White Culture

[webfact]

Seeking to avert higher tariffs, China dispatches top negotiator to U.S.

By David Lawder and Ben Blanchard

 

FILE PHOTO: Chinese Vice Premier Liu He, U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer arrive for a group photo session after concluding their meeting at the Diaoyutai State Guesthouse in Beijing, China, May 1, 2019. Andy Wong/Pool via REUTERS/File Photo

 

WASHINGTON/BEIJING (Reuters) - Chinese Vice Premier Liu He will travel to Washington for two days of trade talks this week, China said on Tuesday, setting up a last-ditch bid for a deal that would avoid a sharp increase in tariffs on Chinese goods ordered by U.S. President Donald Trump.

 

U.S. officials have accused China of reneging in the past week on substantial commitments made during months of negotiations aimed at ending their trade war, prompting Trump to issue a new deadline to raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent.

 

The higher tariffs are scheduled to take effect at 12:01 a.m. EDT (0401 GMT) on Friday, a spokesman for the U.S. Trade Representative's office said. That comes right in the middle of Liu's visit.

 

China's Commerce Ministry said that Liu, who leads the talks for Beijing, will spend only two days in Washington - Thursday and Friday - instead of the three days he had previously planned before Trump announced the tariff increase.

 

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Monday cast doubt on the talks, telling reporters China had backtracked on previous commitments.

 

The gloomier tone shook Wall Street, causing major stock indexes to tumble more than 1 percent. Treasury yields and oil prices also fell as the potential for an unraveling of the trade talks sparked fresh concerns about global economic growth.

 

During a 10-month U.S.-China war, U.S. tariffs have been imposed on $250 billion worth of Chinese goods, and retaliatory Chinese tariffs slapped on $110 billion worth of American products. Trump has pushed for sweeping changes to China's policies on intellectual property theft, technology transfers industrial subsidies and market access.

 

Trump has criticized the U.S. trade deficit with China, which hit a record $419 billion in 2018, as stealing American manufacturing jobs. His hard line on China has played well with his political base in Midwestern industrial and farm states, with Trump seeking re-election next year.

 

Trump had initially set the tariff increase to 25 percent on $200 billion worth of Chinese goods, including internet modems and routers, printed circuit boards, vacuum cleaners and furniture, in January. He delayed the deadline until March 1 to allow negotiations, and then postponed the increase indefinitely, citing progress in the talks.

 

CHINESE LAWS

A person with knowledge of the talks told Reuters that Chinese negotiators sought to reverse earlier agreements to make changes to Chinese laws to reflect policy changes on a "comprehensive" range of issues. It would be difficult to overcome this setback and reach agreement on other sticking points, such as subsidies and cloud-computing access, in just two days of talks, the person said.

 

Wendy Cutler, a former USTR chief negotiator for Asia, said it was normal to see drama in the final stages of a major trade negotiation, but indications of Chinese backtracking on previously agreed text were cause for concern.

 

"That signals a deep lack of trust between the negotiating teams, which can be hard to rebuild," said Cutler, now managing director of the Asia Society Policy Institute in Washington.

 

"It all now hinges upon what Liu He is bringing with him to Washington," Cutler added. "If he can convince Lighthizer that China will honor commitments made during previous rounds then things presumably can get back on track so to the remaining sticking points can be addressed."

 

China's response to the prospect of new tariffs has been reserved. Foreign Ministry spokesman Geng Shuang said in a press briefing on Tuesday that mutual respect was the basis for reaching a trade agreement.

 

"Adding tariffs can't resolve any problem," Geng said.

 

"Talks are by their nature a process of discussion. It's normal for both sides to have differences. China won't shun problems and is sincere about continuing talks," Geng said.

 

China will keep calm against threats of higher tariffs from the United States and has "complete confidence" in its ability to face challenges in trade talks, a commentary in the Communist Party's People's Daily, China's top newspaper said on Wednesday.

 

China has repeatedly said it will make changes to open its economy on its own timeline, not in response to trade disputes.

 

But recently it has adopted new laws, including a foreign investment law, and amended others, moves some see as efforts to tackle the concerns of the United States and other foreign investors, including those from China's largest trading partner, the European Union.

 

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

 

Negotiations to remove U.S. tariffs have been one of the remaining sticking points. China wants the tariffs removed. U.S. officials want to keep some, if not all, as part of any final deal to ensure China lives up to its commitments.

 

(Reporting by David Lawder in Washington and Ben Blanchard in Beijing; Additional reporting by Jeff Mason and David Shepardson in Washington, Michael Martina in Beijing and Sinead Carew in New York; Editing by Will Dunham and Simon Cameron-Moore)

 

-- © Copyright Reuters 2019-05-08

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[khwaibah]

So it has taken a wedgie to get their attention.????

 

[zydeco]

Stock market bubble pumpers say,

"But, but, but the premier is on the plane!"

Edited May 8, 2019 by zydeco

[Srikcir]

6 hours ago, webfact said:

Seeking to avert higher tariffs, China dispatches top negotiator to U.S.

Chinese negotiator was already scheduled to be in the US for trade negotiations. With Trump's tweet surprise announcement (even to his own administration) the decision for the Chinese was whether to cancel their trip or proceed as planned.

To proceed as planned to negotiations is to show that the Chinese government is not cowered by Trump's announcement and recent negotiations with Trump has shown China that Trump acts impetuously.

[rabas]

1 hour ago, Srikcir said:

Chinese negotiator was already scheduled to be in the US for trade negotiations. With Trump's tweet surprise announcement (even to his own administration) the decision for the Chinese was whether to cancel their trip or proceed as planned.

To proceed as planned to negotiations is to show that the Chinese government is not cowered by Trump's announcement and recent negotiations with Trump has shown China that Trump acts impetuously.

 

US negotiators knew the whole story, just in from Reuters, China sent last minute changes to the entire 150 agreement reneging on all concessions made to the US over the last year. China acts with malice.

 

Edited May 8, 2019 by rabas

[Gecko123]

1 hour ago, rabas said:

 

US negotiators knew the whole story, just in from Reuters, China sent last minute changes to the entire 150 agreement reneging on all concessions made to the US over the last year. China acts with malice.

 

I think the Chinese are pissed and sick of strong arm tactics. When the Chinese look at the likes of Pompeo, Navarrow, Lighthizer, Bolton, Mnuchin and Trump I'm sure all they see are a bunch of arrogant white guys who think they're smarter than any Chinese person ever born. I'm sure behind the scenes, there's a lot of contempt for the Trump administration, despite 'the Donald's' claims that he and Xi have a great relationship.

 

I think they've made a strategic decision that even though Trump may be posturing as if he's bargaining from a position of strength, he's actually in a weak position because it's he who needs a trade deal to have any chance of re-election. Wouldn't be surprised at all if the Chinese are so sick of dealing with Trump they're prepared to escalate the trade war just to undermine his chances of re-election.

[Ulic]

I think most people are missing the point. China has not lived up to their commitments from 40+ years ago to open its markets to foreign companies. The theft of intellectual property and forced technology transfer and subsidies of Chinese industry has been going on for almost as long. These are more than irritants and they are not complaints of just the USA. The EU, Canada, and Australia also share these issue concerns. China falls back on the "these things take time" excuse but with 40+ years having passed the only sensible thing to do is hold China's feet to the flame and dictate the solution. Also, leave the increased tariffs in place until after the implementation and enforcement of the new laws. This will hopefully create a sense of urgency in China. After all with 40+ years having passed the "these things take time" excuse has worn thin.

[simple1]

58 minutes ago, Ulic said:

I think most people are missing the point. China has not lived up to their commitments from 40+ years ago to open its markets to foreign companies. The theft of intellectual property and forced technology transfer and subsidies of Chinese industry has been going on for almost as long. These are more than irritants and they are not complaints of just the USA. The EU, Canada, and Australia also share these issue concerns. China falls back on the "these things take time" excuse but with 40+ years having passed the only sensible thing to do is hold China's feet to the flame and dictate the solution. Also, leave the increased tariffs in place until after the implementation and enforcement of the new laws. This will hopefully create a sense of urgency in China. After all with 40+ years having passed the "these things take time" excuse has worn thin.

What I do not understand is why some US companies agreed to hand over their IP in the first place and continued to do so, then whine about terms of trade. Theft of IP by hacking / espionage if a very different matter, which the US and other nations also carry out.

[keemapoot]

37 minutes ago, simple1 said:

What I do not understand is why some US companies agreed to hand over their IP in the first place and continued to do so, then whine about terms of trade. Theft of IP by hacking / espionage if a very different matter, which the US and other nations also carry out.

It has been a pretty simple calculus for US companies. They wanted access to the China market, and they were willing to do what it took to get it. For example, it's well known in tech circles that Huawei's creation came about by a massive theft from Cisco of IP and that when Cisco threatened suit, the Chinese government met with Cisco leadership and informed them that if they proceeded they would be banned from the China market, but if they "let" Huawei steal their technology, they would allow and promote Cisco in the China market for years. That in fact happened, and today we see the world-beater Huawei has become. 

 

In a sense, the shoe is on the other foot now, because the leverage the US has now is that the US is the largest world market for Chinese goods, and the leverage can work in reverse and the US has something China wants and needs. Without the US market, China would have serious problems domestically.

[Srikcir]

14 hours ago, rabas said:

China acts with malice.

aka 'negotiating tactic.'

Not limited to Trump who likes to 'dish it out' but can't stand resistance and retaliation.

Remember this?

Sep 19, 2016 - Donald Trump: "If somebody hits me, I have to hit 'em back."

Looks like Xi belongs to the same school.

[simple1]

37 minutes ago, keemapoot said:

It has been a pretty simple calculus for US companies. They wanted access to the China market, and they were willing to do what it took to get it. For example, it's well known in tech circles that Huawei's creation came about by a massive theft from Cisco of IP and that when Cisco threatened suit, the Chinese government met with Cisco leadership and informed them that if they proceeded they would be banned from the China market, but if they "let" Huawei steal their technology, they would allow and promote Cisco in the China market for years. That in fact happened, and today we see the world-beater Huawei has become. 

 

In a sense, the shoe is on the other foot now, because the leverage the US has now is that the US is the largest world market for Chinese goods, and the leverage can work in reverse and the US has something China wants and needs. Without the US market, China would have serious problems domestically.

OK, makes sense. In shorthand Cisco made a Realpolitik decision, so assume you don't hear of Cisco whining. Article re Cisco response to trump's tariff war.

 

https://www.cnbc.com/2018/09/11/cisco-chief-new-us-china-tariffs-would-be-fairly-significant-for-us.html

[keemapoot]

1 minute ago, simple1 said:

OK, makes sense. In shorthand Cisco made a Realpolitik decision, so assume you don't hear of Cisco whining. Article re Cisco response to trump's tariff war.

 

https://www.cnbc.com/2018/09/11/cisco-chief-new-us-china-tariffs-would-be-fairly-significant-for-us.html

It's hard to imagine the hit to Cisco and other companies' revenue growth and profit picture had they not had China growth over these past 30 years. They knew they were helping to create a monster that would one day eat them, but there was no other choice given the opportunities in the China market.

[Srikcir]

42 minutes ago, keemapoot said:

It's hard to imagine the hit to Cisco and other companies' revenue growth and profit picture had they not had China growth over these past 30 years. They knew they were helping to create a monster that would one day eat them, but there was no other choice given the opportunities in the China market.

2015: Though China may not be the main market for Cisco, contributing less than 5% to its net revenues, it does present lucrative growth opportunities. https://www.forbes.com/sites/greatspeculations/2015/09/24/cisco-seeks-partnerships-to-revive-its-china-business-amid-geopolitical-headwinds/#122378b65358

 

It's not that Cisco looks to benefit from revenue growth through product partnering with Chinese companies. It also potentially can benefit from capital appreciation resulting from investment in Chinese companies.

• In 2016 Cisco and Chinese state-owned Inspur (China’s leading cloud computing and big data service provider) formed a joint venture (51% Inspur & 49% Cisco) that would enrich Inspur’s data center portfolio and improve Inspur’s ability to build complete cloud data centers while contributing to Cisco’s long-term, sustainable development strategy in China to become an important addition to Cisco’s operations in China. https://newsroom.cisco.com/press-release-content?articleId=1805023
• Inspur will resell Cisco’s networking gear in China and the two parties will jointly develop hardware and software. https://www.forbes.com/sites/greatspeculations/2015/09/24/cisco-seeks-partnerships-to-revive-its-china-business-amid-geopolitical-headwinds/#122378b65358

But there's a 'pay the piper' for financial benefits from expanding its enterprise in China, Cisco has to willingly share technology. But Trump's concept of global trade doesn't accept a win-win, only a win-lose transactional deal between nations.