Trump praises China move on autos, says trade deal could happen soon


December 15, 2018

WASHINGTON (Reuters) – U.S. President Donald Trump welcomed China’s move on Friday to suspend additional tariffs on U.S.-made vehicles, saying it could help push forward a larger trade deal with Beijing.

“U.S. is doing very well. China wants to make a big and very comprehensive deal. It could happen, and rather soon!” Trump wrote on Twitter.

Reporting by Susan Heavey; Editing by Tim Ahmann

Source: Reuters “Trump praises China move on autos, says trade deal could happen 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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The U.S. Army Has a Vision for the Future. Is It the Right One?


Steven Metz |Friday, Dec. 14, 2018

Last week the U.S. Army’s Training and Doctrine Command released a new report entitled, “The U.S. Army in Multi-Domain Operations 2028.” The title might seem to suggest that the document would only interest die-hard military geeks. But despite its complex and arcane phrasing, the report is actually a fascinating window into how the Army sees future armed conflict and how it intends to prepare for it.

The report expands on the National Defense Strategy, which the Pentagon unveiled in early 2018. That document identified America’s primary security threat as “revisionist powers,” particularly Russia and China. The Army’s new report expands on this idea, labeling Russia the “pacing threat” that will shape capability development over the next few years, while flagging China as the more pressing long-term adversary. While very different in national objectives and capabilities, the report notes, Russia and China “operate in a sufficiently similar manner to orient on their capabilities collectively.” What works to deter or defeat one of them, the Army believes, will also work against the other.

According to the report, China and Russia “believe they can achieve objectives below the threshold of armed conflict … fracturing the U.S.’s alliances, partnerships, and resolve” using diplomatic and economic actions; unconventional operations; information warfare such as weaponized social media, false narratives and cyber attacks; and conventional military forces. This is what security experts call “gray zone” aggression.

While the Army sees a role for itself in the gray zone, most of the new report focuses on how it would respond if China and Russia resorted to war “by employing layers of anti-access and area denial systems designed to rapidly inflict unacceptable losses on U.S. and partner military forces,” forcing Washington to either accept aggression or pay a high price to reverse it.

If this sounds like what Saddam Hussein tried to do when he invaded Kuwait in 1990, it is. The difference is that the U.S. military of 1990 was so superior to the Iraqi armed forces that it could reverse Saddam’s aggression at a politically acceptable cost. The Army and the other services believe that without augmented capabilities, they might not be able to do that in the future against the technologically advanced Russian and Chinese militaries. The way to regain clear superiority over potential opponents is by developing “multi-domain operations” that tightly integrate military formations and operations across all of the domains of warfighting: land, air, sea, space and cyber. Once this integrated approach is in place, the Army will be able to “overmatch the enemy through cross-domain synergy and multiple forms of attack all enabled by mission command and disciplined initiative.”

The Army’s vision is based on strategic and political assumptions that may or may not hold.

In a sense this, too, is similar to what the U.S. military did to Iraqi forces in 1991, except faster, more complex, more tightly integrated and generally better. But this makes sense only if Russia and China actually plan to attack nearby nations, and if American policymakers would be willing to go to war to throw them out. Therein lies the rub: The new Army report and, more broadly, the U.S. military’s vision of the future are based on strategic and political assumptions that may or may not hold. As is always the case, assumptions are the foundation of any vision of the future but also its greatest potential weakness.

The Army’s vision, for instance, assumes that Russia and China would gobble up weaker nations unless the United States prevents them from doing so, and that Americans are willing to pay any price for a military to deter or reverse their gains. But it is equally plausible that Russia and China are self-deterred by the political and economic costs of invading and ruling nearby nations. If that is true, the United States might spend trillions of dollars on unnecessary military capabilities to prevent something that wasn’t going to happen anyway. Al-Qaida tried to goad the United States into spending itself into weakness and failed. Russia and China might pull it off.

The vision also assumes that Americans will continue to consider armed aggression by adversaries intolerable, and that they will be willing to bear the cascading economic costs of war to prevent or reverse it. This might have been true in 1991, when the United States stood atop a global economy not as interconnected as it is today. Whether it will still enjoy this paramount position in the future is an open question. Would a U.S. president and Congress truly risk a catastrophic global economic crisis to save a nation invaded by Russia or China?

Throughout history, militaries often have prepared to fight the previous war rather than the one they were eventually confronted with. Could this be happening again? The U.S. military’s vision of the future as described in the new Army report is astute from an operational perspective, but its underlying strategic and political assumptions are straight out of 1991. But this is not a slam on the Army. As it should, America’s land force is thinking about how it might fight in the future. It cannot decide why it might fight.

To make the Army’s future vision even more effective, America’s political leaders and security intellectuals need to reach a working agreement on the purpose of U.S. military power. The Army and the other services need to be told by the civilian leadership what they should prepare to do rather than having to invent their own predictions of the future strategic environment. In lieu of that, the best the Army can do is prepare for a replay of Operation Desert Storm and hope that this is what America asks it to do.

Steven Metz is the author of “Iraq and the Evolution of American Strategy.” His WPR column appears every Friday. You can follow him on Twitter @steven_metz.

Source: World Politic Review “The U.S. Army Has a Vision for the Future. Is It the Right One?”

Note: This is World Politic Review’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.


China commerce ministry would welcome U.S. trade delegation visit


December 13, 2018

BEIJING (Reuters) – China and the United States are in close contact over trade, and any U.S. trade delegation would be welcome to visit, a commerce ministry spokesman said on Thursday.

U.S. President Donald Trump and Chinese President Xi Jinping this month agreed to a truce that delayed the planned Jan. 1 U.S. increase of tariffs on $200 billion worth of Chinese goods while they negotiate a trade deal.

China has agreed to cut tariffs on U.S.-built cars and auto parts to 15 percent from 40 percent, a Trump administration official said on Tuesday, setting the stage for new talks aimed at easing the dispute between the world’s two largest economies.

China’s tariff cut was communicated during a phone call between Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin, the official said.

Both sides are in touch, said Gao Feng, spokesman at the Chinese commerce ministry, when asked at a regular news briefing about details of the Tuesday telephone conversation.

“Both sides exchanged views on the timetable and roadmap for next steps,” said Gao, who was also asked if China was planning to send a delegation to the United States to discuss trade.

“At this time, both sides are in close contact. China welcomes the U.S. side to come to China for consultations, and also is open to visiting the United States for talks,” he said.

Separately, China on Wednesday bought at least 500,000 tonnes of U.S. soybeans in its first major purchase of the oilseed since Trump and Xi struck their trade truce at Dec. 1 talks in Argentina, traders said.

“Soybeans have always been an important import product from the United States,” said Gao.

“We have a huge domestic market demand.”

Reporting by Christian Shepherd; Writing by Ryan Woo; Editing by Clarence Fernandez

Source: Reuters “China commerce ministry would welcome U.S. trade delegation visit”

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


Exclusive: China makes first big U.S. soybean purchase since Trump-Xi truce


Karl Plume December 13, 2018

CHICAGO (Reuters) – China on Wednesday made its first major purchases of U.S. soybeans since President Donald Trump and his Chinese counterpart Xi Jinping struck a trade war truce earlier this month, providing some relief to U.S. farmers who have struggled to find buyers for their record-large harvest.

Trump told Reuters in an interview on Tuesday the Chinese were already buying a “tremendous amount” of U.S. soybeans and would also soon cut tariffs on U.S. autos.

The purchase of over 1.5 million tonnes of beans is the most concrete evidence yet that China is making good on pledges the U.S. government said Xi made when the two leaders met on Dec. 1 and agreed to a 90-day detente to negotiate a trade deal.

Global markets had whipsawed since then, with little sign that China was making the substantial purchases of U.S. farm, energy and industrial products that Trump said would start immediately after the meeting.

Investors have been skeptical about the progress made toward ending a trade war that has disrupted the flow of hundreds of billions of dollars of goods between the world’s two largest economies. The arrest in Canada of a top Chinese executive from technology giant Huawei Technologies Co Ltd also stoked concern in markets that the trade war could worsen.

In another sign of concessions to the United States, China appears to be easing its high-tech industrial push, dubbed “Made in China 2025,” which has long irked Washington.

China has also told state oil trader Unipec to buy U.S. oil, and the United States is expecting Beijing to cut tariffs on U.S.-made autos and car parts.

BACK IN BUSINESS

The soybean purchases by Chinese state-owned companies, valued at more than $500 million, will do little to reduce the $43.1 billion U.S. trade deficit with China, which Trump wants to narrow over the long term.

The purchases will, however, provide a goodwill gesture before the next round of U.S.-China talks to change their terms of trade. The United States has a long list of complaints against China on intellectual property, forced technology transfers and industrial subsidies.

The soybean exports will also provide relief to U.S. farmers. Soybeans are the single most valuable U.S. agricultural export product and China bought 60 percent of those exports in 2017, worth $12.25 billion.

But China has been out of the market since Beijing imposed a tariff on U.S. soy imports in July, pushing prices of the oilseed to decade-lows.

Benchmark soybean futures Sv1 on the Chicago Board of Trade hit their highest level since midsummer on Wednesday.

Chinese state-run firms Sinograin and Cofco bought the soybeans, said one European trader. The sellers included global agricultural merchants Cargill Inc, Louis Dreyfus Company and U.S. farmer-owned agriculture company CHS Inc (CHSCP.O).

he trader said China was seeking to buy a total of 2.5 million to 3 million tonnes of U.S. soybeans.

Cargill and CHS declined to comment. Dreyfus did not immediately respond to requests for comment.

One U.S. trader with direct knowledge of the deals said Chinese state-owned firms bought at least 12 cargoes for shipment from January to March. Another trader with direct knowledge of the deals and one who sells beans to exporters involved said around 30 cargoes had traded by Wednesday afternoon.

“China was buying right out of the gate this morning. It looks like we’re back in business now,” the first U.S. trader said.

The soybeans are expected to be shipped mostly from grain terminals in the U.S. Pacific Northwest, the most direct route to Asia, the U.S. traders said.

JUST A START

U.S. farmers welcomed the deals.

“This is a start,” said Valley City, North Dakota farmer Monte Peterson. “Any business that we can put together we’re pretty grateful for.”

The White House this week delayed additional payments from a $12 billion aid package for farmers stung by the trade war because it expected Beijing to resume buying U.S. soybeans.

U.S. farmers stored soybeans after the fall harvest, instead of selling them to grain traders and processors, because of low prices and lack of alternative buyers.

Commodities traders and analysts said soybean prices may struggle to build on Wednesday’s gains unless China buys considerably more soybeans.

“If this is all we’re going to get, it is a whopping disappointment and we are adding at least 200 million bushels to our soybean stocks,” said Ted Seifried, chief market strategist for Chicago-based Zaner Ag Hedge. “We need follow-up sales in short order in order to keep the momentum higher in soybeans.”

The 25 percent tariff on U.S. soybeans Beijing imposed on July 6 remains in effect. The higher duties discouraged private Chinese importers from making purchases as Brazilian soybeans, which are not subject to the tariffs, are less expensive.

China this year has relied on Argentina and top exporter Brazil for most of its soybeans used to feed the world’s largest pig herd. Brazil will start harvesting its next crop in early 2019 – leaving a window for the U.S. to sell.

“The Chinese evidently want the beans quickly as they have not been able to cover all their needs in South America,” the European trader said.

Reporting by Karl Plume; additional reporting by Michael Hogan in Hamburg and Julie Ingwersen, Tom Polansek and Michael Hirtzer in Chicago; editing by Caroline Stauffer, Simon Webb, Bernadette Baum and Richard Chang

Source: Reuters “Exclusive: China makes first big U.S. soybean purchase since Trump-Xi truce”

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


Canada frees CFO of China’s Huawei on bail; Trump might intervene


Julie Gordon, Anna Mehler Paperny December 11, 2018

VANCOUVER (Reuters) – A top executive of Chinese telecoms giant Huawei Technologies Co Ltd was granted bail by a Canadian court on Tuesday, 10 days after her arrest in Vancouver at the request of U.S. authorities sparked a diplomatic dispute.

Meng Wanzhou, Huawei’s [HWT.UL] chief financial officer and the daughter of its founder, faces U.S. claims that she misled multinational banks about Iran-linked transactions, putting the banks at risk of violating U.S. sanctions.

In a court hearing in Vancouver, British Columbia, Justice William Ehrcke granted C$10 million ($7.5 million) bail to Meng, who has been jailed since her arrest on Dec. 1. The courtroom erupted in applause when the decision was announced. Meng cried and hugged her lawyers.

Among conditions of her bail, the 46-year-old executive must wear an ankle monitor and stay at home from 11 p.m. to 6 a.m. Five friends pledged equity in their homes and other money as a guarantee she will not flee.

If a Canadian judge rules the case against Meng is strong enough, Canada’s justice minister must next decide whether to extradite her to the United States. If so, Meng would face U.S. charges of conspiracy to defraud multiple financial institutions, with a maximum sentence of 30 years for each charge.

The arrest of Meng has put a further dampener on Chinese relations with the United States and Canada at a time when tensions were already high over an ongoing trade war and U.S. accusations of Chinese spying.

U.S. President Donald Trump told Reuters on Tuesday he would intervene in the U.S. Justice Department’s case against Meng if it would serve national security interests or help close a trade deal with China.

China had threatened severe consequences unless Canada released Meng immediately, and analysts have said retaliation from Beijing over the arrest was likely.

The U.S. State Department is considering issuing a travel warning for its citizens, two sources said on Tuesday.

The Canadian government was considering issuing a similar warning, Canada’s CTV network reported. Reuters was not able to confirm the report.

Earlier on Tuesday, the Canadian government said that one of its citizens in China had been detained.

Two sources told Reuters the person detained was former Canadian diplomat Michael Kovrig. The Canadian government said it saw no explicit link to the Huawei case.

However, Guy Saint-Jacques, Canada’s former ambassador to China, asked by the Canadian Broadcasting Corp whether the Kovrig detention was a coincidence, said: “In China there are no coincidences … If they want to send you a message they will send you a message.”

The Chinese embassy did not immediately reply to a request for comment.

ELECTRONIC MONITORING

Meng, who was arrested as she was changing planes in Vancouver, has said she is innocent and will contest the allegations in the United States if she is extradited.

Tuesday was the third day of bail hearings. Meng’s defense had argued that she was not a flight risk, citing her longstanding ties to Canada, properties she owns in Vancouver and fears for her health while incarcerated.

Her family assured the court she would remain in Vancouver at one of her family houses in an affluent neighborhood. Her husband said he plans to bring the couple’s daughter to Vancouver to attend school, and Meng had said she would be grateful for the chance to read a novel after years of working hard.

“I am satisfied that on the particular facts of this case … the risk of her non-attendance in court can be reduced to an acceptable level by imposing bail conditions,” said the judge, adding that he was also persuaded by the fact that Meng was a well-educated businesswoman with no criminal record.

She must remain in Canada and be accompanied by security guards when she leaves her residence. Meng will pay a cash deposit of C$7 million, with five guarantors liable for a remaining C$3 million if she absconds.

Meng was ordered to reappear in court on Feb. 6 to make plans for further appearances.

Huawei, which makes smartphones and network equipment, said in a statement it looked forward to a “timely resolution” of the case.

“We have every confidence that the Canadian and U.S. legal systems will reach a just conclusion,” it said, adding that it complied with all laws and regulations where it operates.

The case against Meng stems from a 2013 Reuters report here about Huawei’s close ties to Hong Kong-based Skycom Tech Co Ltd, which attempted to sell U.S. equipment to Iran despite U.S. and European Union bans.

Huawei is the world’s largest supplier of telecommunications network equipment and second-biggest maker of smartphones, with revenue of about $92 billion last year. Unlike other big Chinese technology firms, it does much of its business overseas.

Reporting by Julie Gordon and Anna Mehler Paperny in Vancouver; writing by Nick Zieminski and Rosalba O’Brien; additional reporting by Ben Blanchard and Michael Martina in Beijing, John Ruwitch in Shanghai and David Ljunggren in Ottawa; editing by Cynthia Osterman and Bill Rigby

Source: Reuters “Canada frees CFO of China’s Huawei on bail; Trump might intervene”

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, U.S. discuss next stage of trade talks


December 11, 2018

BEIJING (Reuters) – China and the United States discussed the road map for the next stage of their trade talks on Tuesday, during a telephone call between Chinese Vice Premier Liu He and U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer.

Earlier this month in Argentina, U.S. President Donald Trump and Chinese President Xi Jinping agreed to a truce that delayed the planned Jan. 1 U.S. hike of tariffs to 25 percent from 10 percent on $200 billion of Chinese goods.

Lighthizer said on Sunday that unless U.S.-China trade talks wrap up successfully by March 1, new tariffs will be imposed, clarifying there is a “hard deadline” after a week of seeming confusion among Trump and his advisers.

China’s Commerce Ministry, in a brief statement, said Liu had spoken with Mnuchin and Lighthizer on Tuesday morning Beijing time on a pre-arranged telephone call.

“Both sides exchanged views on putting into effect the consensus reached by the two countries’ leaders at their meeting, and pushing forward the timetable and roadmap for the next stage of economic and trade consultations work,” the ministry said.

It did not elaborate.

A U.S. Treasury spokesman confirmed that the call with Liu took place, but offered no further details. The U.S. Trade Representative’s office did not immediately respond to a query about the call.

The Harvard-education Liu, Xi’s top economic advisor, is leading the talks from China’s end.

Global markets are jittery about a collision between the world’s two largest economic powers over China’s huge trade surplus with the United States and Washington’s claims that Beijing is stealing intellectual property and technology.

The arrest of a top executive at China’s Huawei Technologies Co Ltd [HWT.UL] has also roiled global markets amid fears that it could further inflame the China-U.S. trade row.

Reporting by Ben Blanchard and Lusha Zhang; Additional reporting by David Lawder in Washington; Editing by Richard Borsuk & Shri Navaratnam

Source: Reuters “China, U.S. discuss next stage of trade 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.


China calls on Canada to free Huawei CFO or face consequences


Meng Wanzhou, Executive Board Director of the Chinese technology giant Huawei, attends a session of the VTB Capital Investment Forum “Russia Calling!” in Moscow, Russia October 2, 2014. REUTERS/Alexander Bibik

Ben Blanchard, David Ljunggren December 8, 2018

BEIJING/OTTAWA (Reuters) – China warned Canada on Saturday that there would be severe consequences if it did not immediately release Huawei Technologies Co Ltd’s [HWT.UL] chief financial officer, calling the case “extremely nasty.”

Meng Wanzhou, Huawei’s global chief financial officer, was arrested in Canada on Dec. 1 and faces extradition to the United States, which alleges that she covered up her company’s links to a firm that tried to sell equipment to Iran despite sanctions.

The executive is the daughter of the founder of Huawei.

If extradited to the United States, Meng would face charges of conspiracy to defraud multiple financial institutions, a Canadian court heard on Friday, with a maximum sentence of 30 years for each charge.

No decision was reached at the extradition hearing after nearly six hours of arguments and counter-arguments, and the hearing was adjourned until Monday.

In a short statement, China’s Foreign Ministry said that Vice Foreign Minister Le Yucheng had issued the warning to release Meng to Canada’s ambassador in Beijing, summoning him to lodge a “strong protest.”

Adam Austen, a spokesman for Canadian Foreign Minister Chrystia Freeland, said Saturday there is “nothing to add beyond whatrights, Le said.

The move “ignored the law, was unreasonable” and was in its very nature “extremely nasty,” he added.

“China strongly urges the Canadian side to immediately release the detained person, and earnestly protect their lawful, legitimate rights, otherwise Canada must accept full the Minister said yesterday”.

Freeland told reporters on Friday that relationship with China is important and valued, and Canada’s ambassador in Beijing has assured Chinese that consular access will be provided to Meng.

When asked about the possible Chinese backlash after the arrest of Huawei’s CFO, Prime Minister Justin Trudeau told reporters on Friday that Canada has a very good relationship with Beijing.

Canada’s arrest of Meng at the request of the United States while she was changing plane in Vancouver was a serious breach of her lawful responsibility for the serious consequences caused.”

The statement did not elaborate.

“There will probably be a deep freeze with the Chinese in high-level visits and exchanges,” David Mulroney, former Canadian ambassador to China, said on Friday.

“The ability to talk about free trade will be put in the ice box for a while. But we’re going to have to live with that. That’s the price of dealing with a country like China.”

Meng’s arrest was on the same day that U.S. President Donald Trump met in Argentina with China’s Xi Jinping to look for ways to resolve an escalating trade war between the world’s two largest economies.

“We are tracking the developments of this case and refer you to the filings in the Supreme Court of British Columbia,” said a U.S. State Department official, speaking on condition of anonymity.

The news of Meng’s arrest has roiled stock markets and drawn condemnation from Chinese authorities, although Trump and his top economic advisers have played down its importance to trade talks after the two leaders agreed to a truce.

A Huawei spokesman said on Friday the company has “every confidence that the Canadian and U.S. legal systems will reach the right conclusion.” The company has said it complies with all applicable export control and sanctions laws and other regulations.

Reporting by Ben Blanchard in Beijing and David Ljunggren in Ottawa; Editing by Alexander Smith and Nick Zieminski

Source: Reuters “China calls on Canada to free Huawei CFO or face consequences”

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