China Trade Deal On The Verge After Beijing Slams Trump's Latest Surprise "Flip-Flop"

One day after Trump surprised trade watchers by announcing he would impose 25% tariffs on up to $50 billion in Chinese tech imports as well as other sanctions, a confused Beijing hit back at the US president, saying that if the U.S. insists on unilateral measures, China will respond accordingly, according to foreign ministry spokeswoman Hua Chunying told reporters in Beijing on Wednesday.

“Every flip-flop in international relations simply depletes a country’s credibility,” Hua added following the White House's statement on Tuesday that a final list of imported goods to be targeted will be released by June 15, and levies imposed “shortly thereafter.” 

Trump’s latest u-turn was greeted with dismay in the Chinese state media, though pledges to retaliate were muted: "The world faces an extremely mercurial White House administration,” an editorial in China’s Global Times tabloid read. “The Chinese government has the ability and wisdom to handle such situations."

As Bloomberg notes, the announcement by Trump, which seemed to tear up an agreement reached only 10 days ago in Washington, is the latest twist in a trade dispute between the U.S. and China that has rattled financial markets for months and could threaten the broadest global upswing in years, according to the International Monetary Fund.

Earlier on Wednesday, the Wall Street Journal reported that the trade talks between the two countries scheduled for June 2 in Beijing may be derailed by the fresh threat from Washington. Specifically, the WSJ reported that in order to test the waters after Trump's surprising announcement, a U.S. advance team was scheduled to arrive in Beijing Wednesday afternoon ahead of Commerce Secretary Wilbur Ross’s planned arrival on Saturday.

Members of the U.S. team, consisting of staffers from the Commerce, Treasury, Agriculture and Energy departments and the office of the U.S. Trade Representative, are set to meet with their Chinese counterparts to hammer out broad outlines of the talks.

If the two sides fail to reach accord about issues to be discussed, Ross’s trip could be canceled, the people said. “If the working-level teams from both sides can’t agree on anything, there would be no point for Ross to take the trip,” one of the WSJ sources said. Should those discussions go well, "the people said the high-level talks would proceed as planned."

While the ongoing trade dispute poses a risk to China’s economic outlook, the two countries will likely find common ground, said Robin Xing, chief China economist at Morgan Stanley; he expects China will buy an additional $60 billion to $90 billion of American goods over several years as it seeks to address Trump’s criticisms over the trade surplus.

“The two parties can reach a deal by China increasing imports,” Xing said Wednesday in a Bloomberg Television interview from Beijing. “De-escalation over time through negotiation remains our base case because we see areas where China and the U.S. can find some middle ground to make some mutually beneficial progress, for example to meet China’s own demand for upgrading consumption.”

Trump has vacillated in recent weeks on how hard to push Beijing over issues such as tariffs and intellectual property. The dispute began in March, when his administration first threatened to slap tariffs on as much as $50 billion in Chinese shipments to punish Beijing for violating American I.P. rights.

It is unclear if the latest flip-flop jeopardizes what until last weekened was seen as an all but done deal on ZTE, and, reciprocally, NXP-Qualcomm. As a reminder, China pressed the U.S. to give ZTE a break after the Commerce Department cut off the company from U.S. suppliers to punish it for allegedly lying to American officials in a sanctions case. Republican Senator Marco Rubio and other lawmakers from both parties have criticized Trump’s leniency toward ZTE, arguing that doing business with the company presents a risk to national security.

When Trump announced the initial plan to impose tariffs on Chinese goods, he also instructed the Treasury Department to draw up new curbs on investment in the U.S. by Chinese companies. The Treasury has presented its

As Bloomberg accurately highlights, the latest move by Trump signals the more hawkish wing of Trump’s trade team is trying to amplify its hard line, after Treasury Secretary Steven Mnuchin said this month that any talk of a trade war was suspended for now.

“Mnuchin’s ‘trade war on hold’ comments look to have been repudiated,” said Derek Scissors, a China analyst at the American Enterprise Institute in Washington. “It may be the administration has shifted somewhat to appease the Congress on the lifting of the ZTE sanctions.”

Which begs the question: is China trade hawk dragon Peter Navarro back in Trump's good graces, and if so, is the countdown to Mnuchin's resignation officially on?

Comments

PrayingMantis ebworthen Wed, 05/30/2018 - 07:54 Permalink

 

   ... any thoughts if Ivanka and Jared have anything to do with the flip-flops? 

             ... >>> ... “CUI BONO? Ivanka Trump received valuable trademarks from China just before Donald Trump’s ZTE reversal” ...

          >>> https://qz.com/1290623/ivanka-trump-received-trademarks-from-china-just-before-donald-trumps-zte-reversal/ ...

 

    ... “ ... Ivanka Trump’s trademarks, which she applied for after her father was elected but before she chose to became a full-time White House staffer, will allow her to profit off branded goods and prevent impersonators from profiting from her celebrity in China.

Between ZTE receiving its fine and Trump’s reversal, a Chinese state-owned corporation announced a $500 million loan package for a theme park in a Trump-branded real estate development.

Trump also received approval for package of trademarks in Chinashortly after his election, and his company is working with Chinese-state owned contractors on a project in Dubai. ... “ ...

 

In reply to by ebworthen

666D Chess TheSilentMajority Wed, 05/30/2018 - 08:15 Permalink

Haha, but it is fucking obvious, I mean three weeks after I saw the markets shooting up as if Hillary had won, it was crystal clear to me that the American public had been fooled once again. By the way, the markets were plummeting and gold was shooting up at the beginning of his acceptance speech. Then he said this:

https://www.youtube.com/watch?v=ams4BMa9A6c&t=35s

 

and gold starts tanking and the "markets" start an epic reversal. What a coincidence, wouldn't you say?

In reply to by TheSilentMajority

PrayingMantis 666D Chess Wed, 05/30/2018 - 08:18 Permalink

 

    ... “ ... The question at the heart of Trump’s latest rounds of trademark approvals is whether the US president has received any special treatment from the Chinese government, and if so whether that would reach the level of a violation of the “emoluments clause,” of the constitution. The clause bars someone who holds office in the US from receiving gifts or fees from a foreign state without the consent of Congress. ... “ ...

   ... “ ... Donald Trump has more than 100 trademarks in China, including 35 granted pre-approval since he became US president ...” ...

        ... >>> https://qz.com/929553/here-are-all-the-trump-trademarks-the-us-president-owns-in-china-and-some-that-he-doesnt/ ... 

 

In reply to by 666D Chess

MK ULTRA Alpha PrayingMantis Wed, 05/30/2018 - 08:41 Permalink

This is serious, it will decide the future of the US economy and our standard of living. Trump isn't being tough enough on the China trade surplus. We can't accept a deal to continue to hollow out US industrial and technology sectors.

The Trump Ross deal is to increase farm, ranch and energy exports to China while allowing the continued hollowing out of strategic industries.

The only reason the Intellectual Property (IP) part of the equation has been included is because of a political outcry from congress. The restrictions on Chinese investment inside the US is now in play.

There are hundreds of thousands of Chinese intelligence agents in universities, companies and inside the US government stealing technology, military data and federal personnel data. China isn't a normal trading partner.

The Chinese record on complying with trade restrictions and espionage restrictions is to pay lip service and do the opposite.

The Chinese are at war with the US, an economic war now and a hot war later, that is the plan. Considering the fate of the nation, I don't believe Trump is being tough enough on China, nor the US multinationals who produce in China and dump on the US. It is a one way street hollowing the US out and not allowing the kind of growth in strategic industries vital to the national survival.

Mnuchin behavior and actions are not in America's best interest. What he said in China wasn't following what was planned, it was a sell out and folded to the Chinese. He shouldn't be in the middle of trade negotiations. Section (Super) 301 was always the law and that law should be followed. If the corrupt biased anti-American WTO rules against any decisions made by the US Trade Representative then the US needs to abrogate the WTO treaty because it is destroying the US in favor of nations which subsidize their industries and use tariffs of which is exactly what China is doing on US goods made in America shipped to China.

China has a huge state owned industrial sector subsidized by the state dumping production on the US to hollow out critical national industries. This point should be a major point of negotiation but it's ignored.

US trade in goods and services are limited and restricted in many nations. We do not have free trade, we don't have fair trade, we have controlled trade of which the US has been the fool.

It's called reciprocity and this isn't being explained properly. The Chinese are cheating on all levels and it's time to say this is over, it must be stopped or there will not be a US economy with factories and technology.

It is critical the China trade surplus be reduced, not by exporting farm products and oil, no, the US manufacturing and technology base must be protected no matter what the multinational companies dumping products made in other nations on this country have to say, we must be protected from predatory nation killing practices and the planned destruction of our economy by the Chinese.

Trump is not being tough enough.

In reply to by PrayingMantis

Boxed Merlot MK ULTRA Alpha Wed, 05/30/2018 - 11:36 Permalink

...It's called reciprocity and this isn't being explained properly. The Chinese are cheating on all levels...

And from the article: "...he expects China will buy an additional $60 billion to $90 billion of American goods over several years as it seeks to address Trump’s criticisms over the trade surplus..."

So what could be simpler? Selling something to another nation that requires enormous effort to produce and ship or just transfer a few electronic blips into an account managed by a decision maker? Ah, I remember the days like they were just yesterday when it seemed China would Hoover every interest bearing UST we could issue in exchange for boatloads of plastic party favors.

In reply to by MK ULTRA Alpha

nidhug MK ULTRA Alpha Wed, 05/30/2018 - 13:16 Permalink

" Trump isn't being tough enough on the China trade surplus"

why is there such a unbalance in trade?

try to research reserve currency;)

you made your own bed, now you lie in it.

not our fault that the ussa have huge trade deficits with every country forced to buy your fucking greenbacks, if i could decide every single $ in the world would be sent home;)

In reply to by MK ULTRA Alpha

HockeyFool TheSilentMajority Wed, 05/30/2018 - 08:17 Permalink

This reads like a fucking CNN report.

"Trump is crazy! He fucked everything up. It must be because someone else changed his mind. Ivanka! Jared! Jews! We have this as fact from confidential demotards .... I mean sources. "

When in fact, this author (nor most commenting here) has no fucking idea of what is actually going on or why Trump changed his stance. Shit does not happen in a vacuum.

In reply to by TheSilentMajority

PrayingMantis HockeyFool Wed, 05/30/2018 - 08:31 Permalink

 

   ... “ ... Trump’s partner, DAMAC Properties, awarded a $32-million contract to the Middle East subsidiary of China State Construction Engineering Corporation to build a six-lane road as part of the residential piece of the Trump World Golf Club Dubai project called Akoya Oxygen, according to news releases released by both companies. It is scheduled to open next year.

The companies’ statements do not detail the exact timing of the contract except to note it was sometime in the first two months of 2017, just as Trump was inaugurated and questions were raised about a slew of potential conflicts of interest between his presidency and his vast real estate empire.

Read more here: http://www.mcclatchydc.com/news/politics-government/white-house/article…

 

In reply to by HockeyFool

rejected PrayingMantis Wed, 05/30/2018 - 08:43 Permalink

And here's an article straight from China.

http://www.globaltimes.cn/content/1104484.shtml

The Trumps are using the office of President to peddle their goods while pretending to want the return of the American corporations.

But the believers will never change. Like a poster below that states his paycheck determines if he is a winner. That increase in pay everyone got was from the government borrowing from the FRB because they sure as hell didn't reduce spending,,, and from all the pensions from aging Grandma's whose taxes went up.

But it shows you how easy and cheap Americans can be bought. These fake tax reductions are another nail in America's coffin.

In reply to by PrayingMantis

PrayingMantis chinooky47 Wed, 05/30/2018 - 15:41 Permalink

 

    ... @chinooky >>> “ ... You are just partisan or a bot causing confusion and disarray. ... “ ...

                      ... ​​​​​​totally wrong on all counts ...

    ... I’m no partisan ... I despise Obumboclot and that Queen of Arkancide, equally for the same “conflict of interest” corruptions  Mr. Tangerine Man and his family are doing to enrich themselves ...

     ... and as for confusion and disarray, I have a feeling you’re psychologically projecting your inner thoughts and limitations ... it’s you who’s confused and your thoughts disarrayed ... 

     ... and as for a “bot” accusation, that’s an “argumentum ad hominem”,  liberally and haphazardly thrown by people without anything meaningful to debate with while mentally showing that their brain  “elevators never reach the top “ ... 

   ... it appears @chinooky, that if someone you “worship” commits corruption, it would be just a “turn-a-blind-eye”, OK ... but everyone else on your crosshairs’ hate-list would be persona-non-grata and totally, and outright fraudulently corrupt ... it’s called hypocrisy ...

 

    ... I’m only shining a light on the truth, but if you can’t handle the truth, it would no longer be my problem ... it’s your problem ...

 

In reply to by chinooky47

silverer white horse Wed, 05/30/2018 - 07:52 Permalink

You mean LordWillingly, the guy that does nothing whatsover but criticize Trump? The guy that never offers solutions, only spews out vitriol without stating facts or citing references for his statements? The guy that ignores all the laws broken and bad policies passed by Obama, and all the folks that were Arkancided by the Hillbillaries? That ignoramus?

In reply to by white horse

the_river_fish LordWillingly Wed, 05/30/2018 - 07:46 Permalink

The U.S. only charged 1.65% in import tariffs in 2017

Chinese companies paid an average of 2.5% (or $12.54 billion on exports of $505.60 billion) in tariffs on exports to the United States.

U.S. companies paid an average of 7.9% (or $10.29 billion on exports of $130.37 billion) in tariffs on exports to China

https://thistimeitisdifferent.com/us-custom-duties-2017

Average import tariffs or custom duties per country

https://thistimeitisdifferent.com/average-import-tariffs-may-2018

 

In reply to by LordWillingly

RedDwarf lester1 Wed, 05/30/2018 - 13:01 Permalink

"China has massive tariffs on US made Goods. We need to do what they do. It's as simple as that."

Another economic illiterate.  We need to do the exact opposite.  We need to do free trade on our end regardless of their actions.  It's as simple as that.

Forget what is 'fair'.  What matters is what is beneficial to you.  If you can buy X from China more cheaply than you can make it locally, then buy X from China and focus on making Y instead.  You are economically better off.  If China wants to bar you from selling Y to them, or China has no interest in Y, then they are the ones who potentially lost out.  You got X cheaper, and have Y in addition now.  Your standard of living is higher even with China doing tarriffs or bans.

Trade deficits are gibberish anyway.  It is a political red herring, not economics.  You have a trade deficit with your barber.  You give him money, the reverse does not happen, at least not directly.  China, by accepting USD for goods and services, will eventually spend that USD somewhere.  If not, then you traded real goods and services for paper.  Once they spend their USD, it is back out in the wild, eventually someone will use that USD to buy Y from you even if it's not China per se.

If you are a painter getting a haircut, and China is the barber, you pay the barber, the barber buys gas with it, the gas station at some point needs to be repainted, and voila you get paid for the labor you provide.  You still have a trade deficit with the barber, and the gas station now has a trade deficit with you.  So the fuck what?  It does not matter because the currency is fungible.  It does not matter if the barber refuses to hire you as a painter.  If the barber is the cheapest and best barber in town, you probably should get your haircut from him regardless of his desire to only hire is brother to do his painting rather than you, even if you are the best and cheapest painter in town.

In reply to by lester1