In this file:
· Kudlow says U.S. and China could reach trade deal soon
· China Trade War Update: Does Anybody Know What's Going On?
Kudlow says U.S. and China could reach trade deal soon
By Amie Simpso, Brownfield
March 11, 2019
White House Economic Adviser Larry Kudlow says a U.S.-China trade deal could be reached by April.
In an interview Sunday, Kudlow said U.S. and Chinese trade officials were making progress and have been in communication over teleconference this past week working out “difficult final points.”
He says a final deal must be enforceable and good for U.S. workers, farmers, and manufacturers...
China Trade War Update: Does Anybody Know What's Going On?
Kenneth Rapoza, Senior Contributor, Forbes
Mar 10, 2019
The China trade war is on pause again. New tariffs, which were supposed to double on March 2, are part of a new ceasefire agreement between Beijing and Washington. Is it a 60-day trade truce? Is there no timeline on it? Nobody knows.
This Chinese trade war is a moving target. Market insights on the subject seem to change every third day. We went from Trump and Xi Jinping ready to sign a “great deal” at the Mar-a-Lago resort in Florida in March to Trump and Xi ready to sign something that looks kind of like a deal at the Mar-a-Lago resort in April to maybe Xi is not coming after all ... in a matter of 72 hours.
China and the U.S. battling over trade is like watching the New England Patriots play the New York Yankees. What on earth is this game? Why is the Gronk playing third base? What’s Aaron Judge doing in shoulder pads covering Julian Edelman in deep left? Oh, man, and here comes Portuguese soccer star Cristiano Ronaldo to kick a field goal. Okay, this is getting ridiculous.
Two weeks ago, Treasury Secretary Steve Mnuchin supposedly got China to agree not to weaken the yuan. A weaker currency is an easy way for China to lessen the impact of tariffs. Why would China agree to keep its currency within a particular trading band at the behest of a country whose intelligence agencies have recently declared it public enemy No. 1? The only way China would do that is if they were promised no more tariffs.
A currency deal, in other words, is a gentleman’s agreement at best. It is unenforceable as it is now. And it depends on maximum trust from both sides, which is nonexistent.
China has a managed foreign exchange rate, unlike the Brazilian real or the Russian ruble, which are free-floating.
On Friday, Larry Kudlow, Trump’s economic advisor, told Fox Business News that there might not be a deal. It sent the market lower. Trump hates it when the market goes lower, especially when it can be blamed on his policies.
Kudlow maintains that Beijing and Washington still do not see eye-to-eye on important items. State subsidies to favored industries is one, especially high tech.
China has its own wishlist. It wants the U.S. to open the market to its tech infrastructure industries like telecommunications systems. Think Huawei. Forget it, Beijing. That won’t happen.
The U.S. wants China to get tougher on intellectual property. They opened a new IP court in December. What else does the U.S. want China to do on this front?
“Chinese demands have yet to be addressed. They want to break into the U.S. e-commerce payments system and have it blessed by the U.S. side. And the U.S wants the Chinese to promise not to retaliate if there are new tariffs. I cannot imagine China agreeing to this,” Michael Pillsbury, American Director of the Center on Chinese Strategy at the Hudson Institute, told FBN last week.
Despite the standoff, the tariff threat is on ice for a good 60 days.
Barclays Capital said Friday that their new base case scenario has President Trump actually removing the 10% tariffs on $200 billion worth of Chinese imports set in September. Their Hong Kong-based economist Jian Chang says that Xi has told them that new tariffs are a dealbreaker.
The European Union is now threatening to leave Trump’s side on the issue.
Their chief trade negotiator urged Trump to stop with tariff escalations against them if he wants to keep them as a partner against China...