Archive for ‘Treasury Secretary’

05/04/2020

As Trump administration debated travel restrictions, thousands streamed in from China

(Reuters) – In defending his strategy against the deadly coronavirus, President Donald Trump repeatedly has said he slowed its spread into the United States by acting decisively to bar travelers from China on Jan. 31.

“I was criticized by the Democrats when I closed the Country down to China many weeks ahead of what almost everyone recommended. Saved many lives,” he tweeted, for instance, on March 2.

But Reuters has found that the administration took a month from the time it learned of the outbreak in late December to impose the initial travel restrictions amid furious infighting.

During that time, the National Security Council staff, the state department and other federal agencies argued about everything from how best to screen for sick travelers to the economic impact of any restrictions, according to two government officials familiar with the deliberations.

The NSC staff ultimately proposed aggressive travel restrictions to high-level administration officials – but it took at least a week more for the president to adopt them, one of the government officials said.

In meetings, Matthew Pottinger, deputy national security adviser and a China expert, met opposition from Treasury Secretary Steven Mnuchin and National Economic Council director Larry Kudlow, said two former NSC officials and one of the government officials involved in the deliberations. The two top aides were concerned about economic fallout from barring travelers from China, the sources said.

Each day that the administration debated the travel measures, roughly 14,000 travelers arrived in the United States from China, according to figures cited by the Trump administration. Among them was a traveler who came from Wuhan to Seattle in mid-January, who turned out to be the first confirmed case in the United States.

On Jan. 22, Trump downplayed the threat posed by the virus, telling CNBC from the World Economic Forum in Davos, Switzerland, “We have it totally under control.”

The battle within the White House over whether and how to stop infected travelers from China lasted nine more days.

On Jan. 31, Trump issued a proclamation barring entry of non-U.S. citizens, other than the immediate family of citizens and permanent residents, who had traveled to China within the last two weeks. The restrictions have since been expanded to many other countries.

It is unclear when the president was made aware of the NSC’s proposal and what prompted his decision to act, but the decision followed the World Health Organization’s declaration the day before that the epidemic was a “public health emergency of international concern.”

U.S. Centers for Disease Control and Prevention officials told Reuters that they contributed to the decision as part of the administration’s newly convened coronavirus task force.

A Treasury Department spokesperson said that Mnuchin “never objected to the decision to restrict flights from China.”

A White House spokesman, Judd P Deere, said: “Any suggestion that Larry Kudlow objected to restricting flights from China to contain COVID-19 and protect the health of the American people is completely false. Larry fully supported the President’s bold decision.”

In a statement, NSC spokesman John Ullyot said that the council’s early meetings about the coronavirus involved great expertise and robust discussion and were professional.

As of April 4, the coronavirus has infected more than 300,000 people in the United States, and killed over 8,000, according to the Reuters coronavirus tracker. The country has more cases than anywhere else in the world.

The sources for this story, former NSC members, public health officials and others involved in, or briefed on, the administration’s response, spoke on condition of anonymity because they were not authorized to comment on the record.

POPPING A FLARE

The NSC, which operates within the White House to coordinate policies and recommendations involving national security across agencies, was at the center of the effort to formulate the early response to the outbreak.

The council was first notified of the outbreak on the morning of Dec. 31, according to one of the government officials involved, when an NSC official was forwarded an email from a Department of Health and Human Services (HHS) attache in Beijing that had been sent to senior HHS officials the night before.

The “pop-a-flare” notice, as it is known, described strange cases of pneumonia that could not be definitively traced to seasonal flu, said the government official, who saw the message. The email said the Chinese would soon be notifying the World Health Organization, the official said.

On Jan. 3, Dr. Gao Fu, head of China’s disease control agency, informed his U.S. counterpart, Dr. Robert Redfield, director of the CDC, in an emotional telephone call that the outbreak was growing out of control, according to the same federal official and a former NSC official. Both said they had been informed of the details.

Gao’s agency did not respond to a request for comment.

Ullyot, the NSC spokesman, disputed the timeline, saying the council did not learn of the coronavirus outbreak until Jan. 3. The CDC, a part of HHS, confirmed to Reuters that it learned of an outbreak in late December and that the call with Gao occurred Jan. 3.

Health agencies were scrambling to gather information, the two government officials involved in the deliberations said. Questions went back to the U.S. Embassy in Beijing, and experts across the government: How many travelers arrive daily from Wuhan, China, the initial site of the outbreak? What U.S. airports do they fly into? What would be the pros and cons, including costs, of any travel restriction?

In discussions with the NSC, public health officials, including from HHS and CDC, initially argued for the targeted approach of medically screening travelers from Wuhan, as they sifted through information about where and how quickly the virus was spreading, one of the government officials involved said. Public health officials tend not to favor border closures because they can restrict medical response and divert limited resources.

The NSC’s Pottinger was pushing hard for strict travel restrictions – expressing doubt about the truth of the data China was releasing, according to the official.

There was “a lot of yelling, a sign of frustration,” said a former NSC staffer who was not in the meetings but got messages from colleagues in attendance expressing dismay. The person described the messages but did not share them with Reuters. The two current federal officials confirmed the acrimony.

The NSC struggled to reconcile conflicting viewpoints, the two government officials involved said.

The debate delayed the screening of travelers from China by at least a week, one of the officials said. CDC officials ultimately announced enhanced medical screenings for travelers from Wuhan at three international airports, in Los Angeles, San Francisco and New York’s John F. Kennedy, on Jan. 17, expanding them to 20 U.S. airports by Jan. 28.

At one point, during a meeting, Pottinger snapped at health officials that their approach “really has to take a step back,” so that national security interests could shape the response, the official said.

The CDC declined to comment on the debate.

Some former NSC officials who spoke to Reuters traced what they saw as an ineffective response by the council in part to structural changes in 2018 in which former National Security adviser John Bolton had folded the council’s Global Health Security and Biodefense directorate into a larger operation, with the result that pandemic planning was not as great a priority. Others said that, under Bolton, the NSC worked effectively on biopreparedness, but after he departed it lost a number of important experts.

NSC spokesman Ullyot rejected as false the suggestion that the council lacked expertise. The council is staffed by officials with “extensive experience in virology, infectious disease epidemiology, global health security, public health, and emergency response,” he said.

The NSC’s own public health experts were involved in the discussions from the beginning, advocating “early and often” for traveler screening and raising the issue of banning flights from Wuhan, he said.

While the conflict soured the interactions, one of the government officials involved said, data soon emerged that led the health agency officials to agree with Pottinger: A travel restriction for all of China was needed. They saw that there were thousands of travelers arriving daily from Wuhan’s Hubei province to the United States, as well as a rising number of Covid-19 cases reported by the Chinese government beginning in mid-January, the source said.

In its statement to Reuters, the CDC did not directly address what led to its ultimate decision to support the travel restrictions.

By Jan. 24, the staff of the NSC had proposed restricting flights from China, said the government official involved in the deliberations. But as Pottinger met with deputies from other cabinet-level agencies, the recommendation met with resistance because of concerns about spooking the markets and scaring the public, three sources with knowledge of the deliberations told Reuters.

STILL DIVIDED

With opinions still divided, the matter went to top White House aides, at which point Treasury Secretary Mnuchin and National Economic Council director Kudlow argued strongly against the travel restrictions, said two former NSC officials and the government official involved in the deliberations.

In addition to the impact on the stock market, the two top aides expressed concern about the supply chain for everything from semiconductors to ingredients for pharmaceuticals, said one of the government officials involved in the deliberations.

Pottinger was “pleading with Mnuchin and others” to stop travelers from coming, the former NSC official said.

By then, the first known patient in the United States – a man in his 30s who had traveled from Wuhan to Seattle on Jan. 15 – tested positive for the coronavirus disease, COVID-19.

He had slipped through travel screenings because his trip had been broken up, so the Wuhan origin of his trip had not been obvious to customs agents, said the government official with knowledge of the deliberations.

At the World Economic Forum in Davos, Switzerland, President Trump told CNBC on Jan. 22: “It’s one person coming in from China, and we have it under control. It’s going to be just fine.”

On Jan. 29, the Council of Economic Advisers, which advises the president on economic policy, presented an analysis describing a worst-case scenario of what a pandemic and travel restrictions could do to the economy, according to one of the government officials involved in the deliberations, who read it. The report supported Kudlow and Mnuchin’s arguments against such restrictions and “scared everyone,” the source said.

The next day, at an afternoon meeting of the White House’s newly formed coronavirus task force, as well as other attendees, travel restrictions were still being debated, according to the government official involved in the deliberations and a former NSC official who learned of the meeting from former colleagues.

During the meeting, Mick Mulvaney, then President Trump’s chief of staff, entered the room, telling a smaller group, including Pottinger: “The president wants to see you now,” according to the official involved in the deliberations and the former NSC officials.

Mulvaney referred questions to the White House, which did not respond.

Trump issued the order the next day. By then, the novel coronavirus was already carving a lethal path through a Seattle nursing home.

Source: Reuters

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

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

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

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