Posts Tagged ‘agriculture’

Trump says China ‘back in the market’ for U.S. soybeans — U.S. Farmers look for new buyers

December 12, 2018

President Donald Trump said on Tuesday that China was buying a “tremendous amount” of U.S. soybeans and that trade talks with Beijing were already under way by telephone, with more meetings likely among U.S. and Chinese officials.

Trump told Reuters in an interview that the Chinese government was “back in the market” to buy soybeans after a Dec. 1 truce in the U.S.-China trade war.

But traders in Chicago said they have seen no evidence of a resumption of such purchases following China’s imposition of a 25 percent tariff on U.S. soybeans in July.

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“I just heard today that they’re buying tremendous amounts of soybeans. They are starting, just starting now,” Trump said in the interview.

Trump also said he believes China will soon cut tariffs on U.S. autos to 15 percent from the current 40 percent level.

“I think they’re looking to do it immediately, very quickly,” he said.

A Trump administration official earlier told Reuters that China’s plan to cut car tariffs was outlined in a phone call between Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

SOYBEAN SALES AWAITED

U.S. government data has not shown any soybean sales to China since July, when Beijing imposed tariffs on U.S. supplies of the oilseed in retaliation for U.S. duties on Chinese goods.

Traders have been watching closely for signs of confirmation of a resumption of Chinese buying of U.S. soybeans, particularly after Trump tweeted on Tuesday morning that “very productive conversations” were going on with China. “Watch for some important announcements!” he added.

Chicago Board of Trade soybean futures edged higher on Tuesday on hopes that new deals would be signed soon, but there were no signs of increased activity in the cash markets, traders said.

U.S. Agriculture Department rules require exporters to promptly report sales of 100,000 tonnes or more of a commodity made in a single day.

China last year purchased about 60 percent of U.S. soybean exports in deals valued at more than $12 billion. With those exports gone, soybean prices had tumbled to their lowest in a decade, heaping pain on U.S. farmers, a key Trump constituency.

Trump and Chinese President Xi Jinping called a temporary truce in their trade war on Dec. 1. Trump agreed to postpone for 90 days a Jan. 1 increase in tariffs on Chinese goods while the two sides negotiated over increased Chinese purchases of American farm and energy commodities, an end to forced technology transfers and stronger protections for U.S. intellectual property in China.

Trump said on Tuesday that those negotiations were already taking place by telephone.

“We’ll probably have another meeting. And maybe a meeting of the top people on both sides,” Trump said. “If it’s necessary, I’ll have another meeting with President Xi, who I like a lot and get along with very well.”

Trump did not offer any timetable for further face-to-face meetings among U.S. and Chinese officials.

He said he would wait to increase tariffs on Chinese goods to 25 percent from 10 percent until it becomes apparent whether the United States and China can make a deal.

Reporting by Roberta Rampton and Jeff Mason; Additional reporting by Tom Polansek and Michael Hirtzer in Chicago; Writing by David Lawder; Editing by Sandra Maler and Leslie Adler

Reuters

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U.S. Soybean Farmers Work to Loosen China’s Grip

Agriculture officials are looking to Asia and Europe amid trade tensions, while producers consider new domestic uses.

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CHICAGO—U.S. soybean farmers worked for decades to make China their biggest foreign customer. Now they face a tougher challenge: weaning themselves off the market.

As trade tensions cut deeply into exports, U.S. soybean farmers, industry groups and government officials are seeking a stronger foothold in international markets beyond China, including Europe and Southeast Asia.

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Despite Huawei Arrest Caper, China – U.S. Working To Carry Out Buenos Aires Agreement on Trade

December 11, 2018

Top Chinese and American trade officials spoke by phone on Tuesday (Dec 11), signalling that dialogue between the two nations on trade issues is at least continuing despite a diplomatic row over the arrest of a senior Chinese businesswoman.

China’s Vice-Premier Liu He, US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer spoke by phone Tuesday morning Beijing time, according to a statement from China’s Ministry of Commerce.

The two sides exchanged views on the timetable and road map of future trade talks, the ministry said, without providing further details.

Donald Trump and Xi Jinping at a dinner meeting on Dec. 1 Photographer: Pablo Martinez Monsivais/AP

At a time when the status of a deal brokered between the two sides in Buenos Aires this month was already in doubt, the arrest of Huawei Technologies Co. Chief Financial Officer Meng Wanzhou – linked to potential sanctions violations – had threatened to torpedo the progress made.

Both sides have signalled that they want to separate the two issues, with an eye on the March 1 deadline for further agreement on trade differences.

“It’s a positive signal that work is in progress” on trade negotiations despite tensions related to the arrest of Meng, said Michelle Lam, a greater China economist at Societe Generale SA in Hong Kong.

The news of Meng’s arrest in Canada contributed to increasing alarm in financial markets about the lack of specifics in a trade truce announced after US President Donald Trump and Chinese leader Xi Jinping dined together at the Group of 20 meeting.

Under the terms disclosed, Trump agreed to pause increasing tariffs on Chinese imports for 90 days while negotiations got under way.

S&P 500 E-Mini futures pared losses on news of the phone call and China stocks turned positive. The Shanghai Composite Index rose 0.3 per cent before falling back a little.

Meanwhile, China has accused Canada of violating a bilateral agreement by failing to speedily inform its consulate of Meng’s arrest – an accusation the Canadian government denies.  Over the weekend, Chinese authorities separately summoned the ambassadors of Canada and the US to protest Meng’s arrest on allegations she committed fraud to sidestep sanctions against Iran.

The case has become a flash-point in ties between the US and China that’s rattled investors and sent stock markets tumbling.

Since the Buenos Aires agreement, China has acted to meet its side of the bargain. For example, it intends to announce this month the first batch of US soybean purchases where most, if not all, will be destined for state reserves, according to government officials.

Dow Jones, Apple Recover; Why Huawei Is U.S. Trump Card In China Trade War

December 11, 2018

The Chinese patent ruling against Apple (AAPL) that helped sink the Dow Jones early Monday was just a paper cut — Apple stock rallied to close higher. But it sent a message to President Trump. As China’s ‘national champion’ Huawei hangs in the balance, Trump has the leverage to extract major trade concessions or unleash a long-term China trade war that rips up worldwide supply chains and roils the global economy.

Image result for Huawei, pictures, corporate, logo

The Dow Jones dived 505 points as Wall Street fretted over detained Huawei CFO Meng Wanzhou, who faced another bail hearing in Canada. But the Dow Jones and Apple stock, the Dow’s biggest loser in early trading, both rallied to close slightly higher on the stock market today.

Huawei, China Still Reliant On U.S. Technology

Trump tariffs, though potentially damaging for both economies, have become a sideshow in the U.S.-China trade war. The real fight is over global leadership in advanced technology industries. For now, the dependence of Huawei and the Chinese high-tech sector on American technology has left China highly vulnerable and in desperate need of trade deal.

Jefferies analysts Edison Lee and Timothy Chau wrote that Huawei is dependent on chip technology from Qualcomm (QCOM) and the Android operating system from Google parent Alphabet (GOOGL). “If Huawei cannot license Android from Google, or Qualcomm’s patents in 4G and 5G radio access technology, it will not be able to build smartphones or 4G/5G base stations,” they wrote.

The U.S. briefly banned doing business with sanctioned Chinese communications equipment giant ZTE, a de facto death sentence before Trump intervened. Now that Huawei CFO Meng Wanzhou is in custody and the company faces U.S. penalties for violating sanctions on doing business with Iran, one of the brightest corporate jewels could face an existential crisis.

China also depends on chip-equipment technology dominated by Applied Materials (AMAT), Lam Research (LCRX) and KLA-Tencor (KLAC).

“Outside of Applied, Lam and KLA, we believe alternative suppliers of the array of leading-edge semiconductor equipment that Chinese companies need to produce chips do not exist,” Moody’s wrote in a June report.

Xi Wants U.S. China Trade Deal

Despite anger over the arrest of Huawei CFO Meng Wanzhou, Chinese President Xi Jinping appears intent on meeting commitments made in his Argentina dinner with Trump. China may be able to weather Trump tariffs, but its vulnerability to a freeze-out of U.S. technology provides every reason to expect that a deal will happen. Trump wants to score a victory and almost settled for a quite modest one in May.

Still, the U.S. could overplay its hand by keeping Huawei CFO Meng in custody or demanding that Xi figuratively bow down to Trump.

The timing of the Chinese court ruling vs. older Apple iPhones was likely more than coincidence, with Huawei essentially on trial. It’s a reminder that Beijing can seriously hurt U.S. companies using China as a manufacturing base and dependent on the country as a source of revenue.

In other words, both the stakes involved and the likelihood of a deal in the China trade war just went up.

https://www.investors.com/news/economy/dow-jones-apple-rally-huawei-is-china-trade-war-trump-card/

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U.S., China Kick Off a New Round of Trade Talks — “Timetable and road map”

December 11, 2018

Image result for Liu He ,, photos

In a phone call, officials discuss Chinese purchases of agricultural products and changes to fundamental Chinese economic policies

Chinese Vice Premier Liu He last month
Chinese Vice Premier Liu He last month PHOTO: CLEMENS BILAN/EPA/SHUTTERSTOCK
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WASHINGTON—The U.S. and China started the latest round of trade talks with a phone call involving Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He.

The three senior officials discussed Chinese purchases of agricultural products and changes to fundamental Chinese economic policies during the phone call, said people familiar with the conversation. They didn’t provide further details.

As part of the trade truce reached between Mr. Xi and Mr. Trump, Chinese officials are also considering making changes to the Made in China 2025 plan, a state-led industrial policy aimed at enabling Chinese companies to dominate a number of industries such as artificial intelligence and robotics, said people familiar with the matter. The policy is a focal point of the U.S.’s complaints that Beijing engages in unfair trade practices that put foreign firms at a disadvantage to Chinese companies.

China’s Commerce Ministry, in a brief statement, said the conversation—held Monday evening in the U.S., Tuesday morning in China—was meant to “push forward with next steps in a timetable and road map” for negotiations. Mr. Liu plans to travel to Washington after the new year, people familiar with the matter said.

The call follows up the 90-day tariff cease-fire agreed to by Presidents Trump and Xi Jinping this month.

U.S. and Chinese officials have said that Beijing has planned to announce purchases of soybeans as a goodwill gesture in the talks which are expected to conclude around March 1.

During the negotiations, the U.S. said it won’t raise tariffs on $200 billion of Chinese goods to 25% from 10%, as it had planned to do on Jan. 1.

By holding the phone call, both sides are suggesting a willingness to keep the negotiations from getting derailed by Chinese anger at the arrest in Canada at the U.S. request of a senior executive at China’s Huawei Technologies Co. The executive, Meng Wanzhou, is the daughter of Huawei’s founder, and the U.S. is seeking her extradition for allegedly misleading banks about the telecommunications equipment giant’s business in Iran to evade U.S. sanctions.

In the past, Mr. Liu, China’s chief trade negotiator has dealt directly with Mr. Mnuchin. Mr. Trump named Mr. Lighthizer as the lead negotiator on China issues and informed Mr. Xi while they discussed the truce over dinner in Buenos Aires on Dec. 1.

Having both the Treasury secretary and trade representative on the phone call suggests that Treasury will continue to have a significant role in China talks. In the past, Treasury has focused on the financial-services sector.

Write to Bob Davis at bob.davis@wsj.com

Appeared in the December 11, 2018, print edition as ‘Call Starts U.S.-China Negotiations on Trade.’

https://www.wsj.com/articles/u-s-china-trade-talks-get-under-way-11544498812

U.S. Companies Feel the Pinch as Tariff Costs Start to Mount

December 7, 2018
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American companies that import products are paying record amounts in customs duties as more tariffs imposed by the Trump administration take effect.

Tariff collections topped $5 billion in October, according to data from the Treasury Department and from Census Bureau data analyzed and released by Tariffs Hurt the Heartland, a lobbying coalition of manufacturing, farming and technology groups.

President Trump campaigned on an aggressive trade agenda, and from early this year has imposed or considered tariffs on thousands of products from dishwashers to semiconductors. U.S. revenue from tariffs has begun to build rapidly only in the last few months, as more of the levies have taken effect.

The amount of tariffs being paid by U.S. importers has doubled since May, including an increase of more than 30% from August to October, according to the data. The sum has risen through the year as steel and aluminum tariffs were applied to imports from a growing group of countries, then surged in October, which was the first full month in which U.S. tariffs were in place on a full $250 billion of imports from China.

Trade, Tech and Tweets: Stock Markets May Get Even Bumpier in 2019
U.S. stock markets have gyrated this week with seemingly positive news on trade followed by President Trump tweeting he is still a “Tariff Man.” U.S.-China tensions, plus worries about economic growth and the tech sector, spell more volatility ahead for investors. Photo Composite: Crystal Tai

China and the U.S. struck a trade truce Dec. 1, agreeing not to add or increase tariffs for now. But the tariff rates in place in October will remain in effect, meaning collections are likely to remain high in November and December.

President Trump has touted the surge in revenue his tariffs have brought in thus far. “We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN,” he said in a tweet on Tuesday.

Tariffs are assessed to the U.S. importer of record, meaning U.S. companies that import items from China and the rest of the world directly are the initial parties responsible for paying. The Census Bureau data are based off customs filings, while the Treasury data are based off actual payments.

While some importers will bear the cost of the tariffs themselves, others may be able to persuade their foreign suppliers to cut prices enough to offset the cost and others may pass the higher costs on to their customers.

“We are now seeing the raw data behind the stories of tariff pain that are coming in from every corner of the country,” said Charles Boustany, a former Republican congressman who is the spokesman for Tariffs Hurt the Heartland. “American businesses, farmers, manufacturers and consumers are suffering under the weight of the current tariffs and are reeling from the continued uncertainty over whether they will be increased even further.”

Russell Tiejema, the chief financial officer of Masonite International Corp., a Tampa, Fla. manufacturer of doors, said at an investors’ conference this week that U.S. tariffs would hit about 10% of the $900 million worth of material his company acquires to build its products.

“About half of that, we would be the importer of record, which means that we would be the party liable for tariff remittance,” said Mr. Tiejema. “The other half we acquire from other suppliers who then acquire it upstream from China, but they stand as the importer of record. In both cases, we need to negotiate, wherever possible, price concessions.”

Many U.S. companies are also facing retaliatory tariffs from China—and from Canada, Mexico, the European Union and other countries hit by U.S. tariffs this year on steel and aluminum. Data from the research group the Trade Partnership, which works with Tariffs Hurt the Heartland to assess the impact of tariffs, estimate that more than $1 billion in tariffs were paid on U.S. exports in October, based on the volume of trade of affected goods.

John T.C. Lee, the president of Andover, Mass. MKS Instruments, which makes precision measuring instruments, said at a Nasdaq Investors Conference this week that his company was facing both U.S. tariffs and retaliatory tariffs from other countries. MKS faces $3 million in tariffs on its imports over a year, and $7 million in tariffs on its exports, he said.

“That is most likely going to be borne by the customers,” he said, noting that many had no other options for getting those products, a situation that gives his company more leverage to raise prices.

Even after the recent increase in revenue from tariffs, they account for a small share of government income. Tariffs were the primary source of federal revenue before World War I, but that share has dwindled with the introduction of the income tax and the liberalization of trade. In October, more than 2% of federal receipts came from tariffs, the most in at least two decades.

Write to Josh Zumbrun at Josh.Zumbrun@wsj.com

https://www.wsj.com/articles/u-s-companies-feel-the-pinch-as-tariff-costs-start-to-mount-1544180471

China Is Preparing to Buy U.S. LNG and Soybeans Again, Sources Say

December 5, 2018
  • Officials told to take necessary steps to restart purchases
  • U.S. said China promised to buy more energy, agriculture goods
Soybeans are unloaded from a grain truck in Illinois, U.S.  Photographer: Daniel Acker/Bloomberg

Chinese officials have begun preparing to restart imports of U.S. soybeans and liquefied natural gas, the first sign confirming the claims of President Donald Trump and the White House that China had agreed to start buying some U.S. products “immediately.”

Chinese officials have been told to take necessary steps for the purchases, according to two officials with knowledge of the discussions. It wasn’t clear whether the preparations meant China would cut the retaliatory tariffs it imposed on those products, or when the purchases would happen. It is possible that Beijing could reimburse buyers for the tariffs they pay, as they have done for purchases for the state soybean reserve.

Chinese purchases of the goods collapsed after Beijing imposed tariffs on them in retaliation for U.S. import taxes. The two nations agreed to temporarily halt the spiraling exchange of tariffs over the weekend, promising to try and iron out their differences by the start of March next year

China’s Ministry of Commerce didn’t respond to phone calls and a faxed request to comment.

Chinese imports of American soybeans fell 95 percent in October compared to last year, damaging the prospects of Midwest farmers who are in the middle of harvest. Even if the tariffs are lifted now, the U.S. crop is becoming less competitive in the Chinese market as the harvest season approaches in South America. America has probably already missed its best chance to sell soybeans to China, according to Cargill Inc., one of the world’s biggest agriculture commodity traders.

U.S. liquefied natural gas was also absent from China’s shopping list in October, following Beijing’s move in September to impose a retaliatory 10 percent tariff on U.S. supplies. Even so, Asia’s biggest gas consumer imported at least one U.S. cargo in November, according to vessel-tracking data compiled by Bloomberg, and there’s another en route. Heading into winter, Australia, Turkmenistan and Qatar were China’s top gas suppliers, according to customs.

— With assistance by Steven Yang, Anna Kitanaka, and Ramsey Al-Rikabi

John Bolton: US may ban imports from China that rely on stolen intellectual property

December 4, 2018

National security adviser John Bolton suggested Tuesday that the White House could seek to bar any imports from China that employ stolen intellectual property from American businesses.

“It’s an idea that should be considered. We may have some authority in that area already, we may need some legislation,” he told attendees at a Wall Street Journal conference.

His announcement came just days after President Trump and Chinese President Xi Jinping reached a 90-day trade truce. The agreement will delay both the imposition of tariffs on an additional $267 billion in Chinese products, and the escalation of existing tariffs on $200 billion in goods from the country.

As part of the deal, China will also purchase a substantial amount of agricultural, energy, and industrial products from the U.S., the White House said in a statement. But there is confusion over other aspects of the deal, particularly whether China will remove the additional 25 percent tariff on U.S. auto imports imposed earlier this year as the trade skirmish between the two countries heated up.

While Trump announced the action on Sunday, China has yet to confirm and White House officials haven’t outlined whether the tariffs will go to zero or to 15 percent, in-line with what China levies on other countries.

When asked on Tuesday, Bolton side-stepped answering directly.

“We don’t see the American future being a third world county supplying natural resources and agriculture products to China. We need to see some major changes to their behavior,” he said. “We have to look at other things we might do.”

https://www.washingtonexaminer.com/business/john-bolton-us-may-ban-imports-from-china-that-rely-on-stolen-intellectual-property

Markets Cheer, Tentatively, After U.S.-China Trade Truce

December 3, 2018

Asian markets jumped on Monday after President Trump and President Xi Jinping of China reached a deal to put their trade war on pause, a sign of exuberance tempered by the broad consensus that the fragile peace may not last long.

Image result for china stock markets, photos

Chinese shares led the rise, rising as high as 3 percent in morning trading, with the market in Hong Kong following closely. Investors in other markets were more restrained, sending shares up less than 2 percent in places like Japan, Australia and South Korea.

Futures contracts that try to predict the performance of the S&P 500 stock index were up more than 1 percent on Monday, suggesting Wall Street would also open with a bounce.

Other kinds of financial markets also responded to the truce, which was reached Saturday. Soybeans rose on commodities markets on the prospect that China would begin buying American-grown crops again. China’s currency, the renminbi, strengthened against the United States dollar.

Image result for Soybeans, american farmers, photos

Soybeans

The truce, forged over a dinner in Buenos Aires between the leaders of the word’s two largest economies, merely postpones a reckoning over trade. Under the deal, the United States will postpone an increase in tariffs set for Jan. 1, and it sets a March 1 deadline for the two sides to reach a more extensive pact.

Image result for Soybeans, american farmers, photos

Warren and Chris Ford in their soybean field

But the deal leaves in place American tariffs on $250 billion in Chinese goods as well as retaliatory measures enacted by Beijing. It remains unclear whether the two sides will be able to resolve thorny questions such as China’s government support for sensitive industries, a group of policies that the Trump administration has criticized, and protections for American-created intellectual property.

Given those unresolved questions, investor enthusiasm may not last.

“We anticipate that things are still likely to get worse before they get better,” Kerry Craig, global market strategist for the asset management arm of J.P. Morgan, the investment bank, said in an emailed statement.

“Small rays of light such as this create tactical opportunities for investors,” he added, “but on balance we would be more cautious on positioning heading into 2019.”

Chinese investors were perhaps more cheered in part because the official news media there de-emphasized the temporary nature of the agreement. It also played down continued areas of disagreement, such as intellectual property protections.

At midday in Asia, shares in Shanghai were up 2.9 percent, while Hong Kong was up 2.7 percent. South Korean shares were up 1.9 percent and Tokyo was up 1.4 percent.

NYT:https://www.nytimes.com/2018/12/02/business/markets-trade.html

See also:

New farmers cultivate a greener future

http://america.aljazeera.com/articles/2014/7/12/new-farmers-femaleminority.html

Did Trump “Cave In” to China at G20?

December 2, 2018

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China’s state-run Global Times quoted Wang Yi, China’s foreign minister, as telling a G20 press conference: “China is willing to expand imports on the basis of its own needs, agrees to open its market and satisfy the legitimate concerns of the United States as part of the process of reform and opening up.”

Mr Trump and Mr Xi entered the critical summit at the Park Hyatt hotel — where the US president was based — on an upbeat tone, suggesting a truce in trade tensions between the two countries was within striking distance. Afterwards, once he was in flight back to Washington on Air Force One, Mr Trump issued a positive statement.

“This was an amazing and productive meeting with unlimited possibilities for both the United States and China,” he said. G20 summit – five things to watch out for Mr Xi, in opening remarks at the dinner, said it was a “great pleasure” to see Mr Trump.

“A lot of things have taken place in the world,” he said.

“Only with co-operation between us can we serve the interest of both peace and prosperity.”

The delegations were arranged around a long rectangular table, with a crystal chandelier hung above it and a row of flowers down the middle. The main course was grilled Sirloin with red onions, goat ricotta, and dates. The wine was a malbec.

The agreement pauses a trade conflict that was already showing signs of inflicting serious damage to the economies of both the US and China, denting global growth forecasts and causing turmoil and volatility in financial markets. Mr Trump entered the dinner facing trouble at home, following the loss of the House of Representatives for the Republican party in midterm elections, and new activity in the probe by special prosecutor Robert Mueller into his 2016 election campaign.

But despite these pressures, there are no guarantees that the ceasefire will last — so the possibility of a new escalation is likely to hang over Washington and Beijing until there is a more solid resolution. Abigail Grace, a China expert at the Center for New American Security said the agreement was a “time out” for both countries.

“Expect a public cooling period for the next three months, with tough discussions between two bureaucracies taking place behind the scenes. The trade war is far from over yet,” she said. Mr Trump has shifted between bluster and compromise on trade depending on his impulse and the political priorities of the moment.

Within the space of two months he struck agreements to ease trade tensions with the EU and Japan and revamp the North American Trade Agreement with Canada and Mexico.

Above from Financial Times

https://www.ft.com/content/812104b6-f5b3-11e8-af46-2022a0b02a6c

Related:

US and China agree 90-day trade tariff ceasefire — “China gives up nothing”

December 2, 2018
  • Donald Trump agreed to hold off on raising the tariff rate on US$200 billion of Chinese imports for 90 days to allow for additional negotiations to address US concerns on Chinese trade practises, the White House said
  • China agrees to buy “very substantial” amount of US goods to reduce bilateral trade imbalance
PUBLISHED : Sunday, 02 December, 2018, 10:40am
UPDATED : Sunday, 02 December, 2018, 3:22pm

South China Morning Post

US President Donald Trump, US Secretary of State Mike Pompeo, US President Donald Trump's national security adviser John Bolton and Chinese President Xi Jinping attend a working dinner after the G20 leaders summit in Buenos Aires, Argentina, 1 December

Donald Trump and Xi Jinping agreed to a 90-day trade truce to allow for additional negotiations to address US concerns after China agreed to buy a “very substantial” amount of American exports, the White House said in a statement released late on Saturday.

Chinese officials agreed that the country would buy more US products in an effort to reduce the large bilateral trade imbalance.

Trump agreed to postpone for 90 days a scheduled increase in tariffs on US$200 billion in Chinese imports while talks to address American concerns about China’s trade practices take place.

If there is no deal at the end of the 90-day grace period, the US will increase the tariffs on the US$200 billion of goods from 10 per cent to 25 per cent. The negotiations, and therefore the 90-day timeline, start immediately.

“President Trump and President Xi have agreed to immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture,” according to the White House statement.

“Both parties agree that they will endeavour to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10 per cent tariffs will be raised to 25 per cent.”

As part of the ceasefire deal, China agreed to purchase a “very substantial amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately”.

However, the exact value of the purchases has not yet been agreed, the White House said.

Chinese Foreign Minister Wang Yi told reporters that China had agreed to import more US goods “according to its domestic market and people’s demands”, which will include “buying more products from the US to gradually address the trade imbalance”.

Wang also said that China would gradually solve the “legitimate concerns” of the US side, but did not elaborate.

Wang said the two sides would continue negotiations with the goal of “removing of all additional tariffs”.

Xi and Trump had “friendly and candid” talks over dinner and reached an “important consensus,” with China agreeing to buy more from the US to address the bilateral trade imbalance, the Chinese foreign minister said.

Dinner discussions about de-escalating tensions between the world’s two largest economies lasted an hour longer than expected.

Both sides appeared satisfied at the end of the gathering, and applause was heard in the room as the dinner drew a close.

Before he sat with Trump, Xi said he was “very happy” to be meeting his US counterpart and saw the dinner as an “opportunity to exchange views”, according to the state news agency Xinhua. The White House described the meetings as “highly successful.”

In addition to trade, Trump and Xi discussed other issues, including the US opioid crisis and Taiwan. Xi agreed to designate fentanyl as a controlled substance, following complaints that inadequate regulations on pharmaceutical and chemical production were hampering America’s efforts to stem the flow of synthetic opioids from China.

The decision, which the US described as a “wonderful humanitarian gesture” and listed as the first item on the White House statement, means that those selling the drug to the US “will be subject to China’s maximum penalty under the law”.

Meanwhile, Wang said the US had agreed to stick to the one-China policy regarding Taiwan, although the White House’s statement did not mention the island.

The US has in the past acknowledged the one-China position without recognising Beijing’s sovereignty over Taiwan.

Beijing, which regards Taiwan as a breakaway province, views the island as a core interest and has warned the US against supporting pro-independence forces and demanded that it cut off military exchanges.

China also expressed support for Trump meeting North Korean leader Kim Jong-un for a second time, with Wang adding that the US had expressed its appreciation of China’s role in help to push the North towards denuclearisation.

https://www.scmp.com/economy/china-economy/article/2175987/trump-and-xi-agree-trade-war-truce-and-no-extra-tariffs

See also:

China agrees to make fentanyl a controlled substance after talks with US at G20 summit

https://www.cnn.com/2018/12/01/politics/fentanyl-us-china-g20-talks/index.html

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Analysis

Stephen McDonell, BBC China correspondent in Beijing

China has pretty much given up nothing in this deal because the future tariffs threatened from the Beijing side were retaliatory in nature and only to be applied if the United State escalated.

For this it has gained a 90-day reprieve, during which time both sides have pledged to ramp up talks.

When China’s Foreign Minster Wang Yi spoke to reporters after the meeting he said the two leaders had agreed to open up each other’s markets and that this process could lead to the resolution of “legitimate” US concerns.

This was either an acknowledgment that Washington does have legitimate concerns or a way of differentiating those American concerns which are reasonable from those which are not actually “legitimate”.

This is not a suspension of the trade war but a suspension of the escalation of the trade war.

Big questions remain about the preparedness of Beijing to allow international access to this enormous market to a level that would satisfy the Trump administration prompting a complete halt in the trade war.

https://www.bbc.com/news/world-latin-america-46413196