people a single destination on Facebook to discover, buy and sell goods in their local communities.”
The Facebook feature could challenge the likes of eBay and Craigslist. According to Facebook, the new platform is a way to formalize what its some 2 billion users have already been doing in Facebook Groups for years – buying and selling goods with other users.
“Whether you’re a new parent looking for baby clothes or a collector looking for a rare find, you can feel good about buying and selling on Marketplace because it’s easy to view the public profiles of buyers and sellers, your mutual friends, and how long they’ve been on Facebook,” the company said in a release.
In May this year, more than 18 million new items were posted for sale in Facebook’s Marketplace in the United States, and that number continues to grow, the company said. The platform is in fact a second attempt by Facebook to launch a Marketplace, after a failed attempt in 2007.
The best thing about the new Marketplace feature is that Facebook is not charging its users for it. However, the selling platform could have the future potential to further monetize Facebook’s global base, and keep them on the network, AFP reported.
ZTE has suffered fresh woe just hours after it disclosed details of its settlement with the US government in which it was found guilty of breaching US export control rules in North Korea and Iran from 2010 - 2016. The Chinese vendor released its forecasted loss for 2016 - and it makes grim reading for stakeholders - ZTE have forecast a loss of $343m for 2016.
The latest financial announcement comes hot on the heels of US Justice, Commerce and Treasury department imposing a whopping fine of $892m on ZTE - with a further $300m suspended for seven years. That projected loss reflects the financial provision the company made against the $892m penalty payable as part of the settlement of the US case. It has since emerged that without that financial provision, the Chinese telecommunications colossus would have reported a net profit of CNY3.83 billion in 2016 - which would have represented a 19% increase from results in 2015.
ZTE had issued a warning almost a month ago in relation to the outcome of the US trade sanctions and what impact they would have on its financial results - and they indicated that a settlement would subsequently result in a heavy fine.
For the first quarter of 2017, ZTE expects its net profit to be between CNY1.15 billion and CNY1.25 billion, an increase of between 21 per cent and 31.7 per cent from a year earlier. Revenue is forecast to increase between 10 per cent and 20 per cent from a year earlier, driven by higher revenue in its carrier networks and consumer businesses, the company said in a statement.
CEO Zhao Xianming said that coupled with recent efforts to streamline operations and its leadership around 5G, "ZTE will be well-positioned for positive overall performance. The company anticipates continued growth and business expansion over the next several years as we continue to work with our partners around the world."