Treasury Secretary Steve Mnuchin - Garner Ted Armstrong Evangelistic Association

U.S. touts EU trade truce, attention now turns to China

Steve Holland, David Lawder — Thu, 26 Jul 2018 08:09:23 +0000

WASHINGTON (Reuters) – The United States signaled on Thursday it is set to push ahead on trade talks with Canada and Mexico after agreeing to suspend hostilities over tariffs with Europe in a fragile deal that may clear the way for renewed pressure on China.

A surprise deal struck on Wednesday will see Washington suspend the imposition of any new tariffs on the European Union, including a proposed 25 percent levy on auto imports, and hold talks over tariffs on imports of European steel and aluminum.

The deal boosted share markets initially, and U.S. industrial shares were stronger on Thursday as fears of a trade war with Europe ebbed.

Both sides claimed victory in the deal, reached by Trump and European Commission President Jean-Claude Juncker in Washington. In return for the talks and a suspension of auto tariffs, the EU will import more soybeans and energy from the United States.

A White House official told Reuters that Juncker had shown greater flexibility than expected in the talks and that while there was no deadline for an overall deal, Trump retained the power to impose tariffs if progress was not made.

One key aspect of the agreement, according to the official who spoke on condition of anonymity, was that the two sides had agreed to work together to tackle China’s market abuses.

“They want to work together with us on China and they want to help us reform the WTO (World Trade Organization),” said the official, adding that the Europeans came into the talks “with a real positive spirit”.

Trump has announced a series of punitive tariffs on Chinese imports in a bid to halt a Chinese surge in high-technology industries that threatens to displace U.S. dominance. Both the U.S. and the EU charge that Chinese companies steal company secrets.

On the North American Free Trade Agreement talks with Canada and Mexico, Treasury Secretary Steve Mnuchin said he was “hopeful that we’ll have an agreement in principal in the near future.”

“Whether it’s one deal or two deals, so long as we get the right agreement, we’re indifferent,” Mnuchin told CNBC.

Trump and officials from his administration said the EU had given ground by agreeing to import more American goods and to hold talks on tariff reductions including on cars, an industry in which Trump has accused Europe of imposing heavy duties.

EU officials said little had been given away by Juncker and that Europe had emerged as the winner by getting Trump to defer the threatened car tariffs which would have hit European carmakers hard.

The deal was hailed by commentators in the United States and Europe for drawing back from an escalation in a trade war that had threatened to take the world back to the kind of protectionism not seen since the 1930s, although some cautioned the relief may be only temporary.

French President Emmanuel Macron appeared to challenge the deal, saying on Thursday he would not discuss agriculture in talks with the United States.

If it holds, the US-EU pact could allow both to focus on China, whose economic rise threatens both. Lawmakers in Washington on Thursday passed legislation to slow Chinese investment in U.S. companies. In Europe, alarm bells have been sounded over China’s growing economic influence there.

“U.S. and EU will be allied in the fight against China, which has broken the world trading system, in effect,” Trump’s economic adviser Larry Kudlow said. “President Juncker made it very clear yesterday that he intended to help us, President Trump, on the China problem.”

CASUALTIES IN TRADE FIGHT

Since taking office last year, Trump has implemented policies to restrict what he sees as unfair competition from other countries. He tore up an agreement to join a Pacific trade pact, has threatened to pull out of NAFTA, and imposed steel and aluminum tariffs aimed at China.

In an effort to rein in China’s high technology industries that he charges have stolen intellectual property from American companies, Trump has ramped up threats of tariffs on $50 billion worth of imports from China to $450 billion after China retaliated with its own duties on imports from the United States.

The impact has fallen mainly on U.S. farmers and Republican party lawmakers. A move by Trump to offset farmers’ losses with a $12 billion aid package drew criticism with farmers saying they wanted access to markets rather than subsidies.

U.S. Trade Representative Robert Lighthizer, a veteran of trade negotiations from former President Ronald Reagan’s administration in the 1980s who is Trump’s top trade official, told lawmakers in Washington that the United States could not afford to capitulate to China economically.

“I don’t think it’s a stupid fight,” Lighthizer said of the trade battle with China in heated exchanges in the Senate. “I don’t know a single person that has read this report that thinks it’s a stupid fight to say China should not be able to come in and steal the future of American industry.”

A more conciliatory tone emerged from Mnuchin, who told CNBC the United States was willing to reopen trade talks with China if Beijing was willing to make “serious changes,” as he said the EU had indicated it was willing to do.

In May, the United States and China initially appeared willing to strike a deal that would see China reduce its $350 billion surplus in the trading of goods by buying more U.S. agriculture and energy products.

QCOM.O
NXPI.O

That deal fell apart quickly and has been replaced with a rising tally of tariff retaliation that has led to Trump threatening tariffs on almost everything the United States imports from China.

China has threatened to retaliate dollar for dollar, and its refusal to sign off on regulatory approval caused a $44 billion deal from Qualcomm Inc (QCOM.O) to buy NXP Semiconductors (NXPI.O) to fall apart, a move that showed U.S. companies were being targeted unfairly, Mnuchin said.

Reporting by Susan Heavey and Lindsay Dunsmuir in Washington, Alastair MacDonald in Brussels and Leigh Thomas in Paris; Writing by David Chance; Editing by Will Dunham

Our Standards:The Thomson Reuters Trust Principles.

Source: https://www.reuters.com/article/us-usa-trade-mnuchin/us-touts-eu-trade-truce-attention-now-turns-to-china-idUSKBN1KG1RS

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Why the US-China ‘Trade War’ remains a war of words

Zachary Karabell — Wed, 30 May 2018 14:40:57 +0000

Finished steel coils sit in a storage warehouse. President Donald Trump ordered tariffs on $50 billion worth of imports from China.

CHRIS RATCLIFFE/BLOOMBERG/GETTY IMAGES

Recent days have presented a dizzying series of reversalsfollowed by reversals of reversals over whether, when, or if the United States will impose punitive tariffs on China in response to unresolved issues, ranging from intellectual property theft to lack of access to domestic Chinese markets. On Tuesday, the White House made a splashy announcement that it will move ahead with tariffs, which were widely reported as a done deal. Except that they’re not. The White House said only that it will release a list of affected goods on June 15, with implementation to follow at some point. It’s impossible to know how all of this will play out, but if the past weeks are any guide, it would seem that—like many things in Trumplandia—harsh words may not translate into harsh actions.

If past is any prologue, it would be wise to ignore the noise of the moment and carry on as if these word wars will remain words and not wars. For businesses, the phony trade war offers the temptation of rubbernecking—slowing down to see what’s there. Better to move along with the attitude that there may be nothing to see here. Only react when there’s actually something to react to.

For much of the Trump presidency, there have been voices urging a hard line on China, and voices arguing for engaging China’s leaders. In March, it appeared that the hard-liners were in ascent; the administration announced broad tariffs on steel and aluminum imports globally, which minimally impacted China but sent a strong signal that the White House planned a more confrontational approach. Then the White House announced sweeping tariffs on $50 billion in Chinese goods, followed by a threat of targeting another $150 billion of imports. None of these has yet taken effect.

Ten days ago, after high-level meetings in Beijing and Washington, Treasury Secretary Steve Mnuchin said the pending tariffs had been put on hold, for the moment. But then came Tuesday morning’s White House statement. Next up: Commerce Secretary Wilbur Ross is set to travel to Beijing this weekend, with the aim of some sort of grand bargain on trade. Back and forth, back and forth, with little to show.

For now, the confrontation remains almost entirely verbal, with dueling press releases and proposed tariffs to take effect at some point, which are often delayed when that point is reached. The question is where do we go from here. What’s striking is that each time a moment of action approaches, both the Chinese and the Americans start talking more pointedly about their economic relationship (and their political one, given the high-stakes negotiations surrounding North Korea, and the on-again, off-again Trump-Kim summit. Given the short-termism of our culture, it’s easy to forget that Chinese and American political and business leaders have been arguing and rejiggering their economic relationship at almost every point over the past 20 years.

One of the more intractable issues involves a large but not-well-known Chinese telecom company, called ZTE. Though it is by some measures the fourth-largest phone manufacturerfor the American market, ZTE has had more press in the past weeks than in the past decade. After ZTE admitted violating US sanctions on Iran and North Korea, the US government banned American companies from doing business with it. Given that ZTE depends on US technology companies such as Qualcomm for components, the ban would have the effect of driving ZTE, a multibillion-dollar company that employs tens of thousands of Chinese workers, out of business.

That rather disturbed China’s president Xi Jinping, who broached the matter with Trump. As a goodwill gesture, and an apparent move to ensure Chinese cooperation around North Korea, Trump promised not to drive ZTE out of business and instead to work on a compromise involving substantial penalties. That generated bipartisan criticism in Washington, including from Republicans such as Senator Marco Rubio; the Senate Banking Committee voted 23 to 2 in favor of a motion to limit Trump’s ability to soften sanctions against ZTE.

If this seems confusing, it is. Amid these daily reversals, it’s easy to lose sight of the larger arc, which is that US and Chinese supply chains and trade remain deeply intertwined. The simplicity of proposing massive tariffs always masked the complexity of the relationship and the degree to which it is impossible to penalize China without simultaneously penalizing American businesses, workers, and consumers.

That’s evident in statistics showing just how much of Chinese exports to the States are made by US companies operating in China. Apple and the massive assembly plants operated by Foxconn are often presented as an example of the intermingling of supply chains, but a slew of American-owned firms are manufacturing goods in China. In fact, 43 percent of Chinese exports are sourced from foreign (i.e., non-Chinese) owned firms. The numbers are even higher for many tech-related items such as computers, electronic devices, and telecom equipment.

In the tech sector then, tariffs on US imports from China therefore amount to taxes on US companies and US productsthat will be borne by US buyers, along with US workers. What looks like punishing China ultimately punishes the United States at least as much, and arguably more. The price of nearly every smartphone, flat-screen television, washing machine, drone, game console, tablet, and computer would rise, triggering domestic inflation, denting consumer spending, and impacting those least able to absorb the costs. That may be why recent emphasis in the talks had been on China buying more American agricultural goods and easing access to Chinese markets for US companies. That would actually benefit American citizens—and voters—who would be harmed by tariffs meant in theory to punish China.

Threats and bluster are relatively easy, though not necessarily without their own costs. The easy invocation of tariffs may be seen by Trump as a useful negotiating ploy, but only if Beijing does not call the bluff. For now, the Chinese leadership seems intent on bending a bit to avoid an all-on trade war that would disrupt the Chinese economy. Beijing appears to be taking the approach that it’s best to compromise where it can, rather than fracture an economic relationship that matters greatly to its domestic agenda.

Given the volatile past few months, it’s easy to envision new confrontations that lead to actual tariffs. For now, however, the Trump administration is acting much as it has acted for the past 18 months—with strong rhetoric and threats far surpassing action. The administration is learning that with China, there are only two-edged swords and the prospect of Pyrrhic victories. A war of words may presage problems ahead, or they may be like most words to date: loud and ultimately hollow. Until either side actually imposes tariffs substantially broader than anything now being contemplated, very little has changed. Yes, we need to monitor these debates to see where they lead, and yes the rubbernecking is understandable. But best to drive on, nothing to see here.

Source: https://www.wired.com/story/why-the-us-china-trade-war-remains-a-war-of-words/

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Trump adviser John Bolton calls U.S. Embassy move to Jerusalem ‘a recognition of reality’

Aamer Madhani, USA TODAY — Sun, 13 May 2018 01:06:40 +0000

(Photo: GALI TIBBON, AFP/Getty Images)

As the U.S. Embassy in Israel is set to be moved to Jerusalem in a Monday ceremony, President Trump’s national security adviser, John Bolton, called the controversial decision a “recognition of reality.”

Bolton said Sunday that relocating the embassy from Tel Aviv will “make it easier” to eventually reach a peace agreement between Israel and the Palestinians, even though the region is bracing for large protests.

“If you’re not prepared to recognize that Jerusalem is the capital of Israel and that’s where the American Embassy should be, then you’re operating on a completely different wavelength,” Bolton told ABC’s This Week. “Recognizing reality always enhances the chances for peace.”

Trump announced in December his decision to keep a campaign promise to recognize Jerusalem as Israel’s capital and began the process to move the U.S. Embassy there. West Jerusalem is where Israel’s government is based. Palestinians view east Jerusalem as the capital of a future Palestinian state.

For that reason, every U.S. president since Israel’s founding in 1948 has located the U.S. Embassy in Tel Aviv.

The decision to move the embassy has been greeted with anger from Palestinians. Gaza’s ruling Hamas movement urged tens of thousands of people to join Monday’s protest to coincide with the embassy opening. The Israeli military said it beefed up forces along the Gaza border and dropped leaflets into the Gaza Strip urging residents to keep their distance from the border fence, the Associated Press reported.

Gaza health facilities said they were preparing for possible mass injuries. Shifa hospital spokesman Ayman Sahbani said Sunday that tents with medical equipment were being set up outside the facility to ease pressure on its 20-bed emergency ward, the AP said. Since late March, 42 Palestinians have been killed in weekly clashes with Israel along the Gaza border.

Israeli Prime Minister Benjamin Netanyahu greeted the U.S. delegation after it arrived Sunday, including the president’s daughter, Ivanka Trump, and son-in-law and senior adviser, Jared Kushner. Nethanyahu praised President Trump’s “bold decision” to move the embassy to contested Jerusalem.

The U.S. delegation also includes Treasury Secretary Steve Mnuchin, Deputy Secretary of State John Sullivan, U.S. Ambassador David Friedman, Florida Gov. Rick Scott, plus Republican Sens. Lindsey Graham of South Carolina, Ted Cruz of Texas, Mike Lee of Utah and Dean Heller of Nevada.

More: U.S. Embassy to open in Jerusalem amid Palestinian outcry

More: U.S. plans to move Israel’s embassy to Jerusalem on May 14

More: Trump will begin process to move U.S. Embassy in Israel to Jerusalem, officials say

“We will pray for the boundless potential of the U.S.-Israel alliance & we will pray for peace,” Ivanka Trump wrote on Twitter ahead of the visit.

Monday’s ceremony — which takes place on the 70th anniversary of Israel declaring its independence — for now means moving the ambassador and a small staff to the U.S. consular compound in the southern Jerusalem neighborhood of Arnona and rededicating the building as the American Embassy.

Most of the 850 embassy workers in Tel Aviv won’t move to Jerusalem until a new embassy building is constructed, which could take up to nine years. U.S. consular services, such as issuing visas, will also continue at the Arnona site.

The State Department said in a statement that the administration remains committed to brokering a lasting peace deal.

“We are not taking a position on final status issues, including the specific boundaries of Israeli sovereignty in Jerusalem, nor on the resolution of contested borders,” the statement said.

Source: https://www.usatoday.com/story/news/world/2018/05/13/u-s-embassy-jerusalem-john-bolton-trump/605898002/

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