Posts Tagged ‘trade talks’

Details Emerge in U.S.’s Trade Truce With China — But Huawei Arrest May Change Everything

December 9, 2018

Arrest of Huawei executive Meng Wangzhou has produced a nationalist backlash in China that could make it difficult for Mr. Xi to make concessions to the U.S.

Beijing pledges to announce large purchases in coming weeks, but thornier tech issues weigh on talks

Image result for Huawei, 5G, photos

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A week after President Trump and Chinese leader Xi Jinpingstruck a trade truce in Buenos Aires, details of the ceasefire are becoming clear—big Chinese purchases, tough negotiations and shifting deadlines to finish a deal.

Interviews with officials in both countries, briefed on the Trump-Xi talks, give a fuller picture of the agreement the two men reached. The two sides agreed on a negotiating period of about 90 days, during which the U.S. won’t raise tariffs on $200 billion of Chinese goods to 25%, as it had planned to do on Jan. 1.

Beijing and Washington also agreed that China will purchase large amounts of goods and services, with China pledging to announce soybean and natural-gas purchases in the coming weeks, said officials in both nations. Beijing is also considering reducing tariffs on U.S. automobiles.

Under the terms of the understanding, purchases and tariff reductions aren’t required until a deal is struck, but both sides believe that early purchases would serve as a kind of down payment and give a boost to negotiations. Beijing wants to convince the U.S. to roll back tariffs on Chinese goods.

The heart of the negotiations will deal with much thornier issues, officials say, including broader access for U.S. firms to Chinese markets, prohibitions on intellectual property theft and an end to alleged Chinese pressure on U.S. firms to share technology when doing business in China.

In the Dec. 1 talks between Mr. Xi and Mr. Trump, he and aides laid out how they might handle technology issues, say officials.

Trade talks, though, could run aground after the arrest in Canada of the daughter of the founder of Huawei Technologies Co., Meng Wangzhou, for allegedly helping the telecommunications giant evade U.S. sanctions on Iran. The U.S. wants Ms. Meng extradited to the U.S. The imbroglio has produced a nationalist backlash in China that could make it difficult for Mr. Xi to make concessions to the U.S. In a hearing in Vancouver on Friday Ms. Meng’s attorney said the U.S. allegation would be “hotly contested.”

Vice Foreign Minister Le Yucheng summoned Canada’s ambassador in Beijing on Saturday to lodge a “strong protest” over Ms. Meng’s arrest, according to a statement by the ministry. Mr. Le called on Canada to immediately free Ms. Meng, warning that otherwise it would face consequences.

So far, though, Mr. Xi has instructed his lieutenants to follow through on the agreement he reached with President Trump, according to Chinese officials.

The specifics of the U.S.-China agreement were initially unclear. After the Trump-Xi dinner, on the heels of the Group-of-20 nations leaders’ summit, the U.S. put out a statement saying China had agreed to trade concessions, purchases and the 90-day deadline. At a briefing in Buenos Aires, Chinese officials were silent on the terms of the deal including the 90-day deadline. China since has publicly confirmed the deadline.

Mr. Trump tweeted on Dec. 4 that the talks would last 90 days “unless extended.” His National Economic Council director, Larry Kudlow, also has indicated some wiggle room.

U.S. officials have gone on TV to discuss the negotiations. Treasury Secretary Steven Mnuchin said on Fox News that China would make “additional purchases of $1.2 trillion dollars” and “if that’s real, that will close the trade deficit.” Last year, the U.S. shipped $188 billion of goods and services to Beijing and ran a $336 billion deficit in total trade.

A Treasury official didn’t say over what time period the increase would occur. In the past few months, Mr. Xi has touted a Chinese Commerce Ministry report saying China would import a total of $2.5 trillion in services globally over five years.

Treasury Secretary Steven Mnuchin has said that China would make ‘additional purchases of $1.2 trillion dollars.’
Treasury Secretary Steven Mnuchin has said that China would make ‘additional purchases of $1.2 trillion dollars.’PHOTO: ANDREW HARRER/BLOOMBERG NEWS

The ramp-up in Chinese purchases would be at “such an extraordinary rate that while it’s not impossible, it’s not likely” to occur, said David Dollar, a Brookings Institution China scholar who was Treasury’s representative in Beijing during the Obama presidency.

The most complex topic the two sides agreed to discuss involves intellectual property protection. Beijing has denied U.S. allegations that it requires foreign companies, seeking to do business in China, to hand over technology. But as part of the Argentine agreement, Beijing showed willingness to address longstanding U.S. complaints over a lack of IP protection in China, with Chinese officials saying it is in the country’s interest to strengthen enforcement of existing rules and laws.

That is an issue of particular importance to U.S. business as well. “China should take immediate actions to quickly resolve a number of ongoing cases involving IP theft and discrimination affecting U.S. companies,” said Myron Brilliant, executive vice president at U.S. Chamber of Commerce.

The U.S. looks at the tariffs it has imposed on Beijing imports—$250 billion so far—as a way to enforce any deal. Officials say tariffs won’t be removed unless Beijing not only agrees to changes but puts them into effect. The U.S. could also impose additional tariffs after the 90-day period. Several officials compared the plan to the U.S.’s position on North Korea of not removing sanctions until Pyongyang eliminates nuclear weapons.

There are two near-term tests of whether the Buenos Aires agreement will defuse trade tensions. The first is whether China rapidly delivers on pledges to purchase U.S. agricultural and energy products. The second is how quickly Mr. Xi’s economic envoy, Vice Premier Liu He, heads to Washington for higher-level discussions. In Buenos Aires, Mr. Trump told Mr. Xi that U.S. Trade Representative Robert Lighthizer, who has taken a hard line on China, would be leading the talks.

Before the disclosure of the Huawei case, Mr. Liu had planned to lead a 30-member trade delegation to Washington in the week of Dec. 10, according to people briefed on the matter. It is unclear whether that plan has been affected by Ms. Meng’s arrest.

Both leaders have important reasons to keep the trade talks on track. Mr. Trump has been unnerved by the declines in the stock market, say officials, which have been blamed in part on the uncertain outcome of trade talks.

Mr. Xi wants to bolster the Chinese economy which is coming under growing stress, partly because of the uncertainty over the bilateral economic relationship with the U.S. Customs data released Saturday show an unexpected drop in growth of both Chinese exports and imports last month, portending weaker growth.

Write to Lingling Wei at lingling.wei@wsj.com and Bob Davis at bob.davis@wsj.com

https://www.wsj.com/articles/details-emerge-in-u-s-s-trade-truce-with-china-1544360520

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China separates arrest of Huawei executive from US trade talks

December 7, 2018

US national security adviser John Bolton says tech firms like Huawei will be a major topic in negotiations

South China Morning Post

Friday, December 7, 2018

China has separated the arrest of Huawei’s chief financial officer Sabrina Meng Wanzhou from trade talks between Beijing and Washington, although the US side is hinting that the case would be a bargaining chip in broad dialogue between the two countries.

Gao Feng, a spokesman for the Ministry of Commerce, said on Thursday that he had no information at all about Meng’s case. Gao also said China was confident about reaching a trade deal with the United States within the 90-day truce agreed by the two sides in Argentina last weekend.

Image result for Huawei, 5G, photos

Separately, Chinese foreign ministry spokesman Geng Shuang also refused to directly link the arrest of Meng – in Canada last Saturday at the request of the United States – with the trade negotiations.

China demanded that Canada and the US explain the arrest and release Meng immediately, Geng said. “As for the China-US trade talks, I have been saying in the last two days that … the two sides are accelerating negotiations to reach a win-win deal as soon as possible.”

Beijing’s restrained response marked a contrast to rhetoric in the country’s state-run media. Global Times, the hawkish tabloid backed by the Communist Party’s official mouthpiece People’s Daily, published an editorial calling Meng’s arrest a “despicable” hooligan act by Washington to contain Huawei’s rise.

The editorial argued that the arrest in Vancouver – on the same day as US President Donald Trump and his Chinese counterpart Xi Jinping dined together in Buenos Aires – had “clearly violated the important consensus the two leaders reached in Argentina”.

“We are still not clear whether [the arrest] is a joint action by US administrative and judicial forces or is a result of chaotic policies at various US departments,” the editorial read. It added that Meng’s case showed China was facing a complicated power play in the US.

At the same time, US national security adviser John Bolton said in an interview with NPR, the US broadcaster, that global Chinese tech firms like Huawei would be a “major subject” of discussion between the US and Chinese governments during their trade negotiations, although Bolton did not specify whether Meng’s case would be covered in future talks.

“Huawei is one company we’ve been concerned about,” the senior White House adviser was quoted as saying. “There are others as well. I think this is going to be a major subject of the negotiations that President Trump and President Xi Jinping agreed to in Buenos Aires.”

The US is reportedly investigating whether Huawei contravened US sanctions by selling technology to Iran. The telecoms giant has denied any wrongdoing by the company and Meng.

Chinese researchers argued that Meng’s arrest was part of Washington’s plan to seek more from Beijing in trade negotiations.

Liu Weidong, a China-US affairs expert from the Chinese Academy of Social Sciences, said it was a calculated act by Washington aimed at improving its hand in trade negotiations with Beijing.

“We’ll see more cases like this over the next three months, sanctioning China’s state-owned enterprises and individuals, to boost momentum on the US side,” Liu said.

Meanwhile, China’s state news agency Xinhua again hailed the Xi-Trump summit, saying the talks had been a great success that produced “exciting” results.

Trump tweeted that he shared Beijing’s optimism about a potential trade deal. He wrote: “Statement from China: ‘The teams of both sides are now having smooth communications and good cooperation with each other. We are full of confidence that an agreement can be reached within the next 90 days.’ I agree!”

Additional reporting by Kristin Huang

https://www.scmp.com/economy/china-economy/article/2176878/beijing-declines-link-huawei-executive-sabrina-meng-wanzhous

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U.S. Pursued Huawei CFO’s Arrest Despite Risk to Trade Talks With Xi

December 7, 2018
  •  Trump dinner with Chinese leader was same day as Meng arrest
  •  White House says president didn’t know of arrest in advance
Huawei Arrest Is ‘Slap in The Face’ for China, Asia Society’s Stone Fish

The Trump administration arranged the arrest of Huawei Technologies Co.’s chief financial officer aware of potential blow-back in trade talks with Beijing but intent on showing resolve to crack down on Chinese companies accused of violating U.S. law.

The arrest happened about the same time that President Donald Trump dined with Chinese President Xi Jinping in Buenos Aires to discuss the trade war between the countries.

Xi Jinping, left, with Donald Trump along with members of their delegations in Buenos Aires, on Dec. 01.   Photographer: Saul Loeb/AFP via Getty Images

White House National Security Adviser John Bolton, who sat at the table with Trump and Xi, knew in advance of the U.S. request that Canadian authorities arrest Huawei CFO Wanzhou Meng, he told National Public Radio Thursday. After Bolton’s interview, a White House official said that Trump was not aware of the arrest in advance, distancing the president from the provocative move.

But planning for the arrest was well underway as Trump prepared for a dinner that he said later resulted in “an incredible” deal with Xi — an agreement that may be in danger of unraveling after Chinese officials learned of Meng’s capture and pending extradition to the U.S.

Trump signaled continued optimism in trade talks in a tweet late Thursday, citing an earlier Chinese statement that Beijing was “full of confidence that an agreement can be reached within the next 90 days.” “I agree!” Trump said.

The U.S-orchestrated detention of a leading figure in the Chinese technology industry — Meng is the daughter of Huawei founder Ren Zhengfei and a possible heir to his company — undercuts a key goal for Xi in the U.S. talks: to show relations between the U.S. and China returning to a more normal footing. The Chinese president has sought to prevent the economic conflict from spilling into other sensitive areas such as Taiwan or the disputed shipping lanes of the South China Sea.

Read More: ‘Shocking’ Huawei Arrest Threatens to Upend Trump-Xi Trade Truce

Canadian authorities detained Meng as she was changing planes in Vancouver at the request of the U.S., which alleges that Huawei violated U.S. sanctions on Iran. The same day, Trump and Xi were meeting for the first time in more than a year.

Meng Wanzhou

Photographer: Maxim Shipenkov/EPA

Coincidental Arrest

The timing of the move against Meng was coincidental, driven by an itinerary that put her on Canadian soil on Saturday, said a person familiar with the matter. Even so, the White House didn’t delay or block the action.

Meng’s arrest is part of an ongoing investigation by U.S. prosecutors into whether Huawei violated banking laws as it sought to evade sanctions against Iran by routing a series of transactions through HSBC Holdings Plc, according to a person briefed on the matter.

The U.S. request for Meng’s extradition stems from a Trump administration campaign to increasingly hold Chinese nationals accountable for committing crimes, said a second person familiar with the matter, who asked not to be identified speaking about the sensitive issue.

Read More: Getting Huawei CFO to U.S. After Canada Bust May Take Years

Bolton, in addressing the arrest in the NPR interview, stressed that the conduct of Chinese companies — and especially technology companies — is a central issue in the trade dispute with the U.S. That includes theft of U.S. intellectual property by Chinese actors and forced technology transfers from U.S. companies to Chinese partners in joint ventures, he said.

“Huawei is one company we’ve been concerned about,” Bolton told NPR. “There are others as well. I think this is going to be a major subject of the negotiations that President Trump and President Xi Jinping agreed to in Buenos Aires.

Other administration officials have also stressed the importance of punishing transgressions of trade rules and U.S. law.

Larry Kudlow speaks to members of the media outside the White House in Washington, D.C., on Dec. 3, 2018.

Photographer: Andrew Harrer/Bloomberg

“We have to make sure there is enforcement on any so-called agreement. That is so important,” National Economic Council Director Larry Kudlow told reporters at the White House on Tuesday, a day before Meng’s arrest was announced. “China’s discussed these things with the U.S. many times down through the years and the results have not been very good.”

Huawei Scrutinized

Huawei, China’s largest maker of smartphones and telecommunications equipment, has been swept up in concerns that products made by Chinese technology companies are avenues for surveillance by the country’s intelligence agencies.

Read More: Huawei’s Arrested CFO Rose Through Ranks Despite Father’s Rebuke

In April, the Federal Communications Commission adopted a proposal to prohibit the use of universal service funds to purchase equipment or services from any company identified as posing a national security risk to communications networks.

The agency is seeking comments through Friday on how that proposed rule fits with defense legislation signed in August that bars spending on “‘loans or grants” and specifically targets Huawei and ZTE Corp. In a filing with the agency, Huawei said the defense bill shouldn’t apply to disbursements of the communications subsidy.

So far, China has tempered its response to Meng’s detention. While the government promptly protested the arrest and demanded her release, the foreign ministry later said it was waiting for details on her capture. The ministry also said the U.S. trade talks should continue as a 90-day pause on new tariffs between the U.S. and China enters its second week.

 Updated on 

— With assistance by Jennifer Jacobs, and Chris Strohm

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Reading the Tea Leaves on Trade With China

December 5, 2018

Talks will take place behind closed doors. Here’s what to watch to gauge their progress.

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Image result for china, us, flags, pictures

The U.S. and China have reached a truce in their trade dispute and agreed to 90 days of negotiations. To know if they’re making real progress, here are some signs to watch for:

• Official statements are reconciled. After the weekend’s Buenos Aires meeting, Chinese officials didn’t mention the 90-day negotiating deadline for new talks, increased Chinese purchases, decreased Chinese car taxes and other items the Trump administration had announced. Both sides need to agree on their commitments before new negotiations can proceed.

* China delivers the easy promises. Prompt execution of promised Chinese purchases, especially of soybeans, would confirm that efforts to reach agreement are on track.

*China acknowledges the elephant in the room. Chinese leaders continue to repeat longstanding claims that China treats domestic and foreign companies equally…

US and China ‘under pressure’ to find tariffs compromise at G20

November 30, 2018

All eyes will be on Donald Trump and Xi Jinping as they meet for trade talks in Argentina. With tougher tariffs on the horizon, China hopes to cinch a deal soon — but Trump has made it clear negotiations won’t be easy.

    
Chinese President Xi Jinping and US President Donald Trump in Beijing, China (picture-alliance/AP Photo/A. Harnik)

China hopes to make progress in resolving a trade dispute with the United States during the G20 summit in Argentina, the country’s commerce ministry said on Thursday.

“I hope that the United States and China could move towards each other and work hard to achieve positive results in the meeting,” the ministry’s spokesperson Gao Feng said.

Chinese President Xi Jinping and US President Donald Trump are due to hold high-stakes talks on the sidelines of the summit on Saturday.

As Xi headed out for the summit, he vowed that Beijing would “make a lot of efforts to speed up market access, improve the investment environment and increase protection of intellectual property.”

The Chinese leader has made similar promises before with little follow-through, drawing the ire of foreign businesses located in China.

Trump unsure about trade deal with China

While departing for the G20 summit on Thursday, Trump told reporters that although he was open to making a trade deal with China when he meets with Xi, he wasn’t convinced that he should give up the tariffs.

“We are very close to doing something with China, but I don’t know that I want to do it,” Trump said, adding: “I like the deal we have now.”

This year, Washington levied duties between 10 percent and 25 percent on Chinese goods worth some $250 billion (€219 billion), arguing that the tariffs are necessary to combat what the Trump administration describes as China’s unfair trade practices.

The 10 percent US tariffs are set to climb to 25 percent in January.

Beijing has also raised its own tariffs against the US in retaliation, in a fight that has shaken financial markets.

Read more: US-China trade row: Should Americans worry?

‘Pressure’ on Xi and Trump

With markets and consumers unsettled by the trade conflict between the world’s largest and second-largest economies, experts say the two sides will be more motivated to take steps to solve the tariff dispute.

“Without cooperation on trade issues, bilateral relations would drastically worsen. In this respect, Presidents Xi and Trump are under pressure to find compromises and make progress towards ending the trade dispute,” Cheng Li, a senior fellow at the Brookings Institution, told DW.

Li, who is the director of the US think-tank’s “John L. Thornton China Center”, cautioned that even if a trade deal is reached, it would be “naive” to believe that the economic conflict between the two countries would be over.

“Everyone knows that at the end of a trade war — which cannot go on forever — there are only losers. For that reason alone, they will have to find a solution sooner or later.”

DW’s Fu Yue contributed to this report.

 

China ‘won’t get away with vague promises this time’ in trade talks with US

November 28, 2018

Beijing will have to take action on some demands after Donald Trump added to pressure with more tariff threats ahead of G20 meeting, observers say

China will have to go further than making “vague promises” at this week’s summit with the United States after President Donald Trump turned up the heat in the trade war with more tariff threats, observers say.

Donald Trump and Xi Jinping in April, 2017 at Mar-a-Lago, Florida. Reuters photo

Just days before he meets Chinese President Xi Jinping on the sidelines of the Group of 20 gathering in Argentina, Trump has again escalated the conflict, saying he would not step back from a plan to raise tariffs on goods from China.

He told The Wall Street Journal in an interview published on Monday it was “highly unlikely” his administration would delay or suspend a plan to increase duties on US$200 billion of Chinese products from 10 per cent to 25 per cent.

Trump also threatened to apply tariffs of 10 per cent or 25 per cent on the remaining US$267 billion of Chinese imports if the two sides failed to reach a deal during their meeting in Buenos Aires.

He added that the only acceptable deal would involve China opening up to competition from the US.

Responding to Trump’s comments, Chinese foreign ministry spokesman Geng Shuang on Tuesday said Beijing hoped to find a solution with Washington at the G20 summit, but maintained that China would defend its interests.

“The Chinese side is willing to resolve the trade issues [with the US] through serious dialogue that is based on the principles of equality and integrity,” Geng said. “But we will also resolutely defend our interests [during the talks].”

Separately, Chinese ambassador to the US Cui Tiankai said in an interview with The Wall Street Journal that he hoped the Xi-Trump meeting could “give us clear strategic guidance on where the relationship is going” and make progress in resolving the trade row. Cui also questioned if the US could weather another financial crisis that may emerge if the trade war is prolonged.

Chinese observers see Trump’s latest threat as part of his negotiation tactics ahead of the high-stakes summit, but they believe the pressure is real for China to respond to US demands.

“China will not be able to get away with general and vague promises this time. It has become clear that the Trump administration does not want more promises, it wants action,” said Shi Yinhong, an expert on Sino-US relations at Renmin University of China in Beijing.

Beijing has previously said it would welcome more foreign investment and step up protection of intellectual property rights. But foreign countries and firms doing business in China say they are frustrated because these promises are never carried out and that by subsidising domestic companies Beijing continues to create an uneven playing field.

Trump’s latest tariffs threat came after further pressure on China from his administration last week. An update of the US Trade Representative’s Section 301 investigation into China’s intellectual property and technology transfer policies said Beijing had failed to alter its “unfair, unreasonable and market-distorting practices” at the heart of the trade conflict between the world’s two largest economies.

But it remains unlikely that Beijing will take any concrete action on some of Washington’s key demands – particularly on subsidies, support for its state-owned enterprises and its industrial upgrade plan, according to Shi, who also advises the Chinese government on foreign policy.

Liu Weidong, from the Institute of American Studies at the state-run Chinese Academy of Social Sciences, said while the US was likely to feel the impact of the trade war in the coming months, the stakes were higher for China going into the talks.

“Trump has been sending mixed messages ahead of the summit as a way to increase pressure on China,” Liu said. “China will probably put more emphasis on these talks than the US, so it is likely Beijing will be prepared to make more compromises than expected.”

Those compromises could include plans to address American concerns about theft of intellectual property and widening market access for foreign companies, Liu said.

But he added it was unlikely Beijing would do anything to weaken its state-run enterprises.

Analysts warn that additional US tariffs on Chinese imports could create sharp downward pressure on the yuan, destabilise emerging markets and could even trigger a financial market meltdown.

Qinwei Wang, a senior economist at Amundi Asset Management, said extra tariff pressure could leave Beijing with no choice but to let the yuan exchange rate fall further – exactly the opposite of what Trump wants.

If the two sides can negotiate a ceasefire, it could help keep the yuan from falling below the psychological barrier of 7 per dollar, but breaching that level may trigger market panic and lead to a financial system crisis, Wang said.

Additional reporting by Karen Yeung

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Asia markets mixed as Trump-Xi takes centre stage

November 28, 2018

Asian markets mostly rose Wednesday as they await this weekend’s high-stakes meeting between Donald Trump and Xi Jinping, but dealers remain cautious with the threat of an escalation in the trade war if the pair fail to reach a deal.

Image result for xi jinping, donald trump, photos

Also on the radar is a speech by Federal Reserve boss Jerome Powell, which will be pored over for signs of an easing in its pace of interest rate hikes after his deputy hinted at gradual rises and Trump hit out at recent increases.

Wall Street provided a positive lead following soothing comments from top White House economic advisor Larry Kudlow on the chances of a trade deal when the leaders of the world’s top two economies meet Saturday.

Image result for larry Kudlow, photos

Larry Kudlow

“The president said there’s a good possibility we can make a deal and he’s open to it but certain conditions have to be met, certain things have to be changed,” Kudlow told a White House briefing.

The remarks came a day after the president warned that if he cannot reach a deal with Xi he expects to increase tariffs on $250 billion of Chinese goods and impose levies on all the other goods the US imports from the country.

While observers do not expect a wide-ranging deal to be made at the meeting, which takes place on the sidelines of a G20 summit in Buenos Aires, there is the possibility of an agreement that will allow the two to reach a consensus down the line.

“It will depend a lot about the kind of comments that will come out after the meeting,” Massimiliano Bondurri, founder and chief executive officer of SGMC Capital in Singapore, told Bloomberg TV.

“We don’t expect anything saying a deal will never be found, we expect some formal comments will be made as in discussions will be ongoing, but we haven’t found any agreement as of yet, so that’s likely to weigh on the risk sentiment on global markets.”

– Eyes on Fed’s Powell –

In early trade Hong Kong and Shanghai were each up 0.9 percent while Tokyo rallied 1.1 percent.

Sydney eased 0.2 percent and Singapore dropped 0.1 percent but Seoul was 0.1 percent higher while Wellington, Taipei, Mumbai and Jakarta were all slightly stronger.

Powell’s speech later in the day has taken on more significance after Trump said he was “way off base” for continuing with his interest rate hikes.

“I’m doing deals and I’m not being accommodated by the Fed,” Trump told the Washington Post in his latest swipe at the central bank boss he handpicked for the job. Powell has dismissed similar attacks from the White House in the past.

While the bank is expected to lift rates next month, traders will be looking to see if the Fed chief indicates a slowing of its tightening drive in light of softer readings at home and signs of global weakening.

On Tuesday Fed Vice Chairman Richard Clarida that hinted at a more cautious approach.

Expectations that rates would continue to rise through to 2020 — making it more expensive to borrow for investing — have weighed on global markets this year.

In foreign exchanges the pound continues to struggle after tumbling Tuesday on Trump’s warning that Theresa May’s EU divorce deal could damage her chances of striking a post-Brexit trade agreement with the US.

The British prime minister, who has embarked on a nationwide drive to lobby the public, is also facing an uphill struggle to get her plan through parliament, which is mostly opposed to it. A vote is slated to take place on December 11.

– Key figures around 0350 GMT –

Tokyo – Nikkei 225: UP 1.1 percent at 22,197.85

Hong Kong – Hang Seng: UP 0.9 percent at 26,575.56

Shanghai – Composite: UP 0.9 percent at 2,596.84

Pound/dollar: UP at $1.2738 from $1.2729 at 2140 GMT

Euro/pound: DOWN at 88.63 pence from 88.71 pence

Euro/dollar: DOWN at $1.1289 from $1.1293

Dollar/yen: DOWN at 113.77 yen from 113.79

Oil – West Texas Intermediate: UP 25 cents at $51.81 per barrel

Oil – Brent Crude: UP 22 cents at $60.43 per barrel

New York – Dow Jones: UP 0.4 percent at 24,748.73 (close)

London – FTSE 100: DOWN 0.3 percent at 7,016.85 (close)

Asian markets mixed as Trump threatens to ramp up trade war

November 27, 2018

Asian markets were mixed Tuesday as dealers focused on crunch G20 talks between Donald Trump and Xi Jinping, with the US president warning he will ramp up his trade war with China if the two do not reach a deal.

With the economic superpowers in the middle of an increasingly bitter standoff, there are hopes the two leaders will be able to work out an agreement that brings them back from the brink of a tariffs row that threatens to dent global growth.

In an interview with the Wall Street Journal published Monday, Trump said he thought it “highly unlikely” the US would hold off more than doubling duties on $250 billion of Chinese imports if there is no breakthrough.

© AFP | With just days before a key meeting with Xi Jinping, Donald Trump has threatened to take his trade war with China to another level

“If we don’t make a deal, then I’m going to put the $267 billion additional on,” he told the newspaper, referring to the remainder of Chinese imports that so far have not been hit with tariffs.

“The only deal would be China has to open up their country to competition from the United States.”

While some observers suggested the comments were a typical Trump ploy to apply maximum pressure on Beijing heading into the meeting, there remain fears about what the tycoon has in mind.

“It doesn’t sound like we will see Donald the Deal Maker but instead Trump the Trade Warrior at G20,” said Stephen Innes, head of Asia-Pacific trade at OANDA.

Asian traders moved cautiously in early exchanges after Monday’s global rally, which was fuelled by rising oil prices, Italy’s softer tone in its budget standoff with Brussels and Britain’s Brexit agreement with the European Union.

– Oil outlook warning –

Tokyo ended the morning 0.1 percent higher, Shanghai added 0.1 percent and Sydney rose 0.5 percent but Hong Kong and Singapore each slipped 0.6 percent.

Seoul and Wellington both added 0.3 percent but Taipei shed 0.6 percent and Manila gave up 0.5 percent.

While the meeting is the main event this week, investors are also keeping an eye on speeches from top Federal Reserve officials including boss Jerome Powell, which could signal a softer pace of interest rate hikes.

Rising US borrowing costs — fuelled by surging US growth — have been a major cause of concern for investors but recent comments from the central banker appear to show a more dovish outlook for 2019 as the global economy slows.

On oil markets both main contracts remained under pressure despite Monday’s jump, with market-watchers waiting for next month’s gathering of OPEC and non-OPEC members hoping they will announce a cut in output.

The commodity has been hammered since early October by a series of issues including the uncertain global outlook, the trade war, rising supplies, slowing demand and weakness in China.

As trade tensions begin to bite on the global economy, analysts are predicting slower growth into next year, meaning there would be less demand for oil.

“It has been our long-held view that slower global economic activity would be a factor weighing on oil demand in 2019 and that the market would move into surplus,” London-based Capital Economics said.

– Key figures around 0245 GMT –

Tokyo – Nikkei 225: UP 0.1 percent at 21,843.37 (break)

Hong Kong – Hang Seng: DOWN 0.6 percent at 26,226.26

Shanghai – Composite: UP 0.4 percent at 2,586.54

Euro/dollar: UP at $1.1332 from $1.1326 at 2130 GMT

Euro/pound: UP at 88.46 pence from 88.44 pence

Pound/dollar: UP at $1.2811 from $1.2806

Oil – West Texas Intermediate: DOWN 26 cents at $51.37 per barrel

Oil – Brent Crude: DOWN 17 cents at $60.31 per barrel

New York – Dow Jones: UP 1.5 percent at 24,640.24 (close)

London – FTSE 100: UP 1.2 percent at 7,036.00 (close)

AFP

Asian Stocks Mixed; Energy Stocks Underperform Amid Lower Oil Prices — PetroChina Hits Eight-Month Low

November 26, 2018

 Asian stocks were mixed in morning trade on Monday. Energy stocks underperformed as oil prices plunged to their lowest levels in more than a year last week.

Stock Markets4 hours ago (Nov 25, 2018 09:44PM ET)
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© Reuters. © Reuters.

Investing.com – Asian stocks were mixed in morning trade on Monday. Energy stocks underperformed as oil prices plunged to their lowest levels in more than a year last week.

Santos Ltd (AX:STO) fell 3.5%, PetroChina Co Ltd Class H (HK:0857) slid 1.3%, and Woodside Petroleum Ltd (AX:WPL) was down 2.2%. Oil prices saw a seven-week-sell-off while crude futures traded in bear market territory amid growing worries of an oversupply.

Australia’s ASX 200 slipped 0.7% by 9:50 PM ET (02:50 GMG).

Major miners declined amid worries over weaker demand from China, the largest consumer of metals.

Rio Tinto (LON:RIO) fell 3% while Fortescue Metals Group Ltd (AX:FMG) declined 1.5%. BHP Billiton Ltd (AX:BHP) also dropped 3%.

“I heard some Chinese investors are shooting (down) the nickel price. They think nickel production in Indonesia will bring the market into surplus next year, and demand for stainless will be bad,” CRU analyst Peter Peng said, adding that they expected the nickel price to fall to about $8,000.

China’s Shanghai Composite and the Shenzhen Component slipped 0.1% and 0.4% respectively. All eyes this week would be on U.S. President Donald Trump and his Chinese counterpart Xi Jinping’s planned meeting at the G-20 meeting that kicks off on Friday.

Elsewhere, Hong Kong’s Hang Seng Index was up 1.4%.

Japan’s Nikkei 225 gained 0.4%, while South Korea’s KOSPI traded 0.9% higher.

In other news, European Union leaders gave their official endorsement of U.K. Prime Minister Theresa May’s Brexit withdrawal on Sunday, and warned British politicians that it was the best deal possible for Britain because there is no “plan b.”

May needs to gain Parliamentary approval for the deal in Westminster to move forward with Brexit and failure could lead the U.K. leaving the EU without a deal, according to reports.

Looking ahead, Federal Reserve Vice Chairman Richard Clarida speaks in New York on Tuesday, and Chairman Jerome Powell addresses the New York Economic Club on Wednesday.

Asian Stocks Mixed; Energy Stocks Underperform Amid Lower Oil Prices
 https://www.investing.com/news/stock-market-news/asian-stocks-mixed-energy-stocks-underperform-amid-lower-oil-prices-1699561
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Trump Administration, WTO Not Signaling Optimism for Trade Breakthrough With China at G20

November 26, 2018

Washington sends mixed messages ahead of high-stakes encounter at the G20 summit in Argentina this week.

by
President Donald Trump shakes hands with China's President Xi Jinping in Beijing last year [Fred Dufour/AFP]
President Donald Trump shakes hands with China’s President Xi Jinping in Beijing last year [Fred Dufour/AFP]

Beijing, China – Hopes this week’s meeting between US President Donald Trump and Chinese President Xi Jinping at the G20 in Argentina will achieve a trade breakthrough are fading with analysts and business leaders expressing disappointment over intensifying tensions in the lead up to the summit.

The high-stakes encounter between the two leaders in Buenos Aires was hailed as a last-ditch opportunity for Beijing and Washington to resolve trade differences and avert additional US tariffs on Chinese exports in the new year.

So Henry Wang, president of the Beijing-based think-tank Center for China and Globalization, was surprised when last week US Trade Representative Robert Lighthizer released a statement saying China had failed to alter “unfair, unreasonable, and market-distorting practices”.

“It’s not appropriate to publish this negative report prior to the summit. It’s not conducive to constructive dialogue, and it just doesn’t look good,” said Wang.

The findings are part of an update of the US Trade Representative’s “Section 301” investigation into China’s intellectual property and technology transfer policies.

“They give the impression that things aren’t well coordinated,” said Wang.

“President Trump says something, Lighthizer says something different, and so does [economic adviser Larry] Kudlow etc. China has maintained a message of wanting to seek dialogue and resolve the issue. That should be the attitude on both sides.”

Mutual mistrust

Officials in Beijing have gone on the offensive with China’s Commerce Ministry spokesman Gao Feng telling reporters on Friday the Trump administration had made “totally unacceptable” and “groundless” new accusations against the Chinese side.

The ministry is also assessing the potential impact from a separate US proposal to tighten control over technology exports, saying it would take necessary steps to protect the interests of Chinese firms.

“These moves by the US are only diminishing trust,” said Liu Zhiqin, a senior fellow at Renmin University’s Global Governance Research Center.

“Right now the US has no trust in China and unfortunately many in China now are doubting the sincerity of the Trump administration in wanting to reach a real solution. Does Trump really want to improve our trade relationship, or is China just part of his political sideshow?”

This mutual mistrust was on show on Wednesday at a World Trade Organisation meeting in Geneva, where envoys from China and United accused the other of hypocrisy and flouting WTO rules.

Deputy US Trade Representative and WTO Ambassador Dennis Shea said China was using the WTO to promote “nonmarket policies,” while a Chinese representative said the US was only blaming China to disguise its own violations of WTO rules.

What’s the endgame in the US-China trade war?

President of the American Chamber of Commerce in China, William Zarit, said Washington has simply lost patience with Beijing.

“Many years of discussions with the Chinese government” has “yielded only marginal progress”, he told Al Jazeera by email.

“Regulations are still proceeding in a direction that appears contrary to the values of fairness and clarity. We would like to see the Chinese government offer reciprocal treatment to US companies so they feel welcomed in China in the same way that Chinese companies have been welcomed in the US,” said Zarit.

The Trump administration has imposed tariffs on $250bn of Chinese imports to try force concessions from Beijing. The tariff rate on $200bn worth of Chinese exports to the US is set to increase to 25 percent from 10 percent on January 1.

Despite recent bitter exchanges, Trump expressed confidence in Washington’s punitive approach. On Thursday he spoke to reporters in Florida saying “China wants to make a deal very badly – because of the tariffs.”

That confidence, however, is not shared by Zarit who said tariffs alone are not the best way to address trade concerns. “Applying pressure without also engaging in negotiations is unlikely to yield the optimal outcome,” he said.

Souring relations between China and the United States have not been confined to trade. At the 2018 APEC conference in Papua New Guinea earlier this month President Xi and US Vice President Mike Pence exchanged thinly veiled attacks. Xi criticised the US’ unilateral “winner takes all mentality”, while Pence doubled down on China’s militarisation of the South China Sea and Belt and Road infrastructure initiative.

OPINION

Trump can only go that far with his unilateralism

Joe Macaron
by Joe Macaron

The open hostility has led to speculation that the upcoming G20 meeting would result only in confrontation, and not collaboration.

“It will come to a head at the G20,” top White House economic adviser Larry Kudlow told reporters last week.

Worrying uncertainty

Global markets have slumped with Hong Kong and Shanghai stocks the hardest hit as investors brace for a trade war blow-out.

Wang and Liu both dismissed the idea that the Xi-Trump meeting would resemble a dramatic showdown, saying hope for a solution in China hasn’t been extinguished entirely.

“We shouldn’t underestimate the gesture of having this important high-level meeting. Both sides have shown strong support for it and it has been planned for a long time,” said Wang.

“It shows both leaders have willingness and determination to resolve these issues.”

Liu, however, took a slightly less optimistic tone.

“Of course we always hope for a positive result,” he said, “but we have to acknowledge that there are so many difficulties and uncertainties here. And we won’t be able to solve them in just one week.”

SOURCE: AL JAZEERA NEWS

https://www.aljazeera.com/news/2018/11/china-tensions-rise-xi-trump-trade-talk-181126032716673.html