Category: Business

In A move aimed at diversifying its entertainment business, Amazon India is learnt to be in discussions with multiple players in the film and media distribution segment, including Mumbai-based movie theatre chain Inox Leisure Ltd, for potentially picking up stakes in them, sources told The Indian Express. With its over-the-top (OTT) content business not growing as fast as the company expected — Amazon India launched its OTT platform Prime Video in 2016 — and with movie theatre chains impacted by lockdowns over the last year-and-a-half, Amazon India is said to be looking at acquiring interest in some of these businesses. Inox, a source said, is a likely candidate.

“After the initial growth of the first six months last year, the OTT content business has not grown as fast as the company expected. There are three to four deals in this space being evaluated currently, including some distressed assets. Amazon India is in advanced talks with some of them,” a source close to the development said. Inox Leisure, one of the largest movie theatre chains in the country with 153 multiplexes and 648 screens, has been hit by the pandemic-induced lockdowns across the country. To a specific query on the issue, a spokesperson for Amazon India said, “We do not comment on speculations about what we may or may not do in future”.

Inox Leisure did not respond to a request for comment. On Monday, the movie exhibition company’s share on the BSE ended trading at Rs 302.90, 1.87% higher than its previous close. Inox Leisure, one of the largest movie theatre chains in the country with 153 multiplexes and 648 screens, has been hit by the pandemic-induced lockdowns across the country. For the year ended March 2021, the company posted a net loss of Rs 257 crore, against a profit of Rs 141 crore for 2019-20 (April-March). Around 40 per cent of Inox Leisure’s screens are present in the western part of the country, followed by north, south and east. As of June 30, Inox Leisure’s promoters held 43.63% stake, while 56.23% is public-owned.

The biggest player in the space, PVR Ltd, reported a net loss of Rs 665.64 crore for 2020-21 as against a profit of Rs 131.04 crore in the previous year. PVR has 176 cinemas and 842 screens across the country. Shares of Inox Leisure were at Rs 328.5 on January 28 and traded in the Rs 305-335 range till March 18, after which it started declining and reached a low of Rs 251 on April 19 — when the second surge of Covid-19 peaked. Shares of PVR followed almost a similar trajectory over the period, trading at levels of Rs 1,450 on January 28, and then slipping to Rs 1,015.25 on April 19. As of Monday, PVR’s scrip ended trading at Rs 1,329.90.

In 2019-20, US-based Amazon is learnt to have invested $1.5 billion in its Indian business, bulk of which was pumped into the e-commerce business. Experts tracking the sector pointed out that a major deal by Amazon in the entertainment space could see the company increasing its focus on this side of its business, away from e-commerce, where the company is battling policy changes and large players such as Walmart-backed Flipkart and Reliance Retail. Last year, Amazon began discussions to acquire ailing US-based theatre chain AMC, but the talks reportedly fell through. “In India, the film exhibition market is quite different from the US because the average revenue generated by movie theatres in the US per customer is much higher than in India,” a Gurgaon-based consultant said.

Stocks are falling sharply Monday as worries sweep from Wall Street to Sydney that the worsening pandemic in hotspots around the world will derail what’s been a strong economic recovery. The S&P 500 was 1.9% lower in morning trading, after setting a record high just a week earlier. In another sign of worry, the yield on the 10-year Treasury dropped close to its lowest level in five months. It sank below 1.20% as investors scrambled for safer places to put their money. The Dow Jones Industrial Average was down 769 points, or 2.2%, at 33,918, as of 10:17 a.m. Eastern time. The Nasdaq composite was 1.7% lower.

Airlines, hotels and stocks of other companies that would get hurt the most by potential COVID-19 restrictions were taking some of the heaviest losses, similar to the early days of the pandemic in February and March 2020. Mall owner Simon Property Group tumbled 7.8%, and cruise operator Carnival lost 7.5%. The drop also circled the world, with several European markets down nearly 3%, on worries new, more infectious variants of the virus are dragging particularly hard on economies where vaccination rates are low. The price of benchmark U.S. crude, meanwhile, sank more than 5% after OPEC and allied nations agreed on Sunday to eventually allow for higher oil production this year.

Experts are saying Indonesia has become a new epicenter for the pandemic as outbreaks worsen across Southeast Asia. Meanwhile, some athletes have tested positive for COVID at Tokyo’s Olympic Village, with the Games due to open Friday. “The more transmissible delta variant is delaying the recovery for the ASEAN economies and pushing them further into the doldrums,” said VenkateswaranLavanya, at Mizuho Bank in Singapore. Even though vaccination rates are higher in the United States and some other developed economies, the tightly connected global economy means hits anywhere can quickly affect others on the other side of the world.

In Japan, the world’s third-largest economy, the vaccine rollout came later than in other developed nations and has stagnated lately. Japan is totally dependent so far on imported vaccines, and just one in five Japanese have been fully vaccinated. Financial markets have been showing signs of increased concerns for a while, but the U.S. stock market had remained largely resilient. The S&P 500 has had just two down weeks in the last eight. The bond market has been louder in its warnings, though. The yield on the 10-year Treasury tends to move with expectations for economic growth and for inflation, and it has been sinking from a perch of roughly 1.75% in March. It was at 1.19% Monday morning, down from 1.29% late Friday.

Analysts and professional investors say a long list of reasons is potentially behind the sharp moves in the bond market, which is seen as more rational and sober than the stock market. But at the heart is the risk the economy may be set to slow sharply from its current, extremely high growth. Besides the new variants of the coronavirus, other risks to the economy include fading pandemic relief efforts from the U.S. government and a Federal Reserve that looks set to begin paring back its assistance for markets later this year.

Worries about a possible sharp slowdown have particularly hurt stocks whose profits are most closely tied to the strength of the economy. Stocks of smaller companies, for example, have been scuffling since hitting a peak in March even though many reports on the economy still show it’s growing at a very healthy rate. The Russell 2000 index of smaller stocks slumped 2.3% Monday, outpacing losses for their larger rivals on Wall Street. The selling pressure was widespread, with more than 90% of the stocks in the S&P 500 lower. Even Big Tech stocks were falling, with Apple down 3.1% and Mircosoft 1.5% lower. During earlier hiccups for the stock market, investors would often big up such stocks further on expectations they will continue to grow almost regardless of the economy’s strength.

Among the few gainers on Wall Street were potential winners of a return to a stay-at-home economy. Clorox rose 1.2%, and Campbell Soup gained 1%. In Europe, Germany’s DAX lost 2.9%, and France’s CAC 40 fell 2.9%. The FTSE 100 in London slumped 2.6%. In Asia, Japan’s Nikkei 225 lost 1.3%, Hong Kong’s Hang Seng fell 1.8%, South Korea’s Kospi dropped 1%. Australian stocks sank 0.9%.

Global rating agency Sta­ndard and Poor’s has affirmed India’s sovereign rating at “BBB-” and maintained a stable outlook on gradual recovery in the economy. India’s recovery will gather pace through the second half of FY22 and into the following year, helping to stabilise the country’s overall credit profile, S&P said in a statement. It, however, warned the country’s fiscal settings were weak, and the deficits would remain elevated over the coming years even as the government undertook some consolidation.

India’s strong external settings help to buffer the risks associated with the government’s high deficits and debt stock. India’s economy is recovering from a deep contraction in FY21 and a subsequent severe second wave of Covid. “We ex­pect real GDP growth to rebo­und to 9.5 per cent in FY22 on continued. India’s long-term rating was affirmed at ‘BBB-‘ with a stable outlook while the short-term rating was held at ‘A-3’. The stable outlook reflects our expectation that India’s economy will recover following the resolution of the COVID-19 pandemic,” analysts at the rating agency wrote. “And that the country’s strong external settings will act as a buffer against financial strains despite elevated government funding needs over the next 24 months”.

S&P said, however, it may lower the country’s ratings if the economy recovers significantly slower than expected from fiscal year 2021/22, or if the general government deficits and associated indebtedness materially exceeds its forecasts. The rating agency said India continued to outperform its peers and it expected economic activity to begin to normalise throughout the rest of the year and the economy to grow 9.5% for the full year after a contraction of 7.3% in 2020/21. “The pace of India’s ambitious COVID-19 vaccination campaign will be crucial to the mitigation of adverse outcomes from future pandemic waves,” analysts wrote.

The agency, however, expects the country’s fiscal position to remain weak and only sees a gradual deficit consolidation over the next three years. S&P said there was a risk that some damage to the real economy from India’s deep economic downturn last year, and the more recent coronavirus outbreak, could be enduring but implementation and acceleration of key reforms could help to address this risk over the next few years.

“The government’s ability to deliver and execute additional economic reforms, especially those that spur investment and job creation, will be important for India’s ability to recover from the economic slowdown,” it said. “Existing vulnerabilities, including a relatively weak financial sector, rigid labour markets, and sluggish private investment, could hamper the economic recovery if not meaningfully addressed”.

Bitcoin recovered from a five-month low on Tuesday, June 22nd in volatile session in which it fell below $30,000, extending losses sparked a day earlier when China’s central bank deepened a crackdown on cryptocurrencies. But its outlook remained tilted to the downside, analysts said. As per Reuters, the world’s largest cryptocurrency dropped to $28,600, its lowest since early January. It was last up 3.7% at $32,802, and remains about 13% higher so far this year.

Bitcoin had fallen below $30,000 for the first time in more than five months, hit by China’s crackdown on the world’s most popular cryptocurrency on June 21st. The digital currency slipped to about $28,890, and has lost about 50% of its value since reaching an all-time high of $64,870 in April. China has told banks and payments platforms to stop supporting digital currency transactions. It follows an order on Friday to stop Bitcoin mining in Sichuan province.

On Monday, China’s central bank said it had recently summoned several major banks and payments companies to call on them to take tougher action over the trading of cryptocurrencies. Banks were told to not provide products or services such as trading, clearing and settlement for cryptocurrency transactions, the People’s Bank of China said in a statement. China’s third-largest lender by assets, the Agricultural Bank of China, said it was following the PBOC’s guidance and would conduct due diligence on clients to root out illegal activities involving cryptocurrency mining and transactions. China’s Postal Savings Bank also said it would not facilitate any cryptocurrency transactions.

Chinese mobile and online payments platform Alipay, which is owned by financial technology giant Ant Group, said it would set up a monitoring system to detect illegal cryptocurrency transactions. The latest measure came after authorities in the southwest province of Sichuan on Friday ordered Bitcoin mining operations to close down. Authorities ordered the closure of 26 mines last week, according to a notice widely circulated on Chinese social media sites and confirmed by a former Bitcoin miner.

Sichuan, a mountainous region in southwest China, is home to many cryptocurrency mines – basically huge centers with racks upon racks of computer processors, owing to the large number of hydroelectric power plants there. China accounted for around 65% of global Bitcoin production last year, with Sichuan rating as its second largest producer, according to research by the University of Cambridge. “Concerns mount over China’s ongoing clampdown and fears that widespread acceptance of Bitcoin and other digital currencies will be delayed because of concerns about their environmental impact,” noted analyst FawadRazaqzada at trading site ThinkMarkets.

Last month China’s cabinet, the State Council, said it would crack down on cryptocurrency mining and trading as part of a campaign to control financial risks. Some analysts have warned of potential further falls in the price of Bitcoin due to a price chart phenomenon known as a “death cross”, which occurs when a short-term average trendline crosses below a long-term average trendline.

Other cryptocurrencies also fell as investors worried about tougher regulation of digital currencies around the world.Separately, the auction house Sotheby’s said that a rare pear-shaped diamond that is expected to sell for as much as $15m can be bought at an auction next month using cryptocurrencies. It is the first time that such a large diamond has been offered in a public sale with cryptocurrency.

Digital currencies like Bitcoin often make headlines for the massive swings in their value, but beyond the intrigue of skyrocketing and plummeting prices the rising popularity of cryptocurrencies poses serious questions for financial institutions and monetary policy. Eswar Prasad joins David Dollar for a conversation on the digitalization of money and what digital currencies could mean for the future of cash, international payments, and the strength of the U.S. dollar. Prasad also explains why some central banks have hesitated to introduce digital currencies while others have embraced them.

DAVID DOLLAR: Hi, I’m David Dollar, host of the Brookings trade podcast Dollar & Sense. Today, my guest is Eswar Prasad, an economics professor at Cornell and a senior fellow in the global development wing at Brookings. Eswar has recent op-eds in The New York Times and The Washington Post about digital currencies, and he has a new book coming out in September, “The Future of Money.” So that’s our topic today. Thanks for joining the show, Eswar.

ESWAR PRASAD: Thanks for having me, David. Always a pleasure talking to you.

DOLLAR: So let’s start with Bitcoin because it has gotten so much attention recently with the wild swings in prices. What’s going on with that? Is Bitcoin money? Is Bitcoin the future of money?

PRASAD: So Bitcoin is an interesting form of money. When it was created back in 2009, the objective of its creator or creators—whoever that might be, we don’t know yet—was to create a medium of exchange that could bypass a trusted authority, such as a central bank or a financial institution, and allow people to transact using just their digital identities. This was a very alluring prospect at the time because right after the global financial crisis it seemed like trust was shaken in both central banks and commercial banks as well.

The remaining portion of the interview is available at: https://www.brookings.edu/podcast-episode/digital-currencies-are-transforming-the-future-of-money/?utm_campaign=Brookings%20Brief&utm_medium=email&utm_content=135351819&utm_source=hs_email

Amazon founder Jeff Bezos paid no income tax in 2007 and 2011. Tesla founder Elon Musk’s income tax bill came to zero in 2018. And financier George Soros went three straight years without paying federal income tax, according to a report from the nonprofit investigative journalism organization ProPublica. Overall, the richest 25 Americans pay less in tax — 15.8% of adjusted gross income — than many ordinary workers do, once you include taxes for Social Security and Medicare, ProPublica found.

An anonymous source delivered to ProPublica reams of Internal Revenue Service data on the country’s wealthiest people, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. ProPublica compared the tax data it received with information available from other sources. It reported that “in every instance we were able to check — involving tax filings by more than 50 separate people — the details provided to ProPublica matched the information from other sources.’’

Using perfectly legal tax strategies, many of the uber-rich are able to whittle their federal tax bills down to nothing or close to it. Soros went three straight years without paying federal income tax; billionaire investor Carl Icahn, two, ProPublica finds. The findings are sure to heighten the national debate over the vast and widening inequality between the very wealthiest Americans and everyone else. ProPublica reports that the tax bills of the rich are especially low when compared with their soaring wealth — the value of their investment portfolios, real estate and other assets.

The Biden administration said it is investigating how tax information from several of the world’s richest people — including Jeff Bezos, Elon Musk and Warren Buffett — was leaked to the public. “The unauthorized disclosure of confidential government information is illegal,” said Treasury spokeswoman Lily Adams. “The matter is being referred to the Office of the Inspector General, Treasury Inspector General for Tax Administration, Federal Bureau of Investigation, and the US Attorney’s Office for the District of Columbia, all of whom have independent authority to investigate.”

The investigation comes after a report that showed new information from a trove of never-before-seen IRS records. Earlier Tuesday, ProPublica reported on exclusively obtained IRS documents which showed how the likes of Bezos, Musk, Buffett, Bill Gates, George Soros, Mark Zuckerberg and Michael Bloomberg have legally avoided paying income tax.”Any unauthorized disclosure of confidential government information by a person of access is illegal and we take this very seriously,” White House press secretary Jen Psaki told reporters during Tuesday’s briefing.

Psaki also reiterated the Biden administration’s stance on having wealthy Americans pay more taxes to fund the President’s proposals.  “I’m not going to comment on specific unauthorized disclosures of confidential government information. I can tell you that, broadly speaking ,we know that there is more to be done to ensure that corporations, individuals who are at the highest income are paying more of their fair share. Hence, it’s in the President’s proposals, his budget and part of how he’s proposing to pay for his ideas,” Psaki said.

Bitcoin, the original cryptocurrency, was launched in 2009. Today, there are thousands of cryptocurrencies with a total value of about $2 trillion. The surge in their prices earlier this year minted tens of thousands of cryptocurrency millionaires—at least on paper. Cryptocurrencies might turn out to be a massive speculative bubble that ends up hurting many naive investors. Indeed, many cryptocurrency fortunes have already evaporated with the recent plunge in prices. But whatever their ultimate fate, the ingenious technological innovations underpinning them will transform the nature of money and finance.

Myth No. 1

A cryptocurrency is real money that can be used for payments.

Cryptocurrencies such as bitcoin and Ethereum were designed as a way to make payments without relying on traditional modes such as currency notes, debit cards, credit cards or checks. The bitcoin white paper, which set off the cryptocurrency revolution, envisions an electronic payment system that allows “any two willing parties to transact directly with each other without the need for a trusted third party,” cutting governments and banks out of the financial loop. The website Pymnts claims, “Blockchain IS the future of the payments industry,” a reference to the computational technology that undergirds cryptocurrencies.

In fact, it has become very expensive and slow to conduct transactions using cryptocurrencies. It takes about 10 minutes for a bitcoin transaction to be validated, and the average fee for just one transaction was recently about $20. Ethereum, the second-largest cryptocurrency, processes transactions slightly faster but also has high fees.

Moreover, wild swings in the values of most cryptocurrencies make them unreliable as a means of payment. In late April, the price of a Dogecoin was 20 cents. It tripled in the next two weeks and then fell to half that peak value ten days later. It is as though a $10 bill could buy you just a cup of coffee one day and a lavish meal at a fancy restaurant just a few weeks later. Even on a calmer, more typical day, the value of a major cryptocurrency such as Ethereum might fluctuate by 10 percent or more, making it too unstable to be practical. Recently, Elon Musk announced that Tesla would no longer accept bitcoin as a form of payment, reversing a policy it had implemented earlier in the year. The value of a single coin almost immediately plummeted. A Chinese crackdown on cryptocurrencies then briefly took another one-third off the price in just one day.

Myth No. 2

Cryptocurrencies are a good investment.

Investment funds in bitcoin and other cryptocurrencies have proliferated. Even major banks such as Goldman Sachs and Morgan Stanley are getting into the game. And you would certainly have made a fantastic return if you had bought any of the major cryptocurrencies last year. A typical article in the Motley Fool debates not whether cryptocurrencies are a good investment but “which one is right for you.” The website Business Mole claims: “Even with adjustments made, Bitcoin and Ethereum are very profitable. It’s simple.”

But beware. Part of the allure seems to be that, like gold, the supply of most cryptocurrencies is tightly controlled (by the computer programs that manage them). For instance, about 18.5 million bitcoin have been created so far, and there will eventually be a maximum of 21 million bitcoin. This is a cap set by the computer program that manages the supply of the currency.

Scarcity by itself is not, however, enough to create value—there has to be demand. Since cryptocurrencies cannot easily be used to make most payments and have no other intrinsic uses, the only reason they have value is because many people seem to think they are good investments. If that changed, their value could quickly drop to nothing.

Myth No. 3

Bitcoin is fading. Meme coins are the future.

Bitcoin is now seen as the granddaddy of cryptocurrencies, and investors (or speculators, more precisely) are piling into other cryptocurrencies such as Dogecoin. In 2019, Investopedia claimed that bitcoin was “losing its power as the driving force of the cryptocurrency world.” “Bitcoin And Ethereum Are Being Left In The Dust ByDogecoin,” reads a recent Forbes headline.

Dogecoin and other such cryptocurrencies, which are simply built around memes (Dogecoin, with its ShibaInu dog mascot, references the “doge” meme), don’t even make a pretense of being usable in financial transactions. And there is no clear constraint on the supply of these coins, so their prices surge or crash on random events such as tweets from Musk. The valuations of meme currencies seem to be based entirely on the “greater fool” theory—all you need to do to profit from your investment is to find an even greater fool willing to pay a higher price than you paid for the digital coins.Bitcoin’s technology does seem outdated compared with some of the newer cryptocurrencies that enable greater anonymity for users, faster transaction processing and more sophisticated technical features that facilitate automatic processing of complex financial transactions. For all its flaws, however, bitcoin remains dominant: It accounts for nearly half of the total value of all cryptocurrencies.

Myth No. 4

Cryptocurrencies will displace the dollar.

Morgan Stanley’s chief global strategist, Ruchir Sharma, has argued that bitcoin could end the dollar’s reign—or at least that the “digital currency poses a significant threat to [the] greenback’s supremacy.” A Financial Times headline proposes, even more ominously, that “Bitcoin’s rise reflects America’s decline.”Cryptocurrencies are not backed by anything other than the faith of the people who own them. The dollar, by contrast, is backed by the U.S. government. Investors still trust the dollar, even in hard times. As one illustration, domestic and foreign investors continue to eagerly snap up trillions of dollars in U.S. Treasury securities even at low interest rates.

New cryptocurrencies called stablecoins aim to have stable values and therefore make it easier to conduct digital payments. Facebook plans to issue its own cryptocurrency, called Diem, that will be backed one for one with U.S. dollars, giving it a stable value. But the value of stablecoins comes precisely from their backing by government-issued currencies. So while dollars might become less important in making payments, the primacy of the U.S. dollar as a store of value will not be challenged.

Myth No. 5

Cryptocurrencies are just a fad and will fade away.

Warren Buffett has compared cryptocurrencies to the 17th-century Dutch tulip craze, while Bank of England Governor Andrew Bailey cautioned, “Buy them only if you’re prepared to lose all your money.” Economist NourielRoubini called bitcoin “the mother or father of all scams” and even criticized its underlying technology.

Cryptocurrencies may or may not persevere as speculative investment vehicles, but they are triggering transformative changes to money and finance. As the technology matures, stablecoins will hasten the ascendance of digital payments, ushering out paper currency. The prospect of competition from such private currencies has prodded central banks around the world to design digital versions of their currencies. The Bahamas has already rolled out a central bank digital currency, while countries like China, Japan and Sweden are conducting experiments with their own official digital money. The dollar bills in your wallet—if you still have any—could soon become relics.

Even transactions such as buying a car or a house could soon be managed through computer programs run on cryptocurrency platforms. Digital tokens representing money and other assets could ease electronic transactions that involve transfers of assets and payments, often without trusted third parties such as real estate settlement attorneys. Governments will still be needed to enforce contractual obligations and property rights, but software could someday take the place of other intermediaries, including bankers, accountants and lawyers.

After years of outright dislike for cryptocurrencies, India’s central bank appears to have had a change of heart. On May 31, the Reserve Bank of India (RBI) told banks and other financial institutions in the country that they should not cite its 2018 circular that barred them from dealing with cryptocurrencies while cautioning customers against virtual coins. The 2018 circular was struck down by the Supreme Court in March 2020, which made it invalid.

“It has come to our attention through media reports that certain banks/ regulated entities have cautioned their customers against dealing in virtual currencies… by referring to the RBI circular dated April 06, 2018 (pdf). Such references to the above circular by banks/ regulated entities are not in order as this circular was set aside by the supreme court,” the latest RBI circular read.

The cryptocurrency ecosystem in India is interpreting the RBI’s stance as a support for the industry. “This is positive news for the entire crypto industry—businesses, stakeholders, and investors. Investing in crypto has always been 100% legal in India and the new RBI circular clearly confirms the right to do business with crypto firms,” said AvinashShekhar, Co-CEO at ZebPay.

RBI’s cryptocurrency stance

India’s central bank as well as the country’s government have never supported virtual coins. Besides the 2018 circular that nearly stifled the cryptocurrency ecosystem in India, RBI has time and again issued warnings against investments into bitcoins and other virtual coins.

In 2017, India’s then-finance minister ArunJaitley had said the government “does not recognise Bitcoin as legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payments system.”But the central bank perhaps thought it ethical to warn banks against illegally quoting an outdated circular.

RBI’s recent statement came after several leading Indian banks, including the State Bank of India and HDFC Bank, sent emails to their customers warning them against the use of cryptocurrency. The banks cited RBI’s 2018 circular in these emails stating that users who deal in virtual currencies may face account suspension.There have also been reports that WazirX, India’s largest cryptocurrency bourse, faced many issues with financial transactions with its banking partners due to the confusion related to the RBI’s earlier notification.

“The crypto industry has been facing a lot of issues when it comes to using formal banking channels for trades and this circular will clear the air. RBI’s stance on crypto asset trading was not changed since the supreme court order in March 2020 and it was highly unpleasant to see banks pulling the plug on crypto exchanges which impacted millions of investors across the country,” said ShivamThakral, CEO of BuyUcoin, a Delhi-based cryptocurrency exchange.

The Sunday Times, UK, reported this year’s Rich List that identifies a record 171 UK billionaires — 24 more than in 2020. That is the biggest jump in the 33 years The Sunday Times has been tracking the fortunes of the UK’s most affluent people. The combined fortunes of the billionaires in this Rich List grew by nearly 22 per cent to 597.269 billion pound.The richest person on the list is Sir Len Blavatnik, a Ukrainian-born businessman who made his money from energy and aluminium groups in the former Soviet Union. He earlier topped the list in 2015.

Mumbai born brothers David and Simon Reuben were listed as Britain’s second-wealthiest, with a combined fortune of 21.5 billion pound.Indian steel magnate Lakshmi Mittal climbed up in the list from No.19 last year to No.5 this year, Mittal, has seen net increase by 7.899 billion to 14.68 billion pound.

Srichand and Gopichand Hinduja and family have fallen in the rankings from No.1 in 2019, to No.2 in 2020, down to No.3 this year. The family’s net increased by 1 billion, to 17 billion pound.Chronicle Live UK reported would-be Newcastle United owners David and Simon Reuben’s fortune has risen by an astonishing 5 billion during the last year as they maintained their place as the second richest people in the UK.

The Reubens would only be part owners of United in the deal proposed by Amanda Staveley but their wealth, combined with that of Saudi PIF, would make Newcastle financial powerhouses if the deal can be resurrected through either arbitration or various court cases.The Times reported the Reubens as going on a “spending spree” during the last year, snapping up buildings at far below market value. They spent $150million on Manhattan hotel The Surrey — and have “snapped up undervalued hotels and other properties”, in particular in the US. (IANS)

Home prices in the US continued to climb in April, reaching new highs and rising at the fastest pace on record.  The median sale price was a record $341,600 in April, according to a report from the National Association of Realtors. It was the highest median price since NAR began tracking this data in 1999. The median price, which includes existing single-family homes, townhomes, condominiums and co-ops, was up a record 19% from a year ago.

Looking only at single family homes, prices were up 20% from last year, the fastest price appreciation since NAR began tracking those prices in the early 1970s. Homes are selling in a record fast 17 days, according to NAR, and an overwhelming 88% of homes sold in April were on the market for less than a month. Stiffer competition, especially from a growing number of all-cash buyers, is squeezing many first-time buyers out of the market.

“First-time buyers in particular are having trouble securing that first home for a multitude of reasons, including not enough affordable properties, competition with cash buyers and properties leaving the market at such a rapid pace,” said Lawrence Yun, NAR’s chief economist.

Much of that price gain was propelled by competition. For every listing, there were an average of five offers, according to Yun. And a quarter of all buyers are making all cash offers, up from 23% in March and just 15% a year ago. The price gain and increase in all-cash offers is no surprise given the imbalance of supply and demand, said Joel Kan, Mortgage Bankers Association’s associate vice president of economic and industry forecasting.”In the short-term, inventory shortages will persist,” he said. “The insufficient level of inventory amidst fierce competition is putting upward pressure on home prices in most parts of the country.”

Low inventory is limiting sales

While more inventory came on the market in April compared to March, by the end of April total housing inventory was down 21% from one year ago, and still sits at near-record lows.The low inventory of homes continues to not only push prices higher but is also bringing the number of sales down, according to the report.Sales dropped 2.7% in April from March, the third straight month of decline.But don’t start thinking the market is cooling off, said Yun. Demand is still strong.

“Despite the decline, housing demand is still strong compared to one year ago, evidenced by home sales from this January to April, which are up 20% compared to 2020,” said Yun.Sales were up 34% from a year ago, but comparing last month with April 2020 is a bit distorted. By April of last year, many parts of the country were shut down because of the pandemic and real estate transactions came to a near standstill.But the seasonally-adjusted annual rate of 5.85 million homes sold in April is 11% above the annualized rate for April of 2019.

Yun said that if there were 20% more homes available, real estate agents could sell 20% more homes, it is the low inventory that is holding sales back.

“Bringing supply and demand into a better balance is still months away, and perhaps several years away, due to high prices and a reluctance to move by some homeowners due to Covid 19,” said Robert Frick, corporate economist at Navy Federal Credit Union.

“High prices not only slow sales, but they make downsizing difficult for many older Americans who were looking forward to making a big profit on the sale of their existing home and moving into a cheaper, downsized home,” Frick said. “High housing prices have spread to many more cities around the country, and that’s making downsizing to a smaller home not the financial slam-dunk it was even a couple years ago.”

Buyers getting squeezed out

Yun anticipates the housing market will normalize a bit as the year progresses, especially as more supply becomes available.”We’ll see more inventory come to the market later this year as further Covid-19 vaccinations are administered and potential home sellers become more comfortable listing and showing their homes,” said Yun. “The falling number of homeowners in mortgage forbearance will also bring about more inventory.”

In addition, home builders are building, although US Census Bureau data from earlier this week showed residential housing starts have begun to slow because of challenges in the cost and availability of building materials.But even as more supply comes in to meet the high demand, that demand may cool as some buyers become frustrated.”Some of the buyers will be squeezed out because high home prices are hurting affordability,” said Yun.

In addition, mortgage rates, which have been at record lows, are trending up, with Yun forecasting rates will reach 3.5% by year’s end.”The general direction is toward more claiming of the market from its current frenzy,” said Yun.

The U.S. Chamber of Commerce May 5 announced the formation of the Global Task Force on Pandemic Response, which includes numerous Indian American company executives. The public-private partnership will provide immediate assistance to India and will assist in coordinating relief to respond to COVID-19 surges, according to the news release.

Among the members of the taskforce include Alphabet Inc. chief executive SundarPichai, Adobe Systems CEO Shantanu Narayan, Deloitte CEO PunitRenjen, FedEx chief operating officer and director Raj Subramaniam, IBM chair and CEO Arvind Krishna, and VMware chief operating officer Sanjay Poonen.The group also includes Apple CEO Tim Cook, PepsiCo CEO Ramon Laguarta and Mastercard CEO Michael Miebach, among others. The Task Force will coordinate a coalition of corporations, non-profits and individual efforts to organize relief where it is needed most.

The task force is working with the Chamber’s U.S.-India Business Council and the U.S.-India Strategic Partnership Forum to take three immediate actions to help address the COVID-19 surge in India.Sourcing, shipping and delivering 1,000 Puritan Bennett ventilators desperately needed by healthcare facilities across India. The first ventilators procured by the U.S. Chamber of Commerce Foundation have arrived, with all remaining ventilators expected to arrive by June 3. Medtronic will manufacture the ventilators and handle end-to-end shipping, installation and ongoing and virtual training, the release said.

It is also delivering 25,000 oxygen concentrators to India by the end of May, with transportation support from FedEx, it said. Additionally, it is creating the chief human resources officer India Action Group to provide ideas and practical information to CHROs to help their people in India.

The Global Task Force on Pandemic Response was launched to provide a unified platform for businesses to mobilize and deliver resources to assist COVID-19 efforts in areas of the highest need around the world, the release said.Initial efforts will focus on the pressing need for support in India, with more than 400,000 cases reported on May 1 alone. Through its Steering Committee, the Task Force will work to concentrate efforts where corporate support will be most beneficial, with additional countries to be determined in consultation with the U.S. government, the chamber adds.

The Global Task Force is working in close collaboration with U.S. and Indian government officials to share information and coordinate efforts. This includes regular briefings with the Modi and Biden Administrations, U.S. Congress, U.S. State Department and the U.S. Agency for International Development.

The coalition of leading companies, non-profits and associations that have come together to support these actions include Accenture, Adobe, Amazon, American Express, Amway, Apple, Applied Materials Foundation, Bank of America, BCG, Citi, David & Carol Van Andel Family Foundation, Dell, Deloitte, Dow, Ernst & Young, Emerson, Facebook, FedEx, Goldman Sachs, IBM, Intel, Johnson & Johnson, John Chambers Foundation, Johnson Controls, JP Morgan Chase & Co, KKR, Lockheed Martin, Mastercard, McCormick & Company, McKinsey & Company, Medtronic, Merck, Microsoft, Nasdaq, Newsweek, PepsiCo, Pfizer, Qualcomm Foundation, Raytheon Technologies, the U.S. Chamber of Commerce Foundation, VIAVI Solutions, VMware, Walmart and Zoom.

Reliance Retail ranks 53rd in the list of Global Powers of Retailing by Deloitte, improves from 56th earlier. It remains the 2nd fastest growing retailer in the world despite the base effect of being No.1 last year.

Reliance Retail features consecutively for the 4th time in the list of Global Powers of Retailing and World’s Fastest Retailers. Reliance Retail, last year’s Fastest 50 leader, dropped to second place. The company recorded YoY growth of 41.8%, driven primarily by a 13.1% increase in the number of stores in its consumer electronics, fashion and lifestyle and grocery retail chains, to 11,784 stores across 7,000 plus towns and cities in India at fiscal year end.

E-commerce is a second growth driver, through both digital commerce (B2C) and B2B. The company is partnering with WhatsApp to further accelerate Reliance Retail’s digital commerce business on the JioMart platform using WhatsApp and to support small businesses on WhatsApp.

Reliance Retail acquired the 29 stores of Shri Kannan Departmental Store at the end of FY2019 and in August 2020 announced it would acquire Future Group’s retail, wholesale and logistics units for $3.4 billion.

When fully approved, the deal will almost double Reliance Retail’s store space.82 Reliance Retail also made two e-commerce acquisitions in 2020, buying Vitalic Health and its online pharmacy platform Netmeds in August, and a 96% stake in online home decor company UrbanLadder in November.

Walmart has led the list of the world’s Top 250 global retailers for over 20 years. The company registered YoY FY2019 retail revenue growth of 1.9%, fueled mainly by growth in comparable store sales in the United States.

Amazon becomes the number two global retailer, pushing Costco down to third place. Top 10 retailers focus on core markets, withdrawing from some international markets There were no new entrants to the Top 10 list in FY2019, which continues to be dominated by players based in the United States. The only mover was Amazon, which has risen in the rankings every year since its entry in tenth place in FY2015. (IANS)

The International Monetary Fund has long favored adoption of a global minimum tax on corporate profits, the Fund’s chief economist, Gita Gopinath, told reporters, calling tax avoidance a troubling issue for the global economy.

Gopinath said current disparities in national corporate tax rates had triggered “a large amount” of tax shifting and tax avoidance, reducing the tax base on which governments could collect revenues to fund needed economic and social spending. “It is a big concern,” Gopinath told reporters during an online briefing. “We are very much in favor of a global minimum corporate tax.”

French Finance Minister Bruno Le Maire said on Tuesday a global deal on cross-border taxation was within reach as he welcomed a pledge by U.S. Treasury Secretary Janet Yellen to work on a global corporate minimum rate.

Gopinath said the IMF had not taken a position on the ideal level for such a tax rate, adding that governments would need to replenish their coffers after massive spending to contain the COVID-19 pandemic and mitigate its economic impact.

“The hope is that they will move forward better to have more inclusive, sustainable, green economies, and that would require measures both on the revenue side and on the expenditure side,” she said, adding that each country would have to carefully tailor its own actions on the tax front.

Gopinath said the IMF was still studying the Biden administration’s proposal to raise the corporate tax rate to 28%, but noted that the former Trump administration’s decision to lower that tax rate from 35% to 21% in 2017 had had less impact on investment than initially expected.

US Treasury Secretary Janet Yellen advocated for a global minimum corporate tax in her first major public address. US National Security Advisor Jake Sullivan swiftly underscored the message, tweeting that “the U.S. is committed to end the race to the bottom on corporate tax rates and prevent corporations from shifting jobs overseas” as a core piece of its national security strategy.

As policymakers around the world consider a global minimum corporate tax, it is important to understand the context behind the concept and how this tax might actually work.

International corporate taxation has long presented a challenge for tax authorities around the world. The emergence of globalization and intangible capital in recent decades has made taxing multinational corporations (MNCs) increasingly difficult, and greater international cooperation is needed to make such taxation more effective.

A global minimum tax on profitable MNCs would ensure that a baseline level of revenue is collected from them. Although this tax would not solve all problems related to corporate tax avoidance and evasion, and its design and implementation need careful consideration, it would be an important and helpful step.

U.S. President Joe Biden has said there was “no evidence” that raising the corporate tax rate by seven percentage points would drive business abroad. White House press secretary Jen Psaki noted that the 28% rate would be lower than it was at any time since World War Two.

The United States Trade Representative has announced initiation of investigation against the taxation on digital services adopted or under consideration by countries including the equalization levy applied by India. The other counties under investigation included Italy, Turkey, UK, Spain and Austria.

A statement from the office of the USTR said that in January it was found that digital service taxes (DST) adopted by Austria, India, Italy, Spain, Turkey, and the United Kingdom were subject to action under Section 301 because they discriminated against US digital companies, were inconsistent with the principles of international taxation, and burdened US companies.

USTR is proceeding with the public notice and comment process on possible trade actions to preserve procedural options before the conclusion of the statutory one-year time period for completing the investigations.

“The United States is committed to working with its trading partners to resolve its concerns with digital services taxes, and to addressing broader issues of international taxation,” said Ambassador Katherine Tai.

“The United States remains committed to reaching an international consensus through the OECD process on international tax issues. However, until such a consensus is reached, we will maintain our options under the Section 301 process, including, if necessary, the imposition of tariffs.”

Among the proposed actions, the Joe Biden administration has proposed to impose retaliatory tariffs up to 25 per cent on around 40 Indian products including shrimps, basmati rice, gold and silver items.

The Government of India will examine the proposed action with the stakeholders concerned and would take suitable measures keeping its trade and commercial interest of the country and overall interest of its people, according to official sources.

With regard to India, the investigation was targeted on the 2 per cent equalisation levy (EL)levied by India on e-commerce supply of services. The investigation included whether the EL discriminated against US companies, was applied retrospectively, and diverged from U.S or international tax norms due to its applicability on entities not resident in India.

The U.S. requested for bilateral consultations in this matter, and India submitted its comments to the USTR on 15 July 2020, participated in the bilateral consultation held on 5 Nov 2020.

India made a strong case that the levy is not discriminatory and only seeks to ensure a level-playing field with respect to e-commerce activities undertaken by entities with permanent establishment in India.

It also clarified that the equalisation levy was applied only prospectively, and has no extra-territorial application, since it is based on sales occurring in the territory of India through digital means.

India based e-commerce operators are already subject to taxes in India for revenue generated from Indian market. However, in the absence of the levy, non-resident e-commerce operators, not having any permanent establishment in India but with significant economic presence, are not required to pay taxes in respect of the consideration received in the e-commerce supply or services made in the Indian market. (IANS)

The World Bank has scaled up its projections for India’s economic growth by a massive 4.7 percentage points to 10.1 per cent for 2021-22 due to strong rebound in private consumption and investment growth. The Bank had pegged the GDP growth at 5.4 per cent for the country in its January report.

“India, which comprises almost 80 percent of the region’s (south Asia) GDP, had a substantial revision to growth of 4.7 percentage points since January 2021, due to a strong rebound in private consumption and investment growth in the second and third quarters (July-December, 2020) of FY21,” the Bank said in a report, titled South Asia Economic Focus Spring 2021-South Asia Vaccinates.

Considering the uncertainty caused by Covid cases in 2021-22, the Bank also gave a range of economic growth for India, at 7.5 per cent to 12.5 per cent, for FY22. “Given the significant uncertainty pertaining to both epidemiological and policy developments, real GDP growth for FY’22 can range from 7.5 to 12.5 percent, depending on how the ongoing vaccination campaign proceeds, whether new restrictions to mobility are required, and how quickly the world economy

Private consumption and public investment will see the Indian economy likely growing by 10.1% in 2021-22 (FY22), the World Bank said, although, in a sign of all-around uncertainty caused by the Covid-19 pandemic, it said India’s economic growth in FY22 would be in the broad range from 7.5% to 12.5%.

The 10.1% is 4.7 percentage points higher than the World Bank’s previous estimate for India’s growth in 2021, and reflects the pace of the country’s recovery. However the Bank also expects the Indian economy to contract by 8.5% in FY21, higher than the government’s own estimate of 8%. The International Monetary Fund (IMF) has projected India’s economy will grow by 11.5% over 2021 and 6.8% over 2022, painting a rosier picture.

“Given the significant uncertainty pertaining to both epidemiological and policy developments, real GDP (gross domestic product) growth for FY21/22 can range from 7.5 to 12.5%, depending on how the ongoing vaccination campaign proceeds, whether new restrictions to mobility are required, and how quickly the world economy recovers,” the World Bank said in a report titled “South Asia Vaccinates”.

Going forward, the report said, “the main risks to the outlook include the materialisation of financial sector risks, that could compromise a recovery in private investment, and new waves of Covid-19 infections.” It saw growth in the country at 6-7% in the medium term.

The Indian economy was already slowing ahead of the pandemic, but the disease and mitigation measures such as lockdowns deepened the crisis several times over, contracting output and shrinking spending and investments.

“In response to the Covid-19 outbreak, the authorities implemented a nationwide lockdown, which brought economic activity to a near standstill between April and June 2020 (Q1FY21),” the report said. Aviation and tourism, hospitality, trade, and construction, were the worst hit as well and industrial activity, overall, was also deeply disrupted. Agriculture, however, was mostly unaffected, it noted.

Acknowledging it is “not normal” to cite growth forecast in a range of numbers, World Bank’s Chief Economist for South Asia, Hans Timmer, told reporters: “We are in an unprecedented circumstance. Not just the hits (were) unprecedented, but also the character of the crisis was as we had never seen before.”

He added that certain sectors of the economy hat were hit were normally much more resilient, especially the services sector, domestic services. “It’s the informal sector. And as a result, we can’t rely really on the past on how this recovery will shape up.” The report forecast growth for the South Asia region at 7.2% in 2021 and 4.4% in 2022.

Timmer said the second wave of infections in India “does not mean we go back to the situation a year ago.” “The next few months will be marked by the speed of the vaccine roll-out and the optimism it may bring to consumer spending and investments,” he added. The report estimated “general government deficit to remain above 10%” till the end of FY22, numbers that are in sync with India’s estimate of fiscal deficit.

The US Dollar’s share of global currency reserves dropped in the fourth quarter to around 59%, the lowest in 25 years, according to International Monetary Fund data. The slide came in a quarter when a gauge of the greenback fell the most since 2010, and amid questions about how long the dollar can maintain its status as the pre-eminent reserve currency. The Chinese renminbi is transforming into a force to be reckoned with in currency markets, with more yuan changing hands than ever before in London, the world’s leading foreign-exchange center.

“This is a slow burn theme, but we are of the view that we’re eventually headed into a ‘multiple reserve currency’ framework over time,” Bipan Rai, a strategist at CIBC, said via email. In the fourth quarter, the euro’s share of official foreign-exchange reserves climbed to 21.2% from 20.5%, while the yuan’s rose to almost 2.3% from 2.1%. The renminbi accounted for 1.94% in the final three months of 2019.

For Marc Chandler, chief market strategist at Bannockburn Global, the drop in the dollar’s share of global reserves is temporary and was driven by its slide against most currencies in the fourth quarter. He’s focusing on data that shows dollar holdings among central banks climbed to $7 trillion, a record, noting that the percentage changes are “distorted” by short-term valuation changes.

“The 59% is a statistical noise generated by a combination of valuation and material changes” in demand for the euro in the fourth quarter, he said in an email. “The dollar’s recovery in Q1 21 will reverse the valuation adjustment and will see the dollar share of reserves increase.”
With its rebound this year, the dollar is heading for its best quarterly performance in a year, up by 2.8%. The greenback is still the most dominant currency used, with data from the Bank for International Settlements showing it’s on one side of 88% of all trades.

Americans who purchased new homes or refinanced their mortgages over the past few months may have done so at just the right moment. The average rate on a 30-year fixed-rate mortgage rose to 3.02%, mortgage-finance giant Freddie Mac said Thursday. It is the first time the rate on America’s most popular home loan has risen above 3% since July and the fifth consecutive week it has increased or held steady.

Mortgage rates fell throughout most of 2020 after the Covid-19 pandemic ravaged the economy. That helped power the biggest boom in mortgage lending since before the financial crisis, fueled by refinancings. When rates hit 2.98% in July, it was their first time under the 3% mark in about 50 years of record-keeping.

The recent upward moves paint a clear contrast: More vaccinations in the U.S. and recent progress on the latest coronavirus relief bill have brightened investors’ outlook on the economy, a key variable in determining borrowing rates.

Mortgage rates tend to move in the same direction as the yield on the 10-year Treasury, which has been rising. Treasury yields rise when investors feel confident enough in the economy to forgo safe-haven assets such as bonds for riskier ones including stocks. Last week, the yield hit its highest level in a year.

Freddie Mac chief economist Sam Khater said he expects a strong sales season, partly because he thinks “the uptrend in rates from here will be more muted than the past few weeks.” The Federal Reserve has said it would maintain ultralow interest rates until the economy improves.

The rate on the 30-year fixed mortgage increased to 3.02% this week, up from 2.97% the previous week, according to Freddie Mac, a government-sponsored agency that backs millions of mortgages. That was the first time the rate exceeded 3% since the third week in July and the highest level since the first full week in July, when the rate was 3.03%.

The average rate on 30-year fixed mortgages surged over 3% this week, hitting that benchmark for the first time in seven months.

The rise in rates isn’t a surprise. With expectations that the economy will start to recover and the potential for increasing inflation, many experts see mortgage rates rising in 2021.

However, it’s important to note that even with the recent rate growth, both mortgage and refinance rates remain historically low. As recently as May 2019, rates were over 4%, so many homeowners still have the opportunity to save with a mortgage refinance or purchase a new home at a low rate.

Here’s what rising rates might mean for you.

Rates have surged 0.37% from an all-time low of 2.65% in early January and now sit at 3.02%, according to Freddie Mac. For someone taking out a $250,000 30-year mortgage, this increase in rates would add about $49 to your monthly payment and cost roughly $17,800 more in interest over the life of the loan.

Mortgage interest rates aren’t expected to continue to rise at this rate. “The rise in mortgage rates over the next couple of months is likely to be more muted in comparison to the last few weeks,”  Freddie Mac chief economist Sam Khater said in a statement released yesterday. So don’t expect to see the real estate market turn into a buyers market anytime soon.

This rapid increase in rates has been driven, in part, by rising long-term Treasury bond yields, which topped 1.5%. “Interest rates have been volatile recently, with the benchmark 10-year Treasury increasing about 50 basis points from where it was at the start of the year,” Freddie Mac deputy chief economist Len Kiefer wrote in an email. And that has put pressure on mortgage rates, which historically have moved in tandem with 10-year Treasury bond yields.

For now, however, the message remains the same: If you’re financially ready to buy or refinance a home, today’s mortgage interest rates are historically low.

The US has agreed to suspend tariffs on UK goods including single malt whiskies that were imposed in retaliation over subsidies to the aircraft maker Airbus.  Tariffs will also be lifted on UK cheese, cashmere and machinery.

The duties will be suspended for four months while the two sides seek a long-term settlement. On 1 January, the UK dropped its own tariffs on some US goods, put in place over a related dispute about US subsidies to Boeing.

It is the latest twist in a decades-old trade row that has seen the EU and the US target billions of dollars worth of each other’s exports with taxes.

The UK is part of the dispute as a former EU member. Airbus makes wings and other parts in the UK, but assembles its commercial aircraft in the EU. It has hit Scotch whisky producers particularly hard as the US is a key export market. Distilleries have reported £500m of losses since 2019 due to the tariffs.

Prime Minister Boris Johnson said the trade truce, due to come into force on Monday, would boost British business. “From Scotch whisky distillers to Stilton-makers, the US decision to suspend tariffs on some UK exports today will benefit businesses right across the UK,” he tweeted.

“Fantastic news as we strengthen the UK-US trading relationship and work to build back better from the pandemic.” Simon Cotton, boss of Speyside-based textiles firm Johnston’s of Elgin, says he’s “absolutely delighted” the tariffs have been suspended.

The company, which employs 850 people, has been taking a “25% hit” on every knitwear product it exports to the US – “a significant cost” at a time when Covid and Brexit also pose challenges.

In Speyside many other businesses have felt the impact of the US tariffs, including whisky distilleries and shortbread makers.

“This has been a particularly difficult tax for the businesses here, so it’s a huge relief for the region,” says Mr Cotton. “We’re hoping this paves the way for a permanent removal of these tariffs.”

Karen Betts, head of the Scotch Whisky Association, called the suspension “fabulous news”. “The tariff on single malt Scotch whisky exports to the US has been doing real damage to Scotch whisky in the 16 months it has been in place, with exports to the US falling by 35%,” she said.

“So today, everyone in our industry – from small companies to large – is breathing a sigh of relief.” For more than a decade, the EU and US accused each other of propping up their home aviation markets with tax breaks, research grants and other aid.

But tensions flared in 2019, when former US president Donald Trump retaliated by putting tariffs on $7.5bn (£5.4bn) of EU goods, including UK products such as whisky.

Since it left the EU, the UK has been lobbying Washington to drop the duties on its goods as it seeks a wide-ranging trade deal with the US. Talks with Washington abruptly broke off in January but resumed after Joe Biden became US president.

Biden’s top trade nominee, Katherine Tai, has said she will make it a priority to resolve the row with the EU and Britain – although for now US tariffs continue to apply to EU goods. In a joint statement on Thursday, the UK and the US said that the suspension would “ease the burden on industry and take a bold, joint step towards resolving the longest-running disputes at the World Trade Organization”.

The two countries added that it would also allow time to focus on negotiating “a balanced settlement to the disputes, and begin seriously addressing the challenges posed by new entrants to the civil aviation market from non-market economies, such as China”.

Airbus welcomed the removal of “lose-lose tariffs” and urged the UK and US governments to reach a long-term settlement.  More than £500m-worth of whisky sales have been lost since October 2019, when the 25% tariff was introduced on single malt Scotch. Smaller distillers were hit hardest.

The US is the biggest single-nation export market by value. President Trump’s US Trade Representative reckoned it was a good source of political leverage in the 17-year trade dispute over aircraft manufacturing.

Scottish cashmere sweaters were also targeted. In the political calculation of trade disputes, the US did not include Irish whiskey or Italian cashmere, giving them the opportunity to exploit the rift and grow market share.

It was not until last autumn that the European Union and the UK won the right, at the World Trade Organisation, to hit back over Boeing subsidies by US governments. That levelled the field on which to negotiate a resolution.

Donald Trump used trade tariffs as a bludgeon intended to protect American jobs, and although Joe Biden is not noted as an enthusiast for globalisation and free trade, this suspension of tariffs signals his administration is in the business of negotiated deals between partners.

It acknowledges the trans-Atlantic partners should perhaps focus more on manufacturing competition from China. But there is work to be done: the EU, UK and US have not only the Boeing/Airbus dispute to resolve, but another one over steel and aluminium, which explains the 25% tariff currently on imported American whiskey.

For Liz Truss and the UK government’s attempts to secure post-Brexit trade deals, this is a significant step forward. It seems the Biden administration is not prioritising the European Union ahead of Britain. However, a UK-US free trade deal is a long way from here.