Posts Tagged ‘Chinese trade practices’

Tariff Showdown Shifts to Intense Negotiation Period

April 5, 2018

After Washington and Beijing crank up pressure on trade, lawmakers, business interests and lobbyists look to navigate new rules

President Trump says China is forcing U.S. companies to transfer their technology secrets to China. WSJ’s Shelby Holliday tells you how. Illustration: Adele Morgan

WASHINGTON—The Trump administration’s tit-for-tat with Beijing over potential tariffs has ushered in a high-stakes standoff over the future of trade between the world’s two largest economies.

The combatants will now follow a timeline stretching over the next half year, during which the two sides will seek to negotiate a new normal. President Donald Trump, who initiated the tensions over Chinese trade practices, has put himself in a position to face mounting pressures from lawmakers, an intense campaign from corporate lobbyists, and outcry from businesses big and small navigating cumbersome new trade rules—all of which was feeding tremendous volatility in the stock and commodities markets.

U.S. administration officials did little to gloss over the likelihood that the trade spat had entered a period of protracted negotiations—and more market turmoil—and suggested the president was willing to withstand domestic pressures to achieve an improved trading relationship with Beijing. The clear signal from the White House was the U.S., while open to discussing solutions, wasn’t prepared to back down anytime soon.

“It’ll be a couple months before tariffs on either side would go into effect,” said White House press secretary Sarah Huckabee Sanders. “I would anticipate that if there are no changes to the behavior of China and they don’t stop the unfair trade practices, then we would move forward.”

The developments drove wild swings in the financial markets. Stocks initially tumbled on the news, led by declines of 5% or more in some major U.S. exporters such as Boeing Co. and Deere & Co., before major indexes began recovering. The Dow rose 230.94, or 1%, to close at 24264.30 after earlier falling as much as 510 points.

As the trade negotiations grind on, many investors resigned themselves to more significant price swings in the markets, especially in light of additional uncertainties from rising interest rates to questions over the staying power of an economic expansion now in its ninth year.

At the same time, many investors remain skeptical that the trade-war fears that have absorbed market participants periodically in recent months will ever come to fruition.

Tariff Showdown Shifts to Intense Negotiation Period

Should some of the tariffs on the table—either U.S. or Chinese—become policy, “then that could create a shadow on earnings,” said Omar Aguilar, chief investment officer of equities and multiasset strategies for Charles Schwab Investment Management. But, he added, “so far it seems like just posturing.”

Under the U.S. plan to introduce tariffs, companies have 30 days to submit comments on the Chinese imports that will be subject to the 25% tariffs, a list of 1,333 goods that includes machinery and materials, upon which U.S. industry has grown to rely on to conduct business. Companies will have the opportunity to raise concerns and to note if goods crucial to business—highly specialized machine tools, for example—have been targeted, or if different goods should be included in the tariff list.

The Chinese side, meantime, has put together its own list, which includes levies on soybeans, autos and airplanes, the export of which has grown crucial to the success of many U.S. businesses. “Both sides have put their lists on the table,” China’s Vice Finance Minister Zhu Guangyao told reporters. “Now it’s time for negotiations.”

U.S. business interests will be allowed to air concerns publicly at a May 15 hearing at the International Trade Commission, and companies will have until May 22 to object to the proposed tariffs. “The fact they did it with a 30-day comment period is not that they care about the comments,” said William Reinsch, a senior adviser at the Center for Strategic and International Studies, a Washington think tank. “The point is to buy time for a negotiation.”

After May 22, the U.S. government still has 180 days to decide whether to go ahead, meaning the standoff could last a long time. If Washington backs off, Beijing is likely to do the same.

The two sides have been negotiating behind the scenes. Chinese economic envoy Liu He has exchanged letters with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin over increased opening of the Chinese market. Mr. Mnuchin has been weighing a trip to Beijing, though its timing is uncertain.

China’s President Xi Jinping will give a closely scrutinized speech next week at the Boao Forum for Asia, China’s version of Davos that takes place with world political and business leaders on the southern Chinese island of Hainan. Both sides’ business sectors will be watching closely for signs about China’s position in the talks with the U.S.

The threat of U.S. tariffs now also hangs over a handful of consumer-goods markets including household appliances, lithium ion batteries, and parts for air conditioners—sectors that China hopes to dominate. Many of the products are goods that Beijing outlined in 2015 as part of its “Made in China 2025” goals for Chinese industry, but doesn’t yet produce at a large scale.

Both countries’ lists total approximately $50 billion worth of goods, a sum that hits about 38% of U.S. exports to China. As China is the much larger exporter, the sum hits only about 10% of Chinese exports to the U.S. Even if the tariffs went into place, the direct impact would be relatively small for the $19 trillion U.S. economy and $12 trillion Chinese economy.

President Trump says China is forcing U.S. companies to transfer their technology secrets to China. WSJ’s Shelby Holliday tells you how. Illustration: Adele Morgan

Yet, while the actions threatened so far may stop short of what most analysts would consider a full-blown “trade war,” they have ignited a lobbying battle engulfing much of American industry, and a market shakeout as investors pull out of companies who trade in the goods targeted by Beijing and Washington for action.

Congress has been reluctant to do anything beyond warn the Trump administration that it risks a full-blown trade war, although behind the scenes some lawmakers, especially Republicans, want the government to find a quick solution to the tension.

“Every town hall I go to, trade or tariffs is one of the big questions. That’s what’s on their mind,” said Sen. Joni Ernst  (R., Iowa) on Wednesday. “They are starting to question the president and where we’re going with this,” she said, adding that she was going to express her concerns directly to Mr. Trump on Wednesday. “I need for him to understand that we’re hurting in the Midwest and this is not helping.”

Iowa is among the largest soybean-producing states, and the state’s other senator, Republican Sen. Chuck Grassley, noted on Wednesday that he had cautioned Mr. Trump his administration would own any harm caused by Chinese retaliation.

“If the federal government takes action on trade that directly results in economic hardship for certain Americans, it has a responsibility to help those Americans and mitigate the damage it caused,” Sen. Grassley said in a statement, adding he would work through the Senate Finance Committee, among other venues, to address the matter.

Indeed, soybean futures dropped 3.1% Wednesday afternoon, as China is the world’s largest importer. Meanwhile, some shares of companies that could face retaliatory Chinese tariffs fell Wednesday, with aerospace giant Boeing down 1% and machinery giant Caterpillar and semiconductor maker Nvidia down more than 1% after paring losses.

Trade groups representing industries from agriculture, retailers and manufacturers were quick to raise objections when the lists were announced. Even groups spared from direct tariffs, like the American Apparel & Footwear Association, expressed concerns, with its President Rick Helfenbein saying that while he was pleased apparel, footwear and travel goods weren’t the subject of tariffs, he was still concerned the list would hit machinery used by domestic apparel manufacturers.

“This would directly raise costs on domestic manufacturers and impact our ability to grow ‘Made in U.S.A.,’ ” he said.

Write to Josh Zumbrun at

Appeared in the April 5, 2018, print edition as ‘Showdown Over Tariffs Shifts To High-Stakes Negotiations.’

U.S. Rebuffs China’s Charm Offensive, Edging Closer to Trade War

November 20, 2017

U.S. looks at sanctions with the goal of fundamentally challenging Chinese trade practices

The U.S. and China are vying for influence in Asia, but tensions between the U.S. and North Korea, as well as President Donald Trump’s focus on prioritizing American interests, have complicated Washington’s agenda. Photo: AP

A month before President Donald Trump’s visit to Beijing, Chinese officials presented an offer they thought Washington couldn’t refuse.

China proposed that during the trip, Mr. Trump and his counterpart, Xi Jinping, unveil a plan to widen foreign firms’ access to China’s vast financial industry, according to people with knowledge of the matter. It was a move previous U.S. administrations had sought for years.

To Beijing’s consternation, according to the people, Washington wasn’t interested. The offer was made a second time during one of Mr. Trump’s meetings at the Great Hall of the People. Hours after Air Force One took off from Beijing, China announced the opening on its own.

The cold shoulder from the White House reflects a fundamental shift in how the U.S. manages its relationship with China, one that suggests a bold gamble and a rocky road ahead despite the bonhomie of the presidential summit earlier this month in Beijing.

The financial opening initially attracted wide attention from market participants, and Beijing called it evidence of its commitment to market liberalization. U.S. reaction has been tepid. A White House spokeswoman on Friday called it “welcome but long overdue” and said: “It is also only one of a plethora of problems China needs to address in order to provide fair and reciprocal access to its market.”

The Trump administration, which recently completed a comprehensive review of China policy, is rejecting the longstanding practice of eking out concessions from Beijing on trade and market access around high-level meetings.

To Mr. Trump and his aides, that approach has yielded few substantive benefits but allowed China to continue policies that put American businesses at a disadvantage. One White House official refers to that pattern as Beijing’s “rope-a-dope” strategy. The administration is now investigating trade sanctions or enforcement actions against China with the goal of fundamentally challenging Chinese trade practices.

The White House is also trying to invest in the personal relationship between Mr. Trump and Mr. Xi to absorb some of the shock of the coming trade measures.

That helps explain Mr. Trump’s unorthodox blend of tough talk on trade and effusive praise for Mr. Xi in Beijing. In China and around the globe, the White House is aiming to make an asset out of Mr. Trump’s unpredictability, which has been criticized by foreign-policy experts as a destabilizing influence on international negotiations over trade and national security.


A Chinese Conglomerate’s Fall From Favor
China to Give Foreigners Greater Access to Its Financial Sector (Nov. 10)
In China, Trump Employs Tough Talk, Flattery With Xi (Nov. 9)
Decoding Trump’s China Trade Strategy (Nov. 5)
Where Donald Trump’s Unpredictability Could Hurt Him (Oct. 23)
“The U.S. now believes that only the threat of unilateral action will compel China to change,” says Scott Kennedy, a deputy director at the Center for Strategic and International Studies, a Washington think tank.

The new China strategy carries considerable risk. Some policy experts fear it could set off a trade war. Others, especially advocates of harsh sanctions, worry Mr. Trump might not follow through if Beijing steps up its charm offensive with further attempts to flatter him or if his agenda becomes monopolized by domestic issues, especially the tax overhaul proposed by the Republicans in Congress.

Still, in Beijing, the prospect of a much tougher U.S. stance is starting to sink in. China had hoped to show it is doing its part to improve the relationship by granting Mr. Trump a “state-visit-plus”—including a private dinner with Mr. Xi in the Forbidden City—and opening the financial sector.

“China realizes that it can’t continue to drive away foreign capital,” says He Fan, a professor at Peking University HSBC School of Business. “It likely will take more measures to open up its economy.”

Beijing is likely to point to any opening measures, however symbolic, to argue against unilateral action by Washington.

Under the new financial opening, Beijing pledged to let foreign securities firms own majority stakes in their Chinese ventures and to scrap foreign ownership limits on Chinese banks. Officials indicated the security-industry changes would be limited, at least initially.

Western officials treat such pronouncements with skepticism, pointing to China’s poor follow-up record and saying hurdles have grown despite similar pledges in the past.

“This opening-up comes at a late stage in development,” said the European Chamber of Commerce in a statement. “It is now difficult for foreign firms to capitalize on these changes as domestic Chinese firms have stronger positions in their respective industry.”

Such views are shared by U.S. officials. “The overall approach now is not to negotiate over crumbs, not celebrate small deals that will have limited impact,” one official said.

While attending meetings by the International Monetary Fund and the World Bank in Washington in October, China’s Vice Finance minister Zhu Guangyao told U.S. officials about the new financial-opening plan, according to the people familiar with the discussions. The Chinese side had expected U.S. officials would welcome the proposal and agree to roll it out as a breakthrough during Mr. Trump’s visit to Beijing.

Instead, U.S. officials called it too little too late.

“We said, ‘No, we’re not going to take your gifts because you’re just trying to sucker us,’” said a U.S. official familiar with the discussions. “The idea with China is no negotiation because it will just make us beholden to them and reluctant to slam them on other stuff.”

The Trump administration trade team is weighing a half-dozen trade enforcement actions that are aimed directly, or indirectly, at China, with decisions expected by early next year.

The team is looking at invoking a Cold War-era law that was last used in the early 1980s to block steel and aluminum imports in the name of national security. It is also studying dusting off another law last used in 2002 to protect domestic producers claiming to have been damaged by a sudden surge of cheap imports; solar panels and washing machines are goods in focus.

The U.S. and China are vying for influence in Asia, but tensions between the U.S. and North Korea, as well as President Donald Trump’s focus on prioritizing American interests, have complicated Washington’s agenda. Photo: AP

Shortly before Mr. Trump’s trip to Beijing, his Commerce Department issued a lengthy study justifying the continuing branding of China as a “nonmarket economy,” a status that allows the U.S. to impose extra high duties on Chinese imports found to have been illegally subsidized or “dumped” below production costs. Commerce has since imposed duties of up to 162% on Chinese aluminum foil and 194% for hardwood plywood. China has filed a complaint over that designation to the World Trade Organization.

At the same time, Mr. Trump’s trade agency is building a broad case to charge China with “unfair trade practices” by improperly pressuring American companies to turn over valuable intellectual property as the price for entering the Chinese market.

Still, the question is when, or whether, the administration will actually take action on these fronts. So far, trade enforcement has taken a back seat to White House priorities such as winning passage of a tax cut and securing Chinese cooperation to curb North Korea’s nuclear program.

U.S. officials have struggled to find remedies that won’t trigger a wide backlash from industries that consume Chinese products or free-trade Republicans in Congress. Excessively harsh sanctions could also provoke a full-blown trade war, some policy experts say.

Although an open line to Mr. Xi could help in managing a trade crisis and allow for more meaningful deal-making, efforts to forge a personal rapport with previous Chinese leaders have rarely borne fruit.

“The development of personal relations is a fact, not a strategy,” the White House spokeswoman said. Messrs. Trump and Xi “seem to have established a good personal relationship, as the president has with many world leaders,” she added.

Already, some supporters of Mr. Trump’s promised China trade crackdown have grown frustrated at the limited results. The Alliance for American Manufacturing, a group formed by the United Steelworkers union and U.S. steelmakers, praised Mr. Trump in April when he launched his study on national-security steel tariffs, and his aides had promised action by June.

Now, they have launched a petition drive protesting the delays and demanding the administration follow through.

The deadline “is long past — and still no action,” the petition reads. “President Trump pledged to stand up for America’s working class—and it’s time for him to make good on his word.”

Asked Tuesday at The Wall Street Journal CEO Council about the delays, Commerce Secretary Wilbur Ross said: “Well, the president has indicated that he doesn’t want that to come out until after the tax legislation is dealt with.”

Write to Lingling Wei at, Jacob M. Schlesinger at, Jeremy Page at and Michael C. Bender at

U.S. Gets Warm Words From China’s Xi Ahead of Trump Visit

September 30, 2017

BEIJING — Chinese President Xi Jinping offered warm words for U.S. President Donald Trump on Saturday, calling him a friend and saying he expected Trump’s visit to China in November would be “wonderful”.

China’s relationship with the United States has been strained by the Trump administration’s criticism of Chinese trade practices and by demands that Beijing do more to pressure North Korea to halt its nuclear weapons and missiles programs.

Xi and Trump met for the first time in person at Trump’s Mar-a-Lago estate in Florida in April. Trump has since played up his personal relationship with Xi, even when criticizing China over North Korea and trade.

Meeting U.S. Secretary of State Rex Tillerson at Beijing’s Great Hall of the People, Xi said he had enjoyed his meetings with Trump and that the two had made considerable efforts to push the development of China-US relations.

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U.S. Secretary of State Rex Tillerson (L) meeting with Chinese President Xi Jinping (R) at the Great Hall of the People on September 30, 2017 in Beijing, China. REUTERS/Lintao Zhang/Pool

“The two of us have also maintained a good working relationship and personal friendship,” Xi said, in comments in front of reporters.

“I believe that President Trump’s upcoming visit to China means an important opportunity for the further development of China-U.S. relations,” Xi added. “And I believe his visit will be a special, wonderful and successful one.”

In comments later reported by China’s Foreign Ministry, Xi added that cooperation was the only correct choice for both countries, whose common interests far outweighed their differences.

Both countries must “on the basis of respecting each other’s core interests and important concerns appropriately handle, via dialogue and consultations, differences and sensitive issues”, the statement cited Xi as saying.

Trump will travel to Asia in November for the first time since becoming president, stopping in Japan, South Korea, China, Vietnam and the Philippines on a trip expected to be dominated by the North Korea nuclear threat.

Tillerson told Xi that Trump and his wife Melania were looking forward to going to Beijing.

“This is a relationship that continues to grow and mature on the strength of the relationship between yourself and President Trump. And we look forward to advancing that relationship at the upcoming summit,” he said.

There was no mention of North Korea in comments made in front of journalists at any of Tillerson’s meetings, which also included top diplomat State Councillor Yang Jiechi and Foreign Minister Wang Yi.

China’s Foreign Ministry, in separate statements on Tillerson’s meetings with Yang and Wang, simply said they exchanged views on the situation on the Korean peninsula, without elaborating.

(Reporting by Phil Stewart and Ben Blanchard; Editing by Andrew Bolton)

Chinese state newspaper says Trump trade probe will ‘poison’ relations

August 14, 2017

BEIJING (Reuters) – U.S. President Donald Trump’s order to his top trade adviser to investigate supposedly unfair Chinese trade practices will “poison” relations between the two countries, a Chinese state-run newspaper said on Monday.

Trump will later on Monday issue the order to determine whether to investigate Chinese trade practices that force U.S. firms operating in China to turn over intellectual property, senior administration officials said on Saturday.

The move, which could eventually lead to steep tariffs on Chinese goods, comes at a time when Trump has asked China to do more to crack down on North Korea’s nuclear missile program as he threatens possible military action against Pyongyang.

Trump has said he would be more amenable to going easy on Beijing if it were more aggressive in reining in North Korea.

In an editorial, the official China Daily said it was critical the Trump administration doesn’t make a rash decision it will regret.

“Given Trump’s transactional approach to foreign affairs, it is impossible to look at the matter without taking into account his increasing disappointment at what he deems as China’s failure to bring into line the Democratic People’s Republic of Korea,” the English-language paper said.

“But instead of advancing the United States’ interests, politicising trade will only acerbate the country’s economic woes, and poison the overall China-U.S. relationship.”

An administration official has insisted diplomacy over North Korea and the potential trade probe were “totally unrelated”, saying the trade action was not a pressure tactic.

The China Daily said it was unfair for Trump to put the burden on China for dissuading Pyongyang from its actions.

“By trying to incriminate Beijing as an accomplice in the DPRK’s nuclear adventure and blame it for a failure that is essentially a failure of all stakeholders, Trump risks making the serious mistake of splitting up the international coalition that is the means to resolve the issue peacefully,” it said.

“Hopefully Trump will find another path. Things will become even more difficult if Beijing and Washington are pitted against each other.”

New U.S. ambassador to China says North Korea a top priority

June 26, 2017


The new U.S. ambassador to China has said that stopping the threat posed by North Korea will be a top priority, along with resolving the U.S.-China trade imbalance, according to a video message to the Chinese people released on Monday.

Terry Branstad, a former Iowa governor, has been described by Beijing as an “old friend” of China. Branstad was confirmed on May 24 as President Donald Trump’s new ambassador to China but his arrival date has yet to be announced.

“Resolving the bilateral trade imbalance, stopping the North Korea threat, and expanding people-to-people ties will be my top priorities,” Branstad said in the video message, which was released on a popular Chinese video-streaming platform.

Trump has placed high hopes on China and its president, Xi Jinping, exerting greater influence on North Korea, although he said last week Chinese efforts to rein in the reclusive North’s nuclear and missile programs had failed.


China’s foreign ministry regularly says that Beijing is doing all that it can with regard to North Korea by implementing United Nations Security Council sanctions, while also pushing for greater dialogue to reduce tensions.

U.S. Secretary of State Rex Tillerson said he had pressed China to ramp up economic and political pressure on North Korea during his meeting with top diplomat Yang Jiechi in Washington last week.

“We face many of the same challenges. A strong U.S.-China relationship can contribute to solutions,” Branstad said in the video, without giving details about how he hoped to work with China.

Branstad also recounted his three decades of engagement with China, from his first visit there in 1984 to hosting Xi, then a county-level Communist Party leader, in Iowa in 1985, and then again in 2012 when Xi was vice president.

Trump pledged during his campaign to take a tough stance on Chinese trade practices deemed unfair to the United States, but his rhetoric softened after a friendlier-than-expected meeting with Xi in Florida in April.

Shortly after their meeting, Trump said he had told Xi that China would get a better trade deal if it worked to rein in the North. China is neighboring North Korea’s lone major ally.

The United States ran a trade deficit of $347 billion with China last year, U.S. Treasury figures show.

(Reporting by Christian Shepherd; Editing by Paul Tait)

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”.

Tata Steel UK: What are the options?

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Steel v banks – Why they’re different when it comes to a government bail-out

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.