Posts Tagged ‘trade talks’

China Is Confronting New U.S. Hostility. But Is It Ready for the Fight?

September 24, 2018

The Chinese leader, wearing a dark Mao suit, and the American president, in a black tuxedo, stood side by side with arms aloftat the Kennedy Center. Deng Xiaoping and Jimmy Carter smiled broadly as the orchestra played “Getting to Know You,” signaling the dawn of a new era of friendship and cooperation between their two nations.

Over the next 40 years, China and the United States built the most important economic relationship in the world and worked together on issues such as regional security, counterterrorism and climate change. Taking Mr. Deng’s lead, China played the junior partner, if not always deferential then at least soft-pedaling its ambitions and avoiding conflict with the much stronger United States.

Now, faster than many in either nation expected, that has all changed.

By  Jane Perlez
The New York Times

On Monday, the United States will begin taxing $200 billion in imports from China, the biggest round of tariffs to take effect yet in an escalating trade war. President Trump says the measures are necessary to fight an economic model that requires American companies to hand over technology in exchange for market access and provides state subsidies to Chinese competitors.

China’s strongman leader, Xi Jinping, presiding over an economy gaining quickly on the United States, has openly challenged American leadership abroad while dashing hopes of any political thaw at home. During this time, both Republicans and Democrats in Washington have turned on Beijing, accusing it of imperial ambitions in Asia, aggression in disputed waterspersecution of ethnic minorities and unscrupulous trade policies aimed at dominating the industries of the future.

In a fundamental shift, the Trump administration has formally described China as a “revisionist power” and “strategic competitor” in the past year. China has been saying similar things about the United States for even longer. But as relations have deteriorated in recent months, many Chinese are now asking if their country is really prepared to take on the world’s most powerful nation.

China has abruptly canceled not only trade talks that were planned this week in Washington but also military-to-military talks scheduled to begin Tuesday. The latter move was made to protest American sanctions imposed last week on a Chinese military department for buying warplanes and missile equipment from Russia.

Image may contain: 2 people, people smiling, people standing and suit

Donad Trump and Xi Jinping at Mar-a-Lago, April 6, 2017. Reuters file photo

In a sign of Beijing’s growing international influence, though, the Vatican and the Chinese government said Saturday that they had reached a breakthrough agreement on the appointment of Roman Catholic bishops in China, taking a step toward normalizing relations.

[Discuss China’s role in the world with New York Times journalists in a new Facebook group here.]

As the acrimony and rivalry with the United States have intensified, the immediate worry in Beijing is how the Chinese public, accustomed to a fast-expanding economy, will handle the trade war, and what impact it might have on the ruling Communist Party’s overriding concern of domestic stability.

The government has sought to project confidence.

“Maybe the growth rate will slow 1 percent. We can accept it. That’s not terrible for us,” said Hu Xijin, the editor in chief of The Global Times, a state-run newspaper known for its nationalist tone. He added that Washington would soon realize that its mobile phone and auto manufacturers could not survive without Chinese customers.

Chinese workers at the entrance to a tunnel they are building for the China-Laos railway project near Vang Vieng, Laos, last year. Credit Adam Dean for The New York Times

“As long as our market is expanding economically and growing, China will win the trade war,” he said.

Charles S. Y. Liu, a private equity investor who sometimes advises the government, said the Chinese people were prepared to endure a protracted trade conflict.

“The Chinese are more tolerant of pain because we have been poor for so long,” he said. “Wealth has only arrived in the last decade.”

But many others are worried, and some have urged the Chinese leadership to seize the moment and shift the economy even further toward open markets and private enterprise rather than allowing an inefficient state sector to dig in.

“A closed approach will lead to a decline in the rate of national competitiveness,” wrote Yan Xuetong, dean of the Institute of International Relations at Tsinghua University, in a recent paper. He warned that China risked returning to the stagnation it suffered in isolation during the Mao era.

“When Trump adopts a protectionist strategy, China should have an open door and force the state-owned enterprises to reform,” Professor Yan added in an interview. But he said his advice was being ignored. “I get no reaction. Nobody listens to me.”

Other Chinese are arguing that the spike in hostility from the United States could have been avoided if President Xi had continued the policy of “hiding strength, biding time” followed by his predecessors and originally set by Mr. Deng.

Mr. Xi instead has flaunted two ambitious programs: the global infrastructure plan known as the Belt and Road Initiative and the effort to dominate advanced industries known as Made in China 2025, both of which have drawn criticism by the Trump administration.

“The same things can be done without such arrogance,” said Yun Sun, an analyst at the Stimson Center, a think tank in Washington. “I believe the Chinese policy community does wish to see more actions and more assertiveness but Xi went too far.”

President Xi and President Cyril Ramaphosa of South Africa attending a summit meeting of the Forum on China-Africa Cooperation in Beijing this month. Credit Pool photo by Lintao Zhang

The party has sought to censor criticism of Mr. Xi but there have been glimpses of anxiety online about the potential impact of the trade war as well as anger at the Belt and Road Initiative, which has earmarked hundreds of billions of dollars for overseas projects intended to lift China’s clout abroad.

Echoing a popular opinion on social media, a retired economics professor, Sun Wenguang, has argued that it is wrong to spend so much money in other countries given the problems that China faces at home.

“Some are too poor to see a doctor, some are too poor to have pensions after retirement, and some too poor to go to school,” Professor Sun said in an interview on the Voice of America last month. “Under such circumstances, if you still choose to throw money at other countries, domestic backlash is almost guaranteed.”

As he was speaking, the police entered his home and forced him off the phone.

Professor Sun’s criticism reflects a broader concern in China about the government’s efforts to win over allies. The subject is important because the United States has long touted its alliances as key to its national strength generally and its ability to counter China’s rise in Asia in particular.

China enjoys significant advantages in the region. It is the largest trading partner of almost every country in Asia while President Trump has strained relations with allies around the world. Even Japan, America’s most important ally in Asia, appears to be drifting closer to China as Mr. Trump threatens the nation with tariffs.

In a rapprochement between the two Asian rivals, Prime Minister Shinzo Abe is scheduled to travel to Beijing next month, the first visit to China by a Japanese leader since 2011.

“Trump said recently, ‘Japan, you’re next for tariffs,’” said Mr. Liu, the private equity manager. “Thank you, Donald Trump.”

But some say China is fumbling the opportunity presented by the Trump administration and alienating neighbors by throwing its weight around too aggressively. There has been a backlash in several countries against Belt and Road projects that have left governments in deep debt, created few jobs for local residents or damaged the environment. Others have raised an alarm about Chinese efforts to interfere in politics of smaller nations.

In an essay that has been widely shared on Chinese social media, a prominent Communist Party scholar warned against national arrogance and overreach, noting the fate of rising powers that succumbed to “recklessness and impetuousness” in the 20th century: Germany, Japan and the Soviet Union.

Workers from Sungrow connecting solar panels to custom-made buoys on the banks of a lake in a flooded coal mine in Liulong Village, China, last year. Credit Adam Dean for The New York Times

“I recall a topic hotly debated on line by young internet users: Who is really China’s enemy? Is it America? Japan? Russia?” wrote the scholar, Luo Jianbo, head of the China Foreign Policy Center at the Central Party School. “If we think about things coolly, perhaps none of them are. China’s enemy is itself.”

In many ways, the Chinese political elite has been caught off guard by how quickly relations have deteriorated with the United States, which has long been a source of envy and inspiration for many Chinese as well as a leading destination for education and immigration.

Chinese scholars often observe that new American presidents usually take a hard line against China but seek cooperation after realizing how the two nations need each other. President Trump has stunned them by defying that pattern.

“I personally feel surprised by the fact that Trump is taking such radical measures,” said Mr. Hu, the newspaper editor. “I initially thought it was a joke, but it turns out to be a real policy, putting tariffs on all these products.”

Some Chinese analysts have sought to explain the escalating conflict with the United States by focusing on the personal qualities of the nation’s two leaders. Mr. Trump is a viewed as a fickle, transactional businessman who may retreat after the midterm elections in November. They note he has repeatedly spoken out against China’s trade practices but said little about human rights or military issues.

Mr. Xi, on the other hand, is said to have invested too much politically in his signature programs to back down under foreign pressure.

“Personality matters in this relationship,” said Wu Xinbo, the director of the American Studies Center at Fudan University. “The biggest problem is Trump’s credibility.”

Though Beijing devotes tremendous resources to studying the United States, there seems to be little understanding that the hostility against China in Washington is bipartisan and extends beyond trade, and that many frustrated business leaders, once defenders of good ties with China, now favor tougher measures against it as well.

Teng Jianqun, director of American studies at the China Institute for International Studies, said the government needed to accept the new reality and tell the Chinese public that the coming struggle could be the beginning of a long fight for the country’s survival as a great power.

“We should let our people fully know that this trade war is not a short-term contest,” he said, “but a contest that will determine the future of the Chinese nation.”

Luz Ding contributed research.

A version of this article appears in print on , on Page A1 of the New York edition with the headline: China, Facing U.S. Hostility, Vows to Come Out Swinging.
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China Says No Talks Under Tariff Threat as Trump Threatens More

September 24, 2018

China said talks to resolve the impasse over trade with the U.S. can’t happen as long as President Donald Trump keeps threatening to impose further tariffs.

Related image
An A.P. Moller-Maersk container ship and a Hapag-Lloyd container ship at the Yangshan Deep Water Port in Shanghai. Bloomberg photo by Qilai Shen.

Just over an hour after the Trump administration imposed further duties on another $200 billion in Chinese goods on Monday, Beijing published a document reiterating its position in the standoff. Talks scheduled for this week were cancelled as the imposition of fresh tariffs by Washington neared.

“The door for trade talks is always open but negotiations must be held in an environment of mutual respect,” according to the white paper carried by the state-run Xinhua News Agency. Negotiations “cannot be carried out under the threat of tariffs.”

The latest round of U.S. duties took effect just after midnight Washington time on Monday (midday in Beijing) on a list of products ranging from frozen meat to television components. China is poised to retaliate with tariffs on $60 billion in U.S. goods, a move that Trump has said would spur new duties on another $267 billion in Chinese imports.

In announcing the rates for the retaliatory duties last week, the government in Beijing said the tariffs would be effective as of 12:01 p.m. local time on Sept. 24. As Monday is a public holiday in Beijing, no official confirmation of that has yet been given.

If the president follows through on the escalation threat, U.S. tariffs would cover all goods the nation imported from China last year. The conflict risks descending into a war of attrition that economists warn could undermine the global economy and upend the supply chains of multinational companies.

China on Saturday called off planned trade talks with U.S. officials amid the escalation. The U.S. State Department’s sanctions against China’s defense agency and its director on Thursday contributed to the decision, according to people familiar with the situation. There’s a growing consensus in Beijing that substantive talks will only be possible after U.S. mid-term elections in November, the people said.

Even as both sides slap fresh levies on each others’ products, they have peppered statements with offers to talk.

“President Trump has an excellent relationship with President Xi and our teams have been in frequent communication since President Trump took office,” Lindsay Walters, deputy White House press secretary, said in an emailed statement. “We remain open to continuing discussions with China, but China must meaningfully engage on the unfair trading practices.”

Neither side has backed down since the tit-for-tat tariff war began in July, when the U.S. imposed duties on $34 billion of Chinese goods. The Trump administration imposed a further $16 billion in August. China retaliated in kind to both moves.

Efforts at diplomacy have failed, with no breakthroughs since high-level talks began in May. And things are set to get worse: the 10 percent tariffs on $200 billion in Chinese goods will rise to 25 percent in January if Beijing refuses to offer concessions.

Companies complain that the time frame between announcement of the latest levies and implementation of the tariffs on thousands of products is too short. A protracted trade war will fuel inflation in the U.S., particularly as tariffs are added to categories such as furniture, apparel and technology, according to analysts at Bloomberg Intelligence.

Here’s Where Tariffs on $260 Billion of Goods Are Biting in U.S.

“Retailers are already facing a tidal wave of tariffs. This latest tranche is a tsunami,” said Hun Quach, vice president of international trade for the Retail Industry Leaders Association. “With thousands of consumer products included, little warning, and no time to prepare, businesses are left scrambling.”

Beijing’s plans for tariffs on $60 billion of U.S. goods that are also set to take effect Monday include an additional 5 percent duty on about 1,600 kinds of U.S. products including computers and textiles and an extra 10 percent on more than 3,500 items including chemicals, meat, wheat, wine and liquefied natural gas.

Administration officials have repeatedly warned that the president is serious about his pledge to re-balance the trading relationship and that Chinese retaliation will only lead to further U.S. duties.

Asked last week if Beijing’s planned retaliation was a guarantee that Trump would go ahead with the next round of duties, White House trade adviser Peter Navarro said on NPR’s Morning Edition that “the president was crystal clear in his statement: if China retaliates, the process will move forward on the additional amount.”

Edward Alden, senior fellow at the Council on Foreign Relations, said there was a chance the trade war could spiral out of control but that there is “a window for serious negotiation.”

“The Trump administration must get its position straight though — what does it want from China, and who is empowered as a negotiator by President Trump to bring the deal home? Unless that happens, serious negotiations will be impossible and the likelihood of continued escalation increases,” Alden said.

Amid the onset of economic damage for both economies, state newspaper China Daily reached into the U.S. heartland in an advertising supplement in Iowa’s largest newspaper to highlight the impact on the state’s soybean farmers as “the fruit of a president’s folly.’’

The four-page section in Sunday’s Des Moines Register, which carried the label “paid for and prepared solely by China Daily, an official publication of the People’s Republic of China,” featured articles including one outlining how the trade dispute is forcing Chinese importers to turn to South America instead of the U.S. for soybeans.

Bloomberg

 Updated on 

https://www.bloomberg.com/news/articles/2018-09-24/trump-imposes-next-batch-of-china-tariffs-as-trade-war-escalates

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US, China impose fresh tariffs with no trade talks in sight — China has warned of “qualitative” measures to retaliate

September 24, 2018

The US and China imposed fresh tariffs on each other’s goods on Monday, as the world’s biggest economies showed no signs of backing down from an increasing bitter trade dispute that has rattled financial markets.

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US tariffs on $200 billion worth of Chinese goods and retaliatory tariffs by Beijing on $60 billion worth of US products took effect as of 0401 GMT.

US tariffs on $200 billion worth of Chinese goods and retaliatory tariffs by Beijing on $60 billion worth of US products took effect on Monday. (AP)

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The two countries have already slapped tariffs on $50 billion worth of each other’s goods earlier this year.

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Chinese products hit with new US duties include vacuum cleaners to Internet-connected devices, while US goods targeted by Beijing include liquefied natural gas and certain types of aircraft.

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China’s state council will publish a white paper at 1 pm local time (0500 GMT) on the trade frictions with the US, the official Xinhua news agency reported, without giving further details.

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Though a senior White House official last week said the US will continue to engage China for a “positive way forward,” neither side has signaled willingness to compromise.

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The US official said on Friday there was no date set for the next round of talks. The Wall Street Journal reported that China, which has accused Washington of being insincere in trade negotiations, has decided not to send Vice Premier Liu He to Washington this week.

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Economists warn that a protracted dispute will eventually stunt growth not just in the US and China but across the broader global economy.

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The trade tensions have also cast a pall over broader relations between Beijing and Washington, with the two sides butting heads on a growing number of issues.

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China summoned the US ambassador in Beijing and postponed joint military talks in protest against a US decision to sanction a Chinese military agency and its director for buying Russian fighter jets and a surface-to-air missile system.

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Trade talks in Washington last month produced no meaningful progress.

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Rob Carnell, chief Asia economist at ING, said in a note to clients that in the absence of any incentives Beijing would likely hold off on any further negotiations for now.

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“It would look weak both to the US and at home,” he said, adding that there is “sufficient stimulus in the pipeline” to limit the damage of the latest tariffs on China’s growth.

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“The US-China trade war has no clear end in sight.”

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China may also be waiting for US mid-term elections early next month for any hints of changes in Washington’s policy stance, Carnell added.

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“With generic polls favoring the Democrats, they may feel that the trade environment will be less hostile after November 6.”

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The US administration will levy tariffs of 10 percent on the $200 billion of Chinese products, with the tariffs to go up to 25 percent by the end of 2018.

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Beijing set its new levies on $60 billion of US goods at 5 and 10 percent and warned it would respond to any rise in US tariffs on Chinese products accordingly.

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US President Donald Trump on Saturday reiterated a threat to impose further tariffs on Chinese goods should Beijing retaliate, in line with his previous comments signaling that Washington may move to impose tariffs on virtually all imported Chinese goods if the administration does not get its way.

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China imports far less from the US, making a dollar-for-dollar match on any new US tariffs impossible.

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Instead, it has warned of “qualitative” measures to retaliate.

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Though Beijing has not revealed what such steps might be, business executives and analysts say China could withhold exports of certain products to the US or create more administrative red tape for American companies.

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Some analysts say there is also a risk that China could allow its yuan currency to weaken again to cushion the blow to its exporters.

Reuters

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China to release white paper on trade war stand after calling off US talks

September 24, 2018

Beijing will release a white paper laying out its trade war stance for the first time, after it cancelled talks with the US on Saturday

South China Morning Post

PUBLISHED : Monday, 24 September, 2018, 12:54pm
UPDATED : Monday, 24 September, 2018, 12:55pm

The Chinese government is expected to release a white paper on the trade war between China and United States at 1pm on Monday to detail Beijing’s position, state-run news agency Xinhua said.

On Saturday, Beijing cancelled scheduled talks with Washington meant to defuse trade tensions.

The white paper – “Facts about the China-US trade dispute and China’s stance” – will be the first comprehensive Chinese government statement on the escalating conflict between the world’s two biggest economies.

More will follow soon…

https://www.scmp.com/news/china/diplomacy/article/2165464/beijing-release-paper-trade-war-stand-after-calling-us-talks

Read the White Paper:

Asian markets build on trade talks rally, Turkish lira holds up

September 14, 2018

Asian markets extended their gains Friday on hopes for China-US trade talks, while Turkey’s lira held up after a shock hike in the country’s interest rate and a dip in US inflation.

After a tumultuous start to the month, investors finally had something to smile about Thursday after Treasury Secretary Steven Mnuchin invited Chinese officials for fresh talks to avert an all-out trade war.

The news provided some much-needed support, which was improved on later in the day with data showing US consumer price inflation slid in August, easing pressure on the Federal Reserve to tighten borrowing costs.

© AFP | The Turkish lira rallied against the dollar after the country’s central bank hiked interest rates

While the central bank is expected to lift rates next month, the figures lower the chances of another such move before January and provided a boost to equities on Wall Street.

That, combined with a pick-up in demand for stocks and currencies, sent the dollar southwards against most higher-yielding currencies but up against the safe-haven yen.

It also gave some breathing space to emerging markets, which have been battered in recent weeks by fears of contagion from crises in Turkey, Argentina and South Africa as a stronger dollar makes it harder for them to repay debts.

“Hope springs eternal for emerging markets anytime the US dollar weakens and (Thursday) was no exception,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

“As indeed the stars aligned for emerging markets assets after an astonishing interest rate hike from the Central Bank of Turkey… and an exceedingly soft US (inflation) data.”

– Remain cautious –

The CBT ramped up interest rates to 24 percent from 17.5 percent Thursday as it struggles to fight off inflation and boost the lira, which is down around 40 percent this year.

The surprise move — an indication the CBT wanted to show its independence from strongman President Recep Tayyip Erdogan — sent the lira surging to 6.01 to the dollar from 6.4. While the unit later eased slightly it managed to hold on to most of the rally in Asian trade.

The positive sentiment from Thursday continued heading into the weekend, with Tokyo going into the break one percent higher and Sydney 0.5 percent up.

Hong Kong rose 0.7 percent, adding to the previous day’s 2.5 percent rise, while Seoul surged 1.3 percent and Singapore gained 0.6 percent.

Shanghai dipped 0.1 percent while Manila fell 0.7 percent with investors fretting as Super Typhoon Mangkhut barrels towards the northern Philippines.

But while traders are upbeat, Hannah Anderson, global market strategist at JP Morgan Asset Management, warned against being too hopeful, with the US still considering imposing tariffs on $200 billion of Chinese imports.

“Markets need to separate trade rhetoric and trade actions,” she said.

“While heated rhetoric may contribute to the shifting investor expectations we have seen this week, there has been no fundamental change in the state of the US-China trade dispute,” Anderson added.

“The US is pressing ahead with tariffs… and China’s qualitative restrictions on US companies operating in China are starting to show up as a drag in business surveys.

“China and the US both need to clarify what their goals are in this dispute for us to be hopeful about a near-term resolution.”

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 1.0 percent at 23,042.83 (break)

Hong Kong – Hang Seng: 0.7 percent at 27,213.12

Shanghai – Composite: DOWN 0.1 percent at 2,683.27

Euro/dollar: UP at $1.1691 from $1.1689 at 2100 GMT

Pound/dollar: UP at $1.3112 from $1.3105

Dollar/yen: UP at 112.00 yen from 111.94 yen

Oil – West Texas Intermediate: UP 30 cents at $68.89 per barrel

Oil – Brent Crude: UP 26 cents at $78.44 per barrel

New York – Dow Jones: UP 0.6 percent at 26,145.99 (close)

London – FTSE 100: DOWN 0.4 percent at 7,281.57 (close)

AFP

US President Donald Trump to meet Chinese Vice-Premier Liu He ahead of trade talks

May 17, 2018

Liu’s surprise visit to the White House ‘means that there’s great interest here in furthering’ the talks, Trump’s economic adviser says

South China Morning Post

Image result for Liu He, photos

Liu He

US President Donald Trump will meet with Chinese Vice-Premier Liu He on Thursday to discuss the simmering bilateral dispute threatening more than US$200 billion in trade, the top White House economic adviser said.

The meeting between Trump and his Chinese counterpart’s top economic aide, taking place on the first day of a two-day visit by Liu, was not on the White House schedule or mentioned in the US State Department’s recent announcement about the trip.

“The president is meeting with Liu this afternoon,” National Economic Council director Larry Kudlow told White House reporters. “It means that there’s great interest here in furthering the deal and furthering negotiations and trying to reach some remedies regarding unfair and illegal trading practices.”

Treasury Secretary Steven Mnuchin is leading the trade negotiations, along with Commerce Secretary Wilbur Ross and US Trade Representative Robert Lighthizer, whose department is currently holding hearings in Washington with US companies and industry associations about proposed punitive tariffs on imports from China.

In its statement about the talks, the State Department said additional senior administration officials would also participate.

Liu‘s trip to America is his second in three months and follows the recent visit to Beijing by the US delegation led by Mnuchin, which ended without tangible achievements.

http://www.scmp.com/news/china/diplomacy-defence/article/2146660/us-president-donald-trump-meet-chinese-vice-premier-liu

Trump Shifts From Trade War Threats to Concessions in Rebuff to Hard-Liners

May 15, 2018

President Trump’s recent threat to impose tariffs on as much as $150 billion worth of Chinese goods appeared to be the first volley in what looked like a full-scale trade war with the nation’s greatest economic adversary. Now, suddenly, Mr. Trump seems ready to make peace.

To alleviate trade tensions, Mr. Trump is considering easing up on a major Chinese telecommunications company, ZTE, in exchange for China agreeing to buy more American products and lifting its own crippling restrictions on American agriculture, people familiar with the deliberations said.

The United States government threatened the continued existence of ZTE as a business last month, when the Commerce Department ordered a seven-year halt in American shipments of computer microchips and software that lie at the heart of most of ZTE’s gear. Credit Johannes Eisele/Agence France-Presse — Getty Images

The shift is an abrupt reversal that reflects another twist in the pitched battle inside the White House between the economic nationalists, who channel Mr. Trump’s protectionist instincts, and more mainstream advisers, who worry about the effects of hard-line policies on the stock market and long-term economic growth.

While the nationalists had recently seemed ascendant — pushing Mr. Trump toward a showdown with the Chinese over steel exports and their co-opting of American technology — a deal on ZTE, and potentially a range of other trade actions, would represent a victory for the mainstream contingent, led by Treasury Secretary Steven Mnuchin.

Mr. Mnuchin has taken the lead role in trying to head off potentially harmful tariffs and investment restrictions on China and has succeeded, at least for now, in persuading Mr. Trump to adopt a more conciliatory approach than the president’s more hard-line advisers have advocated, according to people familiar with the deliberations.

An agreement on ZTE, which administration officials said could be struck with a visiting Chinese vice premier, Liu He, later this week, would remove a major source of tension between the United States and China at a sensitive moment: In just a few weeks, Mr. Trump is scheduled to meet the North Korean leader, Kim Jong-un, at a landmark summit meeting in Singapore.

Read the rest:

NYT:https://www.nytimes.com/2018/05/14/business/china-trump-zte.html

EU, Japan seek clarity from crunch US trade talks

March 10, 2018

AFP

© AFP / by Alex PIGMAN | Japan’s Economy Minister Hiroshige Seko was also in Brussels for the talks
BRUSSELS (AFP) – The EU and Japan held crunch talks with their US counterparts in Brussels on Saturday hoping to get “clarity” on President Donald Trump’s controversial new steel and aluminium tariffs.

Trump’s announcement of duties of 25 percent on imported steel and 10 percent on aluminium has stung the European Union and triggered warnings of an all-out international trade war.

Brussels has prepared a list of US products to hit with countermeasures if its exports are affected by the tariffs, but says it hopes to join Canada and Mexico in being exempted. Japan has decried the “grave impact” the Trump measures could have on the world economy.

The EU’s top trade official Cecilia Malmstroem and Japanese Economy Minister Hiroshige Seko began preliminary talks in Brussels ahead of the sitdown with US Trade Representative Robert Lighthizer.

The talks, initially set to address China’s over-supply of steel, have long been in the diary but after Trump’s dramatic announcement they are now a de facto crisis meeting.

“Dialogue is always the prime option of the European Union,” Malmstroem told reporters on Friday, saying Brussels was “counting on being excluded” from the new duties.

She predicted a “long day” of talks on Saturday, while European Commission Vice President Jyrki Katainen sought to play down expectations, saying it was “a meeting, not THE meeting”.

Katainen said Brussels wanted “clarity” on how the tariffs will be implemented and was ready to enforce retaliatory measures to protect European interests if needed.

“We are prepared and will be prepared if need be to use rebalancing measures,” Katainen said.

– US ‘affront’ –

Along with a huge range of steel products, the EU’s hit list of flagship American products lined up for counter measures includes peanut butter, bourbon whiskey and denim jeans.

Germany — singled out for particular criticism by Trump — accused Washington of protectionism, calling the tariffs an “affront to close partners”.

German Chancellor Angela Merkel urged dialogue and warned that “no one can win in such a race to the bottom”.

French President Emmanuel Macron on Friday warned his US counterpart Trump against forging ahead with the planned tariffs, saying they risked provoking a mutually destructive “trade war”.

Trump said the tariffs, which will come into effect after 15 days, will not initially apply to Canada and Mexico. He also added Australia to the list of likely carve-outs.

Complicating matters, Trump indicated on Friday that Australia’s carveout was linked to an unspecified “security agreement” outside of trade policy.

This shed some light on the tycoon’s specific barbs against Germany — the biggest economy in the European Union — that have finger-pointed Berlin for contributing much less than the US towards the funding of NATO.

The EU exports around five billion euros’ ($4 billion) worth of steel and a billion euros’ worth of aluminium to the US each year, and the European Commission, the bloc’s executive arm, estimates Trump’s tariffs could cost some 2.8 billion euros.

Brussels is also looking at “safeguard” measures to protect its industry — restricting the bloc’s imports of steel and aluminium to stop foreign supplies flooding the European market, which is allowed under World Trade Organization rules.

The EU and Japan last year formally agreed the broad outlines of a landmark trade deal that was announced as a direct challenge to the protectionism championed by Trump.

by Alex PIGMAN

EU leaders agree to move on to second stage of Brexit talks

December 15, 2017

AFP and The Associated Press

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© Daniel Leal-Olivas, AFP | Pro-EU anti-Brexit demonstrators wave an EU flag outside the Houses of Parliament in central London on December 13 as MPs debate a proposed amendment to the EU Withdrawal Bill.

Text by NEWS WIRES

Latest update : 2017-12-15

The European Union completed a giant first step in the Brexit negotiations with Britain, giving the green light on Friday to move to trade talks which are poised to be even trickier than the acrimonious divorce proceedings have been so far.

The European Union cleared the way Friday for Brexit talks with Britain to move onto the second stage, which will involve wide-ranging – and potentially far trickier – discussions on their future relationship and trade.

The 27 leaders authorized the move, almost nine months after Britain triggered the two-year mechanism by which it will leave the bloc.

“EU leaders agree to move on to the second phase,” EU chief Donald Tusk said on Twitter. Tusk, who is EU Council President, also congratulated British Prime Minister Theresa May in his tweet.

Since March, the EU side has been marked by a high degree of cohesion, which contrasts with the sometime-chaotic nature of Britain’s approach. The coming talks could well test that cohesion in the EU, not least because of the divergent trading relationships the 27 remaining EU countries have with Britain.

Still, time is running out for Britain – EU negotiators have said that an agreement has to be in place by October next year in order for it to get the requisite clearance from national parliaments in time for the actual day of Brexit in March, 2019.

To get to the second stage, Britain had to satisfy the EU on three issues.

At Friday’s meeting, the leaders said Friday “sufficient progress” had been reached on the outstanding EU bill Britain will have to pay, the rights of citizens in each other’s areas and the commitment to maintain a transparent border between Ireland and Northern Ireland.

Friday’s clearance provides a welcome boost to May, who earlier this week lost a key parliamentary vote over giving lawmakers the final say on the Brexit deal.

May received a round of applause from EU leaders Thursday night after giving her assessment of progress in the talks.

European Commission President Jean-Claude Juncker said Friday that “some of us thought, including me, that she did make big efforts and this has to be recognized.”

Malta’s prime minister, Joseph Muscat, said “there was appreciation from everyone,” despite concerns in the EU about developments in London.

May’s first priority in the next phase of talks is to establish a transition period, likely involving Britain remaining part of the single market and the customs union and probably lasting about two years. A transition period would ease Britain out of the EU and provide some certainty to business. Many British firms, particularly in the finance sector, have warned that they might put contingency plans in place soon that could involve them relocating activities into the EU.

We will deliver on the will of the British people and get the best Brexit deal for our country – securing the greatest possible access to European markets, boosting free trade with countries across the world, and delivering control over our borders, laws and money.

During any transition, the EU is demanding that London should give up its seat at the leaders’ table, lose all its lawmakers in the European Parliament and remove its judges from Europe’s courts. However, it would still have to obey EU laws and respect the primacy of the European Court of Justice.

While sympathizing with May, leaders said they wanted the British prime minister to provide more details on what she is looking for both in the transition period and in the future relationship.

“We need a little bit more clarity from the U.K.; what type of relationship we shall be entering into,” said Croatian Prime Minister Andrej Plenkovic.

“She is having to cope with all sorts of pressure,” he said.

And Irish Prime Minister Leo Varadkar said “lot of thinking” needs to be done about future relations.

“There has been a lot of divergent thinking on what that should look like,” he told reporters.

Varadkar held separate talks with May overnight “to compare notes,” and he said they would meet again early in the new year.

When asked about the chances that Britain might not leave in 2019 as planned, most leaders said only that this should be up to the British people and parliament.

(AP)

EU parliament backs outline Brexit deal — Withdrawal accord will be legally binding

December 13, 2017

STRASBOURG (Reuters) – The European Parliament urged EU leaders on Wednesday to allow the next phase of EU negotiations to start, backing a motion that recognized the talks had made sufficient progress as a well a line criticizing Britain’s Brexit negotiator David Davis.

Earlier on Wednesday, the EU’s chief negotiator told lawmakers that Britain could not renege on commitments made to ensure Brexit talks with the European Union move on to discussions on the future relationship between the two.

European Union leaders are almost certain to judge on Friday that “sufficient progress” has been made on the rights of citizens, the Brexit divorce bill and the Irish border to allow negotiations to move to the next phase. The EU executive recommended last week that the leaders approve trade talks.

European Parliament — FILE photo

The European Parliament will have to approve any Brexit deal, although its motion on Wednesday was not binding.

The agreement, presented in a joint report last Friday, was in the view of some in Brussels, undermined by Brexit minister David Davis’s comment that it was more “a statement of intent” than a legally binding. Davis has subsequently said he wants the accord swiftly translated into a legal text.

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David Davis

“We will not accept any going back on this joint report. This progress has been agreed and will be rapidly translated into a withdrawal accord that is legally binding in all three areas and on some others that remain to be negotiated,” EU Brexit negotiator Michel Barnier told EU lawmakers.

Barnier said a lot more further steps were required to secure an orderly withdrawal.

“We are not at the end of the road, neither regarding citizens’ rights nor for the other subjects of the orderly withdrawal. We remain vigilant,” he said.

Barnier said the next phase of talks would focus on a “short and defined” transition period and initial discussions on a future relationship, which he stressed would not erode the EU single market and its four freedoms, including free movement of people.

Reporting by Philip Blenkinsop; Editing by Matthew Mpoke Bigg