In this file:
· Trump Fumes Over China Trade, Faulting Democrats for His Impasse
· Exclusive: China backtracked on nearly all aspects of U.S. trade deal - sources
· Trump 'happy' to keep tariffs on Chinese goods; Beijing threatens retaliation
Trump Fumes Over China Trade, Faulting Democrats for His Impasse
President says he’s been told China wants to make a deal
China warns it’ll retaliate when U.S. hikes tariffs on Friday
By Shannon Pettypiece and Ye Xie, Bloomberg
May 8, 2019
The U.S. and China sent conflicting signals over trade, with President Donald Trump expressing optimism about the prospect of a deal and Beijing warning that it will retaliate if the U.S. follows through on a threat to hike tariffs.
Trump said Wednesday that China indicated it hopes to “make a deal” when senior Chinese officials visit Washington for negotiations Thursday and Friday. The U.S. has said it will raise tariffs on $200 billion of Chinese goods to 25 percent from 10 percent on Friday at 12:01 a.m. New York-time.
“We have gotten an indication they want to make a deal, our teams are meeting with their team tomorrow, we will see what happens," White House press secretary Sarah Huckabee Sanders told reporters after the president commented in a series of tweets.
The S&P 500 Index rose for the first time this week, as markets found a measure of calm after the White House suggested a deal was still possible, even as China’s Commerce Ministry warned it will retaliate if the U.S. follows through on hiking tariffs.
“Escalating the trade conflict is not in the interest of the people in both countries and the world. China deeply regrets the move,” the ministry said in a statement on Wednesday.
With less than 36 hours before the higher tariffs take effect, investors are on edge over the risk that talks between the world’s two-biggest economies will derail, sinking hopes for a lasting truce to their trade war.
"It’s in both countries’ interest to reach a deal. The consequence of a failure is that the economic relationship between the two countries will decouple,” said Cheng Li, research director of the Brookings Institution’s John L. Thornton China Center. “The environment has changed. There’s a possibility that China will play a hard ball.”
In a tweet on Wednesday morning, Trump also took a shot at his challengers, singling out former Vice President Joe Biden, who is running for the 2020 Democratic presidential nomination, saying China would prefer to negotiate with them. Biden has been criticized in recent weeks for playing down the economic threat posed by China, arguing the U.S. is in a much stronger position than Trump credits it with.
Biden will ensure that the U.S. and its allies “write rules of the road” in the relationship with China, Kate Bedingfield, his deputy campaign manager, wrote on Twitter on Wednesday.
“The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to “negotiate” with Joe Biden or one of the very weak Democrats, and thereby continue to ripoff the United States (($500 Billion a year)) for years to come....” Trump said. In a subsequent tweet, he wrote: “Guess what, that’s not going to happen.”
Pressure Cooker ...
Exclusive: China backtracked on nearly all aspects of U.S. trade deal - sources
David Lawder, Jeff Mason & Michael Martina, Reuters
May 8, 2019
WASHINGTON/BEIJING (Reuters) - The diplomatic cable from Beijing arrived in Washington late on Friday night, with systematic edits to a nearly 150-page draft trade agreement that would blow up months of negotiations between the world’s two largest economies, according to three U.S. government sources and three private sector sources briefed on the talks.
The document was riddled with reversals by China that undermined core U.S. demands, the sources told Reuters.
In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: theft of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.
U.S. President Donald Trump responded in a tweet on Sunday vowing to raise tariffs on $200 billion worth of Chinese goods from 10 to 25 percent on Friday – timed to land in the middle of a scheduled visit by China’s Vice Premier Liu He to Washington to continue trade talks.
The stripping of binding legal language from the draft struck directly at the highest priority of U.S. Trade Representative Robert Lighthizer - who views changes to Chinese laws as essential to verifying compliance after years of what U.S. officials have called empty reform promises.
Lighthizer has pushed hard for an enforcement regime more like those used for punitive economic sanctions – such as those imposed on North Korea or Iran – than a typical trade deal.
“This undermines the core architecture of the deal,” said a Washington-based source with knowledge of the talks.
“PROCESS OF NEGOTIATION” ...
FURTHER TALKS THIS WEEK ...
Trump 'happy' to keep tariffs on Chinese goods; Beijing threatens retaliation
Makini Brice & David Lawder, Reuters
via Kitco News - May 8, 2019
WASHINGTON (Reuters) - U.S. President Donald Trump said on Wednesday he would be happy to keep tariffs on Chinese imports, prompting Beijing to threaten retaliation, as the world’s two largest economies prepared to resume talks to end a trade war that has roiled global supply chains and financial markets.
The United States and China have locked horns over trade since last year, when the Trump administration slapped levies on billions of dollars worth of Chinese goods and demanded the Asian nation adopt policy changes that would, among other things, make China’s market more accessible to U.S. companies.
Beijing has responded in kind with its own tariffs on a range of U.S. goods including soybeans and pork products. While expectations have mounted that the two sides appeared to be nearing a deal, relations have soured in recent days.
Reuters, citing U.S. government and private-sector sources, reported on Wednesday that China late last week had backtracked on almost all aspects of a draft trade agreement, threatening to blow up the negotiations.
Trump, who has embraced largely protectionist policies as part of his “America First” agenda, warned China on Wednesday that it was mistaken if it hoped to delay a trade deal until a Democrat controlled the White House.
“The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to ‘negotiate’ with Joe Biden or one of the very weak Democrats,” Trump, a Republican, tweeted on Wednesday.
“Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers,” he added.
China has announced it is sending Vice-Premier Liu He, its lead negotiator for the trade dispute, to Washington for talks on Thursday and Friday, which some observers have taken as a sign that Beijing wants to strike a deal.
In the meantime, the U.S. government said in its official journal on Wednesday it would raise tariffs on $200 billion of Chinese goods to 25 percent from 10 percent effective at 12:01 a.m. EDT (0401 GMT) on Friday. Trump announced the plan on Sunday.
Separately, China’s Commerce Ministry said it would respond in kind, adding that escalating trade frictions were not in the interest of either country or the world.
Speaking to reporters, White House spokeswoman Sarah Sanders separately said the Trump administration has received an “indication” that China wants an agreement. Major stock indexes rebounded from this week’s earlier losses after her comments.
SWEEPING CHANGES ...