Trump team demands China slash U.S. trade surplus by $200 billion, cut tariffs

[rooster59]

Trump team demands China slash U.S. trade surplus by $200 billion, cut tariffs

By David Lawder and Sue-Lin Wong

 

U.S. Treasury Secretary and member of a U.S. trade delegation Steven Mnuchin leaves a hotel in Beijing, China, May 4, 2018. REUTERS/Thomas Peter

 

WASHINGTON/BEIJING (Reuters) - The Trump administration has drawn a hard line in trade talks with China, demanding a $200 billion cut in the Chinese trade surplus with the United States, sharply lower tariffs and advanced technology subsidies, people familiar with the talks said on Friday.

 

The lengthy list of demands was presented to Beijing before the start of talks Thursday and Friday between top-level Trump administration officials and their Chinese counterparts to try to avert a damaging trade war between the world's two largest economies.

 

A White House statement did not mention specific demands, but said the U.S. delegation "held frank discussions with Chinese officials on rebalancing the United States–China bilateral economic relationship, improving China’s protection of intellectual property, and identifying policies that unfairly enforce technology transfers."

 

The statement gave no indication that U.S. President Donald Trump would back off on his threat to impose tariffs on up to $150 billion in Chinese goods over allegations of intellectual property theft.

 

The delegation was returning to Washington to brief Trump and "seek his decision on next steps," the White House said, adding that the administration had "consensus" for "immediate attention" to change the U.S-China trade and investment relationship.

 

China's state-run Xinhua news agency described the talks as "constructive, candid and efficient" but with disagreements that remain "relatively big."

 

Tariff threats have roiled stock markets in recent weeks, but the inconclusive outcome of the Beijing talks did little to stop a rally in U.S. shares prompted by jobs data that eased fears of faster Federal Reserve rate hikes. Stocks in Shanghai ended 0.5 percent lower while they fell 1.3 percent in Hong Kong.

 

Trump told reporters in Washington that he was determined to bring fairness to U.S.-China trade.

 

"We will be doing something one way or the other with respect to what's happening in China," Trump said. He added that he had "great respect" for China's President Xi Jinping. "That's why we’re being so nice, because we have a great relationship."

 

China during the meetings asked that the United States ease crushing sanctions on Chinese telecom equipment maker ZTE Corp, people with knowledge of the matter said.

 

Washington's demand for a $200 billion cut from China's U.S. goods trade surplus doubles Trump's previous request for a $100 billion cut. China had a record U.S. goods trade surplus of $375 billion in 2017.

 

Trump has also demanded "reciprocity" between U.S. and Chinese tariffs, frequently complaining about China's 25 percent car tariff while the U.S. equivalent is 2.5 percent.

 

The U.S. team, led by U.S. Treasury Secretary Steven Mnuchin, demanded that China lower tariffs to levels no higher than those imposed by the United States, two people familiar with the demands said. The delegation also asked China to halt subsidies for advanced technology linked to its "Made in China 2025," the sources said.

 

At the heart of the dispute are U.S. allegations that Chinese joint venture requirements and other policies force American companies to turn over their intellectual property, costing them billions of dollars annually and giving China's state enterprises an edge in the race to develop new industries crucial to future growth.

 

China denies such coercion. Its 2025 industrial plan seeks to upgrade China's manufacturing sector to more advanced products, including information technology, semiconductors and aircraft.

 

"I think the U.S. is asking for the impossible. Reducing the deficit by $200 billion by 2020 is quite an unrealistic demand, but it may also be a negotiation tactic to start high first," said Tommy Xie, economist at OCBC Bank in Singapore.

 

BEIJING OFFERS

 

China offered to increase U.S. imports and lower tariffs on some goods, including cars, according to the sources. But Beijing asked the United States to treat Chinese investment equally under national security reviews, refrain from new restrictions on investments and halt a proposal to impose 25 percent tariffs under its "Section 301" intellectual property probe.

 

China also offered to reconsider anti-dumping duties on U.S. sorghum, according to a proposal it submitted.

 

Xinhua said there had been exchanges of opinion on intellectual property protections, expanding U.S. exports and bilateral services trade. It gave no indication of what actions might be taken but said the two sides committed to resolve their trade disputes through dialogue.

 

U.S. negotiators agreed to bring up the ZTE sanctions with Trump after new representations from the Chinese side, Xinhua said. ZTE was hit last month with a seven-year ban on American companies selling components and software to it after the U.S. Commerce Department found ZTE failed to comply with an agreement to settle breached U.S. sanctions on Iran.

 

"My impression was that (the talks) didn't go well given the rhetoric," said Kevin Lai, senior economist at Daiwa Capital markets in Hong Kong. "I think the divide is still very big."

 

In an editorial on its website, widely read Chinese state-run tabloid Global Times cited people close to the talks as saying the Chinese "hit back hard" at U.S. criticism, letting them know that China would not give in.

 

The United States has proposed tariffs on $50 billion of Chinese goods under its "Section 301" probe. Those could go into effect in June following the completion of a 60-day consultation period, but activation plans have been kept vague.

 

China has said its own retaliatory tariffs on U.S. goods, including soybeans and aircraft, will go into effect if the U.S. duties are imposed.

 

 

-- © Copyright Reuters 2018-05-05

 

 

[zydeco]

Get on with it. Got to start sometime or we'll all be servants to China.

[neeray]

It's "war on the world" Trump style. Anything to keep the heat off him with the plethora personal problems and shxt that is piling up on him. He might have the right idea but implementing his ideas like a "bull in a China shop" (hmm, a pun there), is just not the way the world turns.

Wouldn't he just love to have a 44 at his disposal! Shhh.

[metisdead]

A troll post has been removed. 

[stevenl]

I think it is very simple. The demand of goods produced in China by the USA is bigger than the other way round.

[Xonax]

Hopefully Thailand will be next after China. Thailand impose up to 80% import duty on many foreign products.

[car720]

Trump is  trying to use the ancient art of flattery on those that invented it. 

[RobFord]

3 hours ago, Xonax said:

Hopefully Thailand will be next after China. Thailand impose up to 80% import duty on many foreign products.

You priced vehicles lately?

 

The only way raising duties from 30% to 80% are going to do anything for you is if you can’t buy anyway. 

[MajarTheLion]

5 hours ago, neeray said:

Wouldn't he just love to have a 44 at his disposal! Shhh.

Pretty funny, given 44 implemented his own tariffs on Chinese goods. Let me guess..... "that's different", right?

 

But I will say this: regardless who is president, I am generally against tariffs. I'm against Trump's tariffs and I'm against the last guy's tariffs. I'm sure you're as consistent as I am on the issue (chortle).

[sirineou]

4 hours ago, stevenl said:

I think it is very simple. The demand of goods produced in China by the USA is bigger than the other way round.

 I was listening to Bloomberg financial  news this morning as I was driving to work , and a pundit suggested that tariffs were not the answer, and that helping China raise their living standard would also change the trade deficit.

And his asersion was not challenged!!!!

My reply would had being. Raise their living standard to that of Germany? would that improve our trade deficit as it did in Germany?

The truth of the matter is that there are complicated structural imbalances that need to be addressed. 

Intellectual property theft. labor laws, pollution standards, forced chinese/foreign partnerships for market access. etc etc etc.

And not all the blame is  on the Chinese side, if that was the case why do we have imbalances with countries that do not engage in the above? Why do we have a trade deficit with Germany, and other countries?

This is a complicated issue requiring complicated solutions , but unfortunately this reply is already getting too wordy.

 

[Grouse]

I was just reading that, thanks to Warren Buffet's latest investment, that Apple is now worth about 1 trillion USD. But their manufacturing is done by Chinese slave labour!

 

Its not all about money. The USA should sanction countries that allow appalling labour conditions.

 

Apple makes too much profit out of this. Assembling iPhones in America could be done without raisin the price, just reduce the profit margin.

 

Exporting slave labour is not good. The EU is much better in this respect.

 

I do hope China REALLY increases the price of rare earth elements! Touch screens should be vastly more expensive for example

 

Look up Indium In for example

Edited May 5, 2018 by Grouse

[Dumbastheycome]

15 minutes ago, Grouse said:

I was just reading that, thanks to Warren Buffet's latest investment, that Apple is now worth about 1 trillion USD. But their manufacturing is done by Chinese slave labour!

 

Its not all about money. The USA should sanction countries that allow appalling labour conditions.

 

Apple makes too much profit out of this. Assembling iPhones in America could be done without raisin the price, just reduce the profit margin.

 

Exporting slave labour is not good. The EU is much better in this respect.

 

I do hope China REALLY increases the price of rare earth elements! Touch screens should be vastly more expensive for example

 

Look up Indium In for example

Corporate interest  is  solely on the  profit margin. If there were an opportunity  to  have  things  made  exclusively  by  robots  it  would  be done. So  called  "Slaves" provide  the minimal human  input required to  make that profit.

I am sure  Apple would  return its manufacturing  to the US  if  people there were to  work in identical  conditions.

I  can just see  that happening  and  America  becoming  great again......Not !

 

[welovethailand]

HaHa..force China to buy stuff from the US? What does the US make anymore, besides, Debt & killing machines and propaganda?

Sadly I was born there. Used to be great , like when I was a kid.

[Dumbastheycome]

4 minutes ago, welovethailand said:

HaHa..force China to buy stuff from the US? What does the US make anymore, besides, Debt & killing machines and propaganda?

Sadly I was born there. Used to be great , like when I was a kid.

The US still has  it's  Trubble" machine running ! But the  output  from that is  getting  harder and  harder  to sell  too ! 

[farcanell]

7 hours ago, Grouse said:

I was just reading that, thanks to Warren Buffet's latest investment, that Apple is now worth about 1 trillion USD. But their manufacturing is done by Chinese slave labour!

 

Its not all about money. The USA should sanction countries that allow appalling labour conditions.

 

Apple makes too much profit out of this. Assembling iPhones in America could be done without raisin the price, just reduce the profit margin.

 

Exporting slave labour is not good. The EU is much better in this respect.

 

I do hope China REALLY increases the price of rare earth elements! Touch screens should be vastly more expensive for example

 

Look up Indium In for example

So.... in the case of Apple (et al with similar manufacturing models), does this mean that these America’s are contributing to their nation’s deficit, along with the average joe that prefers to buy Chinese goods etc, made by slave labor, over home made goods

 

this trade war development, seemingly driven by trumptopian deal making ideals, scares me more than any possible confrontation with N Korea ever did.

 

 

Edited May 5, 2018 by farcanell

[Ulic]

The USA's first step is to rescind China's most favored trading nation status. Things will improve with the trade imbalance from there. Also, don't fall for China's future promises. Lower duties when China lives up to its commitments to allowing American access to the Chinese market. Only when the US has access to the Chinese markets should duties and most favored trading status be restored. 

[lannarebirth]

6 minutes ago, Ulic said:

The USA's first step is to rescind China's most favored trading nation status. Things will improve with the trade imbalance from there. Also, don't fall for China's future promises. Lower duties when China lives up to its commitments to allowing American access to the Chinese market. Only when the US has access to the Chinese markets should duties and most favored trading status be restored. 

 

That sounds like a plan until you realize the poor Chinese consumer will probably take a social credit hit if he buys any American goods.

 

http://www.atimes.com/chinas-social-credit-system-fuels-an-authoritarian-regime/

Edited May 5, 2018 by lannarebirth

[Redline]

19 hours ago, stevenl said:

I think it is very simple. The demand of goods produced in China by the USA is bigger than the other way round.

Then, you need to read more 

[stevenl]

45 minutes ago, Redline said:

Then, you need to read more 

So you're saying in China demand for goods produced in USA is bigger than in USA demand for goods produced in China.

[Dumbastheycome]

12 hours ago, stevenl said:

So you're saying in China demand for goods produced in USA is bigger than in USA demand for goods produced in China.

In theory ..maybe. But  at the end  of the day demand  is  satisfied  by  the  price. 

So while  the US is  supplied  via  International Corporate structures at  the  cheapest price from locations such as  China because  they  have  made  it so Chinese demand for relatively expensive  goods from the  US is  limited  to  those very  wealthy who would like to  demonstrate   such  wealth. For  the majority  on both sides  of the  fence the "now" affordability/ functionality factor  reigns  supreme.

The   consumer  society which has been induced  to as much of the  world as can functionally subscribe  to it is  dependant  on affordability, not  lasting  quality. Heirloom items  are  contrary  to the  principle of   endless   output/sales.

The undergoing   removal of  up  to or  more than  500  thousand cheap labourers from  the  US will do  nothing   but damage the   balance  of the   equation. 

Perhaps an attempt to sell the  concept of  protecting  the  interests of   Joe/Jane  of the  USA while   in effect  if   not  intent  is likely to be  the  final straw  of  many small  industries. 

So  Corporate  entities  who   give  not  one   <deleted>  of  concern for  other  than  continuance  of  profit and  directly  influence if  not control  political relevance as  to  outcome connive  to  dupe  the  public.

"Demands" to  correct  trade imbalances are  spit  in the  wind. 

The  true  situation is  that  China   can  now  supply  itself with  almost  anything.

The  USA  is   now  deficit  in   such  supply to itself  at  any   cost  that  is  affordable.

Did China  make  it so?

 

 

 

[Redline]

On 5/6/2018 at 8:17 AM, stevenl said:

So you're saying in China demand for goods produced in USA is bigger than in USA demand for goods produced in China.

It’s much  more complex than that

Edited May 7, 2018 by Redline

[holy cow cm]

200 billion buys a lot of warships.

[neeray]

3 hours ago, holy cow cm said:

200 billion buys a lot of warships.

China doesn't need US warships. They build their own.

[stevenl]

6 hours ago, Redline said:

It’s much  more complex than that

No, it is really easy.

[welovethailand]

The way I see it, All the goods in the US come from China, basically. Regardless where they are  built, the wages will always be low from now on. Bring the factories back to the US, the wages will be low.....OH, Wait!!  China is bringing one of their cell phone companies to the US. The one that had to put nets around the factory because of all the "jumpers". Yeah, that one is set to be built in Wisconsin, US.   And poor Americans will be "jumpin'" to get those low paying jobs. (I am American and got out years ago)

[bristolboy]

1 hour ago, welovethailand said:

The way I see it, All the goods in the US come from China, basically. Regardless where they are  built, the wages will always be low from now on. Bring the factories back to the US, the wages will be low.....OH, Wait!!  China is bringing one of their cell phone companies to the US. The one that had to put nets around the factory because of all the "jumpers". Yeah, that one is set to be built in Wisconsin, US.   And poor Americans will be "jumpin'" to get those low paying jobs. (I am American and got out years ago)

The way I see it, you're just bloviating:

https://geopoliticalfutures.com/chinas-exports-to-the-us/

[sukhumvitneon]

To those who think China owns the US as far as national debt, you are wrong.

 

Also, China heavily demands immigrant visas/property/university places in the US.  Hypothetically speaking,  how does a massive surcharge on each plus a remittance tax sound?  Unless China wants tariff concessions, of course.

 

Hit them where it hurts.

Edited May 8, 2018 by sukhumvitneon

[williet98248]

On 5/5/2018 at 3:50 PM, MajarTheLion said:

Pretty funny, given 44 implemented his own tariffs on Chinese goods. Let me guess..... "that's different", right?

 

But I will say this: regardless who is president, I am generally against tariffs. I'm against Trump's tariffs and I'm against the last guy's tariffs. I'm sure you're as consistent as I am on the issue (chortle).

Not sure but  think he is referring to Section 44 of the Thai constitution that Dear Leader uses to do whatever he wants to.  Not President Obama.

[ExpatOilWorker]

2 hours ago, bristolboy said:

The way I see it, you're just bloviating:

https://geopoliticalfutures.com/chinas-exports-to-the-us/

Scary that China produce 60-80% of world production of some items.

 

Interesting quote from the link: " China is far more dependent on the U.S. than the U.S. is on China."

Edited May 8, 2018 by ExpatOilWorker

[Redline]

On 5/8/2018 at 8:18 AM, stevenl said:

No, it is really easy.

Sure, I think you do well in Thailand