Chinese reversal prompts Trump to impose new tariff hike as markets fall

[webfact]

Chinese reversal prompts Trump to impose new tariff hike as markets fall

By Jeff Mason and David Lawder

 

FILE PHOTO: Chinese and U.S. flags are set up for a meeting during a visit by U.S. Secretary of Transportation Elaine Chao at China's Ministry of Transport in Beijing, China April 27, 2018. Picture taken April 27, 2018. REUTERS/Jason Lee/File Photo

 

WASHINGTON (Reuters) - China backtracked on substantial commitments it had made during trade talks with the United States, prompting President Donald Trump to impose additional tariffs on Chinese goods slated to go into effect on Friday, top U.S. trade officials said on Monday.

 

Chinese Vice Premier Liu He is expected to be in Washington on Thursday and Friday of this week as part of a Chinese delegation to try to reach a deal before the new tariff deadline, U.S. Trade Representative Robert Lighthizer said as he briefed reporters with U.S. Treasury Secretary Steven Mnuchin.

 

Trump on Sunday tweeted that he would raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent by the end of the week, and would "soon" target the remaining Chinese imports with tariffs, sending stocks and oil prices lower.

 

"Over the course of the last week or so we have seen ... an erosion in commitments by China," Lighthizer said, adding that China's retreat from those commitments would have led to substantive changes in the text of the deal. "That in our view is unacceptable."

 

Trump wants to see a deal with substantial structural changes to Chinese policies but that is not where the two sides are at the moment, Lighthizer said, adding that the two sides were still talking.

 

"We're not breaking off talks at this point. But for now ... come Friday there will be tariffs in place," Lighthizer said.

 

Mnuchin told reporters that it became clear over the weekend that Chinese negotiators were trying to "go back on language that had been previously negotiated, very clear language, that had the potential of changing the deal dramatically."

 

The two cabinet officials did not divulge the nature of the backtracking.

 

A person familiar with the talks said that the Chinese side was seeking to deal with any policy changes through administrative and regulatory actions, not through changes to Chinese law as previously agreed.

 

"It undermines the core architecture of the deal," the person said, adding that not codifying the concessions would make it difficult to verify and enforce China's compliance.

 

Speaking on condition of anonymity due to the sensitive nature of the talks, the person said that under China's system in which the Communist Party has ultimate control, changes in law are the only way to get even a small measure of certainty.

 

TRUCE ENDS

Trump's tariff announcement abruptly ended a five-month truce in a trade war that has cost the two countries billions of dollars, slowed global growth and disrupted manufacturing supply chains and U.S. farm exports.

 

The United States is demanding sweeping changes to China's economic policies, including better protection of U.S. intellectual property, and ending forced technology transfers and cyber theft of American trade secrets.

 

Washington also wants more access to China's vast markets for U.S. companies, curbs on industrial subsidies and increased purchases of American products.

 

The United States imported about $539.5 billion in goods from China in 2018 and exported $120.3 billion, for a record trade deficit of $419.2 billion, according to U.S. Census Bureau data.Trump has said that China was paying existing U.S. tariffs on Chinese imports into the United States, but in reality, mostly U.S. companies importing the goods pay the tariffs.

 

The United States currently has 25 percent tariffs on $50 billion worth of Chinese machinery and technology goods, and 10 percent tariffs on $200 billion worth of products ranging from computer modems and routers to furniture, lighting and building materials.

 

Negotiations on removing punitive U.S. tariffs has been one of the remaining sticking points between the two sides. China wants the tariffs to be removed, while Trump wants to keep some, if not all, as part of any final deal to ensure China lives up to its commitments, a White House official said on Sunday.

 

(Reporting by Jeff Mason and David Lawder, Additional reporting by Alexandra Alper and Susan Heavey in Washington and Ben Blanchard, Michael Martina, Shu Zhang, Jing Xu, Cheng Leng and Yawen Chen in Beijing; editing by Simon Webb, Susan Thomas and Rosalba O'Brien)

 

-- © Copyright Reuters 2019-05-07

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[Thailand]

Poking the dragon, a dangerous game.

[impulse]

2 minutes ago, Thailand said:

Poking the dragon, a dangerous game.

 

Not much to lose since they've been poking us for 20+ years.

 

 

[Nyezhov]

13 minutes ago, Thailand said:

Poking the dragon, a dangerous game.

the Dragon is paper....They are a Paper Dragon

Edited May 6, 2019 by Nyezhov

[neeray]

Who was it said "trade wars are easy to win"? Hmm, now who was that?

[Cryingdick]

The market basically pared all loses. The American markets ended up down a fraction of a percent and the Chinese markets took 5.8% losses.

 

it was a very big retrace today and anybody that didn’t sell based upon tweets and bought some more found very good prices. 

 

https://money.cnn.com/investing/china-stock-market-meltdown/

 

the chinese got got their asses handed to them overnight.

Edited May 6, 2019 by Cryingdick

[thailand49]

What took so long, this is what China does, string it long and pretend as if they are willing to play along!

[Cryingdick]

15 minutes ago, thailand49 said:

What took so long, this is what China does, string it long and pretend as if they are willing to play along!

Yeah and Trump isn't playing along. 5.8% loss for China in one day. In the old days China operated on this philosophy. It doesn't work anymore.

[car720]

even the Chinese people want an end to the CCP.

[MaxYakov]

12 minutes ago, car720 said:

even the Chinese people want an end to the CCP.

I'm sure the people's wishes will be the government's command.  

[spidermike007]

Trump is in so far over his head with this one. Normally, a US administration would delegate a team to handle negotiations. Trump is too hands on, and this shows in areas where he is weak, such as negotiations. He cannot negotiate his way out of a paper bag. 

 

Trump has said that China was paying existing U.S. tariffs on Chinese imports into the United States, but in reality, mostly U.S. companies importing the goods pay the tariffs.

 

Just another of his thousands of lies, to the American people. He assumes we are all dummies. Sorry Don. Most of us are considerably smarter than you are. It does not take much. The US companies pay the tariffs, and then pass it on the consumers in the way of a huge price hike, which is essentially a tax hike. Trump is messing with the economy. He is playing with fire. Having him in the same room as Xi, is about the equivalent as having Brittany Spears playing chess with Bobby Fischer. The US needs smarter people to handle its negotiations. Trump is outclassed. He has shown it with MBS, Putin, Kim, Trudeau, and now Xi. A child playing with adults.

[attrayant]

8 minutes ago, spidermike007 said:

Trump has said that China was paying existing U.S. tariffs on Chinese imports into the United States, but in reality, mostly U.S. companies importing the goods pay the tariffs.

 

And American manufacturers, seeing less competition from Chinese goods, will be tempted to raise their prices. Everybody wins.

[Tug]

It just means you and I pay more for goods and maybe China lost a bit more money but their system of government can better deal with it than ours

[connda]

The US tossed American farmers under the bus.  Who's next?  China plays the long game which is BRI and Eurasian-African integration and it doesn't come completely on-line until 2049.  The US plays a disjointed short game where no consistent policy can ever be applied to anything as never-ending campaigning for the next election twists the nation's foreign and economic policies without end.  The only tools at America's disposal for short-term fixes are tariffs, embargoes, sanctions, and eventually war.   

[spidermike007]

14 minutes ago, attrayant said:

 

And American manufacturers, seeing less competition from Chinese goods, will be tempted to raise their prices. Everybody wins.

Everyone, except the American public. Trump's plan all along. I think by now, it is clear that he despises people who are not rich. Unless they are his devotees.

[Paul Henry]

Many thanks to POTUS for his sanctions on China. Australian farmers are bounding ahead (even under drought conditions in a lot of the country) Agricultural product prices are the highest they have ever been with more orders arriving from China everyday.with the drought breaking in many parts of the country farmers will increase their cropping of legumes and cereals. Wine sales to China are booming. (Donald doesn't care about California they are Democrates and do not rack the forrest floors to stop wildfires)

On behalf of the Rural sector and the whole country thanks Donald keep up the good work.

[Nyezhov]

39 minutes ago, Tug said:

It just means you and I pay more for goods and maybe China lost a bit more money but their system of government can better deal with it than ours

That shows an astonishing lack of insight into the Chinese economy.

 

And shows further that you know little of the Mandate of Heaven

[Nyezhov]

1 minute ago, Paul Henry said:

Many thanks to POTUS for his sanctions on China. Australian farmers are bounding ahead (even under drought conditions in a lot of the country) Agricultural product prices are the highest they have ever been with more orders arriving from China everyday.

Your welcome. Keep with our program then.

[Tug]

10 minutes ago, Nyezhov said:

That shows an astonishing lack of insight into the Chinese economy.

 

And shows further that you know little of the Mandate of Heaven

Oh I don’t know the other day I had to buy a piece of channel iron to fix a trailer that 12 foot long piece of channel cost me 70$ normally it would cost 20 to 30$ it’s just anything a guy does now costs more it is a direct result of Donald’s naive attempt to rectify an existing problem trade wars are not easy or good and the Chinese government is much better suited to Handle a financial downturn than ours 

Edited May 7, 2019 by Tug

[zydeco]

Please explain how there is constant outrage over the mere prospect of the US applying sanctions, along with predictions of economic doom, consumer revolts, and retail collapse. Yet China has more tariffs than the US. This appears to be true pretty much down the line with most countries. But apparently their tariffs are just fine. Only American tariffs are bad.

[Nyezhov]

6 minutes ago, Tug said:

Oh I don’t know the other day I had to buy a piece of channel iron to fix a trailer that 12 foot long piece of channel cost me 70$ normally it would cost 20 to 30$ it’s just anything a guy does now costs more it is a direct result of Donald’s naive attempt to rectify an existing problem trade wars are not easy or good and the Chinese government is much better suited to Handle a financial downturn than ours 

Somehow your inability to source a reasonably priced piece of channel iron does not really bear on Worldwide Macroeconomics does it......

 

[zaZa9]

43 minutes ago, spidermike007 said:

Trump is in so far over his head with this one. Normally, a US administration would delegate a team to handle negotiations. Trump is too hands on, and this shows in areas where he is weak, such as negotiations. He cannot negotiate his way out of a paper bag. 

 

Trump has said that China was paying existing U.S. tariffs on Chinese imports into the United States, but in reality, mostly U.S. companies importing the goods pay the tariffs.

 

Just another of his thousands of lies, to the American people. He assumes we are all dummies. Sorry Don. Most of us are considerably smarter than you are. It does not take much. The US companies pay the tariffs, and then pass it on the consumers in the way of a huge price hike, which is essentially a tax hike. Trump is messing with the economy. He is playing with fire. Having him in the same room as Xi, is about the equivalent as having Brittany Spears playing chess with Bobby Fischer. The US needs smarter people to handle its negotiations. Trump is outclassed. He has shown it with MBS, Putin, Kim, Trudeau, and now Xi. A child playing with adults.

" Just another of his thousands of lies, to the American people. He assumes we are all dummies. Sorry Don. Most of us are considerably smarter than you are. It does not take much. The US companies pay the tariffs, and then pass it on the consumers in the way of a huge price hike, which is essentially a tax hike. Trump is messing with the economy.  "

 

So what ever  happened to the US much repeated Mantra of , "let free markets decide!" and that capitalism was the panacea for all economies , and that it would always triumph over closed economies and tariffs ?

The US was going around the world  not 20 years back , bullying its smaller 'friends' into dropping ALL trade tariffs and , "opening a world economy !!"

I seem to recall that  ,  like China ,  the US certainly dragged its own feet on  tariff relief  over many of its own  industries ... 

But  now its protectionist , now its puting up trade barriers ? 

Why , because its not winning at the game it demanded everyone participate in ?

 

BTW -what pack of idiots moved their factories to China and  never thought the Chinese would NOT steal their intellectual property? If they knew their processes werent 100% secure , then they deserve what they got ! Reverse engineering and a 'borrowing of intellectual properties' has been going on openly since the rise of the Japanese in the 70's .. Business is  about the survival of the fittest - how many times have we heard that before - its up to US companies to sink or swim - a view American business has constantly espoused , as long as they owned the swimming pool. 555

Having a  Nanny State running around protecting their interests for them  pangs of communism ...

In short , if the American product is better , let 'Mericans BUY 'Merican...

[Tug]

21 minutes ago, Nyezhov said:

Somehow your inability to source a reasonably priced piece of channel iron does not really bear on Worldwide Macroeconomics does it......

 

Don’t think you build much do you lol

[Nyezhov]

2 minutes ago, Tug said:

Don’t think you build much do you lol

Not any more, I own the company

[candide]

24 minutes ago, zydeco said:

Please explain how there is constant outrage over the mere prospect of the US applying sanctions, along with predictions of economic doom, consumer revolts, and retail collapse. Yet China has more tariffs than the US. This appears to be true pretty much down the line with most countries. But apparently their tariffs are just fine. Only American tariffs are bad.

The problem is not the fairness (or unfairness) of tariff sanctions. The problem is that it is completely inefficient. Imports from China have steadily increased in 2018 and the trade deficit has never been so high than in 2018.

For Trump and his fan base it looks good, because that's something easy to understand, but it's inefficient. The only outrage is about his moronic policy.

https://www.census.gov/foreign-trade/balance/c5700.html

 

[Benmart]

9 hours ago, spidermike007 said:

Trump is in so far over his head with this one. Normally, a US administration would delegate a team to handle negotiations. Trump is too hands on, and this shows in areas where he is weak, such as negotiations. He cannot negotiate his way out of a paper bag. 

 

Trump has said that China was paying existing U.S. tariffs on Chinese imports into the United States, but in reality, mostly U.S. companies importing the goods pay the tariffs.

 

Just another of his thousands of lies, to the American people. He assumes we are all dummies. Sorry Don. Most of us are considerably smarter than you are. It does not take much. The US companies pay the tariffs, and then pass it on the consumers in the way of a huge price hike, which is essentially a tax hike. Trump is messing with the economy. He is playing with fire. Having him in the same room as Xi, is about the equivalent as having Brittany Spears playing chess with Bobby Fischer. The US needs smarter people to handle its negotiations. Trump is outclassed. He has shown it with MBS, Putin, Kim, Trudeau, and now Xi. A child playing with adults.

You may consider yourself as part of "most of us", but then you aren't President and your comments beg a response.

 

Take a hard look at the past four Presidents and their abysmal dealings with Communist China, and the effects it had with the balance of trade; not to mention Chinese inspired intellectual piracy and cyberwarfare, all of which were inspired by the "smarter people" of those past administrations.

 

It is quite easy to opine about President Trump's voluminous gaffs and "foot-in-mouth" antics, but then he isn't the cookie-cutter, smooth talking scholarly type Chief Executive; of which numerous past holders of that office have effectively contributed to the mess the USA is confronted with today.

 

President Trump didn't create government, it was well instituted and corrupted long before he arrived on the scene.

[Nyezhov]

Well, well, well...

Guess maybe we hold the cards?

Who would have thunk it from the NYT

https://www.msn.com/en-gb/news/indepth/xi-jinping-wanted-global-dominance-he-overshot/ar-AAB13WR?li=BBoPU0R

[thailand49]

12 hours ago, Cryingdick said:

Yeah and Trump isn't playing along. 5.8% loss for China in one day. In the old days China operated on this philosophy. It doesn't work anymore.

China isn't the only country this is an old play from the " Art of War "  North Korea, Iran, Russia I'm not Trump supporter but not against him either he is doing the right thing although a near impossible task because of the swamp it will be tough to undo everything but undoing it isn't what I'm after just fairness and just because T.V. is cheap doesn't mean it is. The Chinese leaders are liars

[stevenl]

6 minutes ago, thailand49 said:

China isn't the only country this is an old play from the " Art of War "  North Korea, Iran, Russia I'm not Trump supporter but not against him either he is doing the right thing although a near impossible task because of the swamp it will be tough to undo everything but undoing it isn't what I'm after just fairness and just because T.V. is cheap doesn't mean it is. The Chinese leaders are liars

And to achieve something he should have coordinated action with allies in stead of alienating them with tariffs.

[candide]

1 hour ago, Nyezhov said:

Well, well, well...

Guess maybe we hold the cards?

Who would have thunk it from the NYT

https://www.msn.com/en-gb/news/indepth/xi-jinping-wanted-global-dominance-he-overshot/ar-AAB13WR?li=BBoPU0R

Interesting quote from your source:

"After a summit in Brussels last month, China agreed to grant European Union countries “improved” market access, stop the forced transfer of technology and discuss the possibility of curtailing state subsidies to Chinese companies, which, other governments say, gives them an unfair competitive advantage. "

 

If Trump did not have the stupid idea to aggressively deal with the EU, maybe an alliance USA + EU + others such as Australia Canada, Japan would have obtained more from China than they can get separately.