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China Opposes Washington’s Decision On Iran Oil Sanctions

The United States quit the deal in May 2018, and renewed U.S. sanctions have hit Iran's economy and contributed to the fall of the national currency, the rial.

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Iranian oil worker
An Iranian oil worker rides his bicycle at a Tehran oil refinery. RFERL

Beijing has lashed out at a U.S. decision to impose sanctions on countries that buy Iranian oil, warning that it will intensify turmoil in the Middle East and in the international energy market.

“China firmly opposes the U.S. implementation of unilateral sanctions and its so-called long-armed jurisdiction,” Foreign Ministry spokesman Geng Shuang said at an April 23 press briefing.

The White House announced on April 22 that the United States will not renew exemptions granted in 2018 to five buyers of Iranian oil — top customer China as well as India, Turkey, South Korea, and Japan — pressuring importers to stop buying from Tehran.

The exemptions, or waivers, allowed the five countries to buy Iranian oil without facing U.S. sanctions. The White House has said that the decision to end them is intended to bring Iran’s oil exports — a key source of revenue for the authoritarian government — to zero.

The United States has said it was working with Saudi Arabia and the United Arab Emirates, two of the largest oil exporters, to ensure the market was “adequately supplied.”

China
“China firmly opposes the U.S. implementation of unilateral sanctions and its so-called long-armed jurisdiction,” Foreign Ministry spokesman Geng Shuang said at an April 23 press briefing.
VOA

Saudi Arabia, Iran’s main regional rival, welcomed the U.S. decision to end all Iran sanctions waivers by May.

“Saudi Arabia fully supports this step…as it is necessary to force the Iranian regime to end its policy of destabilizing stability and its support and sponsorship of terrorism around the world,” Foreign Minister Ibrahim al-Assaf said on April 23.

Japan has said it expects a limited impact from the U.S. decision.

“We will closely watch international oil markets and exchange views with Japanese companies involved in crude imports and may consider taking necessary measures,” Japan’s trade and industry minister Hiroshige Seko said on April 23.

Iranian Oil Minister Bijan Zangeneh said on April 23 that the United States will not succeed in cutting the country’s oil exports to zero, telling parliament that Iran will work “with all our might…toward breaking America’s sanctions.”

A spokesman for Iran’s Foreign Ministry dismissed the U.S. decision on April 22, calling sanctions “illegal” and saying that the country “did not and does not attach any value or credibility to the waivers.”

oil refinery
The White House announced on April 22 that the United States will not renew exemptions granted in 2018 to five buyers of Iranian oil — top customer China as well as India, Turkey, South Korea, and Japan — pressuring importers to stop buying from Tehran. Pixabay

The European Union said on April 23 it “regrets” the U.S. decision, warning that it would further undermine a 2015 agreement between world powers and Iran that granted Tehran sanctions relief in exchange of restrictions on its nuclear program.

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The United States quit the deal in May 2018, and renewed U.S. sanctions have hit Iran’s economy and contributed to the fall of the national currency, the rial.

The EU will “continue to abide by [the deal] as long as Iran continues with full and effective implementation,” EU foreign policy spokeswoman Maja Kocijancic said. (RFERL)

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Amid Intensifying US China Trade Dispute, Indian Exporters Eye Gains

Orient Craft’s new unit in Jharkhand, one of India’s least developed states, will employ about eight thousand workers

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US, China, Trade Dispute, Indian Exporters
Orient Craft, one of India's largest apparel exporters, says it could benefit from increased business as the US-China trade war intensifies. This building in Gurgaon on the outskirts of Delhi houses its office and one of its garment units. VOA

As work on establishing a massive garment-manufacturing unit by one of India’s leading apparel exporters enters the final stages, the company is optimistic about keeping the machines humming. Slated to begin production in August, Orient Craft’s new unit in Jharkhand, one of India’s least developed states, will employ about eight thousand workers.

Inquiries from buyers in the United States, its biggest market, have increased in recent months as a trade dispute with China intensifies, according to A.K. Jain, who heads the Commercial department at Orient Craft. That is why he is upbeat about generating new business. “This is an unbelievable blessing in disguise,” he says. “It will give us an edge.”

Exporters in India are reaping the benefits of the trade war between the world’s two biggest economies as business with both countries jumps, according to Ajai Sahai, who heads the Federation of Indian Export Organizations.

“While overall exports have gone up by nine percent, exports to the U.S. have gone up by 13 percent and to China by 32 percent,” he says. And as the confrontation escalated last week after the two countries failed to reach a deal, his optimism increased. “Since the tariff hike is now substantial from 10 to 25 percent we feel we will have more advantage in market access.”

US, China, Trade Dispute, Indian Exporters
A slowdown in the Indian economy is being attributed to a drop in consumption by an affluent middle class. VOA

India is among a handful of countries set to benefit from the U.S.-China trade dispute, a report by the United Nations Conference on Trade and Development stated in February. “The saying ‘it’s good to fish in troubled waters’ could apply to some bystander nations,” the report said, pointing out that most of the Chinese exports subject to U.S. tariffs will be captured by firms in third countries.

While China has opened its doors wider to a range of agricultural products from India such as rice and sugar, exports to the United States have increased in areas such as chemicals, pharmaceuticals, jewelry, auto components and apparel.

“In various products we were losing out to China with a very narrow margin. With the hike, we are able to offset that,” says Sahai. “That is why the tariff war has presented us an opportunity to enter markets in the U.S. in some areas we were hardly penetrating.”

But even as Indian exports benefit, trade experts warn that clouds are also gathering over New Delhi’s trade relationship with Washington. In recent months, U.S. President Donald Trump has slammed Indian duties on some U.S. goods, saying that India is not providing “equitable and reasonable access” to its markets.

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Economists also warn that an eventual slowdown in global trade due to the U.S.-China trade spat will hit all countries including India, which is already staring at an economic slowdown

Growth in the world’s fastest growing major economy flagged to 6.6 percent in the last quarter of 2018 – it’s lowest in more than a year. It is not expected to fare much better this year.

The slump is blamed on slackening domestic consumption, which powers the Indian economy. Unlike East Asian countries, which have raced ahead on the back of exports, growth momentum in India is largely based on an affluent middle class snapping up goods such as cars, refrigerators, air conditioners and other consumer goods.

But there are concerns as automobile sales, the barometer of consumption, plunged to the lowest in nearly eight years in recent months.

US, China, Trade Dispute, Indian Exporters
Like other carmakers, the Hyundai showroom in Gurgaon has witnessed a decline in sales of cars in recent months. VOA

At the Hyundai car showroom in the upscale business hub of Gurgaon, near Delhi, a range of swanky models beckon customers, but there are few to be seen. This is in marked contrast to the last three years when buoyant automobile sales helped India overtake Germany to become the world’s fourth largest automobile market. That prompted car makers such as Hyundai, Honda and Toyota to expand their presence in the country.

“In recent years, March and April used to be good months. But now 20 to 30 percent drop is there in these months also,” says Gagan Arora, business head at the Hyundai showroom. “There is a slowdown in the whole industry. New buyers are not being added so frequently.”

Economists say while rising exports to the United States and China present a silver lining, the first challenge facing India’s new government due to take office after vote counting in elections is completed this week, will be how to restore overall momentum to the economy and see why consumers are not so willing to open their wallets. (VOA)