Trump delays some tariffs on Chinese imports

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The US is delaying imposing tariffs on some imports from China until 15 December because of “health, safety, national security and other factors”.

The products include mobile phones, laptops, video game consoles, some toys, computer monitors, and certain footwear and clothing.

The surprise news from the United States Trade Representative  office sparked a rally in share prices.

Other items facing a 10% tariff will go ahead as planned on 1 September.

US President Donald Trump, speaking to reporters, said that the delay was in part to avoid hitting US shoppers this Christmas.

The USTR’s announcement was released minutes after China’s Ministry of Commerce said Vice Premier Liu He had conducted a phone call with US trade officials.

 

Technology investors welcomed news of the exemptions, pushing an index of chip stocks up 2.8%. Retailers and industrial shares also rose, with General Electric up 4.4%.

On Wall Street, the three main share indexes were up more than 2% at one stage. The Dow Jones and S&P 500 finished 1.4% ahead, while the tech-dominated Nasdaq finished up 1.9% – led by a 4% rise in Apple.

In the UK, stocks exposed to global trade also rose, with miner Glencore closing up 2.3%.

Mr Trump said on 1 August he would impose a 10% tariff on $300bn of Chinese goods, blaming China for not following through on promises to buy more American agricultural products.

He also personally criticised Chinese President Xi Jinping for failing to do more to stem sales of the synthetic opioid fentanyl amid an opioid overdosing crisis in the US.

But in a tweet on Tuesday, Mr Trump hinted that he was expecting something in return, suggesting that China’s failure to “buy big” from US farmers could be about to change.

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The USTR’s announcement comes amid growing concerns about a global economic slowdown. Goldman Sachs said on Sunday that fears of the US-China trade war leading to a recession were increasing.

Some analysts said Tuesday’s delay does not mean the trade war is over. Elena Duggar, associate managing director at credit rating agency Moody’s, said: “This seeming de-escalation in ongoing tensions may be a temporary reprieve… Relations between the world’s two largest economies will remain contentious, punctuated with occasional steps towards compromise.”

Earlier on Tuesday, China’s chief trade negotiators, Vice Premier Liu He and Commerce Minister Zhong Shan, spoke to their US counterparts, Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer.

The Xinhua news agency said that the Chinese officials issued “a solemn protest” against the punitive duties set to come into effect on 1 September. Mr Lighthizer and Mr Liu have scheduled another telephone call in two weeks.

The two sides were due to hold another round of meetings in Washington in September, but the deterioration in relations in the past two weeks cast doubt on whether the talks would take place.

Additional details and lists of the specific product types affected by the announcement are due to be published by USTR later.

City trader
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The pound is heading for two-year lows against the dollar as markets react to continuing Brexit uncertainty and signs that the UK economy is slowing.

Ms Foley also cited a survey by Bloomberg  which showed that economists are expecting the economy to contract in the second quarter – for the first time since 2012.

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An update on the UK economy is due on Wednesday when growth data for the three-month period to May will be released, and economists polled by Reuters expect growth of 0.1%.

That would be slower than the 0.5% rate seen in the first quarter of the year.

The market is also focusing on the Conservative leadership contest. Under Theresa May’s premiership, the market had thought the chances of a no-deal were slim, but Ms Foley said that was not the expectation if Boris Johnson wins the leadership battle.

“That’s what the market is worried about,” she said.

Neil Mellor, currency strategist at Bank of New York Mellon, said that another factor at play was a strengthening in the dollar ahead of testimony by the head of the US central bank. This was helping to push the pound lower.

Jerome Powell, chair of the Federal Reserve, testifies to the US Congress on Wednesday. Mr Mellor said he could provide a more hawkish tone – meaning interest rate cuts were less likely – than previously expected.

Engineered in Africa: ‘We knew the talent was there’

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Christina Sass (left) with Andela employees
Image copyrightANDELA
Christina Sass (left) with Andela employees

Christina Sass learned at an early age to spot talent in new places. She went on to found Andela, a firm that recruits software engineers in Africa.

Christina Sass (left) with Andela employeesImage copyrightANDELA
Christina realised at school that talent did not depend on which community you came from

Her father, who passed away when she was in her early twenties, remained a profound influence on her, motivating her to “make things happen”. And she set about establishing Andela with co-founder Jeremy Johnson, an educational technology specialist.

They realised there was a glut of IT talent in Africa and, on the flipside, a desperate need globally for qualified software engineers with the right kinds of skills.

When they first called for applications in Lagos in 2014, after “wearing out their shoe leather” spreading the message, thousands applied from across Nigeria.

“We knew we’d find great problem solvers and logical thinkers,” she says. “We just knew the level of talent that was there.”

The numbers were whittled down by a rigorous selection process and the Andela model was born.

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Although around 80% of Andela recruits, already have degrees in computing, they all undergo six months of training to learn soft skills, like negotiation techniques and team working. Only then are they paired up with suitable clients, which have included the BBC and IBM as well as many of the Fortune 500 and Silicon Valley start-ups.

Crucially, though, the recruits don’t relocate. Instead they work remotely.

And whilst international firms pay Andela the going rate for a qualified engineer, the employees receive only a third of that. The rest goes back into Andela to support the matchmaking service and to expand the business.

“Andelans” are tied to working under these terms for four years. After that they can take up employment overseas if it is on offer, or stay on in their home countries.

Andela's Kigali officeImage copyrightANDELA
Andela employees in Kigali, Nairobi, Lagos and Kampala are paid a third of the fee the firm receives for their work

Some observers worry Andela could exacerbate the brain drain, smoothing the way for the most talented engineers to find employment outside Africa. Firms in Lagos, Kampala, Kigali and Nairobi can’t compete with the salaries and lifestyles on offer abroad. And if IT specialists have been provided with the skills, and the contacts with western firms, it may make it easier for them to leave.

“We have a love-hate relationship with Andela,” says Yinka Adegoke, Quartz’s Africa editor.

“They’ve been great for showing [that] startups in Africa can raise money, but no African startup can afford Andela.”

But while the brain drain is a real danger, agrees David Adeleke, editor of Business Insider Sub-Saharan Africa, talented workers who go overseas “often return or at least facilitate knowledge sharing and in the process, significantly help improve the ecosystems they departed.”

It’s early days to see what path most will take, but Andela says of the first batch of alumni, more than 90% are still working in Nigeria.

Ms Sass’ dream is that many of the 1,300 developers now working in hubs in Nigeria, Kenya, Rwanda, Uganda, and smaller offices in Ghana and Egypt will want to build their own start-ups, once their time with Andela is up.

“Our ultimate goal is to have Andela alumni as the next tech leaders in Africa,” she says, maybe even Africa’s own Bill Gates she muses.

But she herself is now ready to move on to new projects. She’s stepping back from her day-to-day role, though she’ll stay on as chairman of Andela’s advisory council.

Next on her agenda? “Andela operates at the high end of the skills spectrum,” she says. “I’m thinking about how do you do that for people who are not.”

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