The initial reaction to the collapse in oil prices this week, initiated by Saudi Arabia’s unilateral declaration that it would open the spigots and flood the market with oil while simultaneously heavily discounting prices, was followed by optimism in some quarters.

That optimism came with the thought that lower oil prices would aid economies struggling with supply chain and worker attendance challenges as a result of the novel coronavirus (Covid-19) pandemic.

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Certainly, lower oil prices will help level balance of payments deficits run by some heavy oil consumers, like India and China. Even Europe, which is a net oil importer, will benefit to varying degrees.

But the size of the price fall will also prove a mixed blessing causing acute pain in other areas, not least among the major players themselves.

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Reuters recently reported on Tesla’s announcement that it is in advanced talks to use batteries from China’s Contemporary Amperex Technology Co Ltd (CATL) that contain no cobalt specifically for use in cars made at Tesla’s Shanghai plant.

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The statement went on to say as a result of using CATL’s lithium-iron-phosphate (LFP) batteries, Tesla would be able to substantially lower the cost of those cars using the alternative battery technology, as cobalt is the most expensive component in traditional nickel-cobalt-aluminum (NCA) and nickel-manganese-cobalt (NMC) batteries.

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Iron ore, coking coal, oil and the base metals have all taken a hit over recent weeks.

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In some part that’s due to a stronger dollar. To a larger degree, however, it’s due to fear that the steps being taken to contain the spread of the new coronavirus (2019-nCoV) are going to cause insurmountable problems for global supply chains and a significant drop in demand from the No. 2 economy in the world, China.

After a dithery start, the Chinese authorities reacted swiftly to close Wuhan, then the whole province of Hubei.

But with cases spreading rapidly all over China and the Lunar New Year being officially extended for an extra week, the whole country has now almost gone into lockdown.

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Although the clocks will count down to 11 p.m. this evening to mark Brexit and Prime Minister Boris Johnson will pronounce “the dawn of a new era” for Britain, ending almost half a century of European Union membership, it will remain an issue of intense division within the U.K. with half the population feeling a sense of satisfaction and half a sense of intense sadness.

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What the future holds for the U.K. after Europe will be decided in part during the next 12 months of negotiations with the E.U. on what kind, if any, of trade deal the U.K. manages to agree with the remaining 27 members of the E.U.

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Heard of Europe’s Green Deal? No?

That may not be surprising, as it was only announced last month. While it sounds like the latest fruit and veg special offer at your local supermarket, it is likely to be one of the most profound policy changes to hit Europe since the formation of the Common Agricultural Policy or the creation of the Euro — or so says Nick Butler, chair of the Policy Institute at Kings College London, writing in the Financial Times this week.

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The Green Deal was announced by new European Commission President Ursula von der Leyen, and in brief, is a commitment by the E.U.’s 27 member states to achieve zero net carbon emissions by 2050.

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Editor’s Note: MetalMiner has recently partnered with Raistone Capital to help manufacturing organizations claim and quickly obtain access to cash refunds for Section 301 tariffs paid on products that are on the exclusion list. Tariff refunds help buying organizations add actual dollars to their bottom line. 

Tariff exclusions are published in the Federal Register (there is also a search portal). You can also search through the lists with your HTS code: 

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This morning in metals news, the U.S. plans to appeal a World Trade Organization (WTO) compliance panel ruling related to its steel dispute with India, China’s crude steel production again hit a record high in 2019 and General Motors announced plans to invest $40 million at its Spring Hill Global Propulsion Systems plant in Tennessee.

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U.S. will appeal WTO compliance panel ruling

In its ongoing dispute with India over its tariffs on Indian hot-rolled carbon steel, the U.S. plans to appeal a WTO compliance panel ruling.

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The successor to the 1994 North American Free Trade Agreement, dubbed the United States-Mexico-Canada Agreement (USMCA), has now made its way through both chambers of the U.S. Congress.

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In December, the White House and House Democrats reached a deal over revisions to the USMCA, yielding an overwhelmingly bipartisan 385-41 vote Dec. 19 that sent the deal over to the Senate.

On Thursday, the Senate voted 89-10 to approve the USMCA via the United States-Mexico-Canada Agreement Implementation Act. Sen. Pat Toomey was the only dissenting Republican vote.

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Steel companies and mining companies in India have heaved a sigh of relief after the federal government amended the prevailing mining law to permit the “seamless transfer” of regulatory approvals to new owners of operational iron ore mines, the Economic Times reported.

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Earlier the week, the government amended the Mines & Minerals (Development & Regulation) Act to ensure smooth transfer of ownership.

The lease of 334 non-captive mineral mines will expire March 31 this year. Of these, 46 mines are operational, 26 of which are iron ore mines.

When the lease expires, all will go on the auction list as per the mining law. However, for some time now there have been apprehensions that the auction round would not be concluded as scheduled.

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The escalation in U.S.-China trade relations appeared to take a brief pause Wednesday when U.S. President Donald Trump and Chinese Vice Premier Liu He signed what has been billed as a “Phase One” trade agreement between the world’s two largest economies.

“Today we take a momentous step, one that has never been taken before with China, toward a future of fair and reciprocal trade as we sign Phase One of the historic trade deal between the United States and China,” Trump said in opening remarks during the signing ceremony Wednesday, adding the deal would begin to “right the wrongs of the past.”

Keep up to date on everything going on in the world of trade and tariffs via MetalMiner’s Trade Resource Center.

Over the past two years, following the launch of a Section 301 investigation in August 2017, the U.S. has imposed a total of approximately $370 billion in tariffs on Chinese goods, with China responding with tariffs of its own at each step of the way amounting to $110 billion.

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