WASHINGTON -- Washington and Beijing are working to revive pivotal talks aimed at ending the trade war that has roiled world markets, Donald Trump's chief economic advisor said Sunday.
If calls between both sides' deputies pan out in the next 10 days "and we can have a substantive renewal of negotiations," Larry Kudlow said on "Fox News Sunday," "then we are planning to have China come to the USA and meet with our principals to continue the negotiations."
The US president himself weighed in on Twitter, saying, "We are doing very well with China, and talking!"
In another tweet, he added that the US economy was "poised for big growth after trade deals are completed," and that China is "eating Tariffs."
Yet it was unclear whether a Chinese delegation would be coming to Washington next month, as a White House spokesperson predicted in July after US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin left a round of trade talks in Shanghai.
Kudlow nonetheless emphasized that high-level phone discussions last week were "a lot more positive than has been reported."
The talks involved Lighthizer and Mnuchin on the US side and Vice Premier Liu He and Commerce Secretary Zhong Shan representing China.
World financial markets have been on edge amid signs pointing to a possible global economic slowdown -- notably because of the trade war between the world's two largest economies -- and have been reacting nervously to even the slightest new indicator.
NO FEAR OF 'OPTIMISM'
But Kudlow insisted that the outlook was far from gloomy.
"Let's not be afraid of optimism," he said, adding that "I sure don't see a recession."
The US-China negotiations began in earnest in January and seemed at first to make progress, raising hopes that a trade deal could be rapidly reached.
But during the spring, the US president abruptly called off the talks, saying the Chinese had reneged on earlier commitments.
The discussions resumed in June at the highest levels in the margins of the G-20 summit meeting in Osaka, Japan, when Trump met with his Chinese counterpart Xi Jinping.
But markets were hit with a fresh surprise when Trump suddenly announced that as of Sept. 1 he was imposing punitive 10-percent tariffs on $300 billion in Chinese goods that had so far been spared.
Then came the announcement Tuesday that Trump -- presumably with an eye on the 2020 elections -- would delay imposing the tariffs until Dec. 15 so as not to cast a shadow on Americans' Christmas shopping plans.
The delay was seen as a concession to China and a backhanded admission that the tariffs -- despite Trump's repeated insistence to the contrary -- could in fact affect US consumers.
IMPACT ON AMERICA DENIED
Nonetheless, the president's chief trade adviser, Peter Navarro, firmly rejected that notion in television appearances Sunday.
He said Trump had decided on the postponement only after several company heads told him their contracts with Chinese suppliers were denominated in dollars, meaning they got no benefit from the weakening of the Chinese yuan and their orders ahead of the year-end holidays would be hard-hit.
Navarro vigorously rejected the notion that the tariff war is hurting American consumers -- despite studies to the contrary by the International Monetary Fund, Harvard University and the Federal Reserve Bank of Boston.
"We're seeing production investment and supply-chain sourcing move -- hemorrhaging from China," Navarro said, with Southeast Asia and the US benefiting.
source: news.abs-cbn.com
Hundreds of US businesses from local bridal shops to multi-billion dollar retailers have submitted comments to the US Trade Representative's Office opposing President Donald Trump's plan to slap tariffs on another $300 billion of Chinese imports.
The higher tariffs would affect everything from apparel and footwear to fireworks and cellphones, and was likely to raise prices for US consumers, the companies warned in submissions ahead of the start of seven days of public hearings on Monday.
Diane Cheatham, owner of Diane’s Formal Affair, an Alabama-based women's boutique, said new tariffs would completely shut down her American suppliers, who will be unable to come up with the funding to cover the additional 25 percent they would need to pay to import their products.
"I am writing this letter pleading with you to keep our industry out of the next round of tariffs," Cheatham said. "I stand shoulder to shoulder with thousands of business owners in this plea. Help us make AMERICA GREAT AGAIN."
Cheatham's comments were echoed by many more US business owners who said the new levies would hurt consumers and cause job losses.
Spirit of 76, a fireworks company that imports 100 percent of its product from China, said the tariffs would cause significant harm to its business where profit margins are already razor thin.
It said it would have to raise prices and the resulting loss in sales would impact hiring and expansion plans.
Large public companies, many of whom's shares sank in May on concern over the impact of tariffs on growth, also warned in broad terms of the trouble an outright trade war would cause.
"We strongly oppose the imposition of additional tariffs," Ralph Lauren Corp said in a letter addressed to US Trade Representative Robert Lighthizer.
The luxury retailer asked for apparel and footwear to be removed from the tariff list, arguing that a rise in duties will lower sales and lead to US workers losing their jobs.
Roku Inc, Tommy Hilfiger owner PVH corp and Best Buy are among a number of companies who have asked to testify at the hearings.
(Reporting by Uday Sampath in Bengaluru; editing by Patrick Graham)
source: news.abs-cbn.com
WASHINGTON/BEIJING - The diplomatic cable from Beijing arrived in Washington late on Friday night, with systematic edits to a nearly 150-page draft trade agreement that would blow up months of negotiations between the world's two largest economies, according to three US government sources and three private sector sources briefed on the talks.
The document was riddled with reversals by China that undermined core US 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 US intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.
US President Donald Trump responded in a tweet on Sunday vowing to raise tariffs on $200 billion 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 US Trade Representative Robert Lighthizer - who views changes to Chinese laws as essential to verifying compliance after years of what US 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 US Trade Representative and the US 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 US 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 fulfill 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 fulfill 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 US, 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 US 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, US officials have little hope that Liu will come bearing any offer that can get talks back on track, said two of the sources.
To avert escalation, some of the sources said, Liu would have to scrap China's proposed text changes and agree to make new laws. China would also have to move further towards the US position on other sticking points, such as demands for curbs on Chinese industrial subsidies and a streamlined approval process for genetically engineered US crops.
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."
(Additional reporting by Chris Prentice in NEW YORK, and Jing Xu and Ben Blanchard in BEIJING Editing by Simon Webb and Brian Thevenot)
source: news.abs-cbn.com
WASHINGTON -- US and Chinese officials say a historic deal ending their ongoing trade war could be imminent, but a key question is how can Washington be sure Beijing will live up to its end of the bargain?
With up to 100 Chinese officials reportedly expected next week in Washington, with the possibility of unveiling a grand agreement after months of tensions, that question is hanging over the talks.
Beijing may make eye-popping offers to buy American energy and agriculture exports as a means of cutting the soaring US-China trade deficit ($378.7 billion in 2018, including services trade), but all eyes will be on whether the agreement has any teeth.
US Vice President Mike Pence said Friday the enforcement mechanism would be key to the decision on whether to remove the punishing US tariffs which now cover more than $250 billion in Chinese imports.
"The reason enforcement has become central to this negotiation is the long history of China not living up to the spirit of the commitments it has made in the WTO and in bilateral negotiations with the US and other countries," Edward Alden, a trade expert at the Council on Foreign Relations, told AFP.
US President Donald Trump has repeatedly accused China of stealing from the United States by buying less from America than it sells.
But Trump also has demanded structural changes to the Chinese economy, including an end to forced transfer of American technology, theft of intellectual property and the massive role the Chinese government plays in markets and industry.
US Trade Representative Robert Lighthizer, who is leading the US delegation along with Treasury Secretary Steven Mnuchin, has insisted Washington will not accept empty promises and will demand verification Beijing is keeping its word.
Reaching trade agreements with China can be especially challenging, given that its regulations are not transparent, Alden said.
"China can change its laws in ways that please the United States, but then use regulatory tools to thwart implementation."
'THAT'S THE CORE'
To ensure strict compliance, US negotiators have proposed monthly, quarterly and semi-annual meetings, with the twice-yearly meetings to involving the most senior officials.
And should American businesses report violations of the agreement, Washington could begin a series of consultations with their Chinese counterparts, and then unilaterally impose new tariffs if no resolution is achieved, according to US media reports.
But China also would have recourse to the same tariff tool in case of a US violation.
"The enforcement mechanism is crucial to the agreement," Doug Barry, spokesman for the US-China Business Council, told AFP.
"Without a credible, time specific, verifiable means to hold parties accountable, we will miss an opportunity to put the trade relationship on a new and better footing."
Alden says the tool under discussion appears novel because bilateral free trade agreements typically resolve disputes through arbitration panels which oversee retaliatory tariffs, similar to the World Trade Organization dispute settlement process.
Businesses on both sides of the Pacific want the talks to wrap up as soon as possible to reduce uncertainty in international commerce at a time when the trade war has weighed on manufacturing sectors in both countries.
Among the top 15 US states exporting to China, many have been hit hard by China's retaliatory tariffs on soy, pork or in the aviation sector, including Alabama, Illinois and Washington State, according to the US-China Business Council.
Companies are calling for the tariffs imposed last year -- which cover more than $360 billion in two-way trade -- to be lifted.
But Washington hopes to retain the ability to resort to tariffs as a cudgel.
"We have to maintain the right to be able to -- whatever happens to the current tariffs -- to raise tariffs in situations where there's violations of the agreement," Lighthizer said in Senate testimony in March.
"That's the core. If we don't do that, then none of it makes any difference."
But, according to Alden, that could create "ongoing uncertainty" for businesses unaware of when either side could seek to impose unilateral tariffs.
source: news.abs-cbn.com
WASHINGTON -- The United States will need to maintain the threat of tariffs on Chinese goods for years even if Washington and Beijing strike a deal to end a costly tariff war, President Donald Trump's chief trade negotiator told lawmakers on Wednesday.
US Trade Representative Robert Lighthizer cautioned that much work was still needed to nail down a US-China trade agreement, including working out how it will be enforced.
"If we can complete this effort - and again I say if ... we might be able to have an agreement that helps us turn the corner in our economic relationship with China," Lighthizer said in testimony to the US House Ways and Means Committee.
The two countries have imposed tit-for-tat tariffs on hundreds of billions of dollars worth of each others' goods, roiling financial markets, disrupting manufacturing supply chains and shrinking US farm exports.
Lighthizer said USTR was taking legal steps to implement Trump's decision on Sunday to delay a tariff increase on more than $200 billion worth of Chinese goods that had been scheduled for Friday.
But USTR later clarified in a statement that it was not abandoning the threat of increasing the tariffs to 25 percent from 10 percent. It said a Federal Register notice would be published this week that would suspend the increase "until further notice."
Lighthizer detailed a long road ahead to resolve US China trade issues, and said that tariffs would remain an important tool to push China to make structural policy changes sought by Trump and lawmakers.
"The reality is this is a challenge that will go on for a long, long time," Lighthizer said. He earlier said he "is not foolish enough" to believe that a single negotiation will change the increasingly sour bilateral trade relationship.
"If there is disagreement at my level, the US would expect to act proportionately but unilaterally," Lighthizer added.
A perennial threat of tariffs would be disappointing news for industry, which is hoping to see an end to the trade war uncertainty that has paralyzed China investment decisions.
Lighthizer's cautious comments about a China deal prospects sent US stocks lower in morning trade, but Wall Street steadied somewhat after US Federal Reserve Chairman Jerome Powell told a separate hearing that the Fed would stop shrinking its $4 trillion balance sheet later this year.
'MOST SEVERE CHALLENGE'
The issues that the United States faces with China are "too serious" to be resolved by promises to purchase more US goods and structural change by China is needed, Lighthizer said.
China has offered to purchase an additional $1.2 trillion of US products over 6 years, people familiar with the talks have said, which would be welcome relief to farmers and businesses hit hard by Beijing's retaliatory tariffs.
But lawmakers have urged the Trump administration not to allow potential big-ticket purchases to distract him from pursuing an end to what the United States alleges are unfair trade practices.
China represents the "most severe challenge" ever faced by US trade policy makers and congressional support has been "critical in persuading China" to take Washington's concerns more seriously, Lighthizer said on Wednesday.
The United States has accused Beijing of forcing US companies doing business in China to share their technology with local partners and hand over intellectual property secrets. China denies it engages in such practices.
Trump administration officials also object to non-tariff barriers in China, including industrial subsidies, regulations, business licensing procedures, product standards reviews and other practices that they say keep US goods out of China or give an unfair advantage to domestic firms.
Lighthizer on Wednesday said that while some progress has been made in the talks, the United States needs to be able to take unilateral action to enforce any agreement.
"I don’t believe this is going to solve all the problems between the United States and China," Lighthizer said. "We're going to be back here and working our way through problems, always with one eye toward the future."
The United States is seeking monthly meetings for lower-level officials, quarterly meetings for vice ministers and semiannual meetings at the ministerial level for the enforcement process, Lighthizer said.
Reuters first reported in January that the US side was demanding such reviews of China's progress on pledged trade reforms.
Lighthizer also said the United States is seeking to prevent China from competitive devaluation of its yuan as part of a currency deal in the talks.
He told lawmakers that the negotiations are to settle China's violations of Section 301 of the Trade Act of 1974 and therefore were executive actions that did not require Congress' approval. The China talks have had more in common with a sanctions-monitoring regime than a traditional trade pact, focused on corrective actions by Beijing.
'SUBSTANTIAL' PURCHASES
While lawmakers from major agricultural states broadly shared their support for a deal that addresses these core issues, they sounded the alarm about the impact of tariffs. US farmers have been among the hardest hit by retaliation from China, the top market for many of their products.
Lighthizer said Trump's team was pushing China to promise to make "substantial" new purchases of US products, including soybeans, corn, ethanol and cotton.
The purchase plan is designed to secure future demand as well, he said.
"Our hope is if you increase those agriculture sales, you would create new customers and results that go out years and years and years and years," Lighthizer said.
source: news.abs-cbn.com
