China raises tariff rates for some U.S. optical fiber products, from July 11

BEIJING (Reuters) – China’s commerce ministry said on Tuesday it is raising “anti-dumping tariff rates” for some optical fiber products originating from the United States, effective on Wednesday, July 11.

Shipping containers are seen at a port in Shanghai, China July 10, 2018. REUTERS/Aly Song

The new anti-dumping tariff rates for dispersion unshifted single-mode optical fiber imported from the U.S. range between 33.3 percent to 78.2 percent, compared with 4.7 percent to 18.6 percent as set in 2011.

U.S. companies including Corning Inc, OFS Fitel, LLC and Draka Communications Americas Inc are among firms affected by the tariff change, the ministry said on its website.

Reporting by Beijing Monitoring Desk; Editing by Richard Borsuk

Fuji Xerox chief sees no breakup of Fujifilm-Xerox JV

TOKYO (Reuters) – The head of Fuji Xerox Co Ltd, the joint venture between Fujifilm Holdings Corp (4901.T) and Xerox Corp (XRX.N), on Tuesday said an escalating dispute between the partners will not lead to the venture’s dissolution.

FILE PHOTO: The Fuji Xerox logo is seen on a photocopier in this illustration photo January 19, 2018. REUTERS/Thomas White/Illustration/File Photo

“I’m confident a breakup will not happen because that wouldn’t make sense (for Xerox) in terms of the energy, money and time it would take to do so,” Fuji Xerox President Kouichi Tamai told Reuters in an interview.

Photocopier maker Fuji Xerox, 75 percent owned by Japan’s Fujifilm and the rest by U.S. copier firm Xerox, is central to a months-long battle between the partners over a $6.1 billion merger combining Xerox with the 56-year-old venture.

Xerox in May pulled out of the proposed merger prompting Fujifilm to file a lawsuit in June. Xerox subsequently said it may not renew its technology agreement with Fuji Xerox.

The U.S. firm, which relies on Fuji Xerox for most of its office copiers, also said it would start sourcing products from new vendors for sale directly to customers in Fuji Xerox’s primary Asia-Pacific market.

For Fuji Xerox, a breakup with Xerox could result in the loss of over $1 billion in revenue. But Tamai said turning to other vendors would be disadvantageous for Xerox.

“That would increase costs for Xerox,” he said. “It is my responsibility to convince Xerox that it is cheaper and more reasonable to source products from us.”

“My mission is to persuade Xerox executives that the merger would be the best solution for both companies,” he said. “Daily interactions with them actually have given me a feeling that many at Xerox actually support the merger.”

Reporting by Makiko Yamazaki and Yoshiyasu Shida; Editing by Chris Gallagher and Christopher Cushing

Japan’s Takeda gains U.S. approval for $62 billion Shire buy

TOKYO (Reuters) – Takeda Pharmaceutical Co Ltd on Tuesday said it has received U.S. approval for its $62 billion acquisition of London-listed Shire Plc, taking the Japanese firm one step closer to its goal of becoming a global top 10 drugmaker.

Shire branding is seen outside their offices in Dublin, Ireland, April 25, 2018. REUTERS/Clodagh Kilcoyne

Takeda in a press release said it received unconditional clearance from the United States Federal Trade Commission.

FILE PHOTO: Takeda Pharmaceutical Co’s logo is seen at its new headquarters in Tokyo, Japan, July 2, 2018. REUTERS/Kim Kyung-Hoon/File Photo

The Tokyo-listed firm is still awaiting approval from regulators in China, the European Union and elsewhere, as well from shareholders of both parties.

Chief Executive Christophe Weber has been working to persuade investors about the deal’s cost-saving merits. However, concerns of the financial burden the combined company will carry has weighed heavily on Takeda’s stock price.

Takeda shares closed flat on Tuesday ahead of the announcement. The stock is down 16 percent since the firm first said at the end of March it was considering bidding for Shire.

The drugmaker expects the deal to close in the first half of 2019.

Reporting by Sam Nussey; Editing by Sherry Jacob-Phillips and Christopher Cushing

VW names Sedran as head of commercial vehicles

FRANKFURT (Reuters) – Volkswagen (VOWG_p.DE) has named Thomas Sedran to lead its commercial vehicles division, VW said on Tuesday, confirming media reports.

FILE PHOTO: Mechanic staff work on the production line of Volkswagen e-Golf in the Glaeserne Manufaktur plant in Dresden, Germany May 8, 2018. REUTERS/Matthias Rietschel/File Photo

Currently VW’s head of strategy, Sedran will assume his new post on Sept. 1, it said in a statement. He replaces Eckhard Scholz, who is leaving at his own request.

Sedran joined VW in 2015, after heading General Motors’ (GM.N) Chevrolet and Cadillac brands in Europe.

A person familiar with the matter had told Reuters earlier that VW was set to name Sedran as head of its commercial vehicles division, which makes vans, light commercial vehicles and pick-up trucks.

Sedran’s appointment is the second management change VW announced this week.

On Monday VW announced that Stefan Sommer, former chief executive of automotive supplier ZF Friedrichshafen, would become its procurement chief from January 1, 2019.

Reporting by Arno Schuetze and Maria Sheahan; editing by Jason Neely

U.S. earnings hopes and trade war lull keep world shares near three-week high

LONDON (Reuters) – World shares hovered near three-week highs on Tuesday, supported by optimism about U.S. company earnings and expectations that global economic growth can withstand trade tensions, although political bickering kept British markets on the backfoot.

The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany, March 9, 2018. REUTERS/Staff/Remote

Wall Street was set for a firmer opening after enjoying its best session in a month on Monday, its gains filtering across Asia, where bourses from Hong Kong to Tokyo ended the day firmer.

European shares also rose, with a pan-European equity index up 0.2 percent after touching a two-week high on Monday, while MSCI’s all-country equity index touched a three-week high before easing back as Chinese shares fell into the red at the close of trading.

Analysts said markets, especially in Asia, remain on edge over the possibility of an escalation in trade wars after China and the United States last week slapped tit-for-tat tariffs on $34 billion worth of each other’s goods.

While that has spurred fears of a global growth slowdown that would hurt equities and commodities, there have not been fresh salvos fired since. Markets also took heart from U.S. jobs data that suggest that the U.S. Federal Reserve might not tighten policy as aggressively as some feared, while German export figures and Chinese factory gate prices have offered some reassurance on economic momentum.

Above all, investors are pinning hopes on U.S. second-quarter results, which start in earnest this week and are expected to showcase growth of more than 20 percent across all sectors, thanks to recent tax cuts, high oil prices and robust growth.

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“Markets are anticipating a strong U.S. earnings season, led by energy, healthcare and tech. We are more downbeat on Europe,” said Peter Garnry, head of equity strategy at Saxo Bank in Copenhagen.

Futures for the SP 500, Dow Jones and Nasdaq pointed to a stronger opening after the previous day’s jump that was driven by banks before heavyweight lenders JPMorgan, Wells Fargo and Citi report earnings on July 13.

With banks estimated to have enjoyed a quarterly windfall of as much as $5 billion from the tax cuts, SP’s banks index posted its sharpest rise since March 26 on Monday.

Figures late on Monday also showed that U.S. consumer credit surging in May to 7.6 percent on the year, maintaining the strong economic narrative.

However, the season is being clouded by trade tensions and their impact on corporate profits, meaning analysts will scrutinize outlook statements to see whether to adjust earnings expectations for the rest of 2018.

“I doubt the upcoming earning season will carry world markets to new highs. The numbers will be strong but equity markets are dominated by the outlook and we know the outlook is clouded by the trade issue,” Garnry added.

POUNDED

Currency markets are dominated by political turmoil in London where Prime Minister Theresa May’s foreign minister and Brexit negotiator both quit on Monday in protest at her plans to keep close trade ties with the European Union after Britain leaves the bloc.

The fear is that the resignations will lead to all-out rebellion in the ruling party’s ranks, toppling May or even triggering fresh elections. While this looks unlikely now, the uncertainty saw sterling sink as much as $1.3225 at one stage before recovering to $1.3245.

“We anticipate elevated headline risks for sterling over the coming weeks,” analysts at the Commonwealth Bank of Australia told clients, though they noted that sterling’s cheap “real” valuation — against trade partners’ currencies and adjusted for inflation — could cushion it against further sharp falls.

A Bank of England rate hike may also support the pound, with markets assigning a roughly 60 percent chance of a 25 basis-point rate hike in August.

The pound’s pain helped the U.S. dollar rise off 3-1/2 week lows against a basket of currencies, but the index stayed flat on the day.

Politics dominated markets in Turkey, where President Tayyip Erdogan’s new cabinet lacked familiar market-friendly names and included instead his son-in-law as finance minister.

Turkish five-year credit default swaps (CDS), which are used to insure against default or restructuring, rose 22 bps since Monday’s close to 297 bps, although the lira bounced after suffering a 3 percent slump on Tuesday, its biggest daily fall in two years.

Meanwhile, Brent crude – up almost 20 percent this year – rose another $1 per barrel to $79 as a Norwegian oil workers’ strike added to the picture of supply shortages following output disruptions in Canada and Libya.

Money managers have raised bullish bets on crude in the week to July 3, data showed on Monday.

Reporting by Wayne Cole and Swati Pandey; Editing by Eric Meijer and Sam Holmes

Huawei says does not expect U.S. sanctions: press

PARIS (Reuters) – China’s Huawei, the world’s largest maker of telecommunication network equipment, does not see itself becoming the target of U.S. sanctions and will keep buying U.S. chips this year, one of its three rotating chairmen told a French newspaper.

FILE PHOTO: A worker adjusts the logo at the stand of Huawei at the CeBIT trade fair in Hanover, in this file picture taken March 15, 2015. REUTERS/Morris Mac Matzen/File Photo

Huawei HWT.UL, also the world’s third-largest smartphone maker, is a private company but has found itself battling perceptions of ties to the Chinese government, which it has repeatedly denied.

Several U.S. lawmakers last month claimed its research funding to American universities posed a “significant threat” to national security, the latest difficulty Huawei has faced operating in the United States.

Another major Chinese telecommunications equipment maker, ZTE Corp (000063.SZ) (0763.HK), was hit last month by a $1.4 billion settlement deal after the U.S. government said the firm broke an agreement to discipline executives who conspired to evade U.S. sanctions on Iran and North Korea.

Asked if he feared his company could also be hit by sanctions, Ken Hu, one of Huawei’s rotating chairmen, told Le Journal du Dimanche:

“It would be hard to imagine. Ten years ago we put in place a system to control our exports, which has become very efficient. Our policy is to closely implement all laws and regulations introduced by Europe, the United Nations and the United States.”

Asked if Huawei could do without U.S. components, Hu said the company’s logistical chain was international. “We must be open and choose the best technologies, the best products. We will therefore keep buying American chips this year.”

Earlier this year, U.S. lawmakers asked Alphabet Inc’s (GOOGL.O) Google to reconsider working with Huawei, which they described as a security threat. And a deal with U.S. telecom firm ATT Inc T.N to sell its smartphones in the United States collapsed at the 11th hour due to security concerns.

Reporting by Ingrid Melander; Editing by David Gregorio

Euro zone budget could be conditional on discipline: IMF’s Lagarde

AIX-EN-PROVENCE, France (Reuters) – IMF Managing Director Christine Lagarde said on Saturday that a proposed joint euro zone budget could be designed with conditions so that it does not become a no-strings-attached transfer of rich countries’ cash to poorer members.

FILE PHOTO: International Monetary Fund (IMF) Managing Director Christine Lagarde speaks at the Foreign Policy annual Awards Dinner in Washington, U.S., June 13, 2018. REUTERS/Yuri Gripas

The leaders of France and Germany agreed last month on a proposal for such a budget that would be used to smooth out economic difference between euro zone countries and stabilize their economies when facing shocks.

The Franco-German idea, at the heart of French President Emmanuel Macron’s plans for deeper euro zone integration, quickly ran into opposition from a dozen other EU countries, led by the Netherlands, concerned about how the money would be raised and used.

“This centralized budget capacity does not need to become a payment facility,” Lagarde said.

“It can very well have disciplinary conditions attached,” Lagarde said, speaking at an economic conference in the southern French city of Aix-en-Provence.

Though details remain to be hammered out, the Franco-German proposal does not speak of imposing conditions, like fiscal discipline or carrying out reforms, to benefit from the joint budget.

Their proposal does, however, call for conditions to continue to be required for access to the euro zone’s bailout fund, the European Stability Mechanism.

France and Germany have proposed that the joint budget be functional from 2021 and that it should be financed by a financial transaction tax, which other countries have already poured cold water on.

Reporting by Leigh Thomas; Editing by Ingrid Melander and Stephen Powell

China’s COSCO Shipping wins U.S. security clearance for OOIL deal

BEIJING (Reuters) – China’s COSCO Shipping Holdings (601919.SS) (1919.HK) said on Sunday a key U.S. review body has cleared its planned $6.3 billion acquisition of shipping firm Orient Overseas International Ltd (OOIL)(0316.HK) on security issues.

FILE PHOTO: Containers from China Ocean Shipping Company (COSCO) are pictured at a port in Shanghai, China, February 17, 2016. REUTERS/Aly Song/File Photo

COSCO said on June 30 that all pre-conditions for the OOIL offer made last year had been met after receiving approval by the Chinese anti-monopoly regulator. It already has approvals from European and United States anti-monopoly regulators.

In a regulatory filing on Sunday the company said the U.S. Committee on Foreign Investment in the United States had notified it that it does not have any outstanding security issues following an agreement with the U.S. government to divest the Long Beach container terminal business to a third party. COSCO said ownership of the container terminal business will be transferred to a trust while a buyer is sought.

There had been concerns the trade fight between Beijing and Washington might end up hampering major deals by U.S. or Chinese firms seeking regulatory approval.

U.S. and China on Friday implemented tariffs against each other’s goods, with no signs of a near-term resolution.

COSCO’s acquisition of OOIL will see the Chinese shipping giant become the world’s third-largest container shipping line.

The deal is the latest in a wave of mergers and acquisitions in global container shipping that has left the top six shipping lines controlling 63 percent of the market and comes at a time when the industry is experiencing a recovery after a lengthy downturn.

Reporting by Min Zhang and Se Young Lee; Editing by Elaine Hardcastle

Paypal to spend $3 billion a year on M&A: CEO to German paper

FRANKFURT (Reuters) – PayPal Holdings Inc is on the lookout for further acquisitions following its recent takeover of iZettle, the Swedish fintech startup, for $2.2 billion, in the U.S. payments company’s biggest ever deal.

FILE PHOTO: Dan Schulman, president and chief executive officer of PayPal Holdings Inc., attends the Viva Technology conference in Paris, France, June 16, 2017. To match Special Report BITCOIN-EXCHANGES/RISKS REUTERS/Benoit Tessier/File Photo

“We have a healthy balance sheet and we are ready to put it to work to buy more companies,” President and CEO Dan Schulman told Germany’s Handelsblatt business daily in an interview .

Paypal is ready to invest up to $3 billion a year on acquisitions that enable it to acquire specific capabilities, Schulman added.

“I wouldn’t rule out that we take on a bigger deal if there’s a good fit for us,” the German-language newspaper quoted Schulman as saying in extracts from an interview released from its Monday edition.

Since separating from online marketplace eBay in 2015, PayPal has shifted from mostly processing online transactions for its parent company to offering a suite of digital payment services.

Reporting by Douglas Busvine; Editing by Keith Weir

France says Europe united against U.S. tariffs as Germany eyes negotiation

AIX-EN-PROVENCE, France (Reuters) – The French government insisted on Sunday that Washington should expect united retaliation from Europe to further tariff increases after Germany signaled it was prepared to negotiate.

FILE PHOTO: French Finance Minister Bruno Le Maire walks in the courtyard as he arrives at the Elysee Palace in Paris, France, July 6, 2018. REUTERS/Regis Duvignau

With Germany’s powerful car industry facing the threat of higher U.S. duties, Chancellor Angela Merkel said last Thursday she would back a lowering of European Union levies on imports of U.S. cars.

“If tomorrow there is an increase in tariffs, like in the car industry, our reaction should be united and strong to show that Europe is a united and sovereign power,” French Finance Minister Bruno Le Maire said.

“The question is no longer whether or not there will be a trade war, the war has already started,” he added, speaking at an economic conference in Aix-en-Provence, southern France.

U.S. President Donald Trump hit the EU, Canada and Mexico with tariffs of 25 percent on steel and 10 percent on aluminum at the start of June, ending exemptions that had been in place since March.

He further escalated tensions last month with threats to impose a 20 percent import tariff on all EU-assembled vehicles, which could upend the industry’s current business model for selling cars in the United States.

“Let it be known that if we are attacked we will react collectively and we will react firmly,” Le Maire said.

The United States currently imposes a 2.5 percent tariff on imported passenger cars from the EU and a 25 percent tariff on imported pickup trucks. The EU imposes a 10 percent tariff on imported U.S. cars.

Under World Trade Organization rules, the EU cannot lower import tariffs for only U.S.-made cars. It would have to reduce them for all WTO members.

While French carmakers would be little affected by U.S. tariffs because they have little exposure to the American market, they would face stiff competition from Asian producers if EU tariffs were cut, a prospect that worries the French government.

SECOND FRONT

Le Maire also insisted the EU would overcome differences on a tax on digital giants such as Google and Apple, which have in the past booked European profits in countries with the lowest tax rates.

“Believe me, we will tax the digital giants by the end of 2018 or at the latest in early 2019 because it’s not only a question of justice but of sovereignty,” Le Maire said.

A joint Franco-German declaration agreed last month by Le Maire and his German counterpart had spoken of an EU agreement for the end of 2018.

President Emmanuel Macron’s government has invested considerable political capital in lobbying Paris’ EU counterparts to back a 3 percent tax on large firms’ digital turnover, in the face of opposition from low-tax countries.

In France, the idea plays well with companies like Google widely seen as getting away with paying lower taxes than other firms, depriving the state of revenues and putting French firms at a disadvantage.

Google France’s head Sebastien Missoffe was loudly booed on Saturday at the conference, attended by the CEOs of many of France’s biggest companies, when he said his firm had paid average corporate tax of 26 percent over the last 10 years, comfortably below the 33 percent statutory rate in France.

Reporting by Leigh Thomas and Pascale Denis; Editing by Ingrid Melander and Dale Hudson