AFP – The United States (US) government gave automakers a reprieve on Friday when finalising electric vehicle (EV) tax credit rules, by letting cars that contain Chinese graphite qualify for the consumer credits through 2026.

The confirmation came as the Treasury Department and Internal Revenue Service published final rules on the clean vehicle provisions under US President Joe Biden’s landmark climate action plan, the Inflation Reduction Act (IRA).

Washington has been seeking to reduce its burgeoning EV industry’s reliance on China.

Starting this year, new rules came into effect restricting Chinese content in batteries if they were to qualify for EV tax credits of up to USD7,500.

From 2025, a qualifying clean vehicle cannot contain critical minerals from businesses controlled by a foreign entity of concern.

But in the final rules, the Biden administration also gave automakers another two years to improve sourcing of materials such as graphite that are considered tough to trace to their origin.

“The final rules being issued today strengthen and secure supply chains and provide certainty for manufacturers and taxpayers,” said the Treasury Department.

President of the Alliance for Automotive Innovation John Bozzella, a Washington lobby representing carmakers, said the rules appear to recognise the realities of the global supply chain.

He added they provide “temporary flexibility in terms of where the critical minerals in EV batteries can be sourced”.

“That’s helpful as more automotive supply chains and battery production is localised to the US and our allies,” he said.

But chairman John Moolenaar of the House Select Committee, cautioned that the rule deepens the country’s reliance on China, urging the Biden administration to “reverse course”.

AFP – The Wall Street Journal (WSJ) will shift its Asia headquarters from Hong Kong to Singapore, in an letter announcement this week to staff.

The United States (US) newspaper said its decision comes after other foreign firms have reconsidered their operations in Chinese financial hub Hong Kong.

WSJ Editor-in-Chief Emma Tucker said in a letter to staff that the shift would also involve an unspecified number of layoffs.

Announcing changes to the WSJ’s Asia operations, Tucker wrote,: “Some of these changes are structural. We are bringing together our business, finance and economics coverage. Some are geographic. We are shifting our centre of gravity in the region from Hong Kong to Singapore, as many of the companies we cover have done.”

On the staff changes, she added, “Consequently, some of our colleagues, mostly in Hong Kong, will be leaving us. It is difficult to say goodbye, and I want to thank them for the contributions they have made to the Journal.”

The union for WSJ employees International Association For Property and Evidence Inc said in a statement that it was “sorry to learn that eight reporters from the Hong Kong and Singapore offices have been laid off from the company”.

AP – Google’s preeminence as an Internet search engine is an illegal monopoly propped up by more than USD20 billion spent each year by the tech giant to lock out competition, United States (US) Justice Department lawyers argued at the closings of a high-stakes antitrust lawsuit.

Google, on the other hand, maintains that its ubiquity flows from its excellence, and its ability to deliver results customers are looking for.

“It would be an unprecedented decision to punish a company for winning on the merits,” Google’s lawyer John Schmidtlein, said late on Friday afternoon in summation of the company’s closing arguments.

Justice Department lawyer Ken Dintzer told the judge “today must be the day” for him to step in and stop Google’s monopolistic behaviour, which he likened to the tactics used by Microsoft two decades ago that prompted a similar antitrust battle.

The US government, a coalition of states and Google all made their closing arguments on Friday in the 10-week lawsuit to US District Judge Amit Mehta, who must now decide whether Google broke the law in maintaining a monopoly status as a search engine.

Much of the case, the biggest antitrust trial in more than two decades, has revolved around how much Google derives its strength from contracts it has in place with companies like Apple to make Google the default search engine preloaded on cellphones and computers.

At trial, evidence showed that Google spends more than USD20 billion a year on such contracts. Justice Department lawyers have said the huge sum is indicative of how important it is for Google to make itself the default search engine and block competitors from getting a foothold.

Google responds customers could easily click away to other search engines if they wanted, but that consumers invariably prefer Google. Companies like Apple testified at trial that they partner with Google because they consider its search engine to be superior.

Google also argues the government defines the search engine market too narrowly. While it does hold a dominant position over other general search engines like Bing and Yahoo, Google said it faces much more intense competition when consumers make targeted searches.

For instance, the tech giant said shoppers may be more likely to search for products on Amazon than Google, vacation planners may run their searches on AirBnB, and hungry diners may be more likely to search for a restaurant on Yelp.

And Google has said that social media companies like Facebook and TikTok also present fierce competition.

During Friday’s arguments, Mehta questioned whether some of those other companies are really in the same market. He said social media companies can generate ad revenue by trying to present ads that seem to match a consumer’s interest. But he said Google can place ads in front of consumers in direct response to queries they submit.

“It’s only Google where we can see that directly declared intent,” Mehta said.

Schmidtlein responded social media companies “have lots and lots of information about your interests that I would say is just as powerful.” The company has also argued its market strength is tenuous as the Internet continually remakes itself.

Earlier in the trial, it noted that many experts once considered it irrefutable that Yahoo would always be dominant in search. Today, it said that younger tech consumers sometimes think of Google as “Grandpa Google”.

Government lawyers also argued the tech company should be sanctioned for the “systemic destruction of documents” they argue was done to purposefully hide evidence of monopolistic intent and practices.

Trial evidence showed that Google lawyers recommended employees ensure their work chats were not saved because of their potential legal implications.

AP – Wall Street capped a choppy week of trading on Friday with the best day for the stock market in over two months, as traders welcomed cooler-than-expected United States (US) employment data as a sign that inflationary pressures on the economy are easing.

The S&P 500 rose 1.3 per cent, its best day since late February. The benchmark index also erased its losses for the week.

The Dow Jones Industrial Average rose 1.2 per cent. The Nasdaq composite ended two per cent higher, reflecting strong gains by technology sector stocks, which accounted for much of the rally.

The nation’s employers added 175,000 jobs last month, down sharply from the blockbuster increase of 315,000 in March, according to the Labor Department. The latest hiring tally came in well below the 233,000 gain economists had predicted. Meanwhile, average hourly earnings, a key driver of inflation, rose less than expected.

The modest increase in hiring last month suggests the Federal Reserve’s (Fed) aggressive streak of rate hikes may be finally starting to take a bigger toll on the world’s largest economy. That may help reassure the Fed that inflation will ease further, which could move the central bank closer to lowering interest rates. “The demand for labour is slowing, which will eventually ease inflation pressures, giving the Fed some leeway to cut rates later this year,” said Chief Economist for LPL Financial Jeffrey Roach.

“Slower payroll growth and fewer hours worked imply the economy is slowing at a measured pace. This jobs report is consistent with the soft landing narrative.”

Treasury yields in the bond market mostly fell following the jobs report. The yield on the 10-year Treasury, which lenders use as a guide for pricing home loans, eased to 4.5 per cent from 4.59 per cent late on Thursday. The two-year yield, which moves more closely with expectations for the Fed, fell to 4.81 per cent from 4.88 per cent.

The US economy is in a tight spot, where the hope is that it remains strong enough to stay out of a recession but not so strong that it worsens the already stalled progress on inflation.

That is essentially the “soft landing” the Fed is hoping to achieve as it tries to cool the rate of inflation to its target of two per cent. Inflation at the consumer level stood at 3.5 per cent in March, far below the peak of 9.1 per cent nearly two years ago.

AP – Nippon Steel said on Friday it has postponed the expected closing of its USD14.1 billion takeover of United States (US) Steel by three months after the US Department of Justice requested more documentation related to the deal.

Tokyo-based Nippon Steel Corp said the deal, already approved by US Steel’s shareholders, is still expected to go through.

“Nippon Steel will continue to fully cooperate with the examination of the relevant authorities,” it said in a statement.

The sale has drawn opposition from US President Joe Biden’s administration on economic and national security grounds, and from former president Donald Trump, the likely Republican presidential candidate in November’s election.

The new timing could push the closing beyond the election, but Nippon Steel denied the delay was related to that.

Initially the deal was supposed to have closed by September. Now it will close by December, meaning it could still close as early as September, according to a company spokesperson, who requested the anonymity customary at Japanese companies.

More than 98 per cent of the Pittsburgh-based US Steel Corp shares voted at a special investor meeting in April approved the takeover. Nippon Steel has said it has prepared adequate financing to go through with the deal. First announced in December last year, the merger of US Steel into Nippon Steel has raised concerns about what that might mean for unionised workers, supply chains and US national security.

The United Steelworkers union has opposed the acquisition.

Japanese Prime Minister Fumio Kishida met Biden last month. But there was no indication the topic came up in the summit.

When Biden visited the Pittsburgh headquarters of United Steelworkers recently, he reiterated his opposition to the Nippon Steel purchase, stressing US Steel “has been an iconic American company for more than a century and it should remain totally American”.

The US steel industry has declined over the decades as global steel production came to be dominated initially by Japan, and more recently by China.

CHANTHABURI (AFP) – Clambering hand-over-hand, sweat dripping into his eyes, a durian labourer expertly slices a cumbersome fruit from a tree before tossing it down to land with a soft thump in his colleague’s waiting arms some 15 metres below.

Among Thailand’s most famous and lucrative exports, the pungent “king of fruits” is as distinctive in its smell as its spiky green-brown carapace, and has been farmed in the kingdom for hundreds of years.

But a vicious heatwave engulfing Southeast Asia has resulted in smaller yields and spiralling costs, with growers and sellers increasingly panicked as global warming damages the industry.

“This year is a crisis,” durian farmer Busaba Nakpipat told AFP bluntly. The weather-beaten 54-year-old took over her parents’ farm in eastern Chanthaburi province – Thailand’s durian heartland – three decades ago.

“If the hot weather continues to rise in the future, it’ll be over,” she said. “Farmers wouldn’t be able to produce durian anymore.”

Durian season usually lasts from March until June, but the soaring temperatures – which in her province have hovered around 40 degrees Celsius for weeks – and subsequent drought have shortened the harvest.

Busaba said the heat causes the durian, which is graduated by weight and size, to ripen faster so it does not grow to its fullest – and most valuable – size.

“The quality of the durian won’t meet the standard,” she said. And not only is she getting less money for the crop, Busaba’s operational costs have risen. Since March a drought has sucked water from the wells, so to keep her precious durian trees alive Busaba is forced to bring in thousands of litres by truck.

“We have to buy 10 water trucks for 120,000 litres of water for one-time watering the whole 1.6 hectares of our farm,” she said, repeating the process every other day, at a cost of thousands of dollars.

“We have prayed for rain,” she said. “But there was no rain.”

Thailand’s durian exports are worth billions and are the kingdom’s third most valuable agricultural product – behind rice and rubber.

But in the nearby durian market, anxiety is running high among stall-holders, many of them with family businesses going back generations.

Siriwan Roopkaew, manning her mother’s stall, said the lack of water has impacted the size of the fruit, but for now prices remain high thanks to demand from China. Around 95 per cent of Thaliand’s durian exports are to China, which shipped nearly USD4.6 billion worth of the fruit from the kingdom in 2023, according to data from Beijing’s Commerce Ministry.

But the weather is threatening Thailand’s dominance.

In May, Chinese state media reported an almost 50 per cent rise in durian imported from Vietnam, citing heat and drought in Thailand.

“Hot weather means there will be less durian. Even this year, there is less durian,” Siriwan, 26, said. “Normally, my stall would be full of durian by now.”

While farmers worried about water, she said, sellers like her family were more concerned about the knock-on economics. “Less durian means our earnings are less,” she said, “so it’d be hard for us to live the whole year.”

BERNAMA – The ringgit is expected to trade cautiously against the US dollar in the near term as investors continue to closely watch local and global economic developments moving forward, an analyst said.

Bank Muamalat Malaysia Bhd Chief Economist Mohd Afzanizam Abdul Rashid said among others, the United States (US) Federal Reserve (Fed) Chairman Jerome Powell has clearly indicated that the option for a rate rise is not in the central bank’s baseline scenario although it is still concerned over inflation rate.

“An important event next week is Bank Negara Malaysia’s Monetary Policy Committee meeting on May 9, especially on its assessment on the recent policy changes and prospect for inflation.

“Other than that, a series of Purchasing Managers’ Indices, the Reserve Bank of Australia’s interest rate decision and China’s trade data will be released next week.

“On that note, the ringgit should linger around MYR4.73 to MYR4.74 per the US dollar next week,” he told Bernama.

This week, the ringgit, along with other ASEAN currencies, reacted towards the two-day Federal Open Market Committee meeting that concluded on Thursday.

According to a dealer, the outcome of the meeting clearly shows that the “higher for longer” narratives for the US interest rate are likely to stay in the near future, given the lack of progress in inflation reaching the Fed’s target level.

On a Friday-to-Friday basis, the ringgit strengthened to 4.7370/7400 versus the greenback from 4.7650/7710 a week earlier.

The local note also rose against the British pound to 5.9487/9525 from 5.9644/9719 over the week and appreciated vis-a-vis the euro to 5.0890/0922 from 5.1157/1221 previously, but it slipped versus the Japanese yen to 3.0947/0968 from 3.0408/0451.

The ringgit, meanwhile, traded mixed against ASEAN currencies.

It appreciated against the Thai baht to 12.8723/8850 from 12.8902/9120 on Friday last week and climbed versus the Philippine peso to 8.25/8.27 from 8.26/8.27 previously.

However, the local currency slipped against the Indonesian rupiah to 294.4/294.8 from 293.9/294.4 a week earlier and eased vis-a-vis the Singapore dollar to 3.5027/5054 from 3.5021/5068.

ANN/THE STAR – Sarawak exported a total of MYR562,19 million worth of vessels in 2023, according to a statement from Deputy Premier Datuk Awang Tengah Ali Hasan.

The statement said the vessels were dispatched to countries including Indonesia and Singapore, United Arab Emirates, Russia, Australia and China.

Speaking at the 5th Anniversary Celebration of the Sarawak Maritime Industry Association (Samin) on Friday, he expressed optimism regarding the future growth of the shipbuilding and ship repair (SBSR) industry. Awang Tengah attributed the projected growth to the Regional Comprehensive Economic Partnership (RCEP) and the comprehensive and progressive Agreement for the Trans-Pacific Partnership (CPTPPO).

“The shipping industry serves as the backbone of global trade, offering a cost-effective and efficient means of transporting goods across regions. It will remain a critical enabler to facilitate international trade, foster economic growth, and support job creation,” he added.