Archive for ‘U.S. Trade Representative’

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
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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

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

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

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

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