Posts Tagged ‘Chinese trade practices’

Trump’s Currency Complaints Hit Unexpected Targets

February 17, 2017

Top-five trading partners China, Japan and Germany brush them off; Taiwan and Switzerland seem to be paying heed


Feb. 17, 2017 3:47 a.m. ET

HONG KONG—U.S. President Donald Trump’s accusations of currency manipulation appear to be reaching an audience he may not have primarily intended.

Mr. Trump vowed on the campaign trail to revive American manufacturing, in part by taking a hard line on Chinese trade practices and labeling the country a currency manipulator. Since taking office, the president has accused both China and Japan of consistently devaluing their currencies,…

Mr. Trump vowed on the campaign trail to revive American manufacturing, in part by taking a hard line on Chinese trade practices and labeling the country a currency manipulator. Since taking office, the president has accused both China and Japan of consistently devaluing their currencies , while his top trade adviser Peter Navarro has accused Germany of benefiting from what he termed the “grossly undervalued” euro .

All three countries, which rank among the U.S.’s top five trading partners, have brushed off the Trump administration’s claims.

“No one has the right to tell us that the yen is weak,” Japan’s finance minister Taro Aso told parliament on Wednesday, following last weekend’s meeting between Mr. Trump and Prime Minister Shinzo Abe . Japan hasn’t directly intervened in currency markets since 2011 following a major tsunami and resulting Fukushima nuclear disaster.

“The charge that Germany exploits the U.S. and other countries with an undervalued currency is more than absurd,” Jens Weidmann , the president of the German central bank, said earlier this month.

China hasn’t directly commented on Mr. Trump’s criticisms, but most analysts say Beijing recently has been propping up the yuan by selling foreign-currency reserves rather than looking to weaken it.

Still, some smaller economies look like they are taking notice, notably Taiwan and Switzerland. The U.S. Treasury found in October that both had engaged in persistent, one-way currency intervention, essentially by buying foreign currencies like the U.S. dollar and selling their own to maintain weak exchange rates.

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Analysts say the central banks of Switzerland and Taiwan are now stepping back from those activities, perhaps to avoid closer scrutiny from the Trump administration. The upshot: The Swiss franc has advanced nearly 2% against the U.S. dollar this year, while the new Taiwan dollar has surged 5.3%. Both have outperformed the euro and yen since the U.S. election in early November.

Taiwan’s central bank bought $500 million in foreign currencies in the fourth quarter, well below its quarterly average of more than $3 billion since 2012, according to Khoon Goh , head of Asia research at ANZ in Singapore, who said he suspects it is stepping back from “currency-smoothing operations.” The central bank said it doesn’t comment on currency policy.

For the first nine months of last year, the Swiss National Bank /quotes/zigman/1379668/delayed CH:SNBN +0.12% intervened heavily in currency markets to slow the franc’s rise, spending an amount roughly equivalent to its current-account surplus for the period, J.P. Morgan/quotes/zigman/272085/composite JPM -0.76% analysts note. Over the following four months, the scale dropped to around two-thirds of the surplus.

“It’s not an entirely fanciful suggestion that the SNB might be tapering intervention in order to the guard against the risk of being cited by the U.S. Treasury as a currency manipulator,” the analysts wrote in a note.

The Swiss National Bank declined to comment.

For the U.S. to label an economy a currency manipulator under the current law, it must have a large trade surplus with the U.S. and a hefty current-account surplus and persistently intervene in the currency in one direction. As of October, no economies met all three criteria.

Recent comments from officials in South Korea, which the Treasury has flagged for its hefty trade surplus with the U.S. and its current-account surplus, suggest they’re similarly eager to avoid U.S. ire, says Govinda Finn , senior analyst at Standard Life Investments in Edinburgh. The Korean won has surged 5.2% against the dollar this year.

But any gains in the Korean and Taiwanese currencies due to U.S. political pressure may not last, he said: “On a longer-term horizon, there’s a pretty strong case to say both of those currencies can and will weaken as the authorities look to support their economies.”

Jenny W. Hsu contributed to this article.

Write to Saumya Vaishampayan at

Donald Trump’s Nominees Stick to His Script

January 19, 2017

Would-be agency leaders voice plans to dismantle Barack Obama’s domestic agenda


Updated Jan. 18, 2017 11:28 p.m. ET

Donald Trump’s cabinet picks took a tough line Wednesday on Chinese trade practices and federal environmental regulations, reflecting the president-elect’s antiestablishment agenda.

The president-elect’s nominees in last week’s confirmation hearings—many chosen for national security posts—took pains to show they could be independent from Mr. Trump on foreign-policy matters. This week, the designees facing senators represented the…


Scott Pruitt Endures Nearly 7-Hour Confirmation Hearing

Posted: Jan 18, 2017 10:28 PM ESTUpdated: Jan 18, 2017 10:55 PM EST


Nominee Betsy DeVos’s Knowledge of Education Basics Is Open to Criticism

WASHINGTON — Until Tuesday, the fight over Betsy DeVos’s nomination to be secretary of education revolved mostly around her support of contentious school choice programs.

But her confirmation hearing that night opened her up to new criticism: that her long battle for school choice, controversial as it has been, is the sum total of her experience and understanding of education policy. In questioning by senators, she seemed either unaware or unsupportive of the longstanding policies and functions of the department she is in line to lead, from special education rules to the policing of for-profit universities.

Ms. DeVos admitted that she might have been “confused” when she appeared not to know that the broad statute that has governed special education for more than four decades is federal law.


Talk of possible US-China trade war

January 9, 2017

It’s no secret that Donald Trump thinks China is ripping America off. He has labeled Chinese trade practices as abusive and unfair. He holds China responsible for stealing American jobs. Engaging in a trade war with China should be avoided at all costs, but the U.S. has several options to renegotiate and rewrite trade agreements with China to protect American interests, and even promote economic and political stability.


Trump has often threatened to impose tariffs on Chinese products coming into America. The range of possible tariffs has varied from 10 percent to 45 percent.

Many countries have tried to keep and create jobs using various kinds of protectionist policies, such as import tariffs, import quotas and trade embargos. But they have never worked. It’s doubtful that tariffs on Chinese products would bring many American jobs back either.

Ironically, China itself is losing some of its industries and jobs that it gained from America such as textiles, to even lower labor-cost countries, such as India and Vietnam.

China can retaliate, too. It can hurt General Motors and Ford by switching to their competitors like Mercedes-Benz and Volkswagen. Some of the aircraft orders placed with Boeing can be transferred to Airbus.

The Chinese state-owned enterprises have already moved a good amount of their investment banking business from American investment houses to their Chinese counterparts. American agricultural products would also lose Chinese markets.

In 2009, when President Obama levied a tariff on Chinese tires, China retaliated by imposing tariffs on American chicken and automotive products.

In a U.S.–China trade war, some of America’s allies, such as Japan, South Korea and Taiwan, would suffer as well. China imports goods from these countries before processing and exporting them to America.

American workers, whether they voted for Trump or not, would be hurt due to the trade war. In addition, they would continue to lose jobs due to increased productivity resulting from the rapidly growing technology and increasing population.

Trade partners

A better option would be to encourage American importers to buy from countries other than China. It would send a clear message to China that America doesn’t want to depend upon it as its major source of imports anymore. America should also shop around and expand its list of countries it can import. This could include India, Indonesia and the Philippines.

The U.S. must use this switch to create bilateral trade agreements with these countries so that they use their export dollars earned to buy American products. This switch would have many advantages. It would not hurt the net number of American jobs, would create jobs in the new exporting country, and would reduce American dependence on China.

It would weaken China’s financial inflows, which in turn would clamp down on its military ambitions. Finally, it would not involve imposing any tariffs on China.

If China can retaliate by switching from its American suppliers to those from other countries, why can’t the U.S. do the same? What’s stopping America from using its powers as a customer to protect its own interests?

Political strategies

Trump has another tool, but he should be cautioned on using it. He can continue to raises questions and concerns about China’s increasing presence in South China Sea and its unfair treatment of Taiwan.

In those scenarios, China would find it easier to compromise on the trade issues. The danger is that China can retaliate by increasing its presence in South China Sea and by putting more pressure on Taiwan.

Military implications

America has unintentionally been a source of China’s military buildup. The U.S. obviously isn’t arming China with military equipment, but the U.S. is making billions of dollars available to the China by buying Chinese exports. America has a competitor not only in the economic marketplace, but also in the political and military arenas.

It is dangerous for America to help its competitor, a communist country, grow both economically and militarily. The champions of the American doctrine of free trade must recognize that it is seriously harming American interests.

China has been waging a trade war against America since it became a member of the World Trade Organization (WTO). America must use its options to protect itself.

The U.S.–China economic relationship is heading for a bumpy ride. Starting with the war of words, both economic and political tensions are expected to arise. America should start with using its trump card—its strength as a customer.

The U.S. should gradually replace China as its principal source of imports. This would weaken both China’s economy and military. In doing so, Trump can very well build economic and political peace through using its consumer strength.

Narendra C. Bhandari, Ph.D. is a professor of management at Pace University’s Lubin School of Business.


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China is allegedly preparing for trade spats with the US after President-elect Donald Trump’s inauguration on January 20, Bloomberg reported, adding that Beijing may intensify scrutiny over US companies operating in the Chinese market in case Trump decides to take any actions against China’s businesses.

“The report suggested that China might target well-known US firms for higher tax or antitrust investigations, launch anti-dumping probes into US products, and cut back government purchases of US goods,” Chinese newspaper People’s Daily reported.

However, there has been no official confirmation of such claims from the Chinese government so far. On the other hand, the Chinese government’s recent policies and statements suggest a further opening up the domestic market to foreign capital. Despite that, there are experts in China who are advising to be prepared for any backlash by the US when Trump comes into office.

Huang Yiping, a renowned Chinese economist, suggested that given Trump’s tough stance on China and his protectionist trade policy rhetoric, China should consider the potential fallout if Trump imposes higher tariffs on Chinese goods. If Trump targets Chinese goods for higher tariffs, it would certainly have a negative impact on trade, but “it is still too early to tell if Trump will deliver on his campaign promises,” Huang, a member of the monetary policy committee of China’s central bank said during an event in New York, according to

Earlier, a columnist Curtis Stone for People’s Daily wrote that despite his tough talk, Trump admires China for its GDP growth and for its infrastructure investment and engineering. “He sees that, while America is aging and falling behind in certain areas, China is growing and moving forward.

The US can learn from China on infrastructure building, and benefit from its successes,” Stone wrote.

He also suggested that America may be the contemporary example of building a great country, but China is the contemporary example of rebuilding a great country.

One example of such great engineering achievement is China’s Beipan River Bridge, which connects Guizhou and Yunnan provinces. It is a 4,400-feet-long cable-stayed suspension bridge that hangs 1,854 feet in the sky. That is equivalent to 200 stories; roughly the height of four Trump Towers stacked.

“The two massive bridges in Guizhou are a tiny example of China’s strength in infrastructure investment and engineering. No other country in the world has lifted more than double the size of America’s entire population out of poverty in such a short period of time,” according to the columnist. Then there are other achievements of China such as the Asian Infrastructure Investment Bank, building of the Silk Road Economic Belt and the 21st Century Maritime Silk Road.

Modern day China is a country which can teach many a lesson so rather than bashing China, perhaps America should learn from and work with China, Stone noted. In his statements Trump has suggested that he wants to spend $1 trillion on infrastructure upgrades in America to rebuild the nation and put people back to work.

However, the problem is how to pay for it and how to do it. China, on the other hand, knows how to fund and carry out serious infrastructure building, so one way for Trump to realize his plan would be to use Chinese funds and technology.

“This would help return some of America’s investment in China back to America for the benefit of America and strengthen the bilateral relationship. Trump’s plan to rebuild America is bold, but it remains to be seen if he will be bold enough to do what is best for America,” the columnist concluded.

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Tata Steel: David Cameron raises concerns with Xi Jinping

April 2, 2016

BBC News

David Cameron and Xi Jinping

Mr Cameron raised the issue with the Chinese president during a dinner at the White House

David Cameron has raised his concerns about the steel crisis with Chinese President Xi Jinping, Number 10 says.

During a Washington dinner on Thursday, Mr Cameron said they needed to work together to tackle “over-capacity”.

It comes as China, which has been accused of hurting the UK’s industry by “dumping” cheap steel, announced import tariffs of up to 46% on some EU steel.

The government and steel firm Tata said the duties were unwelcome, but would not have much impact on UK exports.

Tata said the particular type of steel affected by the tariff had not been exported to China from its UK operations in recent times, but it was concerned about the possible knock on effect.

‘No guarantees’

The two leaders met at the White House during the Nuclear Security Summit in Washington.

The prime minister has said every effort is being made to save thousands of jobs after Tata Steel’s decision to sell its loss-making UK plants – but he also warned there were “no guarantees of success”.

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Tata’s UK business – which directly employs 15,000 workers and supports thousands of others – includes plants in Port Talbot, Rotherham, Corby and Shotton.

Unions and opposition parties say the government is in “chaos”, and want action to save the threatened plants.

The prime minister’s spokeswoman said Mr Cameron “raised concerns about the global steel industry” with President Xi, and said the G20 in China in September could be a good forum to address the issue.

Both the government and the unions are blaming cheap Chinese imports for causing problems in the UK.

In 2013, the UK produced 13 million tonnes of steel while China produced 779 million tonnes. Chinese exports have also soared. In 2003, the country exported 7.2 million tonnes rising to 107 million tonnes in 2015.

The country has been accused of dumping – selling steel very cheaply and regularly at a loss, with UK executives warning for months that the flood of steel was placing unsustainable pressure on the industry.

Chart showing Chinese steel production

Meanwhile, the Chinese ministry of commerce said imports of grain-oriented flat-rolled steel – a type of high-tech steel made by Tata’s Cogent subsidiary in Newport – will be charged duties ranging from 14.5% to 46.3%.

The US has imposed tariffs of 266% on Chinese steel but Britain blocked efforts at EU level to impose similarly high emergency tariffs.

Ministers said they opposed the changes because they could have affected industries other than steel and did impose higher tariffs on some specific Chinese products such as reinforced steel.

Port Talbot steelworks

Image copyright PA

BBC business correspondent Joe Lynam

In the early 2000s, China was soaking up all the world’s steel and iron ore to build its new cities, and created numerous steel production facilities in their industrial towns. Soon they were making more in one factory in a year, for example, than the entire British steel industry.

But when their construction boom waned, they had too much steel. They couldn’t sell it locally and had to dump it overseas at a cut price. And you cannot compete with dumped steel.

In the future, the UK wants to focus on the production of expensive, specialist steel – but that is the very stuff now facing tariffs of up to 46% in China.

The other difficulty for the UK is that it wants to be one of China’s major trade partners in the future.

For example, the government wants the Chinese to pay for a third of the Hinkley Point nuclear power station in Somerset, which is under way but hasn’t got the final green light yet.

But to get that long term relationship, the UK might need to look away from certain Chinese trade practices.
Plaid Cymru leader Leanne Wood called the latest news about China imposing tariffs a “joke”.

Tata jobs statistics

Business Secretary Sajid Javid met Port Talbot workers face-to-face on Friday, to promise he would be “fully involved” in talks over a possible sale and there were “viable buyers” out there.

Steel production makes up 1% of Britain’s manufacturing output and 0.1% of the country’s economic output.



Xi Jinping in Royal Carriage during his visit to London, October 20, 2015

New China premier pledges strong ties with US; Denies hacking from China

March 17, 2013
China’s newly appointed Premier Li Kiqiang, right, and former Chinese Premier Wen Jiabao applaud at the closing session of the National People’s Congress at the Great Hall of the People in Beijing China, Sunday, March 17, 2013. China’s new leader Xi Jinping pledged a cleaner, more efficient government Sunday as the country’s ceremonial legislature wrapped up a pivotal session that installed the latest generation of communist leaders in a once-a-decade transfer of power.(AP Photo/Kin Cheung)

BEIJING (AP) — China’s government is committed to strong relations with the U.S. and sees a rosy outlook for trade and investment between the sides, newly appointed Premier Li Keqiang said Sunday in his first news conference in his new role.

Despite their differences, conflict between the world’s biggest and second-largest economies is not inevitable as long as they respect each other’s major concerns and manage their differences, Li said.

China’s new leaders “attach great importance” to relations that meet the “fundamental interests of people in both countries and serves the global trend of peace and development,” Li told reporters at the traditional premier’s news conference that follows the close of the annual legislative session.

Two-way trade hit almost $500 billion last year, although disputes linger over Chinese trade practices, opposition to Chinese investment in the U.S. and complaints over alleged Chinese computer hacking.

Asked about recent allegations that China’s military was behind massive hacking attacks on U.S. companies and government entities, Li reiterated Beijing’s statements that China is a major target of global hackers and opposes all such criminal activity.

“I think we should not make groundless accusations against each other but spend more time doing practical things that will contribute to cybersecurity,” he said.

Li was appointed premier last week with primary responsibility for running the Chinese economy.