A News Aggregator That Covers The World's Major Wars And Conflicts. Military, Political, And Intelligence News Are Also Covered. Occasionally We Will Have Our Own Opinions Or Observations To Make.
France and Germany want to negotiate with Washington about unfair competition — but they are ready to hit back if necessary.
BERLIN/PARIS — After publicly falling out, Olaf Scholz and Emmanuel Macron have found something they agree on: mounting alarm over unfair competition from the U.S. and the potential need for Europe to hit back.
The German chancellor and the French president discussed their joint concerns during nearly three-and-a-half hours of talks over a lunch of fish, wine and Champagne in Paris on Wednesday.
They agreed that recent American state subsidy plans represent market-distorting measures that aim to convince companies to shift their production to the U.S., according to people familiar with their discussions. And that is a problem they want the European Union to address.
WNU Editor: Washington will counter by saying that the value of the Euro has collapsed in relation to the US dollar, thereby giving European goods an export advantage.
So why all the threats?
I see all of this as posturing and a diversion from the real crisis in Europe which is the energy crisis, the cost of living, rising unemployment, and inflation.
WASHINGTON—Beijing’s commitment to step up purchases of U.S. goods and services under a 2020 trade pact expires Friday with China expected to miss its targets by a wide margin, creating a dilemma for the Biden administration as it calibrates a response.
The White House could potentially reinstate certain tariffs that were cut as part of the trade deal, but that could backfire if China cut back U.S. purchases or took measures against American companies doing business there.
Alternatively, the U.S. could ignore the shortfall, which could send a signal to Beijing that it won’t face consequences.
How the U.S. responds is being watched closely by U.S. businesses, many of which want smooth relations with China to ensure continued access to its giant market. Others including some domestic manufacturers take a harder line, citing Chinese government support for favored industries and saying the U.S. needs to nurture its own supply chains.
* Chinese government imposed a brutal and extraordinary 80 per cent tariff on Australian exports from today
* Diplomatic relations between nations deteriorated as Australia called for probe into the spread of coronavirus
* Britain and 100 other countries also demanded inquiry, leading to fears UK could be dragged into trade war
There are fears Britain could be dragged into a global trade war with China after Beijing slapped an 80 per cent tariff on Australian exports as punishment for demanding an independent coronavirus inquiry - which 100 nations including the UK supported.
On Monday, the World Health Organization bowed to calls from most of its member states to launch an independent probe into how it managed the international response to coronavirus, which has been clouded by finger-pointing between the US and China.
The 'comprehensive evaluation,' sought by a coalition of African, European and other countries, is intended to review 'lessons learned' from WHO's coordination of the global response to the virus outbreak.
Containers of Chinese companies China Shipping and COSCO (China Ocean Shipping Company) are loaded on a container as it is leaving the port in Hamburg, Germany March 11, 2020. REUTERS/Fabian Bimmer
WASHINGTON (Reuters) - The Trump administration is “turbocharging” an initiative to remove global industrial supply chains from China as it weighs new tariffs to punish Beijing for its handling of the coronavirus outbreak, according to officials familiar with U.S. planning.
President Donald Trump, who has stepped up recent attacks on China ahead of the Nov. 3 U.S. presidential election, has long pledged to bring manufacturing back from overseas.
Now, economic destruction and the massive U.S. coronavirus death toll are driving a government-wide push to move U.S. production and supply chain dependency away from China, even if it goes to other more friendly nations instead, current and former senior U.S. administration officials said.
“We’ve been working on [reducing the reliance of our supply chains in China] over the last few years but we are now turbo-charging that initiative,” Keith Krach, undersecretary for Economic Growth, Energy and the Environment at the U.S. State Department told Reuters.
WNU Editor: No one should be surprise that this push to move U.S. production and supply chain dependency away from China is intensifying. This pandemic crisis has open the doors for the White House to pursue a far more aggressive economic policy against China that if proposed a year ago, would have produced an enormous backlash. So what is my prediction. A number of companies and government have learned in the past two months that being solely dependent on China in their supply chain is a prescription for disaster. I do expect a number of companies will remain in China, but it will not be like it was in the past. Many will relocate to other countries, and some will return to the U.S.. Governments are also going to jump in and legislate laws that will make it mandatory for companies to have some of their manufacturing/production facilities in the countries that they want to sell. I can easily see this happening first with medicines, supplements, and medical products.
* Analysis continues to flood in suggesting that if China continues to insist it will buy US goods according to market conditions, it cannot meet Donald Trump’s demands
* With 28 per cent of US exports to China not covered by the deal, economist Chad Bown suggests that these exporters could be cut out of the equation
Almost a week after the signing of the phase one trade deal with the United States, scepticism is continuing to mount as to whether China will fulfil its side of an agreement that “may be doomed from the start”.
Of particular concern is China’s commitment to buying an additional US$200 billion of US goods
over two years, including a clause that would bring its imports of US farm goods to more than US$40 billion a year.
“A close look at the data shows that the numbers are even more unrealistic than first believed,” wrote Chad Bown, a trade specialist at the Peterson Institute for International Economics (PIIE), in a new report. “Even worse, hostilities might renew, leading to a re-escalation of trade tensions currently on hold.”
WNU Editor: I am one of those who does not believe that China will be able to meet the terms of its agreement with the US. But I wonder if the US-China trade deal is also one of those agreements where President Trump is asking for the moon, but is really happy to get a least something out of nothing. Currently most Chinese imports are facing US tariffs, so the US is losing nothing there. Where the gains will/should come from is when China starts to focus on buying more US goods and resources. It may be less than what they promised, but it will still be something out of nothing. The agreement also stops the unsustainable growth of greater US trade deficits with China. In my book that is the biggest win for the US in this agreement, and it obliges the Chinese to negotiate a phase 2 trade agreement. Of course this will all change if President Trump losses the Presidential election later this year. But my Chinese contacts are telling me that Beijing is now resigned to a second term victory for President Trump this November.
* Donald Trump took a victory lap as he signed a trade deal with China at the White House - as his impeachment sped ahead at the other end of Pennsylvania Avenue
* He touted his economy and launched attack after attack on his enemies at packed East Room ceremony, railing against the 'impeachment hoax'
* Trump has vowed that he would ink a trade deal with China for more than two years and imposed steep tariffs to bring Beijing to the table
* Signing is for 'phase one' and the White House promises more segments in the future
* Xi Jinping didn't come for the signing but sent a lower-level official, vice-premier Liu He and Trump said he will go back to China soon to 'reciprocate'
* It's unclear what he's reciprocating for, since Xi didn't come
* East Room press credentials didn't have a date printed on them, suggesting the White House wasn't confident the event would happen on schedule
* President urged House members in the audience to leave early if they needed to cast a vote on sending impeachment articles to the Senate
Donald Trump took a victory lap on Wednesday as he signed a trade deal with China at the White House as his impeachment sped towards the Senate on Capitol Hill.
He boasted to an audience of dignitaries that a new trade deal with China will bring 'a future of fair and reciprocal trade,' then complained about the 'impeachment hoax,' and praised a string of Republican senators who he needs to vote for his acquittal.
The president has long complained about a massive trade deficit between Washington and Beijing. He pledged during the 2016 campaign to come down hard on China.
'We are righting the wrongs of the past,' he said Wednesday, observing that 'our negotiations were tough, honest, open and respectful.'
WNU Editor: China has now officially committed to buying hundreds of billions in goods from the US. Lets see if they honour their commitments. My prediction .... they will not. Their economic projections and expectations are based on having large trade deficits with the U.S.. This "agreement" runs completely contrary to China's long term economic plans and goals. So what I expect next are delays, excuses, and accusations from Beijing when the goals of this agreement are not met.
More News On The U.S. And China Signing 'Phase One' Of Their Trade Deal
* Xi Jinping rejected proposals for a bilateral meeting with Donald Trump after the Apec summit in Chile was cancelled in November
* A frantic three months in US-China relations will culminate in Liu He’s trip to Washington next week, but analysts point to more choppy waters ahead
In the first week of November, after Chile cancelled the Apec summit and before the BRICS summit took place in Brasilia, there were intense discussions between China and the United States about a potential face-to-face meeting between their two respective leaders.
The hope was that after plans of a meeting in Chile’s capital of Santiago were wrecked by violent street protests, Chinese President Xi Jinping and his US counterpart Donald Trump might find a location to finalise a phase one trade deal, according to two separate sources briefed on the matter.
Trump’s desire for an eye-catching photo opportunity with Xi has always been clear, with the US president looking for a “win” in the trade war to help boost his re-election campaign.
For Xi, however, the timing was off. The text of the agreement had not been finalised and the broader US-China bilateral relationship was clouded by protests in Hong Kong and Xinjiang.
WNU Editor: Among the Chinese that I know they have trouble seeing this trade deal succeed. The Chinese are not motivated to buy US products, they are more focused on what they can sell. Chinese President Xi's reluctance to meet President Trump for a signing-op is also Beijing's way of deliberating sending a message to its citizens that this deal is not important, and it will not be enforced. But China does have a huge problem. As much as the Chinese leadership do not trust President Trump, foreign businesses do not trust China, and they are now leaving .... China’s manufacturing exodus set to continue in 2020, despite prospect of trade war deal (SCMP).
I will be signing our very large and comprehensive Phase One Trade Deal with China on January 15. The ceremony will take place at the White House. High level representatives of China will be present. At a later date I will be going to Beijing where talks will begin on Phase Two!
* Observers say Trump could make additional demands when he travels to Beijing after a phase-one trade deal is signed
* They could include buying more goods from the US and structural reforms
US President Donald Trump may use a trip to China to try to nudge Beijing into committing to changes in its economic model, according to observers.
And while a visit might help to ease trade frictions, they said Beijing would be bracing for the US leader to push for more concessions from China. Trump on Tuesday said a partial US-China trade pact – the so-called phase-one deal – would be signed on January 15, and he would also then travel to China for more talks.
“The ceremony will take place at the White House. High-level representatives of China will be present,” Trump tweeted. “At a later date I will be going to Beijing where talks will begin on Phase Two!”
There was no mention of Trump’s tweet in Chinese state media on Wednesday.
WNU Editor: In every business deal that I have done with the Chinese over 35 years, they have used this tactic of saying a deal has been agreed upon, and then showing up later wanting more concessions. President Trump is doing to the Chinese what the Chinese have been doing to everyone else for decades, but in this case President Trump is the one with the leverage because of his power on tariffs. I am also not surprised that Chinese state media is keeping much of this trade deal and President Trump's comments off the air. They do not know how to spin this as a win.
* Vice-Premier Liu He has accepted an invitation to lead a delegation to the US from this Saturday, a source briefed on the matter told the Post
* US trade representative Robert Lighthizer previously said phase one trade deal would be signed in the first week of January
Vice-Premier Liu He is set to lead a delegation to Washington this Saturday, where he is expected to sign a phase one deal that would significantly de-escalate the US-China trade war, a source briefed on the matter has told the South China Morning Post.
“Washington has sent an invitation and Beijing has accepted it,” said the source, who declined to be named due to the highly sensitive nature of the information. The Chinese delegation is expected to stay “a few days” in the US until the middle of next week, the source added.
Neither side has officially confirmed the trip. China’s Ministry of Commerce was not immediately available for comment.
A preliminary agreement with the United States means no new tariffs, but the future of the economic relationship remains uncertain.
A Christmas Truce in the Trade War
After much anticipation, the “phase one” U.S.-China trade deal was announced on Friday, but an immediate stock market bump didn’t accompany it. Markets were at first lukewarm on the deal, though U.S. stocks have closed at record highs this week. For now, the partial agreement avoided $160 billion worth of tariffs that were set to take effect Sunday and significantly reduces others in exchange for Beijing’s commitment to buy more U.S. agricultural products.
The phase one deal is more of a big purchase agreement than a real trade deal, FP’s Keith Johnson explains. “In other words, the likeliest outcome after two years of expensive tariffs, bankrupt farmers, and nervous markets is that the United States might just be able to get back to where it was in the last year of the Obama administration,” he writes.
* Beijing’s response reflects caution about possible missteps ahead while Americans give details of its pledges to boost imports
* Government adviser says Chinese appear less excited that the Americans about the ‘phase one’ agreement, which commit it to buying ‘lots more agricultural goods’
China has released fewer details about its trade deal with the US than the American side has – a sign of caution as one government adviser warned it would be a “huge challenge” for Beijing to live up to its commitments.
While the United States has released details such as the value of American products China has agreed to buy, Beijing’s statement focused more on the broad principles of the “phase one” agreement.
Observers said this reflected Beijing’s concern about possible mishaps ahead of a formal signing ceremony – which is expected to take place in January.
WNU Editor: I concur with this analysis on why this deal was made, and why China will fail in keeping its promises .... A Great Deal Of Nonsense (Michael Every, ZeroHedge/Rabobank).
* The agreement covers a wide range of issues, including intellectual property protection, technology transfers and agricultural purchases
* As an immediate result, a new 15 per cent tariff on around US$160 billion of Chinese goods, scheduled to come into effect on Sunday, will be cancelled
Vice Commerce Minister Wang Shouwen announced on Friday that China and the US have made a breakthrough in trade negotiations, with a consensus agreement reached for a phase-one deal that will halt further tariff increases and lower some already in place.
Speaking in a late-night press conference in Beijing, Wang said the agreement covered a wide range of issues, including intellectual property protection, technology transfer, purchase of agricultural products and expanding trade.
Markets are closed in Beijing, the workday is over, and there are zero official reports in the local media or comments by state officials that a trade deal ever took place. That may be because, as we explained on Thursday night, the language of the "deal" will never be made public and there would be no signing event between President Trump and President Xi.
One may even ask if there is even a "deal"?
As the WSJ writes this morning, China indicated that a near-term trade agreement with the U.S. has yet to be completed despite President Trump’s signoff, highlighting the unpredictability of a negotiation process that has rattled global markets and businesses.
WNU Editor: This is so typical of the Chinese. If there was no trade deal they would be contradicting President Trump right now. So that tells me that there is a deal. But when a deal is not to their liking, there will be no public announcement, and that will be a signal to everyone to not respect it. Bottom line. Beijing is not going to respect what they have agreed to in these trade talks this week, and the trade war continues.
* The Trump administration has reached a trade deal in principle with China, three sources close to the talks told CNBC.
* The president met with advisors Thursday afternoon about whether to scrap the next round of tariffs on China.
* The Trump administration has offered to eliminate tariffs on Chinese goods set to take effect Sunday and cut some existing duties in half, sources told CNBC.
The Trump administration has reached a phase one trade deal with China in principle, pending approval from President Donald Trump, three sources close to talks told CNBC on Thursday.
Trump met with top advisors on Thursday about trade with China and whether to delay the next round of U.S. tariffs. Duties of 15%, set to take effect Sunday, would affect about $160 billion in Chinese-made goods including toys, computers, phones and clothing.
Investors look set to make money when Washington and Beijing sign their “phase one” trade deal — but in the long term, the Sino-U.S. trade war is “unresolvable,” according to one analyst.
Speaking to CNBC’s “Squawk Box Europe” on Tuesday, Patrick Armstrong, CIO of Plurimi Investment Managers, said holding any asset ahead of the agreement being finalized would definitely pay off.
“The way to make money is easy right now, you just have to own something, because everything’s just been grinding higher,” he said. “No one wants to be short going into the day before the trade deal’s announced.”
WNU Editor: China needs those $500 billion trade surpluses with the U.S. to continue to grow and develop at the GDP rate that they have been accustom to. The alternative would be slow growth and economic instability within China itself. That is why I have always been skeptical that these trade talks would succeed. In the minds of the Chinese leadership, they are not in a position to compromise. China's policy right now is to go through the motions of talking, but using what influence it has to make sure that President Trump is defeated in next year's Presidential election. In this context Wilbur Ross is right .... Commerce Secretary Wilbur Ross supports delaying a trade deal until after the 2020 election, saying it eliminates an advantage for China (Business Insider).
* US President Donald Trump, in London ahead of a meeting of Nato leaders, said it is up to him to decide whether to make a deal with China
* He had already said that the Hong Kong Human Rights and Democracy Act, which he signed last week, may hamper his chances of securing a trade deal with China
US President Donald Trump said on Tuesday that he had no timeline for reaching a trade deal with China, and that it now might come after the 2020 presidential election.
The comments, made in London ahead of a meeting of Nato leaders, added to the flurry of trade moves made by the United States in the previous 24 hours.
Trump said progress was being made on the trade agreement with China, but that it was up to him to decide whether to make a deal.
I have no deadline, no. In some ways, I think it’s better to wait until after the election with China Donald Trump
The agricultural industry has been hit especially hard. Farm bankruptcies are up 24% this year, and a report by the American Farm Bureau Federation finds that almost 40% of farmers’ income this year will come either from insurance payouts or government bailouts.
Nobody ever said trade wars are fun and easy — er, Trump did, which wasn’t his smartest statement ever — but the short-term pain for farmers ought to yield longterm benefits to our economy generally. And also improve our global position relative to China’s.
More:
The other big weapon in the Chinese arsenal is investment. The Chinese government is traditionally a major buyer of U.S. government debt, and it holds the second-biggest stash of Treasuries (after Japan). Over the years, many have fretted that a spat between the U.S. and China would lead the latter to sell off that mountain of debt, creating a world of hurt for the U.S. financial system and economy.
The U.S. and China reached a partial agreement Friday that would broker a truce in the trade war and lay the groundwork for a broader deal that Presidents Donald Trump and Xi Jinping could sign later this year, according to people familiar with the matter.
As part of the deal, China would agree to some agricultural concessions and the U.S. would provide some tariff relief. The pact is tentative and subject to change as Trump prepares to sit down with China’s Vice Premier Liu He later Friday.
The deal under discussion, which is subject to Trump’s approval, would suspend a planned tariff increase for Oct. 15. It also may delay -- or call off -- levies scheduled to take effect in mid-December. Such an agreement would be the first breakthrough in the 18-month trade war that has hurt the economies of both nations.
WNU Editor: The markets are happy .... Wall Street rises but pares gains after news of partial U.S.-China deal (Reuters). What's my take? There is nothing in writing. They have agreed to discuss a process on how to consult with each other on what they have agreed upon. Bottom line. This could collapse over the weekend.
Sept 5 (Reuters) - Senior U.S. and Chinese officials have pledged to meet in October to settle their ongoing trade war but a lasting peace seems more elusive than ever.
Since trade negotiations between the world's largest economies broke down in May, both countries have added tariffs on billions of dollars of the others' goods, broken good faith promises and traded public insults.
Washington accused Beijing of reneging on commitments to change its laws to enact economic reforms, while Beijing called U.S. President Donald Trump's tariff's "barbaric." Leaders from both countries are now vowing a long fight, despite slowing domestic economies.
Now that trade war with China has escalated substantially yet again following a weekend in which both the US and China hiked the tariff rate on billions of imports, Deutsche Bank is revisiting how China's stance towards the trade war has evolved over the past 1½ years, and how it may change in the future.
As a reminder, while China first sought to prevent a trade war, and then tried to quickly reach a trade deal with the US, DB economist Yi Xiong notes that China's strategy has changed again since early May, and he describes China's current strategy as "endurance": the main goal is to preserve China's economic resilience, while taking the higher US tariffs as a given fact.
The premise for China's new strategy is two-fold:
* frictions between the US and China have gone far beyond trade, reducing China's potential gains in a trade deal; and
* damage from the higher US tariffs to China's economy has been manageable.
WNU Editor: I concur with the above analysis that China's current trade war strategy is to continue trade talks, respond to US tariffs but with smaller and targeted measures, and to accelerate its opening up to other countries. The problem with this strategy is that China is dependent on open U.S. markets for its export growth, it's leverage on U.S. imports is limited, and opening trade relations with other countries that have trade barriers even more stringent that the Chinese is going to be difficult. Bottom line .... the Chinese need the U.S. market for its products, trade surpluses, U.S. investments and technologies, and more importantly a stable political relationship. This is now all at risk, and the consequences will be a lowering of economic expectations within China itself.
I have been involved in numerous computer science projects since the 1980s, as well as developing numerous web projects since 1996.
These blogs are a summation of all the information that I read and catalog pertaining to the subjects that interest me.
