European Union officials intend to discuss trade relations in sectors other than cars during the second round of trade talks with China, with the aim of reducing the Union's large trade deficit with Beijing, after reaching an agreement on Chinese hybrid car exports to the European market.
Polish Undersecretary of the Ministry of Economic Development and Technology, Michal Baranowski, said before the start of the European Union trade ministers’ meeting in the Irish capital, Dublin, on Friday: “A number of countries will identify the sectors of interest to them” in the upcoming talks with China.
Bloomberg News Agency indicated that the European Union is determining its next steps after Beijing agreed to place a ceiling on its exports of hybrid cars to Europe, after negotiations that lasted for months between the two sides, with the aim of reducing Europe’s huge trade deficit with China.
The European Union seeks to make the Chinese hybrid car export agreement a model to be emulated in other sectors, which it sees as being harmed by the influx of low-cost Chinese goods into the European market. “We have to realize that this is just the beginning,” Baranowski said.
It is noteworthy that trade tensions between the European Union and China have escalated with the expansion of the Union's trade deficit, which currently exceeds one billion euros ($1.1 billion) per day, with expectations that it will continue to grow. European officials say this situation hurts domestic European companies that manufacture products such as cars, chemicals and machinery.
“We must answer our question: Will Europe retain control over strategic sectors that are important to us?” said Lithuanian Foreign Minister Kestutis Podrez, who also referred to the pharmaceutical, semiconductor and quantum computing technology sectors.
So far, the European Union is trying to combine pressure on China with continuing the latest round of negotiations that began in June.
These talks with Beijing resulted in an agreement on hybrid cars that places a maximum limit on the number of Chinese hybrid cars that can be exported to the European Union at the level of 350,000 cars. Beijing also pledged to open its market to certain goods coming from the European Union.
In a statement to reporters on Thursday, European Union Trade Commissioner Maroš Šefčovič said: “We are examining all other areas where our industry is under pressure, and of course this process is currently underway.”
While the China-EU talks are scheduled to continue until early next year, many EU member states are calling for faster and more comprehensive measures.
During the European summit held last week, European Union leaders stressed the necessity of imposing similar restrictions on other Chinese products, preferring that this be done in cooperation with Beijing, but preserving the option of unilateral action if necessary. The leaders also approved new trade powers that allow the European Union to prevent foreign countries from accessing its huge market in the event of an all-out trade war.
The French official in charge of the trade file, Nicolas Fourisier, told reporters on Friday: “The Chinese authorities understand the situation well when we are clear in our speech, and when we adhere to our positions firmly.” “This is something we have not done for a long time.”
Traders said the closure of two major border crossings between Pakistan and Iran halted LPG imports into Pakistan; This caused a shortage of supplies and an increase in prices.
The Jabad-Rimdan and Taftan crossings were closed on October 17, and Pakistan and Iran gave different reasons for the move. The government of the Pakistani province of Balochistan, where the two crossings are located, said that the temporary closure aims to deal with security concerns and reduce smuggling, while the Iranian Ministry of Foreign Affairs attributed the decision to technical problems.
According to the Pakistan LPG Association, the country imports about 7,000 tons of LPG daily from Iran.
Shamsul Haq, former president of the Gwadar Chamber of Commerce and Industry, said that more than 4,000 tons per day enter through the Jad-Remdan crossing alone, and added: “These imports have stopped.”
He also pointed out that more than 1,000 Pakistani containers loaded with potatoes, bananas and rice bound for Iran were stranded. But on Wednesday, the Jabad-Remdan crossing was opened for Pakistani exports of perishable goods.
Traders said that the price of a 12-kg liquefied petroleum gas cylinder rose within days to 7,000 Pakistani rupees ($25) from 4,500 rupees ($16), and it may continue to rise if this disruption continues.
Al-Haq said that hundreds of trucks, including those carrying liquefied petroleum gas tanks, were stuck on both sides of the border. The Quetta Chamber of Commerce and Industry advised its members to stop submitting new applications to Iran until further notice.
The Pakistani army chief visited Tehran this week and discussed border issues with Iranian officials. The Iranian Foreign Ministry said that consultations are underway to resume trade.
US stock futures fell, on Friday, under the weight of the rise in oil prices to their highest levels since May, at a time when efforts to bring the United States and Iran back to the negotiating table falter, exacerbating concerns about the continued disruption of global energy supplies and rising inflationary pressures.
Standard & Poor's 500 futures fell by 0.3 percent, while Dow Jones Industrial Average futures fell by 0.6 percent, and Nasdaq futures fell by 0.1 percent.
In energy markets, Brent crude, the global oil standard, rose by 1.6 percent to $114.92 per barrel, on Friday, while US crude rose by 1.8 percent to $101.22. These gains come in the wake of a 4 percent jump in the price of Brent during Thursday’s trading, after it rose from less than $97 a barrel at the beginning of this month, amid uncertainty surrounding the date when the war with Iran will end and the global energy sector will regain its normal activity.
The repercussions of the rise in oil prices extended to American consumers, as gasoline prices returned to rising. The average price of a gallon of regular gasoline in the United States increased by two cents to $4.29 on Friday, according to the American Automobile Association, compared to $3.07 a year ago.
The cost of artificial intelligence is putting pressure on technology stocks
In parallel with the turmoil in energy markets, concerns about the rising cost of investing in artificial intelligence remained a pressure factor on stocks during the current week, despite the selling wave partially subsiding in early trading on Friday.
Shares of companies related to artificial intelligence are exposed to sharp fluctuations, in light of growing concerns that the high borrowing costs necessary to build data centers and purchase advanced chips will increase the financial burden on companies and limit the investment momentum witnessed by the sector.
Meta Platforms shares fell slightly in pre-market trading on Friday, despite the company announcing quarterly revenues that exceeded analysts’ expectations, while profits fell below estimates. Shares of the parent company of Facebook and Instagram ended Thursday's session down 7 percent.
Meta also announced the creation of a new class of shares to raise the funds necessary to finance its investments in artificial intelligence and cover other expenses, in a move that highlights the amount of funding that the race requires to develop these technologies and expand the associated infrastructure.
On the other hand, Tesla shares recorded a slight increase in pre-market trading on Friday, after closing down by 3.1 percent in the previous session. The electric car company announced quarterly profits that exceeded analysts' expectations during the summer, but its revenues fell below estimates.
As for “Nvidia”, its stock fell by 4.4 percent at Thursday’s close, affected by the wave of selling that affected technology and artificial intelligence stocks, before achieving limited gains in pre-market trading on Friday.
Nvidia's stock movements are of exceptional importance to the American market, as the company leads Wall Street in terms of market value, and the impact of its stock on the performance of the Standard & Poor's 500 index exceeds the impact of any other stock.
