Nigeria and China have renewed their currency swap deal, enhancing economic cooperation and facilitating trade between the two nations, as reported by Guardian Nigeria.

Currency Swap Deal Renewed

Nigeria and China have officially renewed their currency swap agreement, which is vital for strengthening economic ties between the two nations. This deal is designed to enhance trade relations, making transactions more efficient and less vulnerable to fluctuations in foreign exchange markets.

Benefits for Both Nations

The renewed agreement allows both countries to conduct trade using their local currencies, thereby reducing dependence on the U.S. dollar. This initiative is expected to foster economic stability and boost bilateral trade, benefiting businesses on both sides significantly.

Future Prospects

As the agreement takes effect, it is anticipated that Nigeria will experience easier access to Chinese goods and investments. This partnership not only promises immediate economic advantages but also signals a long-term commitment to closer collaboration between Nigeria and China, paving the way for future developments in trade and infrastructure.

Source : Nigeria, China renew currency swap deal – Guardian Nigeria

Australian red meat and live rock lobster exports to China resumed, improving bilateral trade relations after political tensions since 2020. This development aligns with a timetable set by leaders Albanese and Li, enhancing economic ties and benefiting both nations ahead of Lunar New Year.

This announcement comes just two weeks after the resumption of Australian red meat exports to China on December 4, 2024, signaling a broader thaw in bilateral trade relations. The restoration of both live rock lobster and red meat exports follows a timetable set by Australian Prime Minister Anthony Albanese and Chinese Premier Li Qiang on October 10, 2024. During a meeting at the ASEAN Summit in Vientiane, Laos, the two leaders agreed to restore the full live rock lobster trade by the end of 2024. The timing of the resumption will allow Chinese consumers to enjoy Australian lobster just in time for the Lunar New Year celebrations, a development that Australian Trade and Tourism Minister Don Farrell described as an “excellent result” for both the Australian lobster industry and Chinese consumers.

The resumption of lobster exports is not only an economic boon but also an important step in stabilizing the broader relationship between China and Australia. China is Australia’s largest trading partner, and the resumption of trade in high-value products like lobster helps to reinforce the importance of a constructive economic relationship for both countries.

In addition to the lobster trade, Australian exports to China have been gradually recovering since the political tensions of 2020. Prior to the imposition of trade barriers, China was Australia’s largest export market for a wide range of goods, including agricultural products, resources, and services. In 2023, China imported approximately US$155.6 billion worth of Australian goods, up slightly from the previous year. Overall, China remains a critical partner for Australia, accounting for over a third of Australia’s total goods exports, with US$204 billion worth of goods traded in 2023 alone.

According to Australian Minister for Agriculture, Fisheries, and Forestry Julie Collins, the resumption of lobster exports is particularly symbolic as it marks the final removal of trade barriers that have plagued the bilateral trade relationship since 2020.

Australia’s trade with China has faced turbulence in recent years, particularly during the tenure of former Prime Minister Scott Morrison. In 2020, Australia’s decision to align closely with the United States and sign the AUKUS security pact led to a sharp deterioration in relations with China, with Australia suffering trade restrictions on a range of products, including barley, wine, lobster, and beef. These disruptions affected an estimated A$20 billion worth of Australian exports.

Despite these challenges, the broader trade relationship has remained a cornerstone of Australia’s economic strategy. China has been Australia’s largest trading partner for over 15 years, and in 2023, China was the largest importer of Australian agricultural products, resources, and services. The Australia-China Free Trade Agreement (ChAFTA), which came into force in December 2015, played a crucial role in securing preferential access to the Chinese market, particularly for agricultural products. ChAFTA has also allowed Australia to maintain a competitive edge over other major agricultural exporters like the United States, Canada, and the European Union.

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Trump plans significant tariffs on imports from Mexico, Canada, and China. While New Zealand may benefit from increased US exports, overall trade impacts could be limited, with potential challenges ahead.

Few can doubt Donald Trump’s trade intentions once he takes office next January. In a recent social media post, the US president-elect promised:

On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States.

In a separate post he announced there would be an additional 10% tariff on imports from China. While New Zealand goods are exempt (at this stage), we can expect indirect impacts from a variety of directions.

Because the tariffs will raise the price in the US of goods from targeted countries, New Zealand producers have an opportunity to increase their share of the US market.

Also, facing reduced US demand for their products, producers in targeted countries will increase their supply to New Zealand (and other countries). Both effects will benefit New Zealand.

However, there are downsides, too. The tariffs will decrease GDP in the targeted countries. In turn, this will reduce the amount of money those countries have to spend on New Zealand goods.

And because many imports from targeted countries are used in US supply chains, the price of US goods (including those shipped to New Zealand) will increase.

Simulating the global economy

To evaluate the impacts of the tariffs, I use a global model of production and trade that captures interactions between sectors and countries, and consumer demand. (The model is similar to that used by the Productivity Commission’s inquiry into improving economic resilience.)

The modelling finds tariffs will have minimal aggregate effects on New Zealand, but will significantly affect bilateral trade for some goods.

It’s estimated the tariffs will decrease national income in Canada and Mexico by 4.7% and 7.1% respectively, and income in China by 0.8%.

The impacts of the tariffs are largest in Canada and Mexico because, relative to China, these nations face higher tariffs, and the US accounts for a larger share (more than 75%) of each country’s exports.

The model projects the tariffs will have little impact on New Zealand’s national income, with gains in some areas offset by losses in others.

Black Friday shoppers in California: Trump’s tariffs will open doors for New Zealand exports.
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More exports to the US, less to China

There are, however, substantial changes in bilateral trade flows. New Zealand’s yearly merchandise exports to the US are projected to rise by NZ$1.2 billion, as US consumers replace goods from targeted countries with goods produced elsewhere.

About half of that increase in New Zealand exports to the US are agricultural and food products (mainly meat products). The other half are manufactured goods, such as machinery and equipment.

Reduced incomes in targeted economies will reduce New Zealand exports to these countries by a projected $965 million. Dairy products will bear the brunt of this decline.

Most of the decrease in exports is driven by reduced demand in China. This is because China constitutes approximately 25% of New Zealand’s export market, whereas Canada and Mexico collectively account for less than 2%.

New Zealand exports to other countries decrease by $308 million. As targeted countries redirect exports from the US to other markets, New Zealand’s market share reduces as a consequence.

Overall, driven by decreasing exports to China, the value of New Zealand’s total agricultural and food exports falls by $648 million. Conversely, aggregate manufactured exports increase by $280 million.

Reduced imports from the US, more from elsewhere

There are also significant changes in New Zealand imports. As the tariffs increase the price of US goods, New Zealand imports from the US will decline by $353 million.

In contrast, imports from targeted countries increase by $870 million as producers pivot towards non-US markets.

New Zealand imports from other countries decrease by $777 million as these nations direct more exports to the US. Total New Zealand imports decrease by $259 million.

These trade changes may have substantial effects on individual companies and specific communities. But at the economy-wide level, gains in some areas (increased exports to the US and cheaper imports from targeted counties) are offset by losses elsewhere (decreased exports to China and more expensive US imports).

The net result is that the proposed US tariffs will have little aggregate effect on New Zealand.

Bigger challenges

There are at least two changes to the global trading environment that are of greater concern to New Zealand than the recently announced tariffs.

First, if China imposed retaliatory tariffs, as it did when the previous Trump administration imposed tariffs on Chinese goods, it would shrink global GDP and ultimately dampen demand for New Zealand exports.

Second, in the lead-up to the 2024 US election, Trump proposed tariffs of up to 20% on imports from all countries. My model estimates such tariffs would reduce New Zealand exports to the US by two-thirds, and reduce New Zealand GDP and national income by nearly 1%.

Should that happen, there would be challenging trade winds ahead.

This article is republished from The Conversation under a Creative Commons license. Read the original article.