Archive for ‘Robert Lighthizer’

10/05/2019

Trade war: Trump raises tariffs on $200bn of Chinese goods

The US has more than doubled tariffs on $200bn (£153.7bn) worth of Chinese products, in a sharp escalation of the countries’ damaging trade war.

Tariffs on affected Chinese goods have risen to 25% from 10%, and Beijing has vowed to retaliate.

China says it “deeply regrets” the move and will have to take “necessary counter-measures.”

It comes as high-level officials from both sides are attempting to salvage a trade deal in Washington.

Only recently, the US and China appeared to be close to ending months of trade tensions.

China’s Commerce Ministry confirmed the latest US tariff increase on its website.

“It is hoped that the US and the Chinese sides will work together… to resolve existing problems through co-operation and consultation,” it said in a statement.

Tariffs are taxes paid by importers on foreign goods, so the 25% tariff will be paid by American companies who bring Chinese goods into the country.

Chinese stock markets rose on Friday, with the Hang Seng index up less than 1% and the Shanghai Composite more than 3% higher.

However, earlier in the week stock markets had fallen after US President Donald Trump flagged the tariff rise on Sunday.

The US imposed a 10% tariff on $200bn worth of Chinese products – including fish, handbags, clothing and footwear – last year.

The tariff was due to rise at the start of the year, but the increase was delayed as negotiations advanced.

What will be the impact of the tariff rise?

The US-China trade war has weighed on the global economy over the past year and created uncertainty for businesses and consumers.

Even though Mr Trump has downplayed the impact of tariffs on the US economy, the rise is likely to affect some American companies and consumers as firms may pass on some of the cost, analysts said.

Deborah Elms, executive director at the Asian Trade Centre, said: “It’s going to be a big shock to the economy.

“Those are all US companies who are suddenly facing a 25% increase in cost, and then you have to remember that the Chinese are going to retaliate.”

China's Vice Premier Liu He (C) poses for a photo with US Treasury Secretary Steven Mnuchin (R) and US Trade Representative Robert Lighthizer (L) at Diaoyutai State Guesthouse in Beijing on March 29, 2019Image copyright GETTY IMAGES
Image caption US and Chinese officials have held several round of talks in an attempt to strike a deal to end the trade war.

In a statement, the American Chamber of Commerce in China said it was committed to helping both sides find a “sustainable” solution.

“While we are disappointed that the stakes have been raised, we nevertheless support the ongoing effort by both sides to reach agreement on a strong, enforceable deal that resolves the fundamental, structural issues our members have long faced in China.”

French Finance Minister Bruno Le Maire warned that the trade dispute escalation threatened jobs across Europe.

“There is no greater threat to world growth,” Mr Le Maire told CNews. “It would mean that trade tariffs go up, fewer goods would circulate around the world… and jobs in France and in Europe would be destroyed.”

Presentational grey line

‘Serious escalation’ of the trade war

Analysis box by Karishma Vaswani, Asia business correspondent

No breakthrough, and no deal – just, more tariffs.

With this move, US President Donald Trump has effectively dealt a fresh blow to not just the Chinese economy – as he had presumably hoped – but also to US’s.

The previous set of tariffs of 10% on $200bn of Chinese goods have to some extent been absorbed by American importers, but economists say a 25% tariff will be much harder for them to stomach.

They will almost certainly have to pass on that cost to American consumers – and that means higher prices.

Make no mistake, this is a serious escalation – and the trade war between the world’s two largest economies is back on.

This means the rest of us should be prepared for more pain ahead.

Presentational grey line

How will the tariff increase affect negotiations?

Despite this week’s escalation in tensions, talks were held between Chinese Vice-Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday.

A White House spokesman said US officials had agreed with the vice-premier to resume talks on Friday morning, according to media reports.

Even though there had been growing optimism about progress in trade talks recently, sticking points have persisted throughout.

These have included issues around intellectual property protection, how fast to roll back tariffs and how to enforce a deal.

Analysts say the Chinese are still willing to negotiate to retain the moral high ground and because they recognise the importance of solving the trade war.

“A trade war will be bad for China, both the real economy and the financial markets. It will also be bad for the world economy,” said Gary Hufbauer of the Peterson Institute for International Economics.

“Better for China to play the role of conciliatory statesman than angry retaliator.”

Why are the US and China at odds?

China has been a frequent target of Donald Trump’s anger, with the US president criticising trade imbalances between the two countries and Chinese intellectual property rules, which he says hobble US companies.

Some in China see the trade war as part of an attempt by the US to curb its rise, with Western governments increasingly nervous about China’s growing influence in the world.

Both sides have already imposed tariffs on billions of dollars worth of one another’s goods. The situation could become worse still, as Mr Trump has also warned he could “shortly” introduce 25% duties on $325bn of Chinese goods.

What exactly sparked the US president’s latest actions, which apparently took China by surprise, is unclear.

Ahead of the discussions, Mr Trump told a rally China “broke the deal” and would pay for it.

How the trade war has played out

The International Monetary Fund said the row poses a “threat to the global economy”.

“As we have said before, everybody loses in a protracted trade conflict,” the body which aims to ensure global financial stability said in a statement, calling for a “speedy resolution”.

Source: The BBC

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08/05/2019

Exclusive: China backtracked on nearly all aspects of U.S. trade deal – sources

The document was riddled with reversals by China that undermined core U.S. demands, the sources told Reuters.

In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: theft of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

U.S. President Donald Trump responded in a tweet on Sunday vowing to raise tariffs on $200 billion (153 billion pounds) worth of Chinese goods from 10 to 25 percent on Friday – timed to land in the middle of a scheduled visit by China’s Vice Premier Liu He to Washington to continue trade talks.

The stripping of binding legal language from the draft struck directly at the highest priority of U.S. Trade Representative Robert Lighthizer – who views changes to Chinese laws as essential to verifying compliance after years of what U.S. officials have called empty reform promises.

Lighthizer has pushed hard for an enforcement regime more like those used for punitive economic sanctions – such as those imposed on North Korea or Iran – than a typical trade deal.

“This undermines the core architecture of the deal,” said a Washington-based source with knowledge of the talks.

“PROCESS OF NEGOTIATION”

Spokespeople for the White House, the U.S. Trade Representative and the U.S. Treasury Department did not immediately respond to requests for comment.

Chinese Foreign Ministry spokesman Geng Shuang told a briefing on Wednesday that working out disagreements over trade was a “process of negotiation” and that China was not “avoiding problems”.

Geng referred specific questions on the trade talks to the Commerce Ministry, which did not respond immediately to faxed questions from Reuters.
Lighthizer and U.S. Treasury Secretary Steven Mnuchin were taken aback at the extent of the changes in the draft. The two cabinet officials on Monday told reporters that Chinese backtracking had prompted Trump’s tariff order but did not provide details on the depth and breadth of the revisions.
Liu last week told Lighthizer and Mnuchin that they needed to trust China to fulfil its pledges through administrative and regulatory changes, two of the sources said. Both Mnuchin and Lighthizer considered that unacceptable, given China’s history of failing to fulfil reform pledges.
One private-sector source briefed on the talks said the last round of negotiations had gone very poorly because “China got greedy”.
“China reneged on a dozen things, if not more … The talks were so bad that the real surprise is that it took Trump until Sunday to blow up,” the source said.
“After 20 years of having their way with the U.S., China still appears to be miscalculating with this administration.”
FURTHER TALKS THIS WEEK
The rapid deterioration of negotiations rattled global stock markets, bonds and commodities this week. Until Sunday, markets had priced in the expectation that officials from the two countries were close to striking a deal.
Investors and analysts questioned whether Trump’s tweet was a negotiating ploy to wring more concessions from China. The sources told Reuters the extent of the setbacks in the revised text were serious and that Trump’s response was not merely a negotiating strategy.
Chinese negotiators said they couldn’t touch the laws, said one of the government sources, calling the changes “major.”
Changing any law in China requires a unique set of processes that can’t be navigated quickly, said a Chinese official familiar with the talks. The official disputed the assertion that China was backtracking on its promises, adding that U.S. demands were becoming more “harsh” and the path to a deal more “narrow” as the negotiations drag on.
Liu is set to arrive in Washington on Thursday for two days of talks that just last week were widely seen as pivotal – a possible last round before a historic trade deal. Now, U.S. officials have little hope that Liu will come bearing any offer that can get talks back on track, said two of the sources.

 

The administration said the latest tariff escalation would take effect at 12:01 a.m. Friday (0401 GMT), hiking levees on Chinese products such as internet modems and routers, printed circuit boards, vacuum cleaners and furniture.
The Chinese reversal may give China hawks in the Trump administration, including Lighthizer, an opening to take a harder stance.
Mnuchin – who has been more open to a deal with improved market access, and at times clashed with Lighthizer – appeared in sync with Lighthizer in describing the changes to reporters on Monday, while still leaving open the possibility that new tariffs could be averted with a deal.
Trump’s tweets left no room for backing down, and Lighthizer made it clear that, despite continuing talks, “come Friday, there will be tariffs in place.”
Source: Reuters
02/05/2019

China, U.S. hold 10th round of high-level trade consultations in Beijing

CHINA-U.S.-ECONOMIC AND TRADE CONSULTATIONS (CN)

This combo photo shows Chinese Vice Premier Liu He, who is also a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-U.S. comprehensive economic dialogue, posing for photos with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. They held the tenth round of China-U.S. high-level economic and trade consultations in Beijing from April 30, 2019 to May 1, 2019. (Xinhua/Shen Hong, Zhai Jianlan)

BEIJING, May 1 (Xinhua) — Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin held the tenth round of China-U.S. high-level economic and trade consultations in Beijing from Tuesday to Wednesday.

As planned, the two sides will hold the 11th round of high-level economic and trade consultations in Washington D.C. next week.

Liu is also a member of the Political Bureau of the Communist Party of China Central Committee and chief of the Chinese side of the China-U.S. comprehensive economic dialogue.

Source: Xinhua

30/04/2019

Trade war: What you need to know about US-China talks

An aerial view of a port in Qingdao in China's eastern Shandong province on March 8, 2019.Image copyright GETTY IMAGES

The US and China are due to begin a fresh round of talks in Beijing on Tuesday as they edge closer to resolving their damaging trade dispute.

The discussions will be led by US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He.

Talks have dragged on for months, with both sides struggling to agree on key issues.

The trade war has hurt the economy and challenged the multilateral system that has governed world trade for decades.

There has been cautious optimism surrounding the talks in recent months but also a sense that both sides remain divided on some points.

How did we get here?

The US, which accuses China of unfair trading practices, imposed tariffs on $250bn (£193.2bn) worth of Chinese products last year.

Beijing has retaliated with duties on $110bn worth of American products.

Tariffs on $200bn worth of Chinese goods were due to more than double at the start of the year, rising from 10% to 25%.

But both countries agreed to suspend tit-for-tat tariffs after they struck a truce in December, and began negotiations to work towards a deal.

US President Donald Trump recently said the US and China had agreed on “a lot of the most difficult points” but that “we have some ways to go”.

What are the sticking points?

Sticking points in negotiations in recent months have included how a deal would be enforced, issues around intellectual property protection, and how fast to roll back tariffs.

Gary Hufbauer from the Peterson Institute for International Economics in Washington said enforcement was a crucial issue, but remained optimistic about the prospect of a deal.

“China will make lots of promises, the US remains sceptical on implementation,” he said.

Still, he expects a deal to be announced by mid-May. The latest round of talks are expected to be followed by further negotiations in Washington on 8 May.

The US accuses China of stealing intellectual property and wants Beijing to make changes to its economic policies, which it says unfairly favour domestic companies through subsidies. It also wants China to buy more US goods to rein in a lofty trade deficit.

Mr Xi addressed some of these concerns last week at the Belt and Road forum in Beijing ahead of the trade talks.

He said China would boost efforts to secure intellectual property protection, increase imports of goods and services and ensure a fair trading environment for firms.

But what makes trade negotiations particularly difficult to resolve is the fact they are part of a broader power struggle between the world’s two largest economies.

China’s growing influence has put many Western governments – and particularly the US on the defensive. Some in China see the trade war as part of US efforts to curb its rise.

Against this backdrop, there is a view that the trade deal will not put an end to a US-China rivalry, which is already playing out in the technology sector.

What’s at stake?

The trade war is already having an impact on the world economy.

International Monetary Fund chief economist Gita Gopinath said the escalation of US-China trade tensions was one factor that had contributed to a “significantly weakened global expansion, especially in the second half of 2018.” The IMF cut its growth forecast for this year by 0.2 percentage points to 3.3%.

The Organisation for Economic Cooperation and Development (OECD) also said tariffs imposed by the US and China last year had slowed economic growth in the world’s two largest economies.

Beyond the tangible economic fallout, some fear the trade war is challenging the multilateral system which has governed global trade for decades, including through the World Trade Organisation (WTO).

“The system is already fragile. An all out trade war, in which both sides break their WTO commitments, will be very damaging,” Mr Hufbauer said.

Source: The BBC

11/04/2019

U.S., China agree to establish trade deal enforcement offices – Mnuchin

WASHINGTON (Reuters) – The United States and China have largely agreed on a mechanism to police any trade agreement they reach, including establishing new “enforcement offices,” U.S. Treasury Secretary Steven Mnuchin said on Wednesday.

Mnuchin, speaking on CNBC television, said that progress continues to be made in the talks, including a “productive” call with China’s Vice Premier Liu He on Tuesday night. The discussions would be resumed early on Thursday, Washington time, he added.

“We’ve pretty much agreed on an enforcement mechanism, we’ve agreed that both sides will establish enforcement offices that will deal with the ongoing matters,” Mnuchin said, adding that there were still important issues for the countries to address.

Mnuchin declined to comment on when or if U.S. tariffs on $250 billion worth of Chinese goods would be removed. Although President Donald Trump said recently that a deal could be ready around the end of April, Mnuchin declined to put a timeframe on the negotiations, adding that Trump was focused on getting the “right deal.”

“As soon as we’re ready and we have this done, he’s ready and willing to meet with President Xi (Jinping) and it’s important for the two leaders to meet and we’re hopeful we can do this quickly, but we’re not going to set an arbitrary deadline,” Mnuchin added.

The United States is demanding that China implement significant reforms to curb the theft of U.S. intellectual property and end forced transfers of technology from American companies to Chinese firms.

Washington also wants Beijing to curb industrial subsidies, open its markets more widely to U.S. firms and vastly increase purchases of American agricultural, energy and manufactured goods.

The Chinese commerce ministry on Thursday confirmed that senior trade negotiators from both countries discussed the remaining issues in a phone call following the last round of talks in Washington.

“In the next step, both trade teams will keep in close communication, and work at full speed via all sorts of effective channels to proceed with negotiations,” Gao Feng, the ministry’s spokesman told reporters in a regular briefing in Beijing.

Mnuchin did not address whether the enforcement structure would allow the United States a unilateral right to reimpose tariffs without retaliation if China fails to follow through on its commitments.

People familiar with the discussions have said that U.S. negotiators are seeking that right, but that China is reluctant to agree to such a concession. Alternatively, the United States may seek to keep tariffs in place, only removing them when China meets certain benchmarks in implementing its reforms.

Mnuchin said he and U.S. Trade Representative Robert Lighthizer, who is leading the negotiations, are focused on “execution” of drafting the documents in the trade agreement.
The two sides are working on broad agreements covering six areas: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade, according to two sources familiar with the progress of the talks.
“Some of the chapters are close to finished, some of the chapters still have technical issues,” Mnuchin said.
Source: Reuters
14/03/2019

Trump says he is in no rush to complete China trade deal

WASHINGTON (Reuters) – U.S. President Donald Trump said on Wednesday he was in no rush to complete a trade pact with China and insisted that any deal include protection for intellectual property, a major sticking point between the two sides during months of negotiations.

Trump and Chinese President Xi Jinping had been expected to hold a summit at the president’s Mar-a-Lago property in Florida later this month, but no date has been set for a meeting and no in-person talks between their trade teams have been held in more than two weeks.
Bloomberg reported on Thursday that a meeting between the two was more likely to take place in April at the earliest.
A person familiar with the matter told Reuters that there “were rumblings” in Washington about a possible meeting in late April.
The president, speaking to reporters at the White House, said he thought there was a good chance a deal would be made, in part because China wanted one after suffering from U.S. tariffs on its goods.
But he acknowledged Xi may be wary of coming to a summit without an agreement in hand after seeing Trump end a separate summit in Vietnam with North Korean leader Kim Jong Un without a peace deal.
“I think President Xi saw that I’m somebody that believes in walking when the deal is not done, and you know there’s always a chance it could happen and he probably wouldn’t want that,” Trump said.
China has not made any public comment confirming Xi is considering going to meet Trump in Florida or elsewhere.
The president, who likes to emphasize his own deal-making abilities, said an agreement to end a months-long trade war could be finished ahead of a presidential meeting or completed in-person with his counterpart.
“We could do it either way. We could have the deal completed and come and sign, or we could get the deal almost completed and negotiate some of the final points. I would prefer that,” he said.
Trump decided last month not to increase tariffs on Chinese goods at the beginning of March, giving a nod to the success of negotiations so far.
But hurdles remain, and intellectual property is one of them. Washington accuses Beijing of forcing U.S. companies to share their intellectual property and transfer their technology to local partners in order to do business in China. Beijing denies it engages in such practices.
Asked on Wednesday if intellectual property had to be included in a trade deal, Trump said: “Yes it does.”
He indicated that from his perspective, a meeting with Xi was still likely.
“I think things are going along very well – we’ll just see what the date is,” Trump told reporters at the White House.
“I’m in no rush. I want the deal to be right. … I am not in a rush whatsoever. It’s got to be the right deal. It’s got to be a good deal for us and if it’s not, we’re not going to make that deal.”

‘MAINTAINING CONTACT’

China’s Foreign Ministry said on Tuesday that Xi had previously told Trump that he is willing to “maintain contacts” with the U.S. president.

Trump says he’s ‘in no rush’ to reach a trade deal with China
Over the weekend, Vice Commerce Minister Wang Shouwen, who has been deeply involved in the trade talks with the United States, did not answer questions from reporters on whether Xi would go to Mar-a-Lago.
Two Beijing-based diplomatic sources, familiar with the situation, told Reuters that Xi would not be going to Mar-a-Lago, at least in the near term.
One said there had been no formal approach from the United States to China about such a trip, while the second said the problem was that China had realized a trade agreement was not going to be as easy to reach as they had initially thought.
“This is media hype,” said the first source, of reports Xi and Trump could meet this month in Florida.

Though Trump said he is not in a hurry, a trade deal this spring would give him a win to cite as an economic accomplishment as he advances his 2020 re-election campaign. The trade war has hurt the global economy and hung over stock markets, which would likely benefit from an end to the tensions.

In addition to smoothing over sticking points on content, the United States is eager to include a strong enforcement mechanism in a deal to ensure that Beijing can be held accountable if it breaks any of its terms.

U.S. Trade Representative Robert Lighthizer, who has spearheaded the talks from the American side, said on Tuesday that U.S. officials hoped they were in the final weeks of their talks with China but that major issues remained to be resolved.

Source: Reuters

23/02/2019

Trump says he’s inclined to extend China trade deadline and meet Xi soon

WASHINGTON (Reuters) – President Donald Trump said on Friday there was “a very good chance” the United States would strike a deal with China to end their trade war and that he was inclined to extend his March 1 tariff deadline and meet soon with Chinese President Xi Jinping.

“I think that we both feel there’s a very good chance a deal will happen,” Trump said.

Liu agreed there had been “great progress”.

“From China, we believe that (it) is very likely that it will happen and we hope that ultimately we’ll have a deal. And the Chinese side is ready to make our utmost effort,” he said at the White House.

The Republican president said he probably would meet with Xi in March in Florida to decide on the most important terms of a trade deal.

 

Optimism that the two sides will find a way to end the trade war lifted stocks, especially technology shares. The S&P 500 stock index reached its highest closing level since Nov. 8. Oil prices rose to their highest since mid-November, with Brent crude reaching a high of $67.73 a barrel. [.N] [O/R]

CURRENCY AGREEMENT

Trump and Treasury Secretary Steven Mnuchin said the two sides had reached an agreement on currency. Trump declined to provide details, but U.S. officials long have expressed concerns that China’s yuan is undervalued, giving China a trade advantage and partly offsetting U.S. tariffs.

Announcement of a pact aimed at limiting yuan depreciation was putting “the currency cart before the trade horse,” but would likely be positive for Asian emerging market currencies, said Alan Ruskin, global head of currency strategy at Deutsche Bank in New York.

“How can you agree to avoid excessive Chinese yuan depreciation or volatility if you have not made an agreement on trade that could have huge FX implications?” Ruskin asked in a note to clients.

In a letter to Trump read aloud by an aide to Liu at the White House, Xi called on negotiators to work hard to strike a deal that benefits both country.

Trump said a deal with China may extend beyond trade to encompass Chinese telecommunications companies Huawei Technologies and ZTE Corp.

The Justice Department has accused Huawei of conspiring to violate U.S. sanctions on Iran and of stealing robotic technology from T-Mobile US Inc.

Chinese peer ZTE was last year prevented from buying essential components from U.S. firms after pleading guilty to similar charges, crippling its operations.

MEMORANDUMS NO MORE

Trump appeared at odds with his top negotiator, U.S. Trade Representative Robert Lighthizer, on the preliminary terms that his team is outlining in memorandums of understanding for a deal with China. Trump said he did not like MOUs because they are short term, and he wanted a long-term deal.

“I don’t like MOUs because they don’t mean anything,” Trump said. “Either you are going to make a deal or you’re not.”

Lighthizer responded testily that MOUs were binding, but that he would never use the term again.

Reuters reported exclusively on Wednesday that the two sides were drafting the language for six MOUs covering the most difficult issues in the trade talks that would require structural economic change in China.

Negotiators have struggled this week to agree on specific language within those memorandums to address tough U.S. demands, according to sources familiar with the talks. The six memorandums include cyber theft, intellectual property rights, services, agriculture and non-tariff barriers to trade, including subsidies.

An industry source briefed on the talks said both sides have narrowed differences on intellectual property rights, market access and narrowing a nearly $400 billion U.S. trade deficit with China. But bigger differences remain on changes to China’s treatment of state-owned enterprises, subsidies, forced technology transfers and cyber theft of U.S. trade secrets.

Lighthizer pushed back when questioned on forced technology transfers, saying the two sides made “a lot of progress” on the issue, but did not elaborate.

The United States has said foreign firms in China are often coerced to transfer their technology to Chinese firms if they want to operate there. China denies this.

The U.S. Chamber of Commerce on Friday urged the U.S. government to ensure the deal was comprehensive and addressed core issues, rather than one based on more Chinese short-term purchases of goods.

China has pledged to increase purchases of agricultural produce, energy, semiconductors and industrial goods to reduce its trade surplus with the United States.

China committed to buying an additional 10 million tonnes of U.S. soybeans on Friday, U.S. Agriculture Secretary Sonny Perdue said on Twitter. China bought about 32 million tonnes of U.S. soybeans in 2017. The commitments are a “show of good faith by the Chinese” and “indications of more good news to come,” Perdue wrote.

China was the top buyer of U.S. soybeans before the trade war, but Beijing’s retaliatory tariffs on U.S. soybeans slashed business that had been worth $12 billion annually.

Source: Reuters

18/02/2019

China applauds ‘positive’ Donald Trump tweet, hopes for US trade war deal ahead of Washington talks

    • Opinion piece in major state media outlets is seen to be part of Beijing’s efforts to reassure its citizens that the tariff war with the United States will soon be over
    • A Chinese delegation led by Vice-Premier Liu He is expected to leave on Tuesday for the American capital after last week’s trade talks in Beijing produced ‘progress’

    China applauds ‘positive’ Donald Trump tweet ahead of Washington talks

    18 Feb 2019

    China and US make ‘progress’ but talks to head to Washington next week

    16 Feb 2019

    Chinese President Xi Jinping urged for a “mutually beneficial” trade deal in this week’s talks when he met US trade representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin in Beijing on Friday, according to Xinhua. Photo: Xinhua
    Chinese President Xi Jinping urged for a “mutually beneficial” trade deal in this week’s talks when he met US trade representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin in Beijing on Friday, according to Xinhua. Photo: Xinhua

    A tweet by US President Donald Trump on the ongoing trade war is a “positive” signal, brightening prospects of a deal from this week’s talks in Washington, according to an opinion piece published by China’s major state media outlets on Monday.

    Monday’s opinion piece was published the day before a Chinese delegation led by Vice-Premier Liu He is expected to leave for talks in Washington.

    In the tweet on Sunday, Trump said: “Important meetings and calls on China trade deal, and more, today with my staff. Big progress being made on soooo many different fronts! Our country has such fantastic potential for future growth and greatness on an even higher level!”

    The opinion piece, which was published by the official Xinhua news agency, the People’s Daily and the Global Times under the pseudonym Niu Tanqin, is seen to be part of Beijing’s efforts to reassure its citizens that the trade war with the United States will soon be over.

    It did contrast previous columns on Trump by the same author, who in March last year argued that China dislikes the American president for his “insatiable demands, greediness and lack of trust worthiness”.

    Last week’s trade talks in Beijing produced “progress” ahead of the March 1 deadline, which could see tariffs on US$200 billion worth of Chinese products increased from 10 per cent to 25 per cent if the world’s two largest economies fail to reach a deal.

    The outcome of the talks in Washington, which are likely to be the last before March 1, will largely decide whether China and the United States can reach a pact, likely in the form of a memorandum of understanding, to suspend the tariff battle that has been roiling global markets and clouding growth prospects since last year.

    According to the opinion piece, Trump’s use of “soooo” instead of “so” indicated that the US president was excited when he heard reports from his trade envoys following the talks in Beijing, which Chinese President Xi Jinping attend on Friday.

    Donald J. Trump

    @realDonaldTrump

    Important meetings and calls on China Trade Deal, and more, today with my staff. Big progress being made on soooo many different fronts! Our Country has such fantastic potential for future growth and greatness on an even higher level!

    “The US side is attaching great importance [to the trade talks]. Although Trump is on vacation, he listened to relevant reports and he definitely will make specific instructions,” it added.

    Trump has been upbeat about the prospects of reaching a trade deal with China, and said on Friday at the White House: “It’s going extremely well.”

    Chinese President Xi urged for a “mutually beneficial” trade deal in this week’s talks when he met US trade representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin in Beijing on Friday, according to Xinhua.

    Stocks in China and Hong Kong surged on Monday, partly bolstered by the increased likelihood of a trade deal between China and the United States.

    Monday’s opinion piece fits into the latest official line that an agreement is very likely to end the tariff war after the Global Times said over the weekend that the bilateral trade talks are “sprinting” towards a positive end.

    Donald Trump’s demands ‘good for China’, says economist Jin Keyu

    Meanwhile, reports in China suggest differences between Beijing and Washington still remain over forced technology transfer, intellectual property rights, cyber theft as well as a verification system to ensure China keeps its promises.

    Xi told the US trade envoys that China is willing to “cooperate” but “cooperation has principals”, a statement showing that Beijing will not entertain US demands if it finds such demands violate China’s principals.

    A White House statement on Friday said that “much work remains”, showing gaps still exist.

    Source: SCMP

16/02/2019

As the clock ticks, there’s a path to a ‘win-win’ outcome in US-China trade talks

  • Ankit Panda writes that a meeting between Donald Trump and Xi Jinping could result in a way out of the impasse, at least temporarily
PUBLISHED : Saturday, 16 February, 2019, 6:02pm
UPDATED : Saturday, 16 February, 2019, 6:04pm

The usual cast of characters were back at the negotiating table, trying to find a way to stem another round of US tariff increases that were stayed in December after the Buenos Aires G20 meeting between US President Donald Trump and Chinese President Xi Jinping.

US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer were back in Beijing, where they again sat across the table from Vice-Premier Liu He, China’s lead trade negotiator. The US delegation also met Xi himself at the end of the talks on Friday.

Both nations said they had made progress to settle their disputes, but admitted there were still difficult issues to deal with. Negotiators will continue the talks in Washington next week.

The stakes are clear and the clock is ticking. The two sides need to arrive at an understanding by March 2, the day on which Trump has said he will move forward with an increase in tariffs.

At least that was the idea. In recent days, Trump has made multiple remarks that suggest the March deadline is anything but absolute. He has hinted he would be open to pushing it back if he sensed that a deal was around the corner. Reports have even suggested the White House is considering another 60-day extension of the tariff truce.

“They’re showing us tremendous respect,” Trump said of China’s attitude in the negotiations, adding that talks were “going along very well”. With Trump slated to travel to Asia at the end of the month for a second summit with North Korean leader Kim Jong-un in Hanoi, the prospect of a second meeting between him and Xi – right before the anticipated deadline – is very real. What’s slowly slipping through the cracks in this process is a sustainable and long-term agreement on structural reform in China, which is what’s been at the centre of the Trump administration’s trade grievances.

Already articulated US concerns cover a broad range of Chinese practices. The ideal short-term measures the American side would like to see include unconditional market access for US firms in China; a less insulated environment for state-owned enterprise decision making; greater regulatory transparency; and fairer legal protections for American businesses in China.

As with so many aspects of the Trump administration’s foreign policy, the US president’s personality is taking over the process, leaving his deputies who are doing the negotiating in a disadvantageous position. For China, the obvious answer then becomes not to discuss the nuances of what kinds of structural reform might be necessary with Lighthizer, but to simply get Xi in the room with Trump.

This mirrors the lesson that North Korea’s Kim has taken away over the course of nearly a year of negotiations with the US. Instead of expending any serious diplomatic capital in a detail oriented negotiation with the secretary of state or the president’s special representative, the key is to simply meet Trump and work out high-level arrangements mano a mano.

In this climate, we can’t expect a real resolution on the core issues. Everything from American misgivings about Beijing’s interventionist industrial policies that protect Chinese enterprises to broader structural shifts in the nature of the US-China economic relationship since the turn of the century are on the table today – and they’ll stay there.

Xi and Trump may well find a temporary way out of the impasse, giving global investors the runway necessary to avert the panic that would likely ensue if the US pushed ahead with a tariff increase on US$200 billion in Chinese goods. Even if China doesn’t quite give the United States a down payment on structural reforms, Xi can promise Trump that he will chip away at the trade deficit while leaving untouched the issues that a more detail oriented negotiator like Lighthizer might zero in on.

If there is a “win-win” outcome here, it would be for Trump and Xi to find an agreeable arrangement that would allow the US president to walk away looking tough to his base while leaving China’s core, long-term industrial policy trajectory unharmed. That would strip away any remaining negotiating leverage the US side might have within the trade war, and it’s not unlikely.

Source: SCMP