U.S. Treasury Secretary Steve Mnuchin and Wang Yang attend the U.S. - China Comprehensive Economic Dialogue to discuss bilateral economic and trade issues in Washington, U.S., July 19, 2017. REUTERS/Yuri Gripas
Yahoo Finance/WSJ: U.S., China Quietly Seek Trade Solutions After Days of Loud Threats
China and the U.S. have quietly started negotiating to improve U.S. access to Chinese markets, after a week filled with harsh words from both sides over Washington’s threat to use tariffs to address trade imbalances, people with knowledge of the matter said.
The talks, which cover wide areas including financial services and manufacturing, are being led by Liu He, China’s economic czar in Beijing, and U.S. Treasury Secretary Steven Mnuchin and U.S. trade representative Robert Lighthizer in Washington.
In a letter Messrs. Mnuchin and Lighthizer sent to Mr. Liu late last week, the Trump administration set out specific requests that include a reduction of Chinese tariffs on U.S. automobiles, more Chinese purchases of U.S. semiconductors and greater access to China’s financial sector by American companies, the people said. Mr. Mnuchin is weighing a trip to Beijing to pursue the negotiations, one of these people said.
Read more ....
WNU Editor: I am very skeptical that the Chinese are going to compromise. China's economic model is based on exports and large trade balances in its favor. They are not going to shift on what they see is an essential policy for their growth and prosperity. They will only start to shift when more tariffs are imposed, and restrictions on their investments are being implemented.
More News On Reports That The U.S. And China Are In Talks To Avoid A Trade War
The US and China are in talks to try to avoid a trade war -- CNN
The US reportedly sent China a to-do list to fix deficit and avoid a trade war -- Business Insider/Reuters
China says it's willing to hold talks with the US to resolve trade differences -- CNBC/Reuters
China and US begin negotiations -- DW
World stocks bounce on report of U.S.-China trade talks -- Reuters
5 comments:
$300 billion trade surplus is prized by China and they won't give it up without a huge fight. Boeing, Caterpillar, Iowa, Wisconsin, Nebraska, Ohio farmers can be hurt by China and that won't help Trump come Nov 2018. They hold some strong cards in this poker game.
You're both wrong. Both parties will gain something. This is about Taiwan and north Korea. Trump knows an opportunity when he sees one. He knows Chinese are very unpopular around the world and especially in Asia right now. Believe it or not, they are much much weaker than you think in many fields and have embarrassed themselves internationally and gained enemies like Japan and Vietnam and Australia and India. ..All strategically important.. and now the threat of trade war. Xi's power grab is a pre-emptive coup avoidance. I hope this is clear to you. Trust me on this. The best point is that Trump knows at one point China will be able to grab Taiwan. It's too remote for the US to really defend it over perhaps decades to come and strategically not that important to risk a major, major war over this. This leads nowhere and everyone knows it. But Trump also knows how much China wants to make Taiwan formally part of China again. It's a long process of course and Xi aims to get this done by 2025-2030. It's one of his goals that enabled him to do the power consolidation. Trump is flexible on this and his US first approach is credible so far. And he wants to make a deal about north Korea. He knows this is all connected and it's possible that everyone except Taiwan can walk away as winners here. And no one cares about going to major (!) war over Taiwan - except perhaps China.
So here's what will happen:
1. There will be positive outcomes regarding "trade war". A big trade increase deal will be announced - several trillion over x years. It will add significantly to US growth and China will profit as well and it'll look like win win.
2. The north Korean problem will be solved and north Korea knows that china will not help them. Trump wants Kim to know this. I do not know if at the end it will have to be a military strike or more, but if the deal goes ahead I know china won't get involved unless the US completely f up the war and it escalates into something that forces china to revaluate the deal. North Korea will likely get rid of Kim and open up its society. It cannot go on like this and north korean top military commanders know that if China won't come to help they're all going to die for certain. They may inflict damage on their south Korean brothers while they go down, but that's not what either side wants. So I expect kim to either die soon or agree to terms with trump.
3. China will annex Taiwan.
4. South China Sea will remain militarised, and we'll have some show skirmishes between all involved to keep tensions up and show every population how tough each side is.
I probably forgot a few things. M2
This is simple, China needs us more than we need them. Trump is simply using this card to correct years of abuse. Again, if it was me I would just tell China that since they have robbed our IP, I am writing off large sums of debt. China like to have people indebted to them such that they can control; but that a digression.
Tempest in a teapot.
The trade with China brought in trillions of dollars worth of cheap products by major corporations who made fortunes on the sale of those products to Americans. Any issue with trade deficits is more than offset by the enormous tax on the profits earned by those corporations and the benefits to the economy by the re-investment of those huge profits in America.
lots of guesses about what N.K., China, and others might do. In 1950, North Korea invaded the South. Nobody thought much about China. Russia gave China the ok and China invaded to assist the North in a war against America and the South. Do not underestimate such a thing happening again. The North does not want American troops at its border. China does not want a unificed Korea if that puts Americans at its border.
At this point we simply do not know how or in what fashion China might respond to Trump's economic changes...Till known, guesses remain merely guesses.
Post a Comment