Posts Tagged ‘World Trade Organization’

Trump demands aides pump up anti-China tariffs

March 15, 2018

After the administration’s top trade official presented a package targeting $30 billion a year in imports, the president asked for an even bigger number.

Donald Trump is pictured. | AP Photo
President Donald Trump has long promised to get tough on trade, but the issue has provoked fierce division among his advisers. | Andrew Harnik/AP Photo

President Donald Trump is getting ready to crack down on China.

Trump told Cabinet secretaries and top advisers during a meeting at the White House last week that he wanted to soon hit China with steep tariffs and investment restrictions in response to allegations of intellectual property theft, according to three people familiar with the internal discussions.

During the meeting, which hasn’t been previously been reported, U.S. Trade Representative Robert Lighthizer presented Trump with a package of tariffs that would target the equivalent of $30 billion a year in Chinese imports. In response, Trump urged Lighthizer to aim for an even bigger number — and he instructed administration officials to be ready for a formal announcement in the coming weeks, according to two people involved in the administration’s trade deliberations.

That sent senior officials at the White House, Treasury Department, State Department, Justice Department, the Office of the U.S. Trade Representative and other key agencies scrambling this week to finalize the proposal. Although the details are still in flux, aides said the administration is considering tariffs on more than 100 Chinese products ranging from electronics and telecommunications equipment to furniture and toys.

Those tariffs are expected to be rolled out as soon as next week, the officials said, adding that the timing could slip. The pending announcement comes after Trump unveiled steep duties on steel and aluminum imports, infuriating Republicans in Congress and many of his own aides.

The Office of the U.S. Trade Representative and the White House declined to comment, and the Treasury Department did not immediately comment. “We don’t comment on internal meetings, but no final decisions have been made on content or timing,” said a White House official.

The president has long promised to get tough on trade, but the issue has provoked fierce division among his advisers. Now, as Trump looks ahead to the midterms and his own reelection campaign, the president has told people close to him that he will no longer allow his staff to stop him from moving forward with policy ideas he strongly supports.

National Economic Council Director Gary Cohn, who strongly opposed the steel and aluminum tariffs, announced last week he will soon resign, and Secretary of State Rex Tillerson, who also privately expressed skepticism of Trump’s trade proposals, was fired on Tuesday. “I’m really at a point where we’re getting very close to having the Cabinet and other things that I want,” Trump said Tuesday.

Tariffs on China’s products could provoke potentially disastrous retaliation against U.S. exporters, including U.S. farmers who rely on the market in China as a major destination for soybeans, pork and other commodities, experts have warned.

The go-it-alone approach could also further stoke tensions with U.S. allies that are also opposed to China’s trade policies, but may view the action as counterproductive to a broader solution.

But tough action against China could earn more support in Congress than the recent steel and aluminum tariffs, which Republican lawmakers condemned as overly broad and harmful to allies. However, lawmakers could still view any China action with skepticism given the chaotic way in which tariffs were rolled out last week.

In addition to the tariffs, the Treasury Department is working to finalize restrictions on Chinese investments as part of the upcoming trade action, although they will likely be introduced only “in concept” as officials continue to consider how broad any action should be, according to an administration official familiar with the planning.

The work on the investment restrictions is focused on making the action as legally defensible as possible, not only at the World Trade Organization but also in accordance with the U.S. Constitution and U.S. laws, the official said.

The Treasury, State and Justice Departments have all insisted on a thorough review of the investment restrictions to avoid a repeat of the fallout from Trump’s original travel ban, which was knocked down by U.S. courts, the official said.

The administration is also considering restricting visas for Chinese citizens or tightening controls on exports of certain goods or technologies that have both military and civilian uses, two of the administration officials said.

The visa restrictions could hit Chinese students going to school in the United States, especially graduate students in science and technology programs, as well as other Chinese nationals working in sensitive jobs, such as at national laboratories. But some administration officials have raised objections to the visa restrictions, and it’s unclear whether they’ll be included in the final package.

The trade crackdown against China would represent Trump’s biggest trade action yet, as he tries to take on Beijing’s massive industrial policy, which often results in U.S. corporations losing valuable technology to Chinese state-controlled companies.

The move would also come only weeks after Trump inflamed trade tensions with allies and foes alike by slapping tariffs on imports of steel and aluminum.

“Steel tariffs are one thing. Taking on the entire Chinese industrial policy apparatus that is designed to suck technology out of the world is another,” said one outside adviser to the administration who has been briefed on the planning and was not authorized to speak on the record.

The Office of the U.S. Trade Representative has calculated tariffs equivalent to about $30 billion per year, which it says represents the market value of technology that U.S. companies are forced to hand over each year with little to no compensation to do business in China, according to two of the administration officials helping plan the action.

The officials added that the administration looked to the Made in China 2025 plan — a coordinated industrial policy Beijing is using to upgrade the country’s manufacturing sector — as a guide when crafting the tariffs.

Administration officials are still debating whether to roll out the tariffs in phases, one of the officials said.

“I think China is going to have to respond. The question is, are they going to do that in a targeted way or are they going to escalate dramatically,” said Matthew Goodman, a senior adviser and expert on Asian economics at the Center for Strategic and International Studies.

Goodman, who served as a White House adviser to Presidents Barack Obama and George W. Bush, said the proposed tariffs are “not wildly out of proportion with the problem.”

A U.S. International Trade Commission investigation in 2011 found that intellectual property theft cost U.S. producers nearly $26 billion in losses in 2009 on copyrighted material alone. Another study from the U.S. software industry in 2011 put software theft losses as high as $60 billion.

“After the inevitable explosion you’re going to have over this, it’s possible that this could bring people back, quietly, to the table over time, but I wouldn’t predict that in the short term,” Goodman said.

In addition to any major retaliation, China will also most likely challenge the tariffs at the World Trade Organization. The United States would likely run afoul of its obligations at the global trading group, where Washington committed to keep its tariffs under a certain level, including with China.

Still, the outside adviser said the Trump administration “seems hell-bent on going it alone” against Beijing, rather than organizing a coordinated approach with other trading partners or through a global forum like the WTO.

The European Union, Japan and other close U.S. economic allies similarly view China’s trade transgressions — theft of intellectual property and technology among them — as damaging to the global trading system.

But unilateral tariffs against Beijing raise “some serious questions about strategy” and could provide further cover for China as the world focuses on U.S. action as a brazen violation of global trade rules, the adviser said.

The move is related to an order Trump signed in August that directed Lighthizer to open an investigation into China under Section 301 of the Trade Act of 1974 for violations of U.S. intellectual property rights. Officials have been examining whether any of China’s laws, policies, practices or actions force American companies to transfer valuable technology to compete in the market or otherwise fail to adequately protect intellectual property rights.

The uncertainty surrounding the steel and aluminum tariffs and other trade issues, such as the ongoing NAFTA negotiations and the investigation into China’s industrial policies, are a “possible headwind” that could undo many of the benefits of tax and regulatory reform, Joshua Bolten, president and CEO of the Business Roundtable, told reporters Tuesday.

“The sooner that the administration is able to clarify what it is doing on steel and aluminum and tariffs and the better the administration is able to do in pursuing a coherent strategy in addressing unfair practices around the world, that’s rules-based and consistent, the better it will be,” Bolten said.

Doug Palmer contributed to this report.


U.S. Allies Jostle to Win Exemptions From Trump Tariffs

March 10, 2018
Heated iron bars at a Hyundai Steel plant in South Korea. In trying to shield their domestic steel and aluminum producers, countries risk creating an every-nation-for-itself atmosphere that would undermine the system for resolving global trade disputes. Credit Shin Dong-Jun/European Pressphoto Agency, via Shutterstock

FRANKFURT — South Korea made an impassioned appeal to the American secretary of defense and national security adviser, reminding them of its role trying to defang North Korea. Europe pointed out that it was, in fact, a longstanding military ally of the United States.

But it was Australia that deployed a secret weapon a day after President Trump signed an order imposing tariffs on steel and aluminum imports, as nations jockeyed for exemptions from the levies.

“We’re calling in all contacts at every level,” Julie Bishop, Australia’s foreign minister, told the Australian Broadcasting Corporation. Top among those enlisted: the golfing legend Greg Norman, a friend of Mr. Trump’s. “We will continue to push our case, we’ll continue to advocate on behalf of Australia for as long as it takes,” she said.

In seeking to win a respite from the tariffs, American allies tried a mix of persuasion and threats, personal appeals and diplomatic leverage. But they faced a delicate balancing act. A country that offers something in return for an exemption could set a precedent, allowing the White House to make further demands in the future in return for access to the United States market, and fracture any sense of unity between capitals from Brussels to Seoul that have roundly criticized the tariffs.

Questions over how to pressure Mr. Trump were similarly perilous. Nations trying to protect their own domestic steel and aluminum producers risked creating an every-nation-for-itself atmosphere, undermining the decades-old World Trade Organization system for resolving global trade disputes. But taking legal action could not only launch a protracted process but also trigger American ire.

“If you now start making concessions on other things, you give in to blackmail,” said Guntram Wolff, the director of Bruegel, a research organization in Brussels. “I would reject that.”

European Union countries were compiling a list of American products that could be subject to reciprocal levies. The provisional list correlated strongly with Republican congressional districts and included Harley-Davidson motorcycles, bourbon, rice, kidney beans, sweet corn, tobacco and peanut butter.

The region is likely to face a tough decision, however, about whether to wait for World Trade Organization approval, a lengthy process, or simply to impose the retaliatory sanctions. Cecilia Malmstrom, the European commissioner for trade, said during a news conference in Brussels on Wednesday that any fight back against the United States would be “by the book.”

But even as European Union leaders prepared for retaliatory action, they also recalled the long history of trans-Atlantic bonhomie.

Brigitte Zypries, the German economics minister, wrote in a letter to Wilbur Ross, the United States commerce secretary, that Europe and America should work together to address the real problem: a global glut of steel production that has driven down prices.

“We need trans-Atlantic solidarity on this issue, and not trade conflicts,” she said.

Still, there were signs that attempts by some countries to win tariff immunity from the United States were sowing tension among European allies.

Liam Fox, Britain’s international trade secretary, told the BBC on Friday he would “be looking to see how we can maximize the U.K.’s case for exemption” when he visits Washington next week. The suggestion that Britain might go its own way provoked a rebuke from Jyrki Katainen, European Union vice president for jobs and competitiveness. “We cannot accept that the E.U. is divided to different categories,” Mr. Katainen said Friday.

Australia had already shown how to win Mr. Trump’s favor with an energetic lobbying effort that seems to be paying off. The president, who excluded Canada and Mexico from the tariffs, singled out Australia on Thursday as another country that could be exempt.

Ms. Bishop, the Australian foreign minister, said she had been in contact with Secretary of State Rex W. Tillerson while he had been traveling in Africa. She also said she had spoken with close business contacts of Mr. Trump. And she made her case to Nikki Haley, the United States ambassador to the United Nations, while in New York this week.

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Draghi Asks Who Needs Friends Like These Amid Trump Threat

March 8, 2018
 Updated on 
  • ECB president questions the state of international relations
  • Starting a trade war could affect exchange rates, Draghi says

European Central Bank President Mario Draghi added his voice to those criticizing the U.S. threat to slap import tariffs on some products and called on governments to work together rather than end up in a tit-for-tat dispute.

While he downplayed the impact on the economy, he said recent developments still raise questions about the health of global relations. The past week has seen President Donald Trump announce plans for tariffs on steel and aluminum imports as well as threats of retaliation by some of the U.S.’s biggest trade partners.

 Image result for European Central Bank (ECB) President Mario Draghi attends a eurozone finance ministers meeting in Brussels, Belgium, February 19, 2018. REUTERS/Francois Lenoir/File Photo
 European Central Bank (ECB) President Mario Draghi attends a eurozone finance ministers meeting in Brussels, Belgium, February 19, 2018. REUTERS/Francois Lenoir/File Photo
Draghi `Wonders Who the Enemies Are’ After Trump’s Tariffs Threat

“One wonders who the enemies are,” Draghi says.

Source: ECB

“If you put tariffs against what are your allies, one wonders who the enemies are,” Draghi told a news conference in Frankfurt when asked about Trump’s plans.

Even in Draghi’s opening statement at the press conference, effectively the voice of the ECB’s Governing Council, he noted the trade-war risk, adding “rising protectionism” to the list of downside risks to the outlook.

“We are convinced that disputes should be discussed and resolved in a multilateral framework and unilateral decisions are dangerous,” Draghi said. The ECB chief also wondered aloud, “what’s going to be the response of the exchange rate?”

In the U.S., Trump’s move has led to the resignation of chief economics adviser Gary Cohn. The loss of a pro-trade figure at the White House has only served to heighten concern about the extent of the emerging trans-Atlantic dispute. However, the plan continues to evolve, and the U.S. announced Thursday that it may initially exempt Canada and Mexico.

Speaking earlier on Bloomberg Television, Draghi’s predecessor at the ECB, Jean-Claude Trichet, said Trump’s tariff proposal was “a very dangerous move” that added to the risks facing the international economy.


FRANKFURT, GERMANY (AP) — The Latest on the European Central Bank’s monetary policy meeting (all times local):

3:05 p.m.

European Central Bank head Mario Draghi has expressed concern about U.S. President Donald Trump’s announced trade measures, saying the immediate spillover “is not going to be big” but that “unilateral decisions are dangerous.”

He told a news conference Thursday that trade disputes should be resolved in multi-lateral negotiations, such as in the World Trade Organization.

Draghi said the most important aspect of any potential tariffs would be the impact on economic confidence, which is “difficult to assess.” He said that a drop in confidence would also hurt economic output and inflation.


2:00 p.m.

The euro has jumped higher after the European Central Bank hinted that it is closer to exiting its extraordinary monetary stimulus effort.

The euro rose from $1.2379 before the bank issued its policy statement to as high as $1.2425.

The bank dropped a promise that it could increase its bond purchase stimulus if the economy worsens. That was seen as a step toward ending the 30 billion euros ($37 billion) per month in bond purchases that pump newly printed money into the economy in an effort to support growth and inflation.

The bank has said the purchases will continue at least through September but has given no fixed end date.

Such monetary stimulus tends to weaken a currency, so a hint that an exit is coming tends to send the euro higher.


1:45 p.m.

The European Central Bank has tweaked its main monetary policy statement — a hint that it is getting closer to withdrawing a key economic stimulus program.

The bank on Thursday left its key interest rates on hold as well as the size of its bond-buying stimulus program. But in its statement it omitted an earlier promise that it could increase its bond-purchase stimulus in size or duration if the economic outlook worsens.

Economic growth of 2.7 percent year on year in the fourth quarter has made that promise increasingly outdated.

The bank has said it will continue buying 30 billion euros ($37 million) in bonds per month through September and longer if needed — but has given no precise end date.

Stimulus withdrawal could mean a stronger euro versus the dollar, higher returns on savings and stiffer borrowing costs for indebted governments in the 19-country eurozone.


11:40 a.m.

Markets are waiting to see whether the European Central Bank will drop any hints about when its economic stimulus will end.

ECB President Mario Draghi is to hold a news conference after a meeting Thursday of the bank’s 25-member governing council.

The bank isn’t expected to change its stimulus programs, but investors are watching to see if it drops a promise to ramp up stimulus if needed. Removing that promise would be a small signal that the bank is closer to exiting its stimulus.

The bond-purchase stimulus has been pumping newly created money into the eurozone economy since March, 2015. The ECB has said purchases will continue at 30 billion euros ($37 billion) monthly at least through September.

A stimulus exit would likely send interest rates and the euro higher.

China says ready for trade war as Trump ponders tariffs

March 8, 2018


© AFP | Chinese Foreign Minister Wang Yi issued the stern message as the Trump administration geared up to formally introduce steel and aluminium tariffs as early as Thursday despite global concerns

BEIJING (AFP) – China warned the United States on Thursday that everyone will be harmed if President Donald Trump launches a trade war, as official figures showed the Asian power maintained a robust trade surplus with the US.Chinese Foreign Minister Wang Yi issued the stern message as the Trump administration geared up to formally introduce steel and aluminium tariffs as early as Thursday despite global concerns.

“Choosing a trade war is surely the wrong prescription, in the end you will only hurt others and yourself,” Foreign Minister Wang Yi said.

“China will certainly make an appropriate and necessary response,” Wang said at a press conference on the sidelines of the Communist Party’s annual parliamentary session.

On Wednesday, at the World Trade Organization, China led a group of 18 members urging Trump to scrap the planned tariffs, with its representative saying the levies would pose a systemic threat to the rules-based global trading system.

US imports from China of steel and aluminium make up a small proportion of its total imports from the world’s second largest economy.

But the tariffs may be the first foray in the brewing American trade war with Beijing.

In coming weeks, the Trump administration plans to issue a report on China’s intellectual property practices expected to hammer China and possibly bring about further tariffs on a wider range of Chinese imports.

“The US is acting swiftly on Intellectual Property theft. We cannot allow this to happen as it has for many years!” Trump tweeted hours before Wang took the stage in Beijing.

Trump also took to Twitter to say the US had asked China to “develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States.”

“We look forward to seeing what ideas they come back with. We must act soon!” Trump said.

The amount is a drop in the bucket when compared with the record $375.2 billion trade deficit the US racked up with China last year.

– Averting a trade war –

Trump’s tweets follow China’s moves to resolve the simmering trade tensions.

While Beijing has launched warning shots — like trade investigations into US goods such as sorghum, and hinted it could even take on soybeans, its largest US import — officials have worked to find a peaceful resolution.

President Xi Jinping sent his top economic aide, Liu He, to Washington to discuss trade issues last week on the heels of a similar visit by state councillor Yang Jiechi last month.

But Washington has shown little interest in negotiating, with Liu’s visit resulting in few major breakthroughs beyond a commitment to further talks on trade issues.

Tuesday’s resignation of Trump’s top economic adviser Gary Cohn — who had held talks with Liu during his visit — also throws cold water on the negotiations.

His departure leaves “nationalist” advisors like arch China sceptic Peter Navarro, author of “Death by China”, and Commerce boss Wilbur Ross with the president’s ear.

Last week, Trump said “trade wars are good, and easy to win” when the US is losing billions on trade.

In Beijing, officials continue to search for a way out.

“The lessons of history show engaging in a trade war is never the right way to resolve problems,” said foreign minister Wang.

– Ballooning trade surplus –

Trade data released by China’s customs administration on Thursday shows its massive trade surplus with the US — the root of Trump’s ire — far from finding a more even level.

The surplus with the US stood at $21 billion in February, China’s official data showed, more than double the $10.4 billion surplus registered in February of last year.

“The bigger picture is that while China’s trade surplus with most of the world has declined during the past year…its surplus with the US has continued to expand” said Julian Evans-Pritchard, China Economist at Capital Economics in a note.

February’s surplus did edge downwards from the $21.9 billion recorded in January and $25.6 billion from December.

11 Pacific trade pact countries go it alone without US — TPP Evolving

March 6, 2018


The agreement — rebranded as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership — has been championed as an antidote to growing US protectionism under President Donald Trump. (AFP)
SANTIAGO: A year after an abrupt US withdrawal left a fledgling 12-nation Pacific trade pact for dead, the 11 remaining states will sign a re-vamped deal Thursday aimed at slashing tariffs.
The agreement — rebranded as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — has been championed as an antidote to growing US protectionism under President Donald Trump.
“We are not going to be derailed by Trump’s decision” to withdraw the US, said Felipe Lopeandia, Chile’s top trade negotiator, ahead of the ratification ceremony in Santiago.
After years of negotiations, the original deal — the Trans-Pacific Partnership, or TPP — was signed in February 2016 by 12 countries that border the Pacific Ocean.
But it fell victim to Trump’s “America First” policy, when he removed the pact’s major linchpin before the deal could get under way.
The CPTPP aims to slash tariffs between the 11 members and foster trade to boost growth.
It will “send a political signal to the world and to the United States itself, that this is a global agreement,” said Lopeandia.
Coming in the same week that Trump risked a trade war over his decision to introduce tariffs on imported steel and aluminum, the deal is seen by some members as striking a blow against protectionism.
Washington’s exit meant a drastic downsizing of the original agreement — which with US involvement represented 40 percent of the global economy.
But the pact — though a diminished one involving 13.5 percent of global GDP — remains hugely significant, according to Ignacio Bartesaghi of the Catholic University of Uruguay’s business school.
“There is no trade agreement involving that number of countries, and one that has 30 chapters which deal with all the most modern topics of international trade,” Bartesaghi said.
Last month, Trump told the World Economic Forum in Davos that the US might return if it got a better deal.
“Little by little, his advisers have managed to make Trump realize the role that the United States plays in Asia Pacific and the role played by the TPP in that region, not only in economic and trade terms, but in geopolitical terms,” said Bartesaghi.
But Japan, a key driver behind the revised pact, is skeptical.
“If the United States returns to a more positive attitude toward the TPP, it is something we will welcome (but) it would not be so easy” to change the agreement again, said Tokyo’s chief negotiator Kazuyoshi Umemoto.
More than 20 provisions were suspended or changed in the new agreement, mostly rules over intellectual property originally inserted at the demand of US negotiators.
Analysts noted these provisions were not canceled, however, with some suggesting the door is being left ajar for the US.
Chilean authorities say the new chapter on intellectual property protection is now “more balanced.”
“The CPTPP will establish a new standard for other regional economic integration agreements, and even for future negotiations in the WTO (World Trade Organization) and in APEC (Asia-Pacific Economic Cooperation),” said Chile’s foreign ministry, which is hosting Thursday’s landmark signing.
Chile said membership of the new pact will improve access to markets currently responsible for 17 percent of its total exports.
The other two Latin American countries, Mexico and Peru, will also improve their access to countries on the other side of the Pacific, such as Vietnam and Malaysia.
“It means an increase in our potential market and the possibility that our people can access more products,” said Mario Mongilardi, head of Lima’s chamber of commerce.
The 11 states represent a market of 500 million people, greater than that of the European Union’s single market.
The pact will come into force 60 days after it is fully ratified by six of the 11 members.
The 11 TPP countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.


EU Proposes Retaliatory Tariff of 25% Against U.S. Goods — Retaliatory list includes jeans, cosmetics, bourbon, boats

March 6, 2018


By Viktoria Dendrinou and Jonathan Stearns

 Updated on 
  • Tit-for-tat tariffs of 25% to hit $3.5 billion of U.S. goods
  • Retaliatory list includes jeans, cosmetics, bourbon, boats

Image result for Scott Thiel, photos, bloomberg

“The market is now trying to decide whether Trump is actually going to go through with it”: BlackRock’s Scott Thiel.

The European Union intends to target 2.8 billion euros ($3.5 billion) of U.S. goods ranging from T-shirts and whiskey to motorcycles should President Donald Trump go ahead with his plan to impose a 25 percent tariff on foreign steel.

 Image may contain: 1 person, smiling, eyeglasses and suit
European Commission President Jean-Claude Juncker

The EU aims to apply a tit-for-tat levy on a range of consumer, agricultural and steel goods imported from the U.S., according to a list drawn up by the European Commission and obtained by Bloomberg News. The commission, the EU’s executive arm, discussed the measures with representatives of the bloc’s governments at a meeting on Monday evening in Brussels.

The EU’s retaliatory list targets imports from the U.S. of shirts, jeans, cosmetics, other consumer goods, motorbikes and pleasure boats worth around 1 billion euros; orange juice, bourbon whiskey, corn and other agricultural products totaling 951 million euros; and steel and other industrial products valued at 854 million euros.

 Image result for steel mill, interior, photos

Trump’s vow to curb U.S. imports of foreign steel has sparked opposition within his Republican Party and is based on a national-security argument that the EU dismisses. The White House threat risks provoking retaliation across the globe and a slew of complaints to the World Trade Organization, which has never ruled on a dispute involving trade restrictions justified on national-security grounds.

Growing Concerns

Europe has expressed growing concerns about Trump’s protectionist stance on international trade. The list of U.S. goods on which the EU intends to apply its own 25 percent tariff sends a political message to Washington about the potential domestic economic costs of making good on the president’s threat.

Image result for Harley-Davidson, plant, wisconsin, photos

Paul Ryan, Republican speaker of the House of Representatives, comes from the same state — Wisconsin — where motorbike maker Harley-Davidson Inc. is based. Earlier this week, Ryan said he was “extremely worried about the consequences of a trade war” and urged Trump to drop his steel-tariff plan.

European Commission President Jean-Claude Juncker and his leadership team are due to discuss the retaliation proposal at a meeting on Wednesday. The commission is also weighing filing a complaint to the WTO against the U.S. and introducing “safeguard” measures to prevent steel shipments from other parts of the world to America from being diverted to the European market and flooding it.

— With assistance by Esteban Duarte

S. Korea’s Moon urges ‘stern’ response to new US tariffs

February 19, 2018


© POOL/AFP/File | South Korean President Moon Jae-in seeks a “stern” response to new US tariffs

SEOUL (AFP) – South Korean President Moon Jae-in called Monday for a “stern” response to new US tariffs on the South’s exports as concern grew over looming trade restrictions by Washington.US President Donald Trump last week threatened retaliatory action against China and South Korea and vowed to revise or scrap a 2012 free trade deal with the South which he described as a “disaster”.

Trump also put his “America First” doctrine into action last month by imposing duties of 20 to 50 percent on large washing machines made in nations including the South, as well as tariffs on solar panels imported from China and elsewhere.

Seoul has said it would take the issue to the World Trade Organization while Beijing expressed “strong dissatisfaction” with the move, adopted to protect US manufacturers.

The trade frictions have strained ties at a time when Seoul and Washington are seeking to present a united front against North Korea’s nuclear threat.

Moon, at a meeting with aides, expressed concern over “intensifying protectionism” that may take a toll on the South’s export-reliant economy — also the world’s 11th largest.

“I am concerned that widening restrictions by the US on our exports, including steel, electronics, solar panels and washing machines, may take a toll on the exports despite their global competitiveness,” he said.

“I’d like (officials) to respond to unreasonable protectionist measures in a confident and stern manner by… reviewing whether the measures violate the current Korea-US free trade pact,” he said.

Moon also urged officials to “actively argue the unfairness” of the tariffs when renegotiating the bilateral free trade deal.

Moon’s comments also came days after the US Commerce Department recommended hefty new tariffs on steel imports from countries including the South.

The US trade deficit — which Trump has vowed repeatedly to fix — widened even further during his first year in office, up 12 percent to $566 billion.

The Trump administration last July initiated talks to renegotiate the free trade pact with Seoul, arguing it was lopsided because America’s bilateral trade deficit had ballooned under it.

Two previous rounds of talks made little progress and Seoul’s chief trade negotiator Kim Hyun-chong said at the time there was “a long way to go”.

The next round of negotiations is scheduled in Washington next month.


US eyes heavy tariffs on China, Russia to counter steel, aluminum glut

February 16, 2018


© AFP | US Commerce Secretary Wilbur Ross believes that cheap steel and aluminum imports from places like China and Russia “threaten to impair our national security”

WASHINGTON (AFP) – The US Commerce Department said Friday it recommended imposing tariffs on China, Russia and other countries to counter a global glut in steel and aluminum which it says threatens national security.In a report to President Donald Trump, Commerce Secretary Wilbur Ross includes among the options a nearly 24 percent tariff on all products from China, Russia and three other economies.

Other options would impose either high tariffs or quotas on steel and aluminum imports.

The findings are part of an investigation into the impact of the oversupply of steel and aluminum, and whether it undermines US national security.

In each case “the imports threaten to impair our national security,” Ross told reporters in a conference call about the so-called Section 232 investigation.

China and Russia are primary targets, but many other countries are included in the recommended sanctions, which are sure to spark fears of a global trade war if implemented.

Ross said the sanctions were designed to be broad to prevent targeted countries from circumventing the limits by shipping through a third country.

He said “serial offenders can evade these orders by transshipment through another country.”

For steel, Ross recommended three possible options: a 24 percent tariff on all steel from all countries; a 53 percent tariff on imports from 12 countries, including China, Russia and Brazil; or a quota on steel from all countries.

For aluminum, he recommended either a 7.7 percent tariffs on the metal from all countries; a quota for all countries; or, perhaps the most shocking of all the options, a 23.6 percent tariffs on imports of all products from China, Russia, Hong Kong, Vietnam and Venezuela.

Ross submitted the two reports to the White House in late January.

Trump has until mid-April to decide on any possible action, which he acknowledged likely would prompt action by US trading partners in the World Trade Organization.

US industries have urged the administration to take care since high import tariffs would raise the cost of supplies for major industries.

But Commerce said the goal of the measures is to boost domestic aluminum and steel prodcution.


EU drafting law to restrain Chinese takeovers

January 28, 2018

A draft EU law to restrain Chinese acquisitions of European firms and technologies is progressing, according to a deputy German minister. Matthias Machnig has said the initiative has found support in European capitals.

Visitors at an industrial fair in Shanghai look at a robot arm made by Kuka, a German robot maker taken over by the Chinese company Midea (picture-alliance/dpa/Zhang Jinqiao)

Matthias Machnig, deputy secretary in Germany’s Economics Ministry, told the Welt am Sonntagnewspaper that EU nations urgently needed a “legislative tool” to examine strategic takeovers and stake-holding by foreign states and, if necessary, powers to intervene.

Read more: China’s hunger for German firms

Germany, together with France and Italy, had launched the legislative initiative, which also had European Commission approval and is now subject to consultations within the EU Council of Ministers and the European Parliament, Machnig said.

“It is urgently necessary that within this year we are handed a sharper legislative instrument to resist takeover fantasies or outflows of technology and know-how,” he told the weekly paper.

“The EU with its innovative businesses is attractive for many around the world,” he added. “Firm takeovers are rising, unfortunately often under market-distorting financial conditions.”


Machnig was the German delegation chief at December’s ministerial conference in Brazil of the World Trade Organization (WTO), whose director-general, Roberto Azevedo, last year warned world leaders to “resist the temptation of protectionism.”

Known Chinese investments in Germany had jumped from €100 million ($124 million) seven years ago to €12.1 billion last year, the Cologne-based Institute for Economic Research (IW) told Welt am Sonntag.

“In most cases less than 50 percent of the sum of transactions of Chinese firms in Germany actually became public,” said the IW’s Christian Rusche.

ipj/sms (Reuters, dpa)

China, S.Korea hit out at new US trade tariffs

January 23, 2018


© AFP/File | US Trade Representative Susan Schwab (L) and South Korean Trade Minister Kim Hyun-chong sign the KORUS Free Trade Agreement in June, 2007 in Washington, DC

BEIJING (AFP) – China and South Korea on Tuesday hit out at a US decision to impose stinging tariffs on imported solar panels and washing machines, which marked the latest salvo in Donald Trump’s “America First” drive.The US president approved the steep tariffs — up to 50 percent on large washing machines over three years and up to 30 percent on solar panels over four years — to protect US producers, US trade officials said.

But South Korea, which signed a free-trade agreement with former President George W. Bush, immediately said it would file a petition against the US at the World Trade Organization.

The country’s Trade Minister Kim Hyun-chong said the tariffs were “excessive” and may constitute a “violation of WTO provisions”.

Samsung, South Korea’s biggest firm, said the tariffs were “a tax on every consumer who wants to buy a washing machine”.

In Beijing the commerce ministry warned that “together with other WTO members, China will resolutely defend its legitimate interests”, though it did not indicate any specific counteraction.

The US moves “not only aroused the concern of many trading partners but was also strongly opposed by many local governments and downstream enterprises in the US”, the ministry said in statement attributed to Wang Hejun, the director of the trade remedy and investigation bureau.

Beijing “expresses its strong dissatisfaction”, Wang said.

China is the United States’ biggest trade partner nation but Trump has often hit out at what he calls unfair practices by Beijing, accusing it of killing US jobs.

While running for office, Trump threatened to pull out of the WTO and his hostility to the world trade body has not let up while in office.

Last Friday, the Geneva-based body sided with Beijing in setting a firm date this summer for Washington to implement a ruling faulting the US’s anti-dumping measures against Chinese products.

The US had previously lost a case with China on how it calculates the price of imports to determine predatory pricing, and said in June 2017 that it would implement the panel’s recommendations within a “reasonable” timeframe.

The WTO arbitrator gave Washington until August 22 to implement the ruling.