WASHINGTON - US trade negotiators want to make "meaningful progress" in upcoming talks with China, Treasury Secretary Steven Mnuchin said Thursday, one day after conciliatory gestures by both sides boosted hopes of an eventual resolution.
Mnuchin said on CNBC he is "cautiously optimistic" about chances for a deal to resolve the conflict, but Washington and Beijing will first hold talks at the deputy level to ensure senior officials who meet later can advance towards an agreement.
"We don't want a trip that's just a series of discussions. We want to make meaningful progress," he said.
However, he again warned that President Donald Trump will only accept a good deal, and is willing to raise tariffs if necessary.
There have been positive signs this week in the trade conflict, now entering its second year, as Trump agreed to Beijing's request to delay one round of tariff increases on $250 billion worth of goods for two weeks, until October 15, after China agreed to spare some US products from its retaliation.
China added Thursday that it was "making inquiries" about buying American farm products including big-ticket items like pork and soybeans, not on its previous list of spared goods.
"It is expected that China will be buying large amounts of our agricultural products!" Trump tweeted early Thursday.
American farmers have borne the brunt of the US-China trade spat, especially after US soy exports collapsed last year, virtually wiping out foreign markets farmers had spent years cultivating.
Trump has previously accused Beijing of backsliding on promises to increase purchases of US farm goods and has offered billions in aid to farms badly damaged in the trade war.
'CAUTIOUSLY OPTIMISTIC'
Senior US and Chinese officials are due to hold preliminary talks later this month, in preparation for meetings in early October led by Mnuchin and US Trade Representative Bob Lighthizer.
Mnuchin said "we clearly didn't make the progress we wanted to" at the last meeting in Shanghai in late July, but he added: "I'm cautiously optimistic. I take the Chinese in good faith that they want to come here with a deal now."
But he said Trump "is prepared to keep these tariffs in place. He's prepared to raise tariffs if we need to raise tariffs."
Trump's hardline trade adviser Peter Navarro said on CNN Thursday that the US is focused on addressing "seven acts of economic aggression" by China including "cyber-hacking of our computers to steal our business secrets, intellectual property theft" and "manipulation of the currency."
However Mnuchin said Hong Kong's pro-democracy movement "is definitely not on the table," as "That is an issue for the secretary of state to deal with."
Millions of people have demonstrated over the last 14 weeks in the biggest challenge to China's rule of the financial hub since its handover from Britain in 1997.
Hong Kong's pro-Beijing Chief Executive Carrie Lam warned the United States on Tuesday not to "interfere" with her government's response.
'EATING THE TARIFFS'
Reducing America's soaring trade deficit with China has long been a principal aim in Trump's trade battle with Beijing, but so far it has not led to a reduction in the trade imbalance. In 2018, the US goods trade deficit with China was $419.52 billion.
Trump has long viewed deficits as a defeat for the United States, arguing that they amount to stealing -- a position rejected by most economists.
Meanwhile the US president maintains that the protracted trade war is damaging China more than the United States, and China is "eating the tariffs."
The US Treasury has taken in $66 billion in customs duties in the 11 months through August, 73 percent more than in the same period of the prior fiscal year -- tariffs paid by American importers.
Experts have warned there are signs the US is also feeling the pinch, with job creation slowing across major industries last month, and manufacturing seeing a decided slowdown.
source: news.abs-cbn.com
WASHINGTON - US President Donald Trump on Wednesday welcomed an apparent olive branch from Beijing in the grinding trade war between the 2 nations, which came weeks before negotiations are due to resume.
Beijing announced it was temporarily exempting some US exports from tariff increases, a gesture that lifted equities markets long buffeted by the ups and downs in the conflict now entering its second year.
"It was a big move," Trump told reporters at the White House. He reiterated that Beijing was under pressure to strike a bargain as its economy weakens, which he attributed to US actions.
Top negotiators expect to reconvene in Washington early next month after an acrimonious summer in which trade relations deteriorated sharply and both governments announced waves of new tariffs in a stand-off that is dragging on the global economy.
However, the goods exempted do not include high-profile agricultural items like soybeans and pork that could be crucial to the ultimate success of any agreement.
The exemptions will become effective on September 17 and be valid for a year, according to the Customs Tariff Commission of the State Council, which released 2 lists that include seafood products and anti-cancer drugs.
The lists mark the first time Beijing has announced products to be excluded from tariffs.
Other categories that will become spared include alfalfa pellets, fish feed, medical linear accelerators and mold release agents, and the commission said it was also considering further exemptions.
Both sides imposed fresh tit-for-tat tariffs on September 1, adding to the duties that now cover hundreds of billions of dollars of goods.
"These adjustments signal that China is more willing to make progress in the October trade talks, likely toward striking a 'narrow' agreement that involves China buying more US goods in exchange for the US suspending further tariff hikes," Barclays analysts said in a research note.
They said Beijing had been sounding a more "constructive" note in recent weeks over trade relations.
GROWING PRESSURE
But US businesses in China are increasingly pessimistic about their prospects, with a report released Wednesday saying growing numbers of companies expect their revenues and investment in the local market to shrink.
The American Chamber of Commerce in Shanghai said just 47 percent said they expected to increase their investments in China in 2019 -- down from 62 percent last year -- while three-quarters of businesses surveyed said they opposed the use of punitive tariffs by the United States to force China into a trade deal.
In a sign of the economic pressure being felt by the Asian giant, the central People's Bank of China said on Friday it would lower the required amount of cash that lenders must keep in reserve, allowing for an estimated $126 billion in additional loans to businesses.
China's economy grew 6.2 percent on-year in the second quarter, the lowest rate in nearly three decades -- a fact Trump highlighted on Wednesday.
Auto sales in China fell by 6.9 percent in August compared with the previous year, an official industry association said Wednesday, extending a slump in a massive auto market that has long been a cash cow. It was the 14th consecutive monthly drop.
Trump has said the protracted trade war is damaging China more than the United States.
"China is eating the tariffs," he tweeted Friday, repeating his claim that higher duties mean Washington is collecting billions of dollars from the Asian nation, without passing costs on to US consumers.
But experts have warned there are signs the US is also feeling the pinch, with job creation slowing across major industries last month.
Wall Street added to gains after Trump spoke, amid renewed hope an agreement could be reached to end the trade war. The benchmark Dow Jones Industrial Average was up 0.5 percent shortly around 2 a.m. Thursday.
source: news.abs-cbn.com
BEIJING/WASHINGTON - U.S. and Chinese trade negotiators shift to Shanghai this week for their first in-person talks since a G20 truce last month, a change of scenery for two sides struggling to resolve deep differences on how to end a year-long trade war.
Expectations for progress during the two-day Shanghai meeting are low, so officials and businesses are hoping Washington and Beijing can at least detail commitments for "goodwill" gestures and clear the path for future negotiations.
These include Chinese purchases of U.S. farm commodities and the United States allowing firms to resume some sales to China's tech giant Huawei Technologies.
President Donald Trump said on Friday that he thinks China may not want to sign a trade deal until after the 2020 election in the hope that they could then negotiate more favorable terms with a different U.S. president.
"I think probably China will say "Let's wait," Trump told reporters at the White House. "Let's wait and see if one of these people who gives the United States away, let's see if one of them could get elected."
For more than a year, the world's two largest economies have slapped billions of dollars of tariffs on each other's imports, disrupting global supply chains and shaking financial markets in their dispute over China's "state capitalism" mode of doing business with the world.
Trump and Chinese President Xi Jinping agreed at last month's G20 summit in Osaka, Japan to restart trade talks that stalled in May, after Washington accused Beijing of reneging on major portions of a draft agreement -- a collapse in the talks that prompted a steep U.S. tariff hike on $200 billion of Chinese goods.
Trump said after the Osaka meeting that he would not impose new tariffs on a final $300 billion of Chinese imports and would ease some U.S. restrictions on Huawei if China agreed to make purchases of U.S. agricultural products.
CHIPS AND COMMODITIES
Since then, China has signaled that it would allow Chinese firms to make some tariff-free purchases of U.S. farm goods. Washington has encouraged companies to apply for waivers to a national security ban on sales to Huawei, and said it would respond to them in the next few weeks.
But going into next week's talks, neither side has implemented the measures that were intended to show their goodwill. That bodes ill for their chances of resolving core issues in the trade dispute, such as U.S. complaints about Chinese state subsidies, forced technology transfers and intellectual property violations.
U.S. officials have stressed that relief on U.S. sales to Huawei would apply only to products with no implications for national security, and industry watchers expect those waivers will only allow the Chinese technology giant to buy the most commoditized U.S. components.
Reuters reported last week that despite the carrot of a potential exemption from import tariffs, Chinese soybean crushers are unlikely to buy in bulk from the United States any time soon as they grapple with poor margins and longer-term doubts about Sino-U.S. trade relations. Soybeans are the largest U.S. agricultural export to China.
"They are doing this little dance with Huawei and ag purchases," said one source recently briefed by senior Chinese negotiators.
White House economic adviser Larry Kudlow on Friday said he "wouldn't expect any grand deal," at the meeting and negotiators would try to "reset the stage" to bring the talks back to where they were before the May blow-up.
"We anticipate, we strongly expect the Chinese to follow through (on) goodwill and just helping the trade balance with large-scale purchases of U.S. agriculture products and services." Kudlow said on CNBC television.
U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer will meet with Chinese Vice Premier Liu He for two days of talks in Shanghai starting on Tuesday, both sides said.
"Less politics, more business," Tu Xinquan, a trade expert at Beijing's University of International Business and Economics, who closely follows the trade talks, said of the possible reason Shanghai was chosen as the site for talks.
"Each side can take a small step first to build some trust, followed by more actions," Tu said of the potential goodwill gestures. 'DO THE DEAL’
A delegation of U.S. company executives traveled to Beijing last week to stress to Chinese officials the urgency of a trade deal, according to three sources who asked to not be named. They cautioned Chinese negotiators in meetings that if a deal is not reached in the coming months the political calendar in China and the impending U.S. presidential election will make reaching an agreement extremely difficult.
"Do the deal. It's going to be a slog, but if this goes past Dec. 31, it's not going to happen," one American executive told Reuters, citing the U.S. 2020 election campaign. Others said the timeline was even shorter.
Two sources briefed by senior-level Chinese negotiators ahead of next week's talks said China was still demanding that all U.S. tariffs be removed as one of the conditions for a deal. Beijing is opposed to a phased withdrawal of duties, while U.S. trade officials see tariff removal -- and the threat of reinstating them -- as leverage for enforcing any agreement.
China also is adamant that any purchase agreement for U.S. goods be at a reasonable level, and that the deal is balanced and respects Chinese legal sovereignty.
U.S. negotiators have demanded that China make changes to its laws as assurances for safeguarding U.S. companies' know-how, an insistence that Beijing has vehemently rejected. If U.S. negotiators want progress in this area, they might be satisfied with directives issued by China's State Council instead, one of the sources said.
One U.S.-based industry source said expectations for any kind of breakthrough during the Shanghai talks were low, and that the main objective was for each side to get clarity on the "goodwill" measures associated with the Osaka summit.
There is little clarity on which negotiating text the two sides will rely on, with Washington wanting to adhere to the pre-May draft, and China wanting to start anew with the copy it sent back to U.S. officials with numerous edits and redactions, precipitating the collapse in talks in May.
Zhang Huanbo, senior researcher at the China Centre for International Economic Exchanges (CCIEE), said he could not verify U.S. officials' complaints that 90 percent of the deal had been agreed before the May breakdown.
"We can only say there may be an initial draft. There is only zero and 100% - deal or no deal," Zhang said.
source: news.abs-cbn.com
WASHINGTON -- As the United States and China pursue trade talks, there is a "good chance" that more US firms will be granted licenses to sell products to controversial Chinese telecoms giant Huawei, White House economic adviser Larry Kudlow said Sunday.
Kudlow's comments came after President Donald Trump and China's Xi Jinping agreed on Saturday to a truce in their trade war, and Washington pledged to hold off on new tariffs while they negotiate.
While Trump had signaled the softer position on Huawei, a sticking point in trade talks, by saying US companies could sell equipment "where there's no great national security problem," Kudlow added a bit of detail.
The senior Trump aide told "Fox News Sunday" that "there's a good chance the Commerce Department, Secretary (Wilbur) Ross, will open the door on that and grant new licenses."
Trump told Fox News Channel's "Tucker Carlson Tonight" that after meeting with Xi, he believes the two sides are closer to a trade deal.
"We had a very good meeting. He wants to make a deal. I want to make a deal. Very big deal, probably, I guess, you'd say the largest deal ever made of any kind, not only trade," the president said, according to a transcript released by the channel.
The US has said it fears that systems built by Huawei -- the world leader in telecom network equipment and number two smartphone supplier -- could be used by China's government for espionage via built-in secret security "backdoors."
Huawei has vigorously denied that, saying the US has never provided proof to substantiate it.
Many US lawmakers, including Senate Republicans like Ted Cruz and Marco Rubio, are concerned about any lifting of the effective ban against Huawei accessing crucial American technology or operating in the US market.
"If President Trump has agreed to reverse recent sanctions against Huawei, he has made a catastrophic mistake," Rubio tweeted Saturday.
Kudlow said Huawei would remain on the so-called US Entity List -- foreign companies and individuals that are subject to specific export and technology transfer licensing requirements.
"This is not a general amnesty," Kudlow said.
"The Commerce Department will grant some temporary additional licenses where there is a general availability" of the products to be sold, he added.
In a later interview on CBS talk show "Face the Nation," Kudlow said: "We understand the huge risks regarding Huawei."
On the general issue of US-China trade talks, Kudlow declined to offer any deadline for the resolution of the dispute between the world's top two economies, though he admitted the talks could "go on for quite some time."
"There are no promises, there's no deal made, no timetable," he said. "Just resuming the talks... is a very big deal."
source: news.abs-cbn.com
WASHINGTON - China has pledged to stem a flood of the synthetic opioid fentanyl onto America's streets, where it kills thousands of people a month, but US security experts are skeptical about whether Beijing is willing, or even able, to follow through.
Ten current and former US officials, congressional sources and China and trade experts told Reuters in interviews that China cooperates only when it believes it will get something in return.
In this case, several said, Beijing appears to have offered its help so that it could get the best deal possible from Washington in trade negotiations.
"Will they enforce this, or is this just another gesture to be used to secure something they want?" said Robin Cleveland, vice chair of the congressional US-China Economic and Security Review Commission, which monitors the national security impact of bilateral trade and economic ties.
"I think they would hope to leverage it in some meaningful way in the context of trade talks," she said.
Those trade talks ran into trouble this week with China backtracking on earlier commitments to change its laws in key areas, including intellectual property rights, trade secrets, forced technology transfers, access to financial services and currency manipulation, Reuters reported on Wednesday, citing U.S. government and private-sector sources.
US President Donald Trump responded to China by vowing to raise tariffs on $200 billion worth of Chinese goods from 10 to 25 percent on Friday.
Unless resolved in a new round of negotiations, the mounting tensions over trade could derail China's cooperation on fentanyl.
"They are not going to do it, the record says, unless they get a trade deal, or we threaten them in the absence of a trade deal," said Derek Scissors, an expert on Sino-U.S. economic relations at the American Enterprise Institute think tank.
"They can stop this if they want, but they won't unless they see a deal."
An explosion in the use of fentanyl, an opioid painkiller 50 times more potent than heroin, and its analogues has driven the most devastating chapter of America's long-running opioid crisis, US law enforcement agencies say, and China accounts for most of the fentanyl and fentanyl analogues seized.
The United States recorded more than 28,000 synthetic opioid-related overdose deaths in 2017, according to the US Centers for Disease Control and Prevention, the majority of them fentanyl-related.
Chinese President Xi Jinping promised Trump at a summit in Argentina in December that Beijing would crack down on flows of all fentanyl-related substances.
In April, China pledged that from May 1 it would expand the list of narcotics subject to state control to the more than 1,400 known fentanyl analogues, which have a slightly different chemical makeup but are all addictive and potentially deadly, as well as any new ones developed in the future.
Fentanyl and all of its analogues are controlled substances subject to strict regulation in the United States.
Speaking in Beijing on Friday, Chinese Foreign Ministry spokesman Geng Shuang said China had implemented the change as promised starting from May 1, a move he said had been positively appraised by the United States.
"I want to emphasize here that China keeps to its word," he told a daily news briefing. "At the same time, I would also like to point out that the root cause of the US fentanyl problem is not in China."
Asked whether there was a link between China's promised increased controls on fentanyl and trade talks with the United States, Geng said: "I don't know what person has such an imagination."
China's Ministry of Public Security, National Health Commission and National Medical Products Administration – the departments responsible for the new rules – did not respond to requests for comment on this story. The White House did not respond to requests for comment.
The regulatory change is supposed to shut down the operations of illicit producers and traffickers who advertise and sell fentanyl products on video websites including Google's YouTube and Vimeo, and on the Dark Web.
They deliver the drugs to the U.S. market mainly in the mail, through express delivery services or trans-shipping them through Mexico and Canada.
Trump hailed the agreement as a major advance in efforts to contain the opioid epidemic. Some US officials who work directly with Chinese law enforcement agencies say they believe Beijing is committed to clamping down.
"We see them as a partner we want to work with to effect that change of availability here in the US," said Daniel Baldwin, a senior Drug Enforcement Administration official who was its top representative in Beijing from 2011-2014.
The ruling Communist Party's newspaper, the China Daily, covered the plans to expand the controlled substances list last week under the headline, "China, US join hands to fight fentanyl."
But even Trump's attorney general, William Barr, has said it is too soon to claim victory.
"Whether the Chinese ... actually deliver on it from an enforcement standpoint remains to be seen," Barr testified at a House of Representatives budget hearing in April.
PAST FAILURES
Beijing has reneged on pacts with Washington before, US experts say.
In 2017, the bulk of fentanyl seizures by US Customs and Border Protection came from China, despite an agreement announced in September 2016 by the Obama administration on "enhanced measures" to fight trafficking to the United States. China later said it made no such agreement.
China added fentanyl, 24 analogues and two precursors to its narcotics control list beginning in 2015, leading to a sharp reduction in those products. But manufacturers sidestepped the controls by synthesizing new analogues, some of them even more potent and deadly than the original.
They will remain legal until China follows through on its promise to control all forms of fentanyl.
US law enforcement officials worry China will not be able to fully enforce this new crackdown either, even if it sticks to its promise to try.
Its oversight of more than an estimated 400,000 producers and distributors inside vast chemical and pharmaceutical industries is notoriously weak and enforcement agencies are short of inspectors and weakened by corruption, the U.S. experts said.
Fentanyl analogues are relatively easy to make and some producers create front companies to sell fentanyl to traffickers, US experts say.
Further, experts say, local Communist Party officials are under pressure to hit targets for economic growth and so are often reluctant to shut down any growing businesses, including pharmaceutical firms.
Chinese Customs enforcement appears to be even weaker. Officials stopped fewer than a half dozen fentanyl-related shipments in 2016-2017 before they could be shipped out of China, according to Democratic Senator Dianne Feinstein, a co-chair of the US Senate's Caucus on International Narcotics Control.
U.S. officials have found Chinese inaction frustrating.
"As sophisticated as China is in their intelligence services, I find it odd that they can't stem the flow of fentanyl from their country," Joshua Skule, the executive assistant director of the FBI's Intelligence Branch, told Reuters before Beijing announced it would control all fentanyl-related substances.
China has provided the United States with information that aided in federal indictments of eight Chinese nationals for fentanyl trafficking since 2017. All of the suspects remain at large in China, however, according to a US Congressional Research Service report in December 2018.
"There are many, many laws on Chinese books that don't get enforced. It will turn out that enforcement is quite spotty," Scissors said.
China's government is committed to making a difference on this case, however, says Daniel Baldwin, who served as the U.S. Drug Enforcement Administration's top representative in Beijing for three years.
"We see them as a partner we want to work with to effect that change of availability here in the US," he said.
A bipartisan group of senators has introduced a bill to empower Trump to sanction Chinese drug makers and others who knowingly sell synthetic opioids to traffickers. It also would create a commission to monitor flows of the substances from overseas.
"We have to make sure they keep their word," said Republican Senator Tom Cotton, a co-sponsor of the legislation.
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 - American negotiators locked in trade talks with China are likely to win more access to the country's cloud computing market than initially expected, but Chinese commitments to curb industrial subsidies will probably fall short of US demands, a US Chamber of Commerce official said on Thursday.
In March, media reported that as part of trade negotiations, China would allow US cloud computing companies access to China's fast-growing market through special Chinese free trade zones, giving the companies a limited toehold in the world's second largest economy.
"We expect greater market access opening than was initially provided by the Chinese in these negotiations, which was through a pilot zone," Myron Brilliant, executive vice president and head of international affairs at the US Chamber of Commerce, told reporters on a conference call.
He said the lobbying group wanted to ensure that US cloud companies are able to get licenses and have management control and guaranteed free flow of data across borders.
"It is not clear we will get as much as we would like in that area, but we're going to continue to make this an issue that has to be addressed ultimately, if not in the negotiations, then shortly after," Brilliant said.
WASHINGTON TALKS
Brilliant's comments came after US Trade Representative Robert Lighthizer and US Treasury Secretary Steve Mnuchin concluded two days of talks in Beijing aimed at ending a 10-month tariff war that has cost both sides billions of dollars in exports, disrupted supply chains and roiled financial markets.
Chinese Vice Premier Liu He is due in Washington next week for another round of talks, which Brilliant said were in the "endgame."
Mnuchin called the Beijing talks "productive," but the Trump administration has said little else about them.
The United States has been pressing China for sweeping changes to policies that Washington says encourage theft of American intellectual property and force transfers of US technology to Chinese companies.
Brilliant said that curbing China's massive subsidies for steel and a host of other industries is a priority for US businesses, but the deal is unlikely to provide a major shift in Beijing's practices in that area.
"We're likely to get some language that... touches on transparency, but we're not likely to get the commitment that we want eventually from the Chinese in terms of their really cutting back and eliminating subsidy practices," he said
Reuters reported last month that American negotiators have tempered demands that China curb industrial subsidies as a condition for a trade deal after strong resistance from Beijing, marking a retreat on a core US objective for the trade talks.
TARIFF REMOVAL
Much speculation has also centered on how much, if any, of the US and Chinese tariffs will be removed as part of a deal. A person familiar with the negotiations said that it was likely that some tariffs would remain in place, serving as part of the enforcement mechanism to ensure that China keeps its commitments. They would be removed as China meets certain implementation benchmarks, the person said.
Brilliant said the decision on the tariffs will be ultimately up to US President Donald Trump and Chinese President Xi Jinping. He added that an enforcement mechanism for the agreement might include a "tie-in to tariffs."
Trump has said he would host Xi at the White House, a meeting that could be used to cement an agreement.
source: news.abs-cbn.com
NEW YORK -- Global stocks were mixed Tuesday as markets awaited details on US-China trade negotiations and Brexit talks resumed between the EU and Britain.
Wall Street finished a choppy session marginally lower after European bourses had pushed higher, shrugging off Brexit worries.
"The market is trying to react to a mixed bag of things," said Art Hogan, chief market strategist at National. "How much is priced in terms of good news in China trade and just how much is the economy slowing domestically."
After a strong start to 2019, US stocks have been steady but unspectacular the last 2 weeks while Beijing and Washington have appeared to be inching towards a deal to resolve their trade friction.
After the initial optimism, analysts on Tuesday took a more cautious view of the progress in the tariff battle, with some arguing that the gains already have been figured into valuations or questioning whether an agreement will truly resolve the impasse.
Meanwhile, the Institute for Supply Management reported the US services sector had jumped in February but the report followed other data that suggest the US economy is slowing.
BREXIT TALKS RESUME
London's FTSE 100 gained 0.7 percent, helped by a drop in the pound that lifted share prices of multinationals listed on the benchmark index.
"Stocks continue to shrug off no-deal Brexit worries, as UK and EU negotiations are scheduled in Brussels ahead of the March 29 divorce deadline," analysts at Charles Schwab wrote.
British economic data were mixed, with services sector activity improving in February from the January level, which was a 29-month low.
The data suggest "at least some of the concern about Brexit's impact on the economy has been overdone," noted research group Capital Economics in a client note.
The EU's lead Brexit negotiator Michel Barnier met Britain's negotiating team as both sides sought solutions a few weeks before this month's looming Brexit deadline.
Barnier met UK attorney general Geoffrey Cox and Brexit minister Stephen Barclay for 4 hours over dinner, an EU official told AFP following conciliatory signals from both sides.
The official could not confirm whether the talks would resume on Wednesday when he said journalists would be briefed on the results of Tuesday's meeting.
The Bank of England warned that Europe's financial system faced "potential risks" from a no-deal Brexit, as it extended weekly lending facilities to include euros.
Earlier, Shanghai stocks jumped 0.9 percent after the government announced hundreds of billions of dollars' worth of tax cuts to stimulate the economy.
Beijing will also increase spending, with the fiscal deficit set to increase to 2.8 percent of GDP, from 2.6 percent last year.
The government is aiming for economic growth of 6.0-6.5 percent in 2019 below last year's 6.6 percent, the lowest level in three decades.
The move comes as Chinese leaders are struggling to address a mounting debt crisis as well as the US trade war.
KEY FIGURES AROUND 5:40 AM MANILA TIME
New York - Dow: DOWN 0.1 percent at 25,806.63 (close)
New York - S&P 500: DOWN 0.1 percent at 2,789.65 (close)
New York - Nasdaq: DOWN less than 0.1 percent at 7,576.36 (close)
London - FTSE 100: UP 0.7 percent at 7,183.43 (close)
Frankfurt - DAX 30: UP 0.2 percent at 11,620.74 (close)
Paris - CAC 40: UP 0.2 percent at 5,297.52 (close)
EURO STOXX 50: UP 0.3 percent at 3,327.19 (close)
Tokyo - Nikkei 225: DOWN 0.4 percent at 21,726.28 (close)
Hong Kong - Hang Seng: FLAT at 28,961.60 (close)
Shanghai - Composite: UP 0.9 percent at 3,054.25 (close)
Pound/dollar: DOWN at $1.3176 from $1.3180 at 2200 GMT on Monday
Euro/pound: DOWN at 85.81 pence from 86.05 pence
Euro/dollar: DOWN at $1.1308 from $1.1340
Dollar/yen: UP at 111.88 yen from 111.72 yen
Oil - Brent Crude: UP 19 cents at $65.86 per barrel
Oil - West Texas Intermediate: DOWN 3 cents at $56.56 per barrel
source: news.abs-cbn.com
NEW YORK -- The United States and China are close to reaching a major trade deal that would see both sides lower some of the tariffs imposed during an often-bitter trade war, a report said Sunday.
Negotiators for the 2 sides have made substantial progress and a final accord is close to being hammered out, according to the Wall Street Journal, which quoted anonymous sources on both sides.
A deal would be welcomed by financial markets, which have suffered through the often-rancorous trade conflict between the world's two largest economic powers.
The Journal said talks last month in Washington had helped narrow differences, meaning a formal agreement might be ready when President Donald Trump and his Chinese counterpart Xi Jinping meet in late March while Xi is on a European trip.
It stressed, however, that some hurdles remain, and that the pact will likely spark complaints on both sides that too much has been given away.
The report said China had tentatively agreed to lower tariffs or ease restrictions on farm, chemical and auto products, among others.
Chinese negotiators have also offered to speed up the timetable for removing foreign-ownership limits on car ventures and to reduce tariffs on imported vehicles to below the current 15 percent rate, according to the Journal.
In a move meant to respond to Trump's repeated demands for a narrowing of America's trade gap with China, Beijing would also increase its purchases of US goods, including a possible multi-billion-dollar buys of natural gas from the Cheniere Energy group.
In exchange for Chinese concessions, Washington would do away with most of the trade sanctions it imposed last year, the report said.
The paper quoted analysts as saying that the failure of Trump's recent summit talks with North Korean leader Kim Jong Un in Hanoi could affect the trade talks in one of two opposite ways.
It could persuade Beijing that Trump is desperate for a win, or China might take it as a sign that Trump, as his advisErs say, is willing to walk away from a bad deal.
The year-long tit-for-tat trade war has imposed punishing tariffs totaling many billions of dollars on a large portion of the trade between the two economic powers.
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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.
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WASHINGTON -- US and Chinese negotiators met for over seven hours on Saturday to resolve their trade dispute and avoid an escalation of the tit-for-tat tariffs that have already disrupted global commerce, slowed the world economy and roiled financial markets.
The 2 sides will meet again on Sunday morning as they race to seal an agreement before a March 1 deadline imposed by US President Donald Trump, who has threatened to dramatically hike tariffs on Chinese goods unless there is a deal.
Saturday marked the fifth straight day of the negotiations between the world's two biggest economies. Talks were extended through the weekend after both sides reported progress in narrowing their differences.
The Chinese delegation is scheduled to leave for Beijing on Monday, according to a person familiar with their itinerary.
This is the fourth round of negotiations since Washington and Beijing agreed to a ceasefire in their trade war.
Trump, who has embraced an "America First" policy aimed at rebalancing global trade in favor of the United States, said on Friday there was "a very good chance" a deal would be struck, and that he was inclined to extend his March 1 tariff deadline and meet soon with Chinese President Xi Jinping.
Extending the deadline would mean putting on hold a scheduled increase in tariffs to 25 percent from 10 percent on $200 billion of Chinese imports into the United States.
Trump and US Treasury Secretary Steven Mnuchin said US and Chinese officials had reached an agreement on currency issues, but did not give details. US officials have long argued that China's yuan is undervalued, giving it a trade advantage and partly offsetting US tariffs.
China has also committed to buy an additional 10 million metric tons of US soybeans.
ENFORCEMENT MECHANISM
Reuters reported exclusively on Wednesday that both sides were drafting memorandums of understanding (MOUs) on cyber theft, intellectual property rights, services, agriculture and non-tariff barriers to trade, including subsidies.
On Friday, Trump said he did not like MOUs because they are short-term in nature, and he wanted a long-term deal.
An industry source briefed on the talks said both sides have narrowed their differences on intellectual property rights, market access and narrowing a nearly $400 billion US 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.
There is no agreement on the enforcement mechanism, either. The United States wants a strong mechanism to ensure the Chinese reform commitments are followed through, while Beijing insists upon what it calls a "fair and objective" process.
"Enforcement is a difficult puzzle," said the source, who requested anonymity to speak candidly about the talks. "You need objective arbitrators to make a decision."
It was not clear whether Saturday's talks managed to iron out those differences. Neither side shared the details of the day's discussions.
Trump said the biggest decisions could be reached when he meets with Xi, probably in Florida next month, and that they may extend beyond trade to encompass Chinese telecommunications companies Huawei Technologies and ZTE Corp.
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WASHINGTON -- US President Donald Trump said on Friday a trade summit with Chinese leader Xi Jinping was likely next month, and hailed 2 days of "very good talks" by negotiators.
The negotiations were extended through Sunday as officials race to reach a deal ahead of a deadline next week when US duty rates are due to rise sharply.
But Trump again said he was considering pushing back the deadline for raising tariffs on more than $200 billion in Chinese exports.
"We expect to have a meeting sometime in a not too distant future," he said of the meeting with Xi. "Probably fairly soon in the month of March."
Details remained scant about any concrete progress in the seven-month-old trade war, which has rattled global markets and prompted stark warnings about the risks to the world economy.
"I think there is a very, very good chance that a deal can be made," Trump told reporters at the White House on a second day of trade negotiations with Chinese officials.
"If we are doing well, I could see extending that" deadline for the end of the 3 month tariff truce.
And Trump said an agreement on currency manipulation will be included in the trade pact. Officials from Beijing also expressed optimism about a positive outcome.
"From China, we believe that it is very likely that it will happen," Chinese trade envoy Liu He said, speaking through an interpreter.
WINNING STREAK
Global stock markets were higher on expectations the two sides would avoid further deterioration in their trade relations.
Wall Street rose to a banner finish, posting its longest streak of weekly gains in nearly 24 years.
Analysts say the 2 sides are likely to trumpet mutual agreements to resolve the easier parts of the trade dispute -- increasing purchases of American goods, more open investment in China and tougher protections for intellectual property and proprietary technology.
The harder parts covering issues like scaling back China's ambitious industrial strategy for global preeminence, are another question.
Christine Lagarde, head of the International Monetary Fund, again warned that the US-China trade tensions a "major risk" to world economic growth.
Since July, the countries have hit out with tariffs on more than $360 billion in 2-way trade.
While the tariffs alone are having "minimal" effect on global trade, they are damaging business confidence and weighing on stock markets, Lagarde told the US radio program Marketplace on Thursday.
"I cross my fingers every morning and my toes every evening because I hope that it is going to end up with a way to fix the system, not break it," she said.
The IMF has cut its forecast for global growth this year due to the combined impact of the trade war.
GOOD FAITH
Beijing has reportedly proposed an increase in its imports of US energy and agricultural exports significantly.
US Agriculture Secretary Sonny Perdue tweeted that China has committed to buying "an additional" 10 million metric tons of soybeans as a "show of good faith," but he did not give any details or specify the timeframe.
Still, a broader deal could be difficult given the US demands for far-reaching structural changes.
Gary Clyde Hufbauer, a trade expert at the Peterson Institute for International Economics, said China may have to remove its tariffs in order to increase purchases of US goods, but Trump may feel no pressure to roll back the duties he imposed last year.
"The big surprise would be a complete removal of tariffs by Trump but I'm expecting an asymmetrical removal of tariffs by China in order to get to some of these numbers," he said.
China's retaliation has hit US farm exports hard. The US Agriculture Department estimated this month that US soy exports would not turn to their pre-trade war levels for another six years.
William Reinsch, a former senior Treasury official for trade in the administration of President Bill Clinton, told AFP a risk for Trump is whether any agreement holds and the Chinese honor their commitments.
"If it unravels and we have a string of unmet commitments and then US retaliation right before the election, we're kind of right back where we started," he said.
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SHANGHAI -- China's commerce ministry said on Thursday trade talks with the United States this week were extensive and detailed, and established a foundation for the resolution of each others' concerns.
The two sides "held extensive, deep and thorough exchanges on trade and structural issues of common concern, which promoted mutual understanding and established a foundation for the resolution of each others' concerns," it said.
Both parties agreed to continue to maintain close contact, the ministry said in a brief statement on its website.
The three-day talks in Beijing that wrapped up on Wednesday were the first face-to-face negotiations since US President Donald Trump and his Chinese counterpart Xi Jinping met in Buenos Aires in December and agreed a 90-day truce in a trade war that has disrupted the flow of hundreds of billions of dollars of goods.
Washington has presented Beijing with a long list of demands that would rewrite the terms of trade between the world's two largest economies. They include changes to China's policies on intellectual property protection, technology transfers, industrial subsidies and other non-tariff barriers to trade.
Nearly halfway into the 90-day truce, there have been few concrete details on progress made so far. The meetings in Beijing were not at a ministerial level, so were not expected to produce a deal to end the trade war.
On Wednesday, the US Trade Representative's offices said in a statement officials from the two sides discussed "ways to achieve fairness, reciprocity and balance in trade relations".
"The talks also focused on China's pledge to purchase a substantial amount of agricultural, energy, manufactured, and other products and services from the United States," the USTR said.
At stake are scheduled US tariff increase on $200 billion in Chinese imports. Trump has said he would increase those duties to 25 percent from 10 percent currently if no deal is reached by March 2, and has threatened to tax all imports from China if Beijing fails to cede to US demands.
US officials have long complained that China has failed to live up to trade promises, often citing Beijing's pledges to resume imports of American beef that took more than a decade to implement.
No schedule for further face-to-face negotiations was released after the talks, and USTR said the American delegation was returning to Washington to report on the meetings and "to receive guidance on the next steps".
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SYDNEY -- Asian shares were set for a rousing start on Monday as a dovish turn by the Federal Reserve and startlingly strong US jobs data soothed some of the market's worst fears about the global outlook.
Investors are keen to see how Chinese markets react to the central bank's policy easing announced late on Friday, which frees up around $116 billion for new lending.
Chinese officials also meet their US counterparts for trade negotiations starting later Monday, the first face-to-face talks of the year.
US President Donald Trump said on Sunday that the talks were going very well and that weakness in the Chinese economy gave Beijing a reason to work toward a deal.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.4 percent in early trade, led by a 1.1 percent jump in Australia.
Nikkei futures pointed to opening gains of around 500 points for the cash index. E-Mini futures for the S&P 500 edged up another 0.14 percent.
Risk appetite got a huge boost on Friday when the U.S. payrolls report showed 312,000 net new jobs were created in December, while wages rose at a brisk annual pace of 3.2 percent.
Despite the strength, Federal Reserve Chairman Jerome Powell sought to ease market concerns about the risk of a slowdown, saying the central bank would be patient and flexible in policy decisions this year.
Markets had already gone much further to price in a major chance of a cut in rates this year, and some of that exuberance was tempered by Powell's emphasis on the word "patient" in his speech on Friday.
Yet, Fed fund futures still implied a rate of 2.33 percent by December, compared to the current effective rate of 2.40 percent.
Yields on two-year Treasuries rose to 2.49 percent, from a trough of 2.37 percent, but were still below those on one-year paper.
Powell has another speech on Thursday to expand on his thinking, while there are at least eight other Fed officials scheduled to speak this week.
EXTREME BEAR
The combination of a strong jobs report and a dovish Fed helped the Dow end Friday with gains of 3.29 percent, while the S&P 500 jumped 3.43 percent and the Nasdaq 4.26 percent.
Analysts at Bank of America Merrill Lynch noted global equity markets had lost $19.9 trillion since January last year, and a record $84 billion had flowed out of stocks in just the past six weeks.
With 2,055 of 2,767 US and global companies in a bear market, it might be time to buy.
"Our Bull & Bear Indicator has fallen to an 'extreme bear' reading, triggering the first 'buy' signal for risk assets since June 2016," they wrote in a note.
BofAML saw upside in Chinese and German stocks; US small cap stocks; semi-government debt; energy stocks; US dollar and euro high-yielding bonds and emerging market currencies.
The latter had already received a boost from news Sino-US trade talks were back on, as well as a natural bounce from the wild "flash crash" that rocked markets last week.
The effect was apparent in the Australian dollar, which is often used as a liquid proxy for emerging markets and China risk. The Aussie was up at $0.7117 on Monday, having briefly dived as deep as $0.6715 last Thursday.
The safe-haven yen gave up much of its recent gains to stand at 108.40 per dollar, having gotten as a far as 105.25 last week. The euro was firmer $1.1409, while the dollar index eased a touch to 96.114.
Gold benefited from the diminished risk of U.S. rate hikes and held at $1,284.83, just off a six-month top.
Oil prices started firmer after Brent bounced about 9.3 percent last week, while WTI rose 5.8 percent.
The crude benchmark rose 25 cents to $57.31 a barrel, while U.S. crude futures gained 24 cents to $48.20.
source: news.abs-cbn.com
