BCEAO releases $ 6 billion for West African economies

The BCEAO has just made a liquidity injection of 3350 billion FCFA ($ 6 billion) at a fixed rate of 2% in favor of several banks of the UMOA. A total of 87 financial institutions participated in the operation. The Central Bank of West African States (BCEAO) made a further injection of liquidity to its member countries last week. In total, 3350 billion FCFA ($ 6 billion) were disbursed by the institution.

During the auction on September 14, 87 banks in the sub-region obtained an injection of liquidity at a fixed rate of 2%. With more than 1000 billion FCFA ($ 1.8 billion), it is the Ivory Coast which obtained the most important financing, ie 31% of the funds injected.

It is followed by Senegal with more than 580 billion FCFA ($ 1 billion), Mali with 466 billion FCFA (835 million $), Benin with 434.5 billion FCFA (777 million $) and Burkina Faso with 318 billion FCFA. ($ 569 million). Niger with 241.6 billion FCFA ($ 432 million), Togo with 219 billion FCFA (…

The signing of the China-US agreement recognizes a long-standing status quo on tariffs.

Announced in mid-December, the signing of a "phase 1" agreement between China and the United States came to fruition in a grand ceremony at the White House on January 15. In the presence of Deputy Prime Minister Liu He, Donald Trump hailed a "historic step" towards a future "fair and reciprocal" trade agreement between the two countries.

For now, the 94-page text validates a simple truce rather than a step back. "This agreement does nothing to change the current situation where 80% of Chinese products are taxed by the United States," says Patrick Artus, chief economist at Natixis. In fact, the tariffs gradually implemented since spring 2018, which now hit $ 360 billion in Chinese goods, remain in place. As for the threat of a new rise, brandished last summer, it has been suspended.

200 billion Chinese purchases
This truce was obtained by Beijing at the price of a very ambitious commitment: China is expected to buy in two years for 200 billion dollars of additional American products, including 78 billion manufactured goods, 52 billion hydrocarbons, 38 billion services, and 32 billion agricultural products. The realization of this staggering amount (in 2019, China imported for 163 billion from the United States) feeds a certain skepticism.

The American president postpones the abolition of customs duties until the conclusion of a "phase 2" agreement, which must tackle very thorny subjects such as the Huawei case or Chinese subsidies. However, this future agreement is very unlikely to see the light of day in 2020.

With the presidential election approaching in November, Donald Trump will be keen to take little risk. Especially since he has just reached his goal: to start this electoral year by availing himself of his negotiating skills, supposedly demonstrated by the "phase 1" agreement ...

Taxes paid by… the Americans
The White House tenant cannot boast, however, of having kept his promise to reduce the US trade deficit. "In March 2018, when the US administration launched the first wave of tariffs, the trade deficit in goods with the rest of the world was $ 829 billion. For the past year, it has been more or less stabilized at 850 billion ”, underlines Bruno Cavalier at Oddo BHF.

No wonder: this deficit is due to "a shortfall in domestic savings," says the chief economist, raising tariffs has no effect. It remains to be seen who pays these American taxes. The conclusion of a recent academic study (Who’s paying for the US tariffs?, By Amiti, Redding and Weinstein) is categorical: "practically 100%" of the increase in customs duties was supported by American businesses and consumers.

For Patrick Artus, the overall impact is ultimately neutral on the economy across the Atlantic, because "by the way, the federal government recovered some 120 billion dollars in additional taxes which, not having been used to reduce the deficit public, have been redistributed in one form or another ”.

A welcome truce in China
The same cannot be said of the Middle Kingdom, whose growth slowed in 2019 to its slowest pace in twenty-nine years. Maintaining their prices, Chinese exporters paid for it with a loss of activity - volumes imported by the United States fell by 20% in the fourth quarter of 2019. Admittedly, between the swine epidemic, the crisis in Hong Kong and the difficulties in the automotive sector, the trade conflict is not the only cause. But for Beijing, this truce with Washington is obviously very welcome.