Tag Archives: Trade War

Jared Kushner says US partnerships strengthened under Trump

Amid rising economic uncertainty and global trade tensions Jared Kushner, a senior adviser to US President Donald Trump, on Tuesday spoke to the Future Investment Initiative (FII) on how the US will look to define the global agenda in the medium- to long-term.

Kushner featured in a session moderated by the Chairman, CEO, and Co-Founder of US asset management firm Blackstone, Stephen Schwarzman, at the third edition of the FII held in Riyadh.

Kushner said that he thinks there is “a lot of positive potential” for solving global trade problems, adding that partnerships have strengthened under US President Donald Trump’s tenure.

Trade has been a persistent global challenge throughout 2019 as China and the US have engaged in a tit-for-tat trade war with escalating tariffs.

http://english.alarabiya.net/en/News/gulf/2019/10/29/Jared-Kushner-speaks-on-the-US-world-role-at-Future-Investment-Initiative.html

China hits back at US for sanctions on Iran oil deals

China‘s foreign ministry has criticised sanctions imposed by the United States on specific Chinese entities and people, which the US accuses of knowingly transferring oil from Iran in violation of Washington’s curbs on Tehran.

“We always oppose the so-called long-arm jurisdiction and unilateral sanctions,” ministry spokesman Geng Shuang said on Thursday. “We also oppose the bullying practice of the US.”

China’s cooperation with Iran is legitimate and legal and should be respected and protected, Geng said, adding: “We urge the US to correct its wrongdoing.”

US Secretary of State Mike Pompeo announced on Wednesday that his country is slapping sanctions on five Chinese nationals and six entities, including two COSCO Shipping Corporation subsidiaries.

“We’re telling China, and all nations: know that we will sanction every violation of sanctions,” Pompeo said at a conference on the sidelines of the UN General Assembly in New York.

He warned countries of the risks of breaching sanctions against Iran and its elite Islamic Revolutionary Guard Corps (IRGC) military force.

“The US will intensify our efforts to educate countries and companies on the risk of doing business with IRGC entities, and we will punish them if they persist in defiance of our warnings,” he said.

The latest sanctions follow drone and missile attacks on Saudi Arabian oil facilities on September 14. The US, Saudi Arabia, the UK, France and Germany blame Tehran for the attacks, allegations Iran strenuously denies.

The missile and drone attacks were claimed by the rebel Houthi movement, which has been battling a Saudi-led coalition in Yemen since 2015.

“The more Iran lashes out, the greater our pressure will and should be,” Pompeo said. “That path forward begins now with two new actions.”

In a speech to the annual gathering of world leaders on Tuesday, US President Donald Trump promised to keep trying to squeeze Iran’s economy with sanctions until Tehran agrees to give up what Washington says is a pursuit of nuclear weapons.

Iran has said its nuclear programme has always been for peaceful purposes only.

Last year Trump withdrew from a 2015 international accord with Iran which had put limits on Tehran’s nuclear programme in exchange for sanctions relief.

https://www.aljazeera.com/ajimpact/china-hits-sanctions-iran-oil-deals-190926082855104.html

Trump: US will delay some US tariffs on Chinese goods

The U.S. will delay by two weeks a bump in tariffs on Chinese goods that were set to go into effect Oct. 1, President Donald Trump announced Wednesday. 

The decision, Trump said, was made as a concession to Beijing as it prepares to celebrate at the start of October the 70th anniversary of the founding of modern China.

“At the request of the Vice Premier of China, Liu He, and due to the fact that the People’s Republic of China will be celebrating their 70th Anniversary on October 1st, we have agreed, as a gesture of good will, to move the increased Tariffs on 250 Billion Dollars worth of goods (25% to 30%), from October 1st to October 15th,” Trump wrote on Twitter.

Trump announced in late August he will boost tariffs on $550 billion worth of Chinese imports, including increased penalties that were to take effect early next month. All told, the tariffs encompass just about all U.S. imports of Chinese goods.

The ongoing trade war between the world’s top two economies has sent shockwaves throughout the global economy as the U.S. and China have exchanged wave after wave of tariffs with a long-sought agreement to halt the feud nowhere in sight. Investors have been fretting about the possibility that the dispute could lead to a global recession.

More than a year of ongoing negotiations between the sides have failed to produce meaningful signs of progress towards a comprehensive deal.

The U.S. has sought remedy to its disproportionate trade imbalance with China, as well as claims of intellectual property theft and forced technology transfer by Beijing.

The Chinese government earlier Wednesday announced it would exempt tariffs on 16 American goods for a year beginning Sept. 17.

The mutual steps to water down the trade recriminations come ahead of another round of negotiations expected to begin in October.

https://www.aa.com.tr/en/americas/trump-us-will-delay-some-us-tariffs-on-chinese-goods/1579506

US, China more divided than ever on trade war despite pledge to continue talks: Analysis

The United States and China are more divided on their ongoing trade war, with a lasting peace seeming more elusive than ever, despite their pledge to meet again in October to settle the dispute.

Things have escalated between Washington and Beijing since May when trade negotiations broke down, Reuters said in an analysis on Thursday.

After the trade talks ended, the world’s largest economies have added tariffs on billions of dollars of the others’ goods, traded public insults and broken good faith promises.

Leaders from both countries are now vowing a long fight, despite slowing domestic economies. Neither side has signaled it would shift from positions that led to the impasse in May.

The administration of US President Donald Trump has accused Beijing of reneging on commitments to enact economic reforms, while China called US tariff’s “barbaric.”

Deputies from the US and China trade teams will talk in mid-September to prepare for negotiations between US Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin, and China’s Vice Premier Liu He in early October.

US officials have previously said that the resumption of talks would depend on China returning to the original May deal text, but there has been no sign that China has agreed to take that step.

Beijing has stated three main obstacles in the trade negotiations. They are the removal of US tariffs imposed in the trade war, reduction of the scale of American goods purchases that China will make to help reduce the US trade deficit between the two, and the need for a “balanced” text for any trade deal.

China also wants the United States to lift restrictions on Huawei, the world’s largest telecommunications equipment maker. In May, the Trump administration restricted Huawei from doing commerce with US companies and is lobbying other countries to reduce dealings with the firm.

The Trump administration has imposed 25 percent tariffs on $250 billion worth of imported goods from China. Those US tariffs are now due to rise to 30 percent from October 1. Another $300 billion of Chinese imports face 15 percent US tariffs, some of which began September 1, with the rest to start December 15.

China has demanded that all tariffs must be lifted immediately if a trade deal is reached, but the US wants to keep some tariffs in place to ensure that China met the terms of a potential deal.

Since entering office, Trump has used tariffs extensively against other trading partners to reduce the US trade deficit and revive the country’s ailing manufacturing sector.

“China has been ripping this country off for 25 years, for longer than that and it’s about time whether it’s good for our country or bad for our country short term. Long term it’s imperative that somebody does this,” Trump said in August.

https://www.presstv.com/Detail/2019/09/06/605469/US-China-trade-lasting-peace

A Trade Deal Before November 2020 May Suit Beijing Just Fine

Timetables can be fascinating, especially when those used by the leaders of the world’s most-powerful countries appear to be vastly different.

President Donald Trump tweeted this week that any trade deal China might secure from America would get “much tougher” upon his re-election. The insinuation being of course that Beijing should really work something out before November 2020.

That same day, Xi Jinping told a gathering of Communist Party officials in Beijing that the challenges facing China will only get more complicated and that these struggles may persist through at least 2049.

Based on those two data points, it would seem the gap between Trump and Xi is about 30 years wide. Though maybe it’s smaller.

Political continuity and long-term planning are often cited as being among China’s strengths. It’s also led many to suspect Beijing’s ultimate strategy is to wait Trump out and look to deal with a new administration.

But just as Trump has an election looming, Xi too has other considerations he must balance. The economy is an obvious one.

Chinese growth rates are slowing and the outlook is for them to slow even more. A number of economists cut their forecasts for 2020 this week after new tariffs took effect on September 1.

Not only would a trade deal buttress growth, it would also give Beijing the breathing room it needs to deal with the country’s myriad other economic headaches. Dangerous levels of debt, strains in the banking system and a bubbly housing market are a few of them.

And even if China waits out Trump, there’s no guarantee a new administration would be any easier to deal with. Ultimately, there are plenty of reasons why a deal before November 2020 would suit Beijing just fine.

Hong Kong

Chief Executive Carrie Lam made her biggest concession yet to protesters who’ve rocked the city with sometimes violent demonstrations for the past three months. She announced this week that proposed legislation allowing extradition to China, the issue that sparked the unrest, was being formally withdrawn. Hong Kong’s stock market reacted to the news with its biggest surge since 2011, but it didn’t satisfy many protesters, who called Lam’s move too little, too late. With more demonstrations called for this weekend, we should have a better grasp by Monday on how much ⁠— if at all ⁠— closer the situation has moved toward resolution.

Huawei Counters

The Chinese tech giant struck back against Washington this week by levying a litany of allegations against the U.S. government. Huawei’s claims included assertions that federal agents have been sent to its employees’ homes and even impersonated staff to try to entrap those working for the company. The stakes are high for Huawei, which said last month its mobile phone unit might lose $10 billion of business because of restrictions on what American technology it can buy. Its lead in 5G wireless equipment is also under threat as the U.S. pushes allies to ban its gear.

Pork Prices

In a sign of how much havoc African swine fever is beginning to wreak in China, the city of Nanning began limiting not only the price at which pork can be sold, but also how much each customer can buy. Because it is a staple of most Chinese dinner tables, the price and availability of pork can be a sensitive issue. That can help explain why it now appears that local governments may have been keeping Beijing in the dark about how serious the problem was. Vice Premier Hu Chunhua, who’s also a member of the 25-member Politburo, late last week called the situation “much grimmer than we have been informed.”

Home Ownership

Also sensitive are home prices. One of the issues fueling Hong Kong’s unrest is that its property market is the world’s least affordable. That’s left many with no hope of owning a home. It’s a problem that’s not lost on policy makers in Beijing, with the Politburo saying as recently as July that China won’t loosen its reins on real estate even if economic growth stumbles. To get a sense of the risks that a further surge in property might engender, take a look at Xiamen. Home prices in this so-called second-tier Chinese city have more than tripled in the past decade. A 1,000-square-foot apartment in Xiamen now costs about the same as it would in London, though local wages are just a quarter of what they are in the U.K. capital.

What We’re Reading

And finally, a few other things that caught our eye:

  • Why Chinese equity traders don’t follow Trump on Twitter.
  • China’s hottest new mobile app sparks privacy concerns.
  • How China caused the first-ever drop in global electric car sales.
  • Chinese hedge fund investors are revolting against high fees.
  • Beijing signals more economic stimulus is on the way.

https://www.bnnbloomberg.ca/a-trade-deal-before-november-2020-may-suit-beijing-just-fine-1.1312009

Trump: Dow would be 10,000 points higher without trade war

Donald Trump said his trade war with China has hurt the performance of the U.S. stock market, but that he had to confront the country’s economic practices.

“Let me tell you, if I wanted to do nothing with China, our stock market, our stock market would be 10,000 points higher than it is right now but somebody had to do this,” the president told reporters at the White House on Wednesday. “It was out of control and they were out of control.”

The Dow Jones Industrial Average stood at 26,332 as of about 1:00 p.m. in Washington, up less than 1 percent for the day.

Trump increased tariffs on Chinese imports this week to try to elbow Beijing into resuming talks on a far-reaching trade deal.

“We’ll see what happens, if they want to make a deal, they’ll make a deal, if they don’t want to make a deal, that’s fine,” he said.

Trump declined to say whether Chinese negotiators will visit Washington this month.

Trump has placed tariffs on some $360 billion of Chinese imports since the start of the trade war more than a year ago. On Sunday, he enacted a 15% duty on about $112 billion of Chinese products, mostly electronics and other consumer items.

An existing 25% tax on about $250 billion of goods is set to rise to 30% on Oct. 1. A separate batch of about $160 billion in Chinese goods, including laptops and mobile phones, will be hit with 15% tariffs on Dec. 15 – meaning that virtually every Chinese import will have a tariff levied on it.

Trump has previously said the Dow would be 10,000 points higher if the U.S. Federal Reserve hadn’t raised interest rates last year. Trump routinely criticizes Fed Chairman Jerome Powell.

https://www.aljazeera.com/ajimpact/trump-dow-10000-points-higher-trade-war-190904183945156.html

Hong Kong Manufacturing Sentiment Hit Amid Trade War, Protests

Sentiment among Hong Kong’s manufacturers worsened again in August as the U.S.-China trade war rumbled on and the city’s economy buckled under the brunt of anti-government protests.

The latest reading for the Markit Hong Kong Purchasing Managers’ Index slid to 40.8 from 43.8 in July, a second straight monthly drop, according to data released by IHS Markit. It is a fresh low for the indicator of manufacturing intentions in data going back to at least September 2016. Figures below 50 indicate contraction.

The significant deterioration in the measure in July and August comes as city-wide protests escalated in earnest while the trade war also showed no signs of slowing down. Hong Kong’s economy has slowed sharply so far this year, with weakness across its most important industries including export trade and retail.

https://www.bnnbloomberg.ca/hong-kong-manufacturing-sentiment-hit-amid-trade-war-protests-1.1310699

Oil Mired Near One-Week Low as Trump Ratchets Up Trade Tensions

Oil held near a one-week low after U.S. President Donald Trump sounded a warning to China on trade and following a surprise cutback in American manufacturing.

Futures in New York edged up 0.1%, after falling 2.1% on Tuesday to their lowest closing level since Aug. 26. Trump tweeted that China will have a much tougher time securing a trade deal if the Asian nation waits until after the 2020 U.S. presidential election and he wins. Crude prices were also undermined by plunging gasoline futures, as Hurricane Dorian threatened the U.S. East Coast.

https://www.bnnbloomberg.ca/oil-mired-near-one-week-low-as-trump-ratchets-up-trade-tensions-1.1310670

Bond Rally Gone Too Far But Trade War Risk Keeps Schroders Long

The global debt rally is no longer justified by economic fundamentals but escalating trade war risks are keeping the managers of one of Australia’s top-performing bond funds from exiting long positions.

Bonds are pricing in a recession which is not likely in the near term, according to Simon Doyle, head of fixed income and multi-asset at Schroder Investment Management Australia Ltd., and Stuart Dear, deputy head of fixed income. While they have turned more defensive, the fund managers still favor long-duration exposure in the U.S., Australia and to a lesser extent Europe.

“In some ways you can argue yields have probably gotten a little bit ahead of fundamentals and it’s being driven by sentiment,” Doyle said in an interview in Sydney. “But we are still on the long side at the moment until we see something change on the trade side.”

The pair’s A$2.5 billion ($1.7 billion) Schroder Fixed Income Fund/Australia has beaten 97% of its peers over the last year.

Intensifying fears of a synchronized global slowdown amid the worsening U.S.-China trade dispute has sent investors piling into the safety of government bonds in recent months. In August, U.S. Treasuries saw their strongest rally since the height of the 2008 financial crisis as 10-year yields tumbled below 1.5%. Bond yields also slid to record lows in Europe and Australia.

Zero Rates

Schroders hasn’t ruled out the possibility that rates could move “significantly lower,” Doyle said. Still, for U.S. yields to hit zero, it would probably require a recession, something that is only likely on a one-to-three year view, he added.

“Zero is not out of the realms of possibility, but there are a few things that need to happen for that to occur,” he said. “It’s not a given that this all kind of flows into recession, so we are keeping an open mind. We are playing it from the long side, from the long duration side.”

Schroders has trimmed some of its holdings slightly into the bond rally, and one of the reason that it remains long duration is because risk assets were fully priced, according to Doyle.

“If you work your way through markets there’s not really a lot of risk premium being embedded in asset markets anywhere,” he said. As yields head lower, “it gets harder and harder. You are not going to see those returns repeated,” he said.

Long Sterling

The fund manager sees corporate bonds from transport companies and REITs as attractive, as well as infrastructure securities and inflation-linked notes. In currencies, it favors being long yen and short the Australian dollar, and has a small long position in sterling.

“We think it’s discounted pretty bad scenarios and notwithstanding the machinations of the U.K. parliament, it hasn’t really moved that much,” Doyle said. “It is so cheap that if you do get even a semi-positive resolution to Brexit that it does have quite a lot of upside.”

https://www.bnnbloomberg.ca/bond-rally-gone-too-far-but-trade-war-risk-keeps-schroders-long-1.1310677

China takes US to WTO amid escalating trade war

China says it has filed a complaint against the United States with the World Trade Organization (WTO), after Washington imposed new tariffs on billions of dollars of Chinese imports in an escalating trade war between the two world powers.

China’s Commerce Ministry said in a statement on Monday that Beijing would defend its legal rights in accordance with the rules of the international organization that limit the tariffs each country is allowed to charge.

The announcement came one day after the US began imposing 15-percent tariffs on a variety of Chinese products. In a retaliatory move, China also began imposing new duties on US crude oil.

“These American tariffs seriously violate the consensus reached by the leaders of our two countries in Osaka,” said the ministry, referring to trade talks between the two sides in the Japanese city in June.

US President Donald Trump and his Chinese counterpart, Xi Jinping, had agreed to “fully engage” on trade when they met in Osaka during the G20 summit.

“The Chinese side is strongly dissatisfied and resolutely opposed to that (the imposition of the new tariffs),” it said. “In accordance with relevant WTO rules, China will firmly safeguard its legitimate rights and interests.”

This is the third complaint China has brought to the WTO over the tariffs.

The US on Friday published a written defense in the first of the three legal cases, saying that Beijing and Washington had agreed the issue should not be judged at the WTO.

The US submission also said its actions were exempt from the organization’s rules because they were “measures necessary to protect public morals” — a clause used in the past to argue for trade restrictions over gambling, animal rights and public broadcasting.

Under the rules of the WTO, the US has 60 days to try to settle the latest dispute. Then China could ask the WTO to adjudicate, a process that would take several years.

If the US is found to have broken the WTO rules, then China will be given approval to take trade sanctions.

The Trump administration has so far imposed tariffs on hundreds of billions of dollars’ worth of Chinese goods.

China has also met every single round of the US tariffs with retaliatory measures of its own, but its countermeasures have been milder.

https://www.presstv.com/Detail/2019/09/03/605187/China-US-trade-war-WTO-complaint