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Trump to unveil China tariff list this week, targeting tech goods
April 2, 2018 6:00 am|Comments (0)

WASHINGTON (Reuters) – The Trump administration this week will unveil the list of Chinese imports targeted for U.S. tariffs to punish Beijing over technology transfer policies, a move expected to intensify trade tensions between the world’s two largest economies.

U.S. President Donald Trump delivers remarks on the Infrastructure Initiative at the Local 18 Richfield Training Site in Richfield, Ohio, U.S., March 29, 2018. REUTERS/Yuri Gripas

The list of $ 50 billion to $ 60 billion worth of annual imports is expected to target “largely high-technology” products and it may be more than two months before tariffs take effect, administration officials have said.

The U.S. Trade Representative’s office needs to unveil the list of products by Friday under President Donald Trump’s China tariff proclamation signed on March 22.

The tariffs are aimed at forcing changes to Chinese government policies that USTR says results in the “uneconomic” transfer of U.S. intellectual property to Chinese companies.

The agency’s “Section 301” investigation authorizing the tariffs alleges China has systematically sought to misappropriate U.S. intellectual property through joint venture requirements, unfair technology licensing rules, purchases of U.S. technology firms with state funding and outright theft.

China has denied that its laws require technology transfers and has threatened to retaliate against any U.S. tariffs with trade sanctions of its own, with potential targets such as U.S. soybeans, aircraft or heavy equipment.

On Sunday, Beijing slapped extra tariffs of up to 25 percent on 128 U.S. products including frozen pork, as well as wine and certain fruits and nuts in response to steep U.S. tariffs on imports of aluminum and steel announced last month by the Trump administration.

Fears have arisen that the two countries will spiral into a trade war that will crush global growth.

TARGETING ‘MADE IN CHINA 2025’

U.S. technology industry officials said they expected the Trump administration’s list to target products that benefit from Beijing’s “Made in China 2025” program, which aims to upgrade the country’s domestic manufacturing base with more advanced products.

The state-led program targets 10 strategic industries for replacing imports with Chinese-made products: advanced information technology, robotics, aircraft, shipbuilding and marine engineering, advanced rail equipment, new energy vehicles, electrical generation equipment, agricultural machinery, pharmaceuticals and advanced materials.

“Foreign technology acquisition through various means remains a prime focus under Made in China 2025 because China is still catching up in many of the areas prioritized for development,” USTR said in its report justifying the tariffs.

U.S. Trade Representative Robert Lighthizer has said that preserving America’s technological edge is “the future of the U.S. economy.”

Reports that the tariff list may also include consumer goods such as clothing and footwear drew strong protests from U.S. business groups, which argued that it would raise prices for U.S. consumers.

LIMITED TIME FOR TALKS

While there have been contacts between senior members of the Trump administration and their Chinese counterparts since Trump announced his intention to impose tariffs, there has been little evidence of intensive negotiations to forestall them.

“The administration is following the Japan model from the 1980s,” said a tech industry executive. “They’ll publish a Federal Register notice of tariffs on certain products, then try to reach a negotiated settlement over the next 60 days.”During his first stint at USTR in the Reagan administration, Lighthizer employed similar tactics to win voluntary Japanese export restraints on steel and autos.

Wendy Cutler, a former deputy USTR in charge of Asia negotiations, said that addressing the sweeping intellectual property allegations identified by USTR would require major changes to China’s industrial policy. A 60-day settlement may not be realistic in that case.

“I think they’ve set up a high bar for what they need to achieve, in order not to impose these types of tariffs and investment restrictions,” Cutler said.

Reporting by David Lawder; Editing by Peter Cooney

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Consumer goods firms harness online data to tap Southeast Asia e-commerce boom
October 23, 2017 12:00 am|Comments (0)

SINGAPORE/BANGKOK (Reuters) – When diaper maker DSG International (Thailand) wants to know what its customers are thinking, it often turns to Lazada, an e-commerce firm majority-owned by Alibaba Group Holding (BABA.N).

FILE PHOTO: The Singapore Lazada website is seen in this illustration photo June 20, 2017. REUTERS/Thomas White/Illustration/File Photo

“From (their) data, we know mothers sometimes browse at night, so we can offer flash sales when we know customers are browsing,” says Ambrose Chan, the Thai company’s CEO.

Southeast Asia is the world’s fastest-growing internet market, home to 600 million consumers from Vietnam to Indonesia via Singapore, many of them tech- and social media-savvy. They are rapidly spending more time and money online. A Nielsen study in 2015 estimated Southeast Asia’s middle-class will hit 400 million by 2020, doubling from 2012.

Gross merchandise value of ecommerce in Southeast Asia will balloon to $ 65.5 billion by 2021, from $ 14.3 billion last year, predicts consultancy Frost & Sullivan.

Research firm Euromonitor forecasts internet retailing in Indonesia, for example, will more than double to $ 6.2 billion by 2021, and Thailand will increase 85 percent to $ 2.8 billion.

(For a graphic on Southeast Asia internet sales click reut.rs/2l3qULe)

Consumer goods firms, such as Unilever (UNc.AS) and Japanese cosmetics firm Shiseido (4911.T), say the e-commerce boom allows them to push deeper into markets that can otherwise be difficult to understand and tough to penetrate due to poor retail networks and infrastructure.

“Data from Lazada has been used to position certain products where consumer preferences are different. For example, Thai customers like to buy diapers in special cartons, while Malaysians prefer multiple packs,” says Chan.

To reach more customers and get a better handle on their online behavior, consumer goods companies are forging partnerships with e-commerce firms like Lazada and fashion website Zalora.

POWERFUL, INSIGHTFUL

A customer who clicked on a 50 milliliter product may instead buy a smaller 30 ml product, said Pranay Mehra, vice president, digital and e-commerce at Shiseido Asia Pacific, noting that data and online selling experience can help firms bundle offers, decide on packaging and distribution, and influence where to set up a physical presence.

“This data is very powerful and very insightful, if used properly,” Mehra added.

Unilever, whose products range from Hellmann’s mayonnaise to Dove soap, said it is seeing more demand from rural consumers in developing markets like Indonesia and Vietnam.

RedMart’s President Vikram Rupani poses at their fulfillment centre in Singapore September 22, 2017. Picture taken September 22, 2017. REUTERS/Edgar Su

“With all our e-commerce partners, we’re using data to help us find innovative solutions to unlock key barriers of high cost delivery and poor credit card penetration in remote areas,” said Anusha Babbar, e-commerce director at Unilever Southeast Asia and Australasia.

The conglomerate, which works with the likes of Singapore online grocer RedMart, Indonesia’s Blibli and Vietnam’s Tiki, said it introduced its St Ives skincare brand on Lazada after seeing a trend towards natural products and shopper search data.

DATA AND LOGISTICS

“Traditional retailers will struggle to see customer behavior,” said Lazada Thailand’s CEO, Alessandro Piscini. “We can tell if a customer is pregnant from their search behavior.”

Slideshow (10 Images)

Lazada, he said, plans to use data science to help its merchants customize offers for specific customer groups based on age, gender and other preferences.

Zalora, which sells clothing and accessories online in markets including Singapore, Malaysia and Indonesia, said it was working on ad-hoc projects with some brands to help them understand their customers based on data.

Lazada and Zalora are among the few e-commerce platforms that operate in multiple Southeast Asian countries. But the region is becoming a new battleground as Amazon (AMZN.O) and JD.com (JD.O) make beachheads in Singapore and Thailand.

Lazada Thailand will focus on partnering with fast-moving consumer goods companies to maintain its lead, Piscini said, and is expanding its logistics footprint across a region that has poor roads, clogged cities and thousands of often remote islands.

To be sure, online still contributes a tiny portion to consumer goods companies’ sales, but some local firms are going beyond partnerships and investing in their own e-commerce capabilities.

Thailand’s top consumer goods manufacturer Saha Group (SPI.BK) (SPC.BK) has seen online sales of some of its brands rise tenfold since it began a partnership with Lazada in June, but online still represents just 1-2 percent of total sales.

Saha is using e-commerce data to customize offerings.

“We now make real-time offerings to customers. Before, promotions would be seasonal,” Chairman Boonsithi Chokwatana told Reuters.

The company, whose products include instant noodles, toothpaste and laundry detergent, is investing 2 billion baht ($ 60 million) in logistics to support its e-commerce ambitions, including a 21-storey warehouse and a big data team, he said.

Reporting by Aradhana Aravindan in SINGAPORE and Chayut Setboonsarng in BANGKOJK; Editing by Ian Geoghegan

Our Standards:The Thomson Reuters Trust Principles.

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