Tag Archives: China

The United States and China gave no indication of their next step after wrapping up talks aimed at resolving a tariff fight that threatens to chill global growth.

The two sides will “maintain close contact,” China’s Ministry of Commerce said Thursday. But they announced no agreements or date for meeting again during the 90-day truce declared on Dec. 1 by Presidents Donald Trump and Xi Jinping in their fight over Beijing’s technology ambitions.

That uncertainty dampened Asian investor sentiment. Stock markets in Germany, France, Japan and China fell back after rising Wednesday following Trump’s comment on Twitter that the talks were “going well!”

Negotiators focused on China’s pledge to buy a “substantial amount” of agricultural, energy, manufactured goods and other products and services, the U.S. Trade Representative said.

However, a USTR statement emphasized American insistence on “structural changes” in Chinese technology policy, market access, protection of foreign patents and copyrights and cyber theft of trade secrets. It gave no sign of progress in those areas.

It also said the negotiations dealt with the need for “ongoing verification and effective enforcement.” That reflects American frustration that the Chinese have failed to live up to past commitments.

A Ministry of Commerce spokesman, Gao Feng, said the talks “enhanced mutual understanding and laid the foundation for addressing each other’s concerns.”

Trump hiked tariffs on $250 billion of Chinese goods over complaints Beijing steals or pressures companies to hand over technology.

Washington also wants changes in an array of areas including the ruling Communist Party’s initiatives for government-led creation of global competitors in robotics, artificial intelligence and other industries.

American leaders worry those plans might erode U.S. industrial leadership. Chinese leaders see them as a path to prosperity and global influence and are reluctant to abandon them.

The two sides might be moving toward a “narrow agreement,” but “U.S. trade hawks” want to “limit the scope of that agreement and keep the pressure up on Beijing,” Eurasia Group analysts Michael Hirson, Jeffrey Wright and Paul Triolo said in a report.

“The risk of talks breaking down remains significant,” they wrote.

White House press secretary Sarah Huckabee Sanders expressed optimism to Fox Business Network. She said Wednesday the timing was unclear but the two sides are moving toward “more balanced and reciprocal” trade.

Beijing has tried to mollify Washington and other trading partners by promising to buy more of their goods and open its industries wider to foreign competitors.

Trump has complained repeatedly about the U.S. trade deficit with China, which last year likely exceeded the 2017 gap of $336 billion.

Economists say the 90-day window is too short to resolve all the conflicts between the biggest and second-biggest global economies.

“We can confidently say that enough progress was made that the discussions will continue at a higher level,” said Craig Allen, president of the U.S.-China Business Council. “That is very positive.”

Chinese exports to the U.S. have held up despite tariff increases, partly due to exporters rushing to fill orders before more increases hit. Forecasters expect American orders to slump this year.

China has imposed penalties on $110 billion of American goods, slowing customs clearance for U.S. companies and suspending issuing licenses in finance and other businesses.

U.S. companies want action on Chinese policies they complain improperly favor local companies. Those include subsidies and other favors for high-tech and state-owned industry, rules on technology licensing and preferential treatment of domestic suppliers in government procurement.

For its part, Beijing is unhappy with U.S. export curbs on “dual use” technology with possible military applications. Chinese officials say their companies are treated unfairly in national security reviews of proposed corporate acquisitions, though almost all deals are approved unchanged.

This week’s talks went ahead despite tension over the arrest of a Chinese tech executive in Canada on U.S. charges related to possible violations of trade sanctions against Iran.

China and the United States will continue their vice ministerial-level trade talks in Beijing for a third day on Wednesday, a U.S. official said, as financial market players closely watch the outlook for the trade dispute between the world’s two major powers.

The official was speaking to reporters late Tuesday following two days of talks in which Washington is believed to have called on Beijing to implement measures to protect intellectual property rights and increase imports of U.S. products.

Details of the talks were not immediately available, but U.S. President Donald said in a Twitter post, “Talks with China are going very well!”

The direct dialogue on trade between the world’s two largest economies came around one month after Chinese President Xi Jinping and Trump held a summit.

At their meeting on Dec. 1 in Buenos Aires, Xi and Trump agreed that the United States and China will hold off on imposing further tariffs on each other’s imports and try to complete talks on technology and intellectual property rights issues within 90 days.

The Trump administration warned at the time that “if at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent,” suggesting that a failure to finish negotiations will rekindle trade strains.

Amid escalating U.S.-China trade tensions, global stock markets have recently become shaky and concern has been mounting that the world economy would be weighed down by a slowdown of the Chinese and U.S. economies.

Beijing and Washington hope the latest talks will pave the way for a ministerial-level meeting that U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He, Xi’s economic adviser, will attend, sources close to the matter said.

The United States has so far imposed tariffs of up to 25 percent on $250 billion of Chinese imports, with Trump urging Beijing to curb its huge trade surplus with the United States and improve the country’s alleged unfair business practices.

In retaliation, China has levied tariffs on more than 80 percent of all U.S. imports.

The second day of the vice ministerial-level trade talks coincided with North Korean leader Kim Jong Un’s unexpected arrival in Beijing on Tuesday.

Chinese Foreign Ministry spokesman Lu Kang told reporters later in the day that the holding of the two diplomatic events on the same day was unintentional.

In another sign of progress, China’s farm ministry has newly approved the import of five genetically modified crops, local media said on Tuesday, with the United States putting pressure on the Asian nation to open up its agricultural market further.

Trade talks between the U.S. and China this week should provide an early indication as to what political tensions between the two nations may disrupt the talks.

Deputy U.S. Trade Representative Jeff Gerrish will meet with Chinese officials in Beijing to begin discussing measures the U.S. seeks to allow the current trade war end between the two. If the talks are favorable to the U.S., Politico reports that could lead to higher level talks with higher ranking officials. The U.S. has set a March deadline for China to agree to trade policy reforms.

Meanwhile, China is opening access to its economy back to the United States through purchases of U.S. agricultural products. The state of the Chinese economy is seen as dire by some analysts, which could be a motivation to seek an end to the trade war. However, it remains unclear what specific demands the Trump administration will make and if China deems them reasonable or not.

American envoys are due in Beijing for talks Monday in a tariff battle over Chinese technology ambitions that threatens to hobble global economic growth.

The two days of meetings are aimed at carrying out the Dec. 1 truce by Presidents Donald Trump and Xi Jinping that postponed additional tariff hikes, the Ministry of Commerce announced Friday. It said the American delegation will be led by the deputy U.S. trade representative, Jeffrey Gerrish, but offered no other details.

The talks are going ahead despite tension over the arrest of a Chinese tech executive in Canada on U.S. charges related to possible violations of trade sanctions on Iran.

The two governments express interest in a settlement but give no indication their stances have shifted.

They hope to have “positive and constructive discussions,” said a Chinese foreign ministry spokesman, Lu Kang.

The clash reflects American anxiety about China’s emergence as a competitor in telecoms, solar power and other technologies and complaints by Washington, Europe and other trading partners that Beijing’s tactics violate its market-opening obligations.

Trump wants Beijing to roll back initiatives including “Made in China 2025,” which calls for state-led creation of champions in robotics, artificial intelligence and other fields. American officials worry those might erode U.S. industrial leadership.

China’s leaders have offered to narrow its politically sensitive trade surplus with the United States by purchasing more soybeans, natural gas and other American exports. But they reject pressure to scrap technology initiatives they see as a path to prosperity and global influence.

Both governments face economic pressure to reach a settlement.

Chinese economic growth fell to a post-global crisis of 6.5 percent in the quarter ending in September. Auto sales tumbled 16 percent in November over a year earlier and weak real estate sales are forcing developers to cut prices.

Third-quarter U.S. growth was 3.4 percent and unemployment is at a five-decade low. But surveys show consumer confidence is weakening due to concern growth will moderate this year.

Beijing has tried in vain to recruit France, Germany, South Korea and other governments as allies against Trump. They criticize his tactics but echo U.S. complaints about Chinese industrial policy and market barriers.

The European Union filed its own challenged in the World Trade Organization in June against Chinese regulations the 28-nation trade bloc said hamper the ability of foreign companies to protect and profit from their own technology.

Washington has imposed punitive tariffs of up to 25 percent on $250 billion of Chinese goods. Beijing responded by imposing penalties on $110 billion of American goods, slowing down customs clearance for U.S. companies and suspending issuance of licenses in finance and other industries.

Trump and Xi agreed to a 90-day postponement of more tariff hikes due to take effect Jan. 1. But economists say that is too little time to resolve the sprawling disputes that bedevil U.S.-Chinese relations.

The decision to hold this week’s talks at a deputy minister level reflects the need to work out technical details before higher-level officials make “hard political decisions on major issues,” said Tu Xinquan, director of the China Institute for World Trade Organization Studies at the University of International Business and Economics in Beijing.

In addition to Gerrish, the U.S. team will include the Office of the U.S. Trade Representative’s top negotiator on agricultural issues, Gregg Doud; Treasury Under Secretary for International Affairs David Malpass; Commerce Under Secretary for International Trade Gilbert Kaplan; the U.S. Agriculture Department’s under secretary for trade and foreign affairs, Ted McKinney; the U.S. Department of Energy’s assistant secretary for fossil energy, Steven Winberg; and other senior officials.

The makeup of the U.S. team was announced Friday by the trade representative’s office.

The dispute has rattled companies and financial markets that worry it will drag on global economic growth that is showing signs of declining.

For their part, Chinese officials are unhappy with U.S. curbs on exports of “dual use” technology with possible military applications. They complain China’s companies are treated unfairly in national security reviews of proposed corporate acquisitions, though almost all deals are approved unchanged.

Chinese exports to the United States held up through late 2018 despite Trump’s tariff hikes. But that was due partly to exporters rushing to beat new duties — a trend that is fading.

Some manufacturers that serve the United States have shifted production to other countries.

The investment bank UBS said Friday that 37 percent of 200 manufacturers surveyed said they have shifted out of China over the past 12 months. It said the threat of U.S. tariff hikes was the “dominating factor” for nearly half, while others moved due to higher costs or tighter environmental regulation.

Another 33 percent of companies said they plan to move out of China in the next six to 12 months, according to the UBS report.

Despite the December truce, “most firms expect trade war to escalate,” the report said.

China is tightening rules for slaughterhouses as the nation deals with an outbreak of African swine fever.

This week, China’s Agriculture Ministry announced slaughterhouses must test for African swine fever on pig products before selling them to market. Meat industry publication Meatingplace reports the announcement from China’s agriculture ministry comes amid a new outbreak of the disease on the largest farm to date in northeastern China that is home to 73,000 pigs.

The new regulations take effect in February and require pigs from different origins to be slaughtered separately. If African swine fever is found, the facilities must cull all pigs and suspend operations for at least 48 hours. Last month,

China warned feed imports should be tested after finding the virus in a protein powder made from pig blood. China has reported more than 90 cases of the deadly virus since August.

China is cracking down on illegal hog slaughtering to control the spread of African swine fever. Reuters reports illegal slaughtering and actions such as injecting water and other materials into pigs to increase weight have emerged in some areas recently, after a government ban on live hog transport sent prices soaring in major consumption areas of China.

The activities, according to China, have disrupted the hog slaughter sector and increased the risk of spreading African swine fever. China plans increased inspections of slaughterhouses and harsh punishment for illegal operations. China also intends to build more large-scale slaughterhouses to combat spread.

The move will also encourage sector consolidation. China has reported roughly 90 cases of the deadly African swine fever since early August. The cases have prompted fears of spread across the global pork industry.

A former central bank official in China is optimistic the U.S. and China can reach an agreement by the March deadline that will “pave the way for future talks.”

The South China Morning Post reports Zhu Min,  the deputy governor of the People’s Bank of China from 2009 to 2010, expects it would take at least six months to a year before the two countries could resolve their trade conflict. The official said China was willing to make compromises needed to address some U.S. concerns and to work to reduce the trade imbalance.

But he also expressed concern over Washington’s rivalry with Beijing beyond trade, and the unpredictability of the U.S. president. China began buying U.S. ag products last week as part of the ceasefire agreement between the U.S. and China. Agriculture remains hopeful more purchases are planned.

Ag Secretary Sonny Perdue met with President Donald Trump to talk about a second round of trade-aid payments to farmers.

Perdue had said an announcement was coming out on December third but that’s come and gone. It was first delayed as Washington honored the passing of former President George H.W. Bush. Now, the delay boils down to a Chinese soybean purchase and Office of Management and Budget Director Mike Mulvaney.

Politico says the OMB Director is a longtime critic of farm policy. He’s pushing back against the idea of a second round of trade assistance for farmers and ranchers. “OMB and Director Mulvaney, as always, are looking to hold on to money,” Perdue says. “I understand that. I think this is a commitment that the president made and we hope to have it resolved soon.”

The first Chinese soybean purchase from the U.S. in six months has brought about questions on whether there should even be a second round trade aid, which could amount to as much as $6 billion. While the soybean purchase is encouraging, agriculture is still being hit by retaliatory tariffs imposed by China, Canada, and Mexico.

The resumption of soybean sales to China this week is encouraging to American farmers who have seen the value of their crop plummet amid a trade war with the world’s second-largest economy, but producers see it only as a small step and say they need more federal aid.

Private exporters reported sales of 1.13 million metric tons of soybeans to China on Thursday and another 300,000 metric tons on Friday, the U.S. Department of Agriculture said. The Thursday report was the ninth-largest daily sale since 1977, according to the agency’s Foreign Agriculture Service, and it comes less than two weeks after the Trump administration reached a three-month truce in its trade war with China during which the two sides will try to work out their differences.

Davie Stephens, a Kentucky farmer who serves as president of the American Soybean Association, said the resumption of sales is “positive news” but that “it is vital that this 90-day process result in lifting the current 25 percent tariff that China continues to impose on U.S. soybean imports.”

“Without removal of this tariff, it is improbable that sales of U.S. soybeans to China can be sustained,” he said.

China had suspended U.S. soybean purchases earlier this year but under the truce agreed to buy more U.S. farm products. The country typically buys between 30 million and 35 million metric tons of U.S. beans in a normal year.

News of the U.S. sale might prompt some farmers to sell some of the soybeans they have stored on their farms, in part because South American crops will be hitting the world market within a couple of months, said Huron, South Dakota, farmer Brandon Wipf, who serves on the American Soybean Association board.

“We have a narrow window out of which to operate,” he said. “I think you’ll see some farmers selling, some holding on for a little better prices.”

No beans are moving yet out of North Dakota, which typically sends most of its annual crop to Pacific Northwest ports from which the beans go overseas to southeast Asia.

“It may take some time to get the shuttle trains in place and get ocean-going vessels stationed at the PNW,” said North Dakota Soybean Growers Association Executive Director Nancy Johnson. The sale announced this week is for delivery after the new year, she said, and it did not significantly boost prices.

January soybean futures in early Friday trading on the Chicago Board of Trade gained 40 cents to about $9.06 a bushel. That’s down from almost $15 a bushel four years ago and nearly $10 a bushel 18 months ago.

Soybean farmers are getting the largest share of a federal program created to compensate producers up to $12 billion for trade-related losses, though this year’s payment of 82 cents a bushel doesn’t match a market price drop of about $2 per bushel since May.

The Trump administration has said another 82 cents might be approved next year if a trade deal isn’t reached. Both the American Soybean Association and the National Farmers Union this week pushed for a second payment while the administration works on a long-term trade solution.

The farm sector has already lost far more value to this trade war than the (compensation) payments will provide, and damages due to lost markets will persist long into the future,” Farmers Union President Roger Johnson said. “The administration should be doing everything it can to protect the men and women who feed, fuel and clothe this nation.”

North Dakota U.S. Sen. John Hoeven, chairman of the Senate Agriculture Appropriations Committee, said Friday that he stressed the importance of the second payment to Office of Management and Budget Director Mick Mulvaney.

Not getting a second payment could be a “deal-breaker” for some farmers in terms of their support for the Trump administration, according to Wipf.

“They would see that as a broken promise by the administration,” he said. “We’re of course encouraging the administration not to make the miscalculation that this little bit of detente we have with China has suddenly fixed all the problems we have.”

China is officially buying U.S. soybeans again, which is good news for American agriculture. This week’s purchase amount was one for the record books.

A Farm Journal report says the latest U.S. Soybean Export Sales Report from USDA shows that China bought 1,130,000 metric tons of soybeans. To give that amount some perspective, it’s the ninth-largest one-day purchase in ten years. It’s also the biggest Chinese soybean buy in the four years. It’s also the biggest soybean buy of this year, so far. President Trump told Reuters that, “They’re buying tremendous amounts of soybeans. They’re definitely back in the market.”

Reuters says it seems to affirm the trade truce that the U.S. and China reached on December 1st. We still don’t know if China’s retaliatory tariffs on U.S. soybeans and other farm goods will be dropped as a part of the temporary truce. There’s also no word on whether or not the countries can resolve the longer-term disputes, including forced technology transfers and intellectual property theft within 90 days. That’s when President Trump said additional tariffs will go into effect and the trade war will resume