Archive for ‘tariffs’

28/06/2019

Commentary: Xi-Trump meeting an opportunity to bring talks back on track

BEIJING, June 28 (Xinhua) — Chinese President Xi Jinping is set to sit down with his U.S. counterpart, Donald Trump, on the sidelines of the Group of 20 (G20) summit in the Japanese city of Osaka, igniting a flicker of hope to bring the China-U.S. trade talks back on track.

The meeting arrives at a time when Washington’s trade offensive against China is not only poisoning one of the world’s most important bilateral relationships, but also risking throttling the already frail global economic recovery. Its significance is thus too great to miss.

When the two presidents met each other at last year’s G20 summit in Argentina’s capital city of Buenos Aires, they reached an important consensus to pause the trade confrontation and resume talks. Since then, negotiating teams on both sides have held seven rounds of consultations in search for an early settlement.

However, China’s utmost sincerity demonstrated over the months seems to have only prompted some trade hawks in Washington to press for their luck.

Following its failure to coerce Beijing into swallowing a deal with unequal terms, a disappointed and enraged Washington returned to its tactic of tariffs by raising additional levies on 200 billion U.S. dollars’ worth of Chinese goods from 10 percent to 25 percent, and threatening a new round of tariff hikes on another 300 billion dollars’ worth of goods.

Some ultra-conservative U.S. decision-makers, who have for many years seen in China a “threat” to Washington’s sole superpower status, have tried to extend the trade campaign into a broader operation to shut China out and contain its rise.

As a result, Washington is cracking down on Chinese high-tech companies including telecom equipment provider Huawei, while many Chinese students seeking to study in the United States are facing more restrictions like months-long visa delay.

Thanks to Washington’s relentless efforts, the two countries, which should have celebrated the 40th anniversary of their diplomatic ties this year, are seeing their relations slipping down the path to a possible all-out confrontation.

Despite Washington’s “in-your-face” style of maximum pressure strategy, China has been steadfastly consistent in its position. It has always been committed to settling trade frictions via dialogue and consultation and safeguarding its legitimate and sovereign rights at the same time.

Beijing, as it has on various occasions reaffirmed, does not want a trade war, but is not afraid of one, and will fight to the end if necessary.

Last week, Xi had a telephone conversation with Trump at the request of the U.S. leader, saying that he stands ready to meet Trump in Osaka to exchange views on fundamental issues concerning the development of China-U.S. relations.

Xi’s words reflect an alarming fact that the two countries are facing a challenge to the fundamentals of their relationship. The upcoming Xi-Trump meeting provides a unique opportunity for the two sides to find new common ground in easing trade tensions and bring the troubled ties back onto the right track.

If the two sides can reach an agreement to pick up the talks, the United States needs to place itself on an equal footing with China, and accommodate China’s legitimate concerns on the basis of mutual respect, equality and mutual benefit in order to seek win-win results in the future negotiations.

Just one day ahead of the Osaka G20 summit, some U.S. politician again threatened to slap punitive levies on imported Chinese goods. Such cheap tactics to bring China down to its knees with pressure will get nowhere.

For more than a year, Washington’s spoils in its tariff campaign have so far only seen rising daily costs for ordinary American consumers, growing rejections from U.S. farmers, industry workers and business leaders, roller-coaster rides in U.S. stock markets, as well as China’s increasingly stronger determination to defend its rights.

The trade fight between the world’s two largest economies has already hit hard the global market and dented investors’ confidence worldwide. The latest World Trade Outlook Indicator reading of 96.3 remains at the weakest level since 2010, signaling continued falling trade growth in the first half of 2019, according to the World Trade Organization.

Trade wars produce no winner. In his latest telephone talk with Xi, Trump said he believes the entire world hopes to see the United States and China reach an agreement. To get an agreement, Washington’s hardliners need to know that Beijing will neither surrender to their pressure, nor permit Washington to deprive Chinese people of their rights to pursue a better life.

And for the agreement to be sustainable, Washington’s China policy should be rational. A rising China is not seeking to grab global hegemony. It will continue to work with nations around the world, including the United States, to boost common development and build a community with a shared future for mankind.

The past 40 years of China-U.S. relationship have proved that when the two countries work together, they both win and the world gains as well. But when they fight each other, all are poised to lose.

China and the United States, as two major economies in the international community, bear special responsibility for the wider world.

Therefore, the two sides, just as what Xi said during his meeting with The Elders delegation this April in Beijing, need to manage their differences, expand cooperation and jointly promote bilateral relations based on coordination, cooperation and stability so as to provide more stable and expectable factors to the world.

Source: Xinhua

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23/06/2019

China confirms President Xi Jinping’s three-day trip to Japan this week

  • Leader will arrive on Thursday, ahead of G20 summit in Osaka, foreign ministry says
  • He is expected to hold talks with Donald Trump on sidelines of meeting
China has confirmed that President Xi Jinping will travel to japan this week. Photo: AFP
China has confirmed that President Xi Jinping will travel to japan this week. Photo: AFP

China on Sunday confirmed that President Xi Jinping will attend the G20 summit in Osaka this week.

Xi will spend three days in Japan – his first visit to the country since coming to power in 2013 – the foreign ministry said.

He will travel to Japan on Thursday and is expected to meet his US counterpart Donald Trump on the sidelines of the meeting of leading and emerging economies, which runs from Friday to Saturday, it said.

It is possible the pair will hold formal negotiations over dinner, as they did in Argentina in December at the last G20 summit.
Presidents Xi and Trump are expected to hold talks over dinner, as they did in Argentina in December. Photo: Kyodo
Presidents Xi and Trump are expected to hold talks over dinner, as they did in Argentina in December. Photo: Kyodo

On Saturday, People’s Daily, the mouthpiece of China’s Communist Party said in a commentary that the trade war between China and the US could be resolved only through “equal conversation”.

“For the talks to resume … the key is to address the primary concern of the other side. The tariffs already in place must be revoked,” it said.

Trade deal ‘within reach if Xi and Trump show courage’

Meanwhile, state broadcaster CCTV on Friday criticised Washington’s decision to add five Chinese companies to its list of entities considered a threat to national security.

“The US made this move to put more pressure China ahead of the trade talks,” it said, adding that it might produce a result opposite to the one desired by Washington.

The report came after the US commerce department said it had added five Chinese firms that manufacture supercomputers and their components to the entity list, restricting their ability to do business with the US.

The blacklist effectively bars American firms from selling technology to the Chinese organisations without government approval. Last month, the commerce ministry added telecoms giant 

Huawei

to the list, heightening tensions with Beijing.

Xi told Trump on Tuesday he was willing to meet in Japan. Photo: AP
Xi told Trump on Tuesday he was willing to meet in Japan. Photo: AP

In a telephone conversation on Tuesday, Xi told Trump he was willing to meet in Japan and said he “agreed that the two countries’ trade delegations should keep communications going to solve their differences”, CCTV reported.

Kong Xuanyou, China’s new envoy to Japan, said on Friday that he hoped Xi would make an official visit to the country soon, ideally during the cherry blossom season next spring. The foreign ministry statement made no mention of such a visit.

Source: SCMP

29/05/2019

China showing signs similar to Japanese housing bubble that led to its ‘lost decades’, expert warns

  • China’s housing market showing signs of bubble similar to that seen in Japan in 1980s, says Asian Development Bank Institute dean and CEO Naoyuki Yoshino
  • China’s loose policy following 2008 global financial crisis laid foundations for current housing bubble, with US-China trade war adding to concerns
The average price of a home in Beijing has soared from around 380 yuan (US$55) per square feet in the early 2000s to the current level of well above 5,610 yuan (US$813) per square foot, according to property data provider creprice.cn. Photo: Bloomberg
The average price of a home in Beijing has soared from around 380 yuan (US$55) per square feet in the early 2000s to the current level of well above 5,610 yuan (US$813) per square foot, according to property data provider creprice.cn. Photo: Bloomberg
China must exercise extreme caution in handling its housing sector because it is showing signs similar to those witnessed during Japan’s bubble period of the 1980s that contributed to the collapse of Japanese asset prices and its subsequent “lost decades” of weak economic growth and deflation, a Japanese financial system expert warned.
The parallels between China’s current landscape and Japan’s three decades ago are readily apparent, stemming from a loose monetary policy that laid the foundation for the expansion of a housing bubble, said Naoyuki Yoshino, dean and CEO of the Asian Development Bank Institute.
China flooded its economy with credit in response to the 2008 global financial crisis, fuelling rapid growth in mortgages, real estate borrowings and investments over the past decade.
In the same vein, the Japanese government’s relaxed monetary policy in the 1980s triggered an economic bubble that eventually burst and sank the economy into a recession that 
lasted almost 25 years,

with the Bank of Japan continuing to still keep interest rates at or below zero per cent to this day in an attempt to spur inflation.

The Japanese government’s relaxed monetary policy in the 1980s triggered an economic bubble that eventually burst and sank the economy into a recession that lasted almost 25 years. Photo: Bloomberg
The Japanese government’s relaxed monetary policy in the 1980s triggered an economic bubble that eventually burst and sank the economy into a recession that lasted almost 25 years. Photo: Bloomberg

Japan’s experience could serve as a lesson on how to avoid a housing market collapse that would be especially detrimental to China’s financial sector and real economy, according to Yoshino.

“I’m very much concerned that if land prices keep on rising and if the population starts to shrink along with aggregate demand, then China will experience a similar situation to that of Japan,” Yoshino said.

There are already several strong signs of a housing bubble in China, according to Yoshino, firstly the astronomical surge in property prices in recent years.

I’m very much concerned that if land prices keep on rising and if the population starts to shrink along with aggregate demand, then China will experience a similar situation to that of Japan Naoyuki Yoshino
Home ownership is one of the few ways for Chinese families to generate wealth because of limited investment opportunities. The average price of a home in Beijing has soared from around 4,000 yuan (US$578) per square metre, or 380 yuan (US$55) per square feet, in the early 2000s to the current level of well above 60,000 yuan (US$8,677) per square metre, or 5,610 yuan (US$813) per square foot, according to property data provider creprice.cn.

The increase has also lifted the housing price to income ratio sharply from 5.6 in 1996 to 7.6 in 2013, well above the Japanese rate of 3.0 at its peak in 1988. The price to income ratio is the basic affordability measure for housing.

According to the Global Times, a reasonable home price should be three to six times the median household income. That means a family with an average income can buy a house with three to six years’ annual income. The house price to income ratio in China is above 50 in the first-tier cities and 30 to 40 in the third- and fourth-tier cities, the newspaper said in October. There are four levels of cities in China, defined by a number of factors including gross domestic product (GDP) and population, with Beijing, Shanghai and Shenzhen considered tier-one cities.

Another worrying sign, according to Yoshino, is that China’s financial sector has lent more heavily to the real estate sector than did Japanese banks during their bubble period.

Thirdly, the ratio of Chinese housing loans to the nation’s GDP has consistently been higher than Japan’s by about three times more.

Ever since US President Donald Trump started imposing tariffs on Chinese imports in July, worries have been mounting that China’s property bubble and its record debt level would make the economy vulnerable to the impact of rising trade tensions, leading to a sharper-than-expected economic slowdown.

Despite a government crackdown on debt and risky lending over the last several years, housing prices and bank lending to the sector have continued to rise, pushing homes beyond what the vast majority of people can afford, as well as putting many property developers deeply into debt.

The Chinese Academy of Social Sciences, a top government think tank, said in a report last week that the growth in housing prices in China’s bigger cities, caused by a relatively short supply of new homes, is likely to push up costs across the country.

“The government should closely monitor these cities to avoid overheating,” said Wang Yeqiang, a researcher at the Chinese Academy of Social Sciences who co-authored the report.

Property developers have begun a debt-fuelled land-buying spree just as urban housing demand is entering a long-running structural decline, said Julian Evans-Pritchard, senior China economist at Capital Economics. The potential supply of property that could be built on developers’ land reserves jumped last year to a record high, meaning the risk of a glut of new housing is real, Evans-Pritchard added, if developers were to convert all their land reserves into housing tracts.

“Since real estate drives around a fifth of GDP, a sharp downturn in this sector would be contagious, resulting in a jump in defaults across a wide swathe of the economy that could quickly erode bank capital buffers,” he warned.

China’s corporate debt stood at 155 per cent of GDP in the second quarter of 2018, much higher than other major economies, according to data from the Organisation for Economic Cooperation and Development. In comparison, Japan’s corporate debt level is 100 per cent of GDP and is 74 per cent in the US. China’s corporate debt includes issuances by its 

local government

vehicles which by extension is mostly credit with an implicit guarantee from the central government.

Since real estate drives around a fifth of GDP, a sharp downturn in this sector would be contagious, resulting in a jump in defaults across a wide swathe of the economy that could quickly erode bank capital buffersJulian Evans-Pritchard

China’s imbalance between housing supply and demand may worsen because it faces a similar economic transition that is already well underway in Japan – a

rapidly ageing population

and

shrinking workforce

that led to Japan’s long-term deflation problem, said Yoshino, who is also the chief adviser to the Japan Financial Services Agency’s Financial Research Centre.

Even if rising housing demand due to urbanisation were to push China’s housing prices higher over the near term, the country faces risks from an oversupply of housing in the longer term due to its increasingly unbalanced demographic structure, he said.
The government has proposed that China’s retirement ages of 45 to 50 years for females and 55 to 60 years for males introduced in the 1980s be gradually increased to 65 years for both by 2045 due to a rapidly ageing population.
The rising population of retirees will consume fewer goods and services compared to younger families with children, and in turn, could dampen business investment given lower expected rates of return.
At the same time, more retirees means a bigger burden on the younger generation of taxpayers, which would reduce their wealth and change patterns of consumption. This is especially worrying on the back of China’s high debt level and pension funding gap, similar to the situation in Japan, Yoshino said.
In Japan, benefits from government pension schemes account for an increasing share of the country’s accumulated debt as spending on social protection programmes now represents more than a third of the government’s total budget.
China’s national pension fund is forecast to peak at 6.99 trillion yuan (US$1 trillion) in 2027 before it gradually runs out by 2035, according to the Chinese Academy of Social Sciences. Photo: AFP
China’s national pension fund is forecast to peak at 6.99 trillion yuan (US$1 trillion) in 2027 before it gradually runs out by 2035, according to the Chinese Academy of Social Sciences. Photo: AFP
The strain is also evident in China with the

national pension fund

forecast to peak at 6.99 trillion yuan (US$1 trillion) in 2027 before it gradually runs out by 2035, according to the Chinese Academy of Social Sciences, forcing the government to start to transfer assets from state-owned companies to fill the funding gap.

Against the broader economic slowdown, compounded by the trade war with the US, policymakers are also expected to carve out a highly expansionary fiscal budget for this year, with the broad deficit surging to 6.6 per cent of China’s GDP, up from 4.7 per cent last year, according to Larry Hu, head of China economics at Macquarie Capital.

Alicia Garcia Herrero, Asia-Pacific chief economist at Natixis, noted that the US criticisms of China’s unfair trade practises and currency manipulation were reminiscent of the US-Japan disputes in the 1980s and 1990s.

Because Japan was politically and economically dependent on the US at that time, it inevitably implemented economic policies to reduce its current account surplus. Subsequently, Japan suffered from the bursting of its asset price bubble, which led to deflation and the lost decades.

However, Herrero said that the modern China is less dependent on the US and so is in a better position to resist pressure to adjust its economic policies to create demand for American products.

Wang Yang, one of the seven members of China’s elite Politburo Standing Committee, said the US-China trade war could slash one percentage point off Beijing’s economic growth this year. Last year, growth expanded at its slowest pace since 1990, while corporate bond defaults hit a record high and banks’ non-performing loan ratio hit a 10-year high.

Source: SCMP

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

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
09/03/2019

China exports saw biggest fall in three years in February

Men stand on a port in ChinaImage copyrightGETTY IMAGES

Chinese exports saw the steepest fall in three years in February, adding to worries about growth in the world’s second largest economy.

Official data show exports from China plunged 20.7% from a year earlier, as its trade war with the US took a toll.

Imports fell 5.2% and the figures sent Asia stock markets sharply lower.

Economists caution the data for the first two months of the year can be affected by the Lunar New Year holiday.

The fall in exports was far bigger than the 4.8% drop forecast in a Reuters poll of economists.

Imports also saw a sharper than expected fall of 5.2% year-on-year, the data showed.

Julian Evans-Pritchard, Senior China Economist at Capital Economics said even accounting for seasonal distortions, the figures were “downbeat”.

“Tariffs are weighing on shipments to the US,” he wrote in a research note.

The US and China have placed tariffs on billions of dollars worth of one another’s goods since July, casting a shadow over the global economy.

Even though officials have sounded more positive about negotiations with the US recently, failure to achieve a deal would see tariffs on $200bn (£152bn) of Chinese goods rise almost immediately and could see the US impose fresh tariffs.

Still, Mr Evans-Pritchard said “broader weakness in global demand means that, even if Trump and Xi finalise a trade deal soon, the outlook for exports remains gloomy.”

The data comes as Beijing this week unveiled $298bn worth of tax cuts to boost slowing growth.

Source: The BBC

02/03/2019

Trump asks China to lift tariffs on U.S. farm products

WASHINGTON (Reuters) – U.S. President Donald Trump said he had asked China to immediately remove all tariffs on U.S. agricultural products because trade talks were progressing well.

He also delayed plans to impose 25 percent tariffs on Chinese goods on Friday, as previously scheduled.
“I have asked China to immediately remove all Tariffs on our agricultural products (including beef, pork, etc.) based on the fact that we are moving along nicely with Trade discussions,” Trump said on Twitter, pointing out that he had not raised tariffs on Chinese goods to 25 percent from 10 percent on March 1 as planned.
“This is very important for our great farmers – and me!” Trump said.
Farmers are a key constituency for Trump’s Republican Party, and the U.S. president’s trade war with China has had a heavy impact on them. Beijing imposed tariffs last year on imports of soybeans, grain sorghum, pork and other items, slashing shipments of American farm products to China.
U.S. Agriculture Secretary Sonny Perdue said this week that U.S. trade negotiators had asked China to reduce tariffs on U.S. ethanol, but it was not immediately clear whether Beijing was willing to oblige.
Trump’s post on Twitter came several hours after the U.S. Trade Representative’s office said that it would delay the scheduled hike in tariffs on $200 billion worth of Chinese goods.

The notice, due to be published in the Federal Register next Tuesday, says it is “no longer appropriate” to raise the rates because of progress in negotiations since December 2018. The tariff would remain “at 10 percent until further notice.”

In a statement on Saturday, China said it welcomed the delay.

Speaking at a separate briefing in Beijing, a Chinese government official said both countries were working on the next steps, though he gave no details.

“China and the United States reaching a mutually-beneficial, win-win agreement as soon as possible is not only good for the two countries, but is also good news for the world economy,” said Guo Weimin, spokesman for the high profile but largely ceremonial advisory body to China’s parliament.

A tariff increase to 25 percent from 10 percent was initially scheduled for Jan. 1, but after productive conversations with Chinese President Xi Jinping, the Trump administration issued a 90-day extension of that deadline.

Trump had said on Sunday he would again delay the increase because of progress in the talks.

Source: Reuters

26/02/2019

Trump: US and China ‘very very close’ on deal

US President Donald Trump addresses US governors at the White HouseImage copyrightAFP

President Donald Trump has said that the US and China are “very very close” to signing a trade agreement, potentially ending the long-running feud between the two countries.

Mr Trump told US governors on Monday that both nations “are going to have a signing summit”.

“Hopefully, we can get that completed. But we’re getting very, very close,” he said.

It follows a decision to delay imposing further trade tariffs on Chinese goods.

At the weekend, Mr Trump said both sides had made “substantial progress” in trade talks following a summit in Washington last week.

The rise in import duties on Chinese goods from 10% to 25% was due to come into effect on 1 March.

Instead, Mr Trump said the US is now planning a summit with Chinese Premier Xi Jinping at the US President’s Mar-a-Lago resort in Florida.

US shares rose on the decision to delay tariffs, with the Dow Jones Industrial Average closing 0.23% higher at 26,091.9.

The S&P 500 and the Nasdaq also finished trading in positive territory.

As he prepared to meet North Korean leader Kim Jong-un in Vietnam, Mr Trump also tweeted that a China trade deal was in “advanced stages”.

Mr Trump’s decision to delay tariff increases on $200bn (£153bn) worth of Chinese goods was seen as a sign that the two sides were moving ahead in settling their damaging trade war.

Last week, Mr Trump noted progress in the latest round of negotiations in Washington, including an agreement on currency manipulation, though no details were disclosed.

Sources told CNBC on Friday that China had committed to buying up to $1.2 trillion in US goods, but there had been no progress on the intellectual property issues.

Donald Trump and China's Vice Premier Liu He in the Oval OfficeImage copyrightAFP
Image captionPresident Trump met China’s Vice Premier Liu He on Friday

Gregory Daco, chief US economist at Oxford Economics, said: “We had anticipated such a delay and believe a handshake agreement in which China will promise to import more agricultural products, work towards a stable currency and reinforce intellectual property rights protection will be achieved in the coming weeks.

“However, we don’t foresee a significant rollback of existing tariffs, and see underlying tensions regarding China’s strategic ambitions, its industrial policy, technological transfers and ‘verification and enforcement’ mechanisms remaining in place.”

What has happened in the trade war so far?

Mr Trump initiated the trade war over complaints of unfair Chinese trading practices.

That included accusing China of stealing intellectual property from American firms, forcing them to transfer technology to China.

The US has imposed tariffs on $250bn worth of Chinese goods, and China has retaliated by imposing duties on $110bn of US products.

Mr Trump has also threatened further tariffs on an additional $267bn worth of Chinese products – which would see virtually all of Chinese imports into the US become subject to duties.

US and China's tariffs against each other

The trade dispute has unnerved financial markets, risks raising costs for American companies and is adding pressure to a Chinese economy that is already showing signs of strain.

It has also stoked fears about the impact on the global economy.

Last year, the International Monetary Fund warned the trade war between the US and China risked making the world a “poorer and more dangerous place”.

Source: The BBC

25/02/2019

Trump to delay further tariffs on Chinese goods

Donald Trump and China's Vice Premier Liu He in the Oval OfficeImage copyrightAFP
Image captionPresident Trump met China’s Vice Premier Liu He on Friday

President Donald Trump has announced that the US will delay imposing further trade tariffs on Chinese goods.

The rise in import duties on Chinese goods from 10% to 25% was due to come into effect on 1 March.

Mr Trump said both sides had made “substantial progress” in trade talks, which sent Chinese stocks up nearly 5%.

He added that he was planning a summit with Chinese President Xi Jinping in Florida to cement the trade deal if more progress was made.

A report from China’s official news agency Xinhua also noted “substantial progress” on specific issues such as technology transfer, intellectual property protection and agriculture.

Mr Trump’s decision to delay tariff increases on $200bn (£153bn) worth of Chinese goods was seen as a sign that the two sides are making progress on settling their damaging trade war.

Last week, Mr Trump noted progress in the latest round of negotiations in Washington, including an agreement on currency manipulation, though no details were disclosed.

Sources told CNBC on Friday that China had committed to buying up to $1.2 trillion in US goods, but there had been no progress on the intellectual property issues.

What has happened in the trade war so far?

Mr Trump initiated the trade war over complaints of unfair Chinese trading practices.

That included accusing China of stealing intellectual property from American firms, forcing them to transfer technology to China.

The US has imposed tariffs on $250bn worth of Chinese goods, and China has retaliated by imposing duties on $110bn of US products.

Mr Trump has also threatened further tariffs on an additional $267bn worth of Chinese products – which would see virtually all of Chinese imports into the US become subject to duties.

US and China's tariffs against each other

The trade dispute has unnerved financial markets, risks raising costs for American companies and is adding pressure to a Chinese economy that is already showing signs of strain.

It has also stoked fears about the impact on the global economy.

Last year, the International Monetary Fund warned the trade war between the US and China risked making the world a “poorer and more dangerous place”.

Source: The BBC