In this file:

 

·         One Trump Victory: Companies Rethink China

The trade war is nearing a possible truce, but global companies are nevertheless moving to reduce their dependence on Chinese factories to make the world’s goods.

 

·         Don’t Count on U.S.-China Trade Relations Warming Up Anytime Soon

Despite positive messages from both sides, hopes are fading that they can find mutually beneficial policies.

 

 

 

One Trump Victory: Companies Rethink China

The trade war is nearing a possible truce, but global companies are nevertheless moving to reduce their dependence on Chinese factories to make the world’s goods.

 

By Keith Bradsher, The New York Times (NYT)

April 5, 2019

 

BEIJING — Whatever deal Washington and Beijing reach over the trade war, President Trump has already scored a big victory: Companies are rethinking their reliance on China.

 

The two sides are nearing an agreement, with Mr. Trump saying on Thursday that an “epic” trade pact could be weeks away and that he may soon meet with President Xi Jinping, China’s top leader. But already, spurred by tariffs and trade tensions, global companies are beginning to shift their supply chains away from China, just as some Trump administration officials had wanted.

 

The move, known as decoupling, is a major goal of those who believe the world has grown far too dependent on China as a manufacturing giant. As Beijing builds up its military and extends its geopolitical influence, some officials fear that America’s dependence on Chinese factories makes it strategically vulnerable.

 

Now companies in a number of industries are reducing their exposure to China. GoPro, the mobile camera maker, and Universal Electronics, which makes sensors and remote controls, are shifting some work to Mexico. Hasbro is moving its toy making to the United States, Mexico, Vietnam and India. Aten International, a Taiwanese computer equipment company, brought work back to Taiwan. Danfoss, a Danish conglomerate, is changing the production of heating and hydraulic equipment to the United States.

 

Mr. Trump’s victory in this department is not unalloyed. Despite his promises to bring jobs back to the United States, most of the work is shifting to other countries with lower costs. Reshaping global supply chains also takes time, and China will remain a vital manufacturing hub for decades to come.

 

Still, chief executives say the trade war has prompted a fundamental reassessment of China as the dominant place to make things. Even Chinese companies are expanding overseas, although they still have most of their production in China.

 

“China was the factory of the world,” said Song Zhiping, the Communist Party chief at the China National Building Materials Group, a state-owned giant. “Things are changing. That’s why Chinese companies are going out of China.”

 

A spokeswoman for the United States trade representative’s office declined to comment.

 

While Mr. Trump portrays his trade fight as a clash over jobs, proponents of decoupling within the administration see the effort as a way of contending with a stronger, more aggressive China.

 

Already, China dominates the market for items like...

 

more, including links 

https://www.nytimes.com/2019/04/05/business/china-trade-trump-jobs-decoupling.html

 

 

Don’t Count on U.S.-China Trade Relations Warming Up Anytime Soon

Despite positive messages from both sides, hopes are fading that they can find mutually beneficial policies.

 

By Jenny Leonard, Bloomberg Businessweek

Apr 4, 2019

 

President Trump, who made taking on China’s unfair trade practices one of his top priorities after coming into office in 2017, has shown that he’s willing to use unconventional tools to get Beijing to the table. But even if negotiators from his administration get China to commit to their demands—including protecting U.S. intellectual property and buying massive amounts of U.S. goods and services to narrow the trade deficit—that doesn’t mean America will go back to business as usual with Beijing.

 

This isn’t solely a function of the administration’s brinkmanship, which has led both countries to the point of imposing new duties of roughly $360 billion over the past nine months. Shortly after U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer visited China for a round of negotiations in late March, China’s vice premier, Liu He, returned to Washington for what may be the final push for the two countries to reach a deal. After meeting with Liu on April 4, Trump said that they were “rounding the turn,” while Liu said that a “new consensus” had emerged, according to Xinhua News Agency. But business leaders, both parties in Congress, and U.S. allies are also running out of patience with China’s trade practices, leaving Beijing with few allies in Washington to help defuse an economic standoff.

 

In the past two years, the Trump administration has imposed tariffs on roughly $250 billion in Chinese imports. It’s also vowed to limit market access for Chinese telecommunications companies and to scrutinize Chinese investment in critical U.S. sectors. Embarking on an international campaign, the administration is pushing allies to bar China’s Huawei Technologies Co. from providing the infrastructure for 5G networks. Many Chinese officials find it hard to grasp that the rules of engagement are no longer the same, says Tim Stratford, chairman of the American Chamber of Commerce in Beijing. “Many in China see so many things in the U.S.-China relationship change at the same time, they’re having a hard time assessing what are U.S. policy goals and priorities,” he says.

 

When the U.S. Congress in 2000 agreed to grant China permanent normal trade relations—a year before the country became a member of the World Trade Organization—no one expected China to adopt America’s values. But there was a sense that Beijing was committed to a more market-oriented economy. While China is still too big a market to ignore, the shine has worn off, says Myron Brilliant, executive vice president and head of international affairs at the U.S. Chamber of Commerce. Just 33 percent of respondents in the U.S.-China Business Council’s 2018 member survey said they were optimistic about their companies’ prospects in China, compared with 58 percent in 2009.

 

Initial signs that China was implementing its WTO commitments during President George W. Bush’s first term—including lowering tariffs on thousands of products and revising national and local regulations to bring them into compliance with WTO rules—were followed by a setback when the global financial crisis hit in 2008. For many reformers in China, the crisis was proof that the U.S. economic model had failed. “I think under Xi Jinping the possibility of potential alignment has essentially disappeared,” says Scott Kennedy, a China expert at the Center for Strategic and International Studies. In response to the crisis, he says, the Chinese Communist Party doubled down on indigenous innovation, shutting out foreign companies and strengthening the People’s Liberation Army.

 

Senator Mark Warner, a Virginia Democrat on the Finance Committee, says that while he doesn’t agree with all aspects of the Trump team’s approach to trade—particularly imposing tariffs on imported metals, which has alienated allies—he gives the administration credit for making clear that relations with China cannot continue as they had. Under the Obama administration, Warner says, a sense of “American and Western arrogance” prevailed, while developing a strategy to counter China’s economic aggression should have been a higher priority...

 

more, including links

https://www.bloomberg.com/news/articles/2019-04-05/don-t-count-on-u-s-china-trade-relations-warming-up-anytime-soon