Month: February 2022

The global trade regulator has issued a decision on China’s tariff countermeasures against the United States

The World Trade Organization (WTO) allowed China this week to retaliate with duties on $645 million worth of US imports per year over Washington’s failure to comply with international trade rules. The case is part of a decade-old trade dispute over US anti-subsidy duties on Chinese goods.

The dispute dates back to 2012, when Beijing applied to the WTO to challenge countervailing duties that Washington introduced between 2008 and 2012 on 22 Chinese products, including paper, solar panels, and steel wire. Beijing had initially asked the trade body to award it the right to impose tariffs on $2.4 billion of US goods but later scaled that back to $788.75 million.

“China urges the US to stop looking for excuses and immediately take action to correct its wrongdoings in trade remedy investigations against China,” Gao Feng, the spokesman for China’s Ministry of Commerce, said on Thursday, as quoted by the South China Morning Post.

READ MORE: US, China step up race for rare-earth dominance

The WTO ruling marks the second time that China has been authorized to fight back against US anti-dumping duties. In November 2019, a WTO arbitrator allowed Beijing to slap duties on up to $3.58 billion worth of US imports. In that separate case, the trade body also found fault in the way Washington determined whether Chinese products are being dumped on the US market.

The US has tariffs on more than $300 billion of Chinese goods imposed by former US President Donald Trump, most of which are still in place.

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Arizona Senator pitched a bill to legalize the token, in breach of Constitution

US Senator Wendy Rogers has introduced a bill to make bitcoin legal tender in Arizona this week. With the bill, SB 1341, the Senator is seeking to amend the list of currently accepted legal tender to include bitcoin. This would allow the use of the digital token for the payment of public charges, taxes, debt and other purposes.

However, the US Constitution does not allow individual states to create their own legal tenders. This leaves the question on whether the bill could come into effect as law. The bill would have to pass the Arizona state senate and house and then be signed into law by the State Governor Doug Dukey. However, if indeed passed, the bill could set up a precedent for other US crypto-friendly states.

Many US states have become increasingly interested in Bitcoin and cryptocurrencies in general. Florida Governor Ron DeSantis last month pitched a plan that would allow businesses in the state to pay taxes in cryptoсurrency. Legislators in Wyoming have been mulling using blockchain to boost transparency in the way public funds are spent, while Ohio in 2018 became the first US state to allow taxes on digital assets, but had to scrap the program due to concerns that it was substandard. 

READ MORE: Elon Musk dares McDonald’s to accept his ‘favorite’ crypto

New York Mayor-elect Eric Adams took one of his paychecks in bitcoin, while candidate for Texas governor Don Huffines recently said he would make bitcoin legal tender if he’s elected. Moreover, recent reports state that the US government itself has a sizable hoard of cryptotokens.

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The search for safe haven assets led to a rise in gold bar and coin purchases in 2021

A new report by the World Gold Council (WGC) has revealed that demand for the yellow metal increased to 4,021 tons last year. The growth was propelled by fourth-quarter demand, which jumped almost 50% to a 10-quarter high.

“Demand recouped much of the Covid-related losses sustained during 2020,” the WGC said.

Central bank gold buying has far outpaced that of 2020, surging 82% to 463 tons and thus lifting global reserves to a near 30-year high. The pace of buying slowed in the second half, with a 22% year-on-year decline in Q4.

According to the WGC data, demand for gold in the consumer-driven jewelry and technology sectors also recovered throughout the year in line with economic growth and sentiment. Jewelry growth was almost universal. “Gains were fueled primarily by the two global heavyweights – India and China – but decent recovery was also seen across all other regions.”

Meanwhile, global holdings of gold exchange-traded funds (ETFs) fell by 173 tons in 2021, in sharp contrast to 2020’s record 874-ton increase.

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“Gold’s performance this year truly underscored the value of its unique dual nature and the diverse demand drivers. On the investment side, the tug of war between persistent inflation and rising rates created a mixed picture for demand. Increasing rates fueled a risk-on appetite among some investors, reflected in ETF outflows,” said WGC Senior Analyst EMEA Louise Street.

On the other hand, she said, a search for safe haven assets led to a rise in gold bar and coin purchases, buoyed by central bank buying.

“Declines in ETFs were offset by demand growth in other sectors. Jewelry reached its highest level in nearly a decade as key markets like China and India regained economic vibrancy. We expect similar dynamics to influence gold’s performance in 2022, with demand drivers fluctuating according to the relative dominance of key economic variables,” Street noted.

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Deliveries more than doubled as energy crisis tightens grip

The amount of liquefied natural gas (LNG) running from entry terminals to the European gas transmission system has reportedly set a new monthly record in January, hitting the highest for this month since records began in 2011.

Some 405 million cubic meters of gas were delivered to Europe as of January 28, marking an enormous increase of 110% compared to the annual average for this date over the past five years, according to data from the Gas Infrastructure Europe trade group, as quoted by TASS.

The capacities of re-gasification of LNG and further injections of the fuel into pipelines in Europe are currently loaded at 67.4% of the maximum, the group’s data shows.LNG stocks in European gas storage tanks are 5% above the five-year average, which is thought to be quite high for the end of January.

Earlier this week, the WSJ reported that more than two-dozen tankers loaded with LNG were en route from the US to Europe, lured by high prices in the region, with another 33 ships also likely to head to the EU.

The European energy crunch, which has sent gas and power prices soaring, was exacerbated when storage tanks in the EU dropped to their lowest seasonal levels in more than ten years. The decline was attributed to longer-than-usual maintenance at Norwegian fields and to Russia restocking its own inventories.

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On January 27, the loading levels of gas reserves in underground storage facilities in Europe dropped to 39.22%, which is 15.6% less than the annual average for this date over the past five years. The storage tanks currently contain 42.34 billion cubic meters, 15.7 billion cubic meters less than in 2021.

Additionally, the latest speculation over probable military conflict between Russia and Ukraine continues fueling concerns about the supply of Russian gas. The US and Western allies have pledged to impose a new series of anti-Russian sanctions in the event of an invasion, the very idea of which has been repeatedly rejected by Moscow. The sanctions, reportedly, may target Russian energy sales.

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The nation’s renewable energy sector is expected to grow further

China’s National Energy Administration has announced that 2021 was the fifth consecutive year that newly installed wind and solar farms across the country accounted for over 50% of additional power capacity. 

Statistics show new solar farms added a record 54.9 gigawatts of power last year, which is 14% more than in 2020. Wind power capacity growth, however, declined by a third to 47.6GW after a record 71.7GW was installed in 2020. The decline was a result of a tariff subsidies phase-out for onshore wind farms.

The combined wind and solar farms installation volume of 102.5GW last year accounted for 58% of additional power capacity in the country, compared to 63% in 2020 and between 51% and 55% from 2017 to 2019.

“China may have resorted to stabilizing coal supply in the short term, and balancing competing energy goals is still challenging, but it does not mean it is diverting away from its long-term climate change goals,” Miaoru Huang, research director at energy and commodities consultancy Wood Mackenzie, was quoted as saying by the South China Morning Post.

READ MORE: US, China step up race for rare-earth dominance

She projected that the nation will add close to 120GW of new solar and wind capacity in 2022, up 20% from last year.

China aims to reach a total wind and solar capacity of 1,200GW by 2030, almost double the 635GW in place at the end of last year. It also plans to increase the contribution of non-fossil fuels to total energy consumption to 25% by 2030.

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