Tobbaco

[rooster59]

China agrees to import more from U.S., no sign of $200 billion figure

By Ginger Gibson and David Lawder

 

FILE PHOTO: U.S. President Donald Trump and China's President Xi Jinping shake hands after making joint statements at the Great Hall of the People in Beijing, China, November 9, 2017. REUTERS/Damir Sagolj/File Photo

 

WASHINGTON (Reuters) - China has agreed to significantly increase its purchases of U.S. goods and services, the two countries said on Saturday, but made no mention of a $200 billion (148.42 billion pounds) target the White House had touted earlier.

 

Beijing and Washington agreed they would keep talking about measures under which China would import more energy and agricultural commodities from the United States to close the $335 billion annual U.S. goods and services trade deficit with China.

 

A joint statement issued at the conclusion of intensive trade talks in Washington did not indicate whether the two countries would delay or drop their tariff threats on billions of dollars worth of each country's goods, which has sparked fears of a wider trade war and roiled financial markets.

 

"There was a consensus on taking effective measures to substantially reduce the United States' trade deficit in goods with China," the joint statement said.

 

"To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States goods and services."

 

U.S. President Donald Trump has threatened to impose tariffs on up to $150 billion on Chinese goods to combat what his administration says is Beijing's misappropriation of U.S. intellectual property through joint venture requirements and other policies that force technology transfers.

 

Beijing denies such coercion and has threatened equal retaliation, including tariffs on some of its largest U.S. imports - among them aircraft, soybeans and autos.

 

A report by China's state-run Xinhua news agency described the statement from the two governments as "vowing not to launch a trade war against each other."

 

While the statement said the two sides would engage at high levels and "seek to resolve their economic and trade concerns in a proactive manner," it made no mention of tariffs.

 

It said there was consensus between Washington and Beijing on the need to create "favourable conditions to increase trade" in manufactured goods and services. This could be a reference to China's previous pledges to open up more economic sectors to services.

 

U.S. LNG EXPORTS

 

The United States will also send a team to China to work out the details of increased agricultural and energy exports, the countries said, without specifying timing.

 

A senior U.S. official said that during discussions with a member of President Xi Jinping's office, China was considering a package that relied on major purchases of U.S. liquefied natural gas, including a contract for a U.S. firm to build LNG receiving and processing facilities in China.

 

The package, which also would include new commitments on intellectual property protections, could be agreed by a potential mid-year visit to Washington by China's Vice President Wang Qishan, the official said.

 

Trump made cutting the U.S. trade deficit with China a promise in his presidential campaign.

 

During an initial round of talks earlier this month in Beijing, Washington demanded that China reduce its trade surplus by $200 billion - a figure most economists say is impossible to achieve because it would require a massive change in the composition of commerce between the two countries.

 

As of late Thursday, U.S. officials were still pressing China to agree to that size reduction.

 

But economists say that level would be extremely difficult to achieve, especially as U.S. tax cuts are spurring demand for more imports. The $200 billion figure is equivalent to about 90 percent of Boeing Co's <BA.N> annual aircraft production and is larger than all of the United States' global annual agricultural and oil exports.

 

Eswar Prasad, a Cornell University trade professor and former head of the International Monetary Fund's China division, said that Beijing had clearly balked at a specific quantitative commitment.

 

"It is a very limited and tentative agreement mainly designed to deescalate tensions," Prasad said of the joint statement.

 

IP VAGUENESS

 

The statement was vague on the Trump administration's core intellectual property complaints, saying that both countries "attach paramount importance to intellectual property protections ... China will advance relevant amendments to its laws and regulations, including the Patent Law."

 

There are concerns among some legislators and trade experts that Trump could give priority to a narrower trade deficit over tackling what they say is China's abuse of intellectual property rights. Any deal under which China would import more goods could easily be reversed, economists say.

 

The statement made no mention of whether there would be a relaxation of paralysing restrictions on Chinese telecommunications equipment maker ZTE Corp <000063.SZ> <0763.HK> imposed last month by the U.S. Commerce Department.

 

The action, related to violation of U.S. sanctions on Iran, banned American companies from selling semiconductors and other components to ZTE, causing the Shenzhen-based company to cease operations.

 

Earlier this week, Trump tweeted that he directed the Commerce Department to put ZTE back in business and said the company's situation was part of an overall trade deal with China.

 

 

-- © Copyright Reuters 2018-05-20

 

[Srikcir]

4 hours ago, rooster59 said:

"To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States goods and services."

In other words, such increasing trade with the US will have occurred without any negotiations with the US concerning the US trade deficit. And if Trump then considers trade talk to be completed, the US basically gets nothing more than what is has now in terms of a trade balance, albeit China makes no commitment to reducing its trade surplus with the US and reserves the right to pursue offsetting trade to maintain its current trade balance with the US.

But Trump will get great PR and that's all that counts with the American president.

[sirineou]

 China can reduce some of the trade barriers which it would conceivable increase US exports, but china can not make US products more desirable .

.  Germany does not have some of the impediments to trade attributed to China and has comparable if not higher costs of production, yet the US has a trade deficit with Germany. 

to me the above seems to suggest that the problem is not wholly with China but a large part of it resides in the US.  

[Credo]

5 hours ago, sirineou said:

 China can reduce some of the trade barriers which it would conceivable increase US exports, but china can not make US products more desirable .

.  Germany does not have some of the impediments to trade attributed to China and has comparable if not higher costs of production, yet the US has a trade deficit with Germany. 

to me the above seems to suggest that the problem is not wholly with China but a large part of it resides in the US.  

Germany has for a long time focused on high quality goods.   German products aren't generally cheap, but they are durable and long lasting.  I often buy German products that I use frequently and expect to last a long time.   I had both a blender and regular mixer made in China -- they were replaced 3 times.   I finally bought a good German blender and it has lasted for years.   

 

The US falls in the middle.   Generally good quality, but not exceptional.   Also usually a little less expensive than German, but not cheap.   There are also few things made in the US.

 

I have no idea what manufactured products that China is going to import from the US.   

[sirineou]

31 minutes ago, Credo said:

I have no idea what manufactured products that China is going to import from the US. 

Intellectual property with which   to club us over the head .

[Ulic]

As with all agreements with China, the devil is in the details. China will reduce the trade deficit

with the USA by 200 billion. (Over the next two hundred years)

[Srikcir]

22 hours ago, rooster59 said:

Beijing had clearly balked at a specific quantitative commitment.

"It is a very limited and tentative agreement mainly designed to deescalate tensions," Prasad said of the joint statement.

Maybe because in part China realizes that for the moment a US trade war with China is impractical.

White House delays China trade battle

"The real reason the White House delayed a Friday announcement of an investigation into China's "unfair" trade practices was because State Department and United Nations officials warned the announcement could kill the chances of "convincing China to sign on to a U.N. resolution that would impose new sanctions on North Korea,"

https://www.axios.com/white-house-delays-china-trade-battle-1513304672-d27c0df5-fbf3-4ef3-a004-d9192ebddb5d.html

Who'd knew that trade between nations is linked to global politics?

 

We're seeing this already in the Middle East as the P5 (P6 minus the US) continue their economic re-engagement with Iran driven by the "nuclear deal" despite Trump's threats of economic sanctions against any nation (even allies) who doesn't follow Trump's lead to renege in the deal.

 

Ironically, China is one of the P5 who is committed to honor the deal in spite of Trump's withdrawal. I wouldn't be surprised if China requires Trump's promise not to sanction it over the Iran nuclear deal as part of China's support for Trump's new sanctions on North Korea. Another lesson for Trump?

[stevenl]

He is correct in addressing this issue.