Trump says he’s inclined to extend China trade deadline and meet Xi soon


Jeff Mason, David Lawder February 23, 2019

WASHINGTON (Reuters) – President Donald Trump said on Friday there was “a very good chance” the United States would strike a deal with China to end their trade war and that he was inclined to extend his March 1 tariff deadline and meet soon with Chinese President Xi Jinping.

U.S. and Chinese negotiators had made progress and will extend this week’s round of negotiations by two days through Sunday, Trump told reporters at the White House as he met with his top negotiators and their counterpart, Chinese Vice Premier Liu He.

“I think that we both feel there’s a very good chance a deal will happen,” Trump said.

The Republican president said he probably would meet with Xi in March in Florida to decide on the most important terms of a trade deal.

Extending the deadline would put on hold Trump’s threatened tariff increase to 25 percent from 10 percent on $200 billion of Chinese imports into the United States. That would prevent a further escalation in a trade war that already has disrupted commerce in goods worth hundreds of billions of dollars, slowed global economic growth and roiled markets.

Optimism that the two sides will find a way to end the trade war lifted stocks, especially technology shares. The S&P 500 stock index reached its highest closing level since Nov. 8. Oil prices rose to their highest since mid-November, with Brent crude reaching a high of $67.73 a barrel. [.N] [O/R]

CURRENCY AGREEMENT

Trump and Treasury Secretary Steven Mnuchin said the two sides had reached an agreement on currency. Trump declined to provide details, but U.S. officials long have expressed concerns that China’s yuan is undervalued, giving China a trade advantage and partly offsetting U.S. tariffs.

Announcement of a pact aimed at limiting yuan depreciation was putting “the currency cart before the trade horse,” but would likely be positive for Asian emerging market currencies, said Alan Ruskin, global head of currency strategy at Deutsche Bank in New York.

“How can you agree to avoid excessive Chinese yuan depreciation or volatility if you have not made an agreement on trade that could have huge FX implications?” Ruskin asked in a note to clients.

In a letter to Trump read aloud by an aide to Liu at the White House, Xi called on negotiators to work hard to strike a deal that benefits both country.

Trump said a deal with China may extend beyond trade to encompass Chinese telecommunications companies Huawei Technologies and ZTE Corp.

The Justice Department has accused Huawei of conspiring to violate U.S. sanctions on Iran and of stealing robotic technology from T-Mobile US Inc.

Chinese peer ZTE was last year prevented from buying essential components from U.S. firms after pleading guilty to similar charges, crippling its operations.

MEMORANDUMS NO MORE

Trump appeared at odds with his top negotiator, U.S. Trade Representative Robert Lighthizer, on the preliminary terms that his team is outlining in memorandums of understanding for a deal with China. Trump said he did not like MOUs because they are short term, and he wanted a long-term deal.

“I don’t like MOUs because they don’t mean anything,” Trump said. “Either you are going to make a deal or you’re not.”

Lighthizer responded testily that MOUs were binding, but that he would never use the term again.

Reuters reported exclusively on Wednesday that the two sides were drafting the language for six MOUs covering the most difficult issues in the trade talks that would require structural economic change in China.

Negotiators have struggled this week to agree on specific language within those memorandums to address tough U.S. demands for structural changes in China’s economy, according to sources familiar with the talks. The six memorandums include cyber theft, intellectual property rights, services, agriculture and non-tariff barriers to trade, including subsidies.

An industry source briefed on the talks said both sides have narrowed differences on intellectual property rights, market access and narrowing a nearly $400 billion U.S. trade deficit with China. But bigger differences remain on changes to China’s treatment of state-owned enterprises, subsidies, forced technology transfers and cyber theft of U.S. trade secrets.

Lighthizer pushed back when questioned on forced technology transfers, saying the two sides made “a lot of progress” on the issue, but did not elaborate.

The United States has said foreign firms in China are often coerced to transfer their technology to Chinese firms if they want to operate there. China denies this.

The U.S. Chamber of Commerce on Friday urged the U.S. government to ensure the deal was comprehensive and addressed core issues, rather than one based on more Chinese short-term purchases of goods.

China has pledged to increase purchases of agricultural produce, energy, semiconductors and industrial goods to reduce its trade surplus with the United States.

China committed to buying an additional 10 million tonnes of U.S. soybeans on Friday, U.S. Agriculture Secretary Sonny Perdue said on Twitter. China bought about 32 million tonnes of U.S. soybeans in 2017. The commitments are a “show of good faith by the Chinese” and “indications of more good news to come,” Perdue wrote.

China was the top buyer of U.S. soybeans before the trade war, but Beijing’s retaliatory tariffs on U.S. soybeans slashed business that had been worth $12 billion annually.

Additional reporting by Rajesh Kumar Singh, Makini Brice, Lisa Lambert and Tim Ahmann in Washington and Chris Prentice in New York, writing by Simon Webb and David Lawder; editing by Marguerita Choy and Tom Brown

Source: Reuters “Trump says he’s inclined to extend China trade deadline and meet Xi soon”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

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Trump says could include Huawei and ZTE in trade deal


February 23, 2019

WASHINGTON (Reuters) – U.S. President Donald trump said on Friday he may or may not include Chinese telecommunications companies Huawei Technologies and ZTE Corp in the trade deal being negotiated between the United States and China.

The Justice Department has charged Huawei and its chief financial officer with conspiring to violate U.S. sanctions on Iran by doing business through a subsidiary it tried to hide. The United States is seeking her extradition.

In a separate case, the Justice Department charged the telecommunications equipment maker with stealing robotic technology from T-Mobile US Inc. Huawei has said the companies settled their dispute in 2017.

Trump told reporters at the White House that U.S. officials are not talking about dropping charges against Huawei.

Huawei will be raised with U.S. attorneys and the attorney general in the coming weeks, Trump said, but “right now it’s not something that we’re discussing.”

Last year, Chinese peer ZTE was prevented from buying essential components from U.S. firms after pleading guilty to similar charges, crippling its operations.

ZTE resumed normal business after paying up to $1.4 billion in fines and replacing its entire board, on top of a near $900 million penalty paid in 2017.

It is not clear how ZTE could be involved in any trade agreement.

Reporting by Jeff Mason; Editing by James Dalgleish and Richard Chang

Source: Reuters “Trump says could include Huawei and ZTE in trade deal”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


China has agreed to buy up to $1.2 trillion in U.S. goods: CNBC


February 23, 2019

WASHINGTON (Reuters) – China has agreed to buy up to $1.2 trillion in goods from the United States as part of the current negotiations to end the trade war between the countries, CNBC reported on Friday, citing sources familiar with the situation.

Trump and Chinese President Xi Jinping could meet in late March in Florida, CNBC also reported.

CNBC said though that the two sides remain far apart on a key issue for the United States: the forced transfer of intellectual property. Negotiators have been meeting in Washington this week, with President Donald Trump scheduled to talk with Chinese Vice Premier Liu He on Friday afternoon, in the hopes of coming closer to a trade deal before March 1, when U.S. tariffs on a variety of goods are set to rise to 25 percent from 10 percent.

Two members of the Chinese delegation, who did not give their names, told Reuters they did not know if talks would be extended beyond Friday. They are scheduled to leave for Beijing on Saturday, according to a member of staff at their hotel.

Reuters reported exclusively on Wednesday that the two sides are starting to sketch out an agreement on structural issues, drafting language for six memorandums of understanding on proposed Chinese reforms.

Reporting by Lisa Lambert and Timothy Ahmann in Washington; Editing by James Dalgleish and Chizu Nomiyama

Source: Reuters “China has agreed to buy up to $1.2 trillion in U.S. goods: CNBC”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Saudi Arabia Sees Great Opportunities in China’s Belt and Road


In its report “Saudi Arabia strikes $10 billion China deal, talks de-radicalisation with Xi” yesterday”, Reuters quotes Crown Prince Mohammed as saying,“The Silk Road initiative and China’s strategic orientation are very much in line with the kingdom’s Vision 2030 (Saudi Arabia’s sweeping economic reform program)”. Saudi Arabia saw great opportunities with China.

As a result, Saudi Arabia has been working to add Chinese to the curriculum in Saudi schools and universities. Reuters quotes Saudi government as saying in a statement, “The introduction of Chinese to the curriculum is an important step toward the opening of new horizons for students”.

With good relations with all Middle East powers Saudi Arabia, Iran and Israel, China will succeed in building its 21st century Silk Road (major part of its Belt and Road) linking it with the Middle East from the ports it is building at Gwadar, Pakistan and Kyaukpyu, Myanmar and from the Middle East to Europe and Africa.

Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed at https://www.reuters.com/article/us-asia-saudi-china/saudi-arabia-strikes-10-billion-china-deal-talks-de-radicalisation-with-xi-idUSKCN1QB15H.


Saudi, China sign $28 billion worth of economic accords – SPA


Saudi Arabia’s Crown Prince Mohammed bin Salman poses for camera with the Chinese Ambassador to Saudi Arabia Li Huaxin during a visit to Great Wall of China in Beijing, China February 21, 2019. Bandar Algaloud/Courtesy of Saudi Royal Court/Handout via REUTERS

February 22, 2019

DUBAI (Reuters) – Saudi Arabia and China signed economic cooperation agreements worth a total of $28 billion at a joint investment forum during a visit by Saudi Crown Prince Mohammed bin Salman to Beijing, Saudi state news agency SPA said on Friday.

It said 35 agreements had been signed at the forum, held by Saudi Arabia’s investment agency SAGIA. It also said four licenses for Chinese companies had been awarded at the forum, without giving any details.

Reporting by Sylvia Westall; Editing by Gareth Jones

Source: Reuters “Saudi, China sign $28 billion worth of economic accords – SPA”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


China says humanitarian aid should not be forced into Venezuela


February 22, 2019

BEIJING (Reuters) – Humanitarian aid should not be forced into Venezuela, lest it cause violence, China’s Foreign Ministry said on Friday, warning that Beijing opposed military intervention in the country.

Venezuela President Nicolas Maduro threatened to close the border with Colombia on Thursday as opposition leader Juan Guaido and some 80 lawmakers ran a gauntlet of roadblocks trying to get to the frontier to receive humanitarian aid.

Guaido, who is recognized by dozens of countries as Venezuela’s legitimate head of state, was poised for a showdown with Maduro’s government on Saturday, when the opposition will attempt to bring in food and medicine being stockpiled in neighboring countries.

Maduro denies there is a humanitarian crisis and said on Thursday he was considering closing Venezuela’s key border with Colombia and would close the country’s other main border with Brazil, effectively shutting off any legal land access.

Speaking at a daily news conference, Foreign Ministry spokesman Geng Shuang said that the Venezuelan government had “remained calm and exercised restraint”, effectively preventing large-scale clashes.

“If so-called aid material is forced into Venezuela, and then if it causes violence and clashes, it will have serious consequences. This is not something anyone wants to see,” Geng said.

“China opposes military intervention in Venezuela, and opposes any actions causing tensions or even unrest,” he said.

Maduro retains the backing of both Russia and China.

Beijing has lent more than $50 billion to Venezuela through oil-for-loan agreements over the past decade, securing energy supplies for its fast-growing economy.

A change of government in Venezuela would favor Russia and China, who are the country’s two main foreign creditors, Guaido told Reuters in an interview last month.

Reporting by Ben Blanchard; editing by Darren Schuettler

Source: Reuters “China says humanitarian aid should not be forced into Venezuela”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


U.S., China haggle over toughest issues in trade war talks


Jeff Mason, David Lawder February 22, 2019

WASHINGTON (Reuters) – Top U.S. and Chinese trade negotiators haggled on Thursday over the details of a set of agreements aimed at ending their trade war, just one week before a Washington-imposed deadline for a deal expires and triggers higher U.S. tariffs.

U.S. Trade Representative Robert Lighthizer (2ndL), Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross (Top-L) pose for a photograph with China’s Vice Premier Liu He (2ndR), Chinese vice ministers and senior officials before the start of US-China trade talks at the White House in Washington, U.S., February 21, 2019. REUTERS/Joshua Roberts

Reuters reported exclusively on Wednesday that the two sides are starting to sketch out an agreement on structural issues, drafting language for six memorandums of understanding on proposed Chinese reforms.

If the two sides fail to reach an agreement by March 1, U.S. tariffs on $200 billion worth of Chinese imports are set to rise to 25 percent from 10 percent. Tit-for-tat tariffs between the world’s two largest economic powers have disrupted international trade and slowed the global economy since the trade war started seven months ago.

Negotiators have struggled this week to overcome differences on specific language to address tough U.S. demands for structural changes in China’s economy, two sources familiar with the talks said. The issues include an enforcement mechanism to ensure that China complies with any agreements.

“It’s not surprising that this week has been more challenging,” said an industry source familiar with the talks. “Once you move from putting together outlines to filling out the details, that is where things would naturally become more challenging.”

Chinese officials did not answer questions as they left the U.S. Trade Representative’s office on Thursday evening after more than nine hours of talks on Thursday.

The discussions began with a photo opportunity where U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He faced each other silently across a table in the Eisenhower Executive Office Building next door to the White House.

U.S. President Donald Trump will meet with Liu at the Oval Office on Friday, the White House said late on Thursday. The two also met at the end of talks during Liu’s last visit to Washington in late January.

Trump, who has embraced an “America First” policy as part of an effort to rebalance global trade, has said the March 1 deadline could be extended if enough progress is made.

Sources familiar with the negotiations told Reuters the memorandums would cover forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade.

The two sides remain far apart on demands by Trump’s administration for China to end practices on those issues that led Trump to start levying duties on Chinese imports in the first place.

Chinese President Xi Jinping would need to undertake difficult structural economic reforms to meet U.S. demands. The United States is offering no real concessions in return, other than to remove the tariff barriers Trump has imposed to force change from China.

PEN TO PAPER

One of Trump’s demands that is easier to fix for Beijing is to reduce the trade imbalance between the two nations. The U.S. trade deficit with China reached a record $382 billion through the first 11 months of 2018.

The two sides have reached consensus on how to alleviate the trade imbalances, several Chinese government sources said. Washington and Beijing are looking at a 10-item list for that, including additional Chinese purchases of agricultural produce, energy and goods such as semiconductors.

U.S. Agriculture Secretary Sonny Perdue called China’s pledges to purchase U.S. agricultural produce premature.

“Those proposals are all contingent upon a grand deal,” he said on the sidelines of the U.S. Department of Agriculture’s annual forum in Washington.

“The real issue is structural reforms regarding intellectual property, enforceability of those types of provisions.”

The United States could quickly recover its lost agricultural markets in China if a deal is struck, he said.

Perdue has overseen $12 billion in federal aid to U.S. farmers for losses they have sustained because of the trade war. China had all but halted purchases of U.S. soybeans, which were the single biggest U.S. agricultural export, worth around $12 billion in 2017.

Reporting by Jeff Mason and David Lawder; Additional reporting by Rajesh Kumar Singh, Humeyra Pamuk in Washington, Chris Prentice in New York and Michael Martina in Beijing; writing by Simon Webb; editing by Paul Simao, Richard Chang and Grant McCool

Source: Reuters “U.S., China haggle over toughest issues in trade war talks”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.