2025-06-07 05:39

SYDNEY, June 7 (Reuters) - Global miner Rio Tinto (RIO.AX) , opens new tab is in talks with Australian federal and state governments about a multibillion-dollar bailout for its struggling Tomago aluminium smelter in New South Wales state, the Australian Financial Review reported. The newspaper, citing sources it did not name, reported late on Friday that talks centred on the smelter's electricity contract for 2026 to 2029 and federal production tax credits. Sign up here. Rio and the offices of New South Wales Premier Chris Minns and Prime Minister Anthony Albanese did not immediately respond to Reuters requests for comment on the report. The future of the facility, majority owned by Rio, has been uncertain for months due in part to spiralling energy costs, according to the report. In February, Rio, the world's largest iron ore producer, said it would decide the smelter's future by mid-year. The facility about 125 km (80 miles) north of state capital Sydney uses around 10% of New South Wales' power supply to produce 590,000 tonnes of aluminium per year. In addition to Rio, it is owned by CSR and Hydro Aluminium. Australia's centre-left government in January pledged A$2 billion in production credits to help support the country's four aluminium smelters, including the Tomago facility, switch to renewable power before 2036. https://www.reuters.com/business/energy/rio-tinto-bailout-talks-australian-aluminium-smelter-afr-reports-2025-06-07/

2025-06-07 03:34

Indonesia to get zero tariffs on 80% of exports to EU EU to provide special treatment to Indonesia on deforestation JAKARTA, June 7 (Reuters) - Indonesia said on Saturday that free trade negotiations with the European Union, which have been ongoing for nine years, are expected to be concluded by the end of June. Airlangga Hartarto, the chief economic minister for Southeast Asia's biggest economy, met with EU Commissioner for Trade Maros Sefcovic in Brussels on Friday. Sign up here. "Indonesia and the European Union have agreed to conclude outstanding issues and we are ready to announce a conclusion of substantial negotiations by the end of June 2025," Airlangga Hartarto said in a statement. Indonesia will get zero tariffs for 80% of its export products to the EU and removal of non-tariff barriers, as it pushes for bigger market access for footwear, garments, palm oil and fishery products, Airlanga told a press conference later on Saturday. The EU has discussed Jakarta's rules on mandatory use of local content in products sold in Indonesian market, the automotive industry, trade of critical minerals and investment facilities, Airlangga said. Indonesia and the EU have previously disagreed on EU trade rules for products with potential links to deforestation that could affect Indonesian palm oil. Airlangga said the bloc's deforestation rules were not part of the free trade negotiations, but Sefcovic had "promised to provide special treatment towards Indonesia regarding deforestation." He did not elaborate. Denis Chaibi, EU ambassador to Indonesia, said that talks were ongoing and "we will communicate in details when we have an outcome." Chaibi did not respond to a question about the special treatment. The EU is Indonesia's fifth-biggest trade partner, with total trade between the two reaching 27.3 billion euros ($31.11 billion) last year, according to the EU. Exports from the bloc were worth 9.7 billion euros in 2024, and it imported 17.5 billion euros' worth from Indonesia. Indonesian exports to the bloc could increase by more than 50% within three to four years after the trade deal takes effect, Airlangga said. Indonesian officials have been motivated to accelerate talks on free trade agreements, keen to diversify the country's export destinations as they deal with U.S. tariff challenges. ($1 = 0.8777 euros) https://www.reuters.com/markets/commodities/indonesia-expects-conclude-free-trade-talks-with-eu-by-end-june-2025-06-07/

2025-06-07 02:41

BEIJING, June 7 (Reuters) - China's foreign exchange reserves rose by a less-than-expected $3.6 billion in May, official data showed on Saturday, as the dollar continued to weaken against other major currencies. The country's foreign exchange reserves, the world's largest, rose 0.11% to $3.285 trillion last month, below the Reuters forecast of $3.292 trillion. They were $3.282 trillion in April. Sign up here. The increase in reserves was due to "the combined effects of factors such as exchange rate conversion and asset price changes," China's State Administration of Foreign Exchange said in a statement. The yuan weakened 1.05% against the dollar in May, while the dollar slid 0.23% against a basket of other major currencies . https://www.reuters.com/markets/asia/chinas-forex-reserves-up-36-billion-may-less-than-expected-2025-06-07/

2025-06-07 01:34

June 6 (Reuters) - St. Louis Federal Reserve President Alberto Musalem has put the likelihood of Donald Trump's trade war causing a prolonged surge in inflation at "50-50," warning that U.S. policymakers would face uncertainty "right through the summer," the Financial Times reported on Friday. Musalem told the newspaper that while U.S. President Trump's tariffs could boost inflation for "a quarter or two," there was "an equally likely scenario where the impact of tariffs on prices could last longer." Sign up here. Trump’s tariff hikes and a $2.4 trillion budget bill have shaken markets, prompting a wait-and-see stance from the Fed after last year’s rate cuts. Musalem said he believes officials could benefit from a favorable scenario where uncertainty over trade and fiscal policy "goes away in July," which would put the Fed back on track to cut interest rates in September, according to the FT. He also highlighted, however, the possibility of a scenario "where inflation begins to rise materially and we will not know whether that is a temporary, one-off increase in the price level or whether it has more persistence," the report said. The Fed is expected to hold rates steady at its mid-June meeting, when it will release updated economic projections. https://www.reuters.com/markets/us/feds-musalem-estimates-50-50-chances-tariffs-triggering-prolonged-us-inflation-2025-06-07/

2025-06-06 23:36

USDA delays quarterly ag trade report, cites internal review process Delayed report published without its usual explanatory text Text of report had linked Trump's tariffs to rising agricultural trade deficit Analysts worry that staff cutbacks may affect future reports CHICAGO/WASHINGTON, June 6 (Reuters) - Analysts voiced concerns this week about the integrity of U.S. Department of Agriculture reports after the agency delayed a report and excluded findings that point to tariffs as a reason for a forecasted increase in the agricultural trade deficit, according to Reuters interviews with four analysts. The administration of President Donald Trump has pledged to shrink the farm trade deficit and has said tariffs will strengthen the farm economy, but farm groups have been critical of the approach. Sign up here. The agency's delay of a quarterly agricultural trade report and exclusion of its typical explanatory text were concerning because the moves raised questions about the objectivity of the data, two analysts said. "The trade is uneasy about USDA statistics now," said Charlie Sernatinger, head of grains with Marex, a brokerage and financial services company. A USDA spokesperson said the report was delayed by an internal review. "The report was hung up in internal clearance process and was not finalized in time for its typical deadline. Given this report is not statutory as with many other reports USDA does, the department is undergoing a review of all of its non-statutory reports, including this one, to determine next steps," the spokesperson said. The quarterly trade outlook report jointly published by the USDA's Economic Research Service and Foreign Agricultural Service was scheduled to be released on May 29. Shortly before it was set to publish, its authors were told to stop its release, according to a source familiar with the situation. The authors were then questioned by leaders at the ERS, FAS and USDA Office of the Chief Economist about the report's attribution of the growing agriculture trade deficit to tariffs and sentiments like "Buy Canadian" that have reduced demand for U.S. goods, the source said. In the delayed report released on Monday, the USDA raised its forecast of the U.S. agriculture trade deficit for fiscal-year 2025 to $49.5 billion, from the $49 billion it previously forecast in February. The version of the report published on Monday contains correct and unaltered data, the source said, but excludes explanatory text typically contained in the forecasts. The report delay and redaction were first reported by Politico. Such trade reports would typically be reviewed by communications and policy staff, but the removal of the explanatory text was highly unusual, according to a second source familiar with the report publication process. Two other analysts said they were confident in the USDA data for now, but expressed concern about how Trump's disruption of the federal government could affect future reports. "Departures of key personnel limit the ability of agencies to collect and analyze information," said Patrick Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri. The USDA has lost about 27% of ERS employees and 14% of FAS employees to terminations or voluntary incentives to leave the agency as the Trump administration works to reduce the size and cost of the federal government, according to Reuters reporting. The U.S. had an agricultural trade surplus for decades but in recent years, imports of high-value goods like alcohol, fruits and vegetables have driven a growing deficit, according to USDA data. https://www.reuters.com/world/us/usda-redaction-trade-analysis-causes-concern-about-report-integrity-2025-06-06/

2025-06-06 23:30

Trump says Xi will let critical minerals flow Remark follows rare call between two leaders China did not immediately comment WASHINGTON, June 6 (Reuters) - U.S. President Donald Trump said on Friday that Chinese President Xi Jinping agreed to let rare earth minerals and magnets flow to the United States, a move that could lower tensions between the world's biggest economies. Asked by a reporter aboard Air Force One whether Xi had agreed to do so, Trump replied: "Yes, he did." Sign up here. The Chinese embassy in Washington did not immediately respond to a request for comment. Trump's comment came one day after a rare call with Xi aimed at resolving trade tensions that have been brewing over the topic for weeks. At that time, Trump said there had been "a very positive conclusion" to the talks, adding that "there should no longer be any questions respecting the complexity of Rare Earth products." In another sign of easing tensions over the issue, China has granted temporary export licenses to rare-earth suppliers of the top three U.S. automakers, two sources familiar with the matter said. The U.S. president's top aides are set to meet their Chinese counterparts in London on Monday for further talks. "We're very far advanced on the China deal," Trump told reporters on Friday. The countries struck an agreement on May 12 in Geneva, Switzerland, to roll back for 90 days most of the triple-digit, tit-for-tat tariffs they had placed on each other since Trump's January inauguration. Financial markets that had worried about trade disruptions rallied on the news. But China's decision in April to suspend exports of a wide range of critical minerals and magnets has continued to disrupt supplies needed by automakers, computer chip manufacturers and military contractors around the world. Trump had accused China of violating the Geneva agreement and ordered curbs on chip-design software and other shipments to China. Beijing rejected the claim and threatened counter measures. Rare earths and other critical minerals are a source of leverage for China as Trump could come under domestic political pressure if economic growth sags because companies cannot make mineral-powered products. Since returning to the White House in January, Trump has repeatedly threatened an array of punitive measures on trading partners, only to revoke some of them at the last minute. The on-again, off-again approach has baffled world leaders and spooked business executives. https://www.reuters.com/world/china/trump-says-chinas-xi-agreed-restart-flow-rare-earth-minerals-2025-06-06/