Tag Archives: America First

U.S. trade deficit hits eight-month low as Chinese imports drop

FILE PHOTO: A container ship is shown at port in Long Beach, California, U.S. July 16, 2018. REUTERS/Mike Blake

By Lucia Mutikani

WASHINGTON (Reuters) – The U.S. trade deficit fell to an eight-month low in February as imports from China plunged, suggesting President Donald Trump’s “America First” agenda was starting to bear fruit.

The surprise narrowing in the trade gap reported by the Commerce Department on Wednesday also implied a much stronger pace of U.S. economic growth in the first quarter than initially anticipated at the start of the year.

The 20.2 percent drop in imports from China was the main driver behind a nearly 3.4 percent improvement in the U.S. trade deficit to $49.4 billion, data from the Commerce Department showed. Economists polled by Reuters had forecast the trade shortfall would widen to $53.5 billion in February.

The politically sensitive goods trade deficit with China – a focus of the Trump administration’s protectionist trade policy – decreased 28.2 percent to $24.8 billion in February as U.S. exports to the world’s No. 2 economy jumped 18.2 percent.

But even with the improvement, the trade deficit remains large and February’s drop in Chinese imports could be temporary. The trade data have been volatile in recent months amid big swings between exports and imports, because of the United States’ conflicts with trading partners, including China.

Washington last year imposed tariffs on $250 billion worth of goods imported from China, with Beijing retaliating with duties on $110 billion worth of American products. Trump has delayed tariffs on $200 billion worth of Chinese imports and talks to end the trade impasse continue.

The U.S. goods trade deficit declined 1.7 percent to $72.0 billion in February, also the lowest level since last June.

When adjusted for inflation, the overall goods trade deficit fell $1.8 billion to $81.8 billion in February. The average goods trade deficit for January and February is below the fourth-quarter average. This suggests that trade could provide a boost to gross domestic product in the first quarter after being neutral in the October-December period.

SLOWING DOMESTIC DEMAND

Growth estimates for the January-March quarter are in a 1.5 percent to 2.3 percent annualized range, largely reflecting an accumulation of inventories amid slowing domestic demand. The economy grew at a 2.2 percent rate in the fourth quarter, slowing from the July-September period’s brisk 3.4 percent pace.

U.S. Treasury yields rose slightly after the release of the data. U.S. stock index futures were trading higher while the dollar was largely unchanged against a basket of currencies.

The trade deficit in February was pushed down by a 1.1 percent jump in exports to $209.7 billion. Exports of services were the highest on record.

Goods exports increased 1.5 percent to $139.5 billion in February. The surge in goods exports is a hopeful sign for global economic growth, which has showed signs of slowing in recent months.

Exports of motor vehicles and parts increased by $0.6 billion in February. Shipments of civilian aircraft soared by $2.2 billion in February. But commercial aircraft exports are likely to decline in the months ahead following Boeing’s decision to suspend deliveries of its troubled 737 MAX aircraft.

The MAX planes have been grounded indefinitely following two deadly crashes.

There was a modest increase in soybean exports.

In February, imports rose 0.2 percent to $259.1 billion. Consumer goods imports increased by $1.6 billion in February, led by a $2.1 billion rise in imports of cellphones and other household goods. Imports of industrial supplies and materials fell by $1.2 billion. Capital goods imports rose slightly.

Crude oil imports fell to 173.7 million barrels, the lowest since March 1992, from 223.1 million barrels in January. An increase in domestic production has seen the United States become less dependent on foreign oil.

Imported oil prices averaged $46.89 per barrel in February, up from $42.59 in January.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Trump push for China trade reform draws wide support at home, abroad

FILE PHOTO: Shipping containers of China Shipping and China Ocean Shipping Company (COSCO) are seen on a container ship at Kwai Tsing Container Terminals in Hong Kong, China July 25, 2018. REUTERS/Bobby Yip/File Photo

By David Lawder, Philip Blenkinsop and Michael Martina

WASHINGTON/BRUSSELS/BEIJING (Reuters) – U.S. President Donald Trump’s blunt-force use of tariffs in pursuing his “America First” trade agenda has angered many, from company executives to allied governments and members of both parties of Congress.

But there’s one effort which has drawn broad support from those who oppose him on almost everything else – his push to force Beijing to change what are widely viewed as China’s market-distorting trade and subsidy practices.

As U.S.-China talks to end a trade war reach their endgame, politicians, executives and foreign diplomats are urging Trump and his team to hold out for meaningful structural reforms in China to address entrenched problems in the relationship that hurt U.S. and other foreign companies and workers.

Trump’s trade war “has let the genie out of the bottle” by lifting expectations that the trade war will force China to reform policies that businesses and foreign governments regard as unfair, said Steven Gardon, vice president of indirect taxes and customs at Lear Corp. Gardon’s firm is an automotive seating and electrical supplier with plants in 39 countries, including the United States and China.

“Now that all these issues have been raised, there’s a lot more domestic political support to address these issues, and I don’t think you can pull back from that,” Gardon said at a Georgetown Law School forum this month. “There’s now pressure politically that they have to be addressed for the long term.”

Gardon’s comments reflect a broad shift in U.S. and international business sentiment towards China’s economic and trade policies, one that is aligned with Trump’s goals, if not his tactics.

Trump’s trade team say they are in the final stages of negotiating what would be the biggest economic policy agreement with China in decades. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin head to Beijing this week to try to accelerate talks with Chinese Vice Premier Liu He. Liu is set to travel to Washington for another round of negotiations in early April.

Eight months into the trade war that has disrupted the flow of billions of dollars of goods between the world’s two largest economies, it is unclear if a deal acceptable to both sides can be done.

China’s President Xi Jinping is seen as reluctant to make economic reforms under pressure from the United States, and Trump has said he may keep tariffs on Chinese goods in place for “a substantial period” even if a deal is struck.

Xi may find it easier to live with the tariffs Trump has imposed on trade than to change China’s model for economic development.

As part of a deal, Beijing has offered to make big-ticket purchases from the United States to help reduce a record trade gap. Trump’s team has said those purchases would be worth more than a trillion dollars over about six years.

While big Chinese purchases might be tempting for Trump’s administration, they would do nothing to address what U.S. firms competing in China or against Chinese firms say are structural problems with a system stacked against them.

The United States complains China engages in systematic intellectual property theft, forces foreign firms to give up trade secrets for market access and spends huge sums subsidizing its own industry. Redressing those complaints would require policy reform at the highest level from Xi and China’s ruling Communist Party.

A survey released by the American Chamber of Commerce in China in late February showed that a majority of member U.S. companies supported increasing or maintaining tariffs on Chinese goods, and nearly twice as many as last year want the U.S. government to push Beijing harder to create a level playing field.

The U.S. tariff demands have even encouraged some reform-minded Chinese officials and private-sector business executives to call for a faster pace of reform in China as it celebrates the 40th anniversary of its first steps toward capitalism.

Lighthizer told lawmakers in late February that Chinese-American business people in particular have urged him to “hang tough” in the talks and not to “sell out for soybeans.”

STAY THE COURSE

When Trump delayed a threatened tariff increase well before a March 1 deadline for a deal, he stoked fears that he may be swayed by the big purchase order and leave longstanding structural problems unresolved.

Since then, a steady drumbeat of lobbyists, company executives, foreign diplomats and U.S. lawmakers from both parties have urged Trump to stay the course on his structural demands.

Representative Kevin Brady of Texas, one of the most pro-trade Republicans and a critic of Trump’s tariffs, recently joined that call.

“While we want China to buy more U.S. goods … it’s even more important for us to hold China accountable to meeting high international standards on intellectual property rights, subsidization, overcapacity, and the other structural ways in which China distorts the global economy,” he said at a House Ways and Means Committee hearing just days after the tariff delay was announced.

Last week, Senate Democratic leader Chuck Schumer, a longtime China trade hawk, took to the Senate floor to urge Trump not to “back down” and take a deal based largely on Chinese purchases of American soybeans and other goods.

On Thursday, Schumer tweeted: “Now’s not the time to drop $200B in tariffs just because China’s close to a deal, @realDonald Trump.”

FILE PHOTO: U.S. President Donald Trump listens to a question as he meets with former hostage Danny Burch, an oil engineer who was taken hostage in Yemen in September 2017, in the Oval Office at the White House in Washington, U.S. March 6, 2019. REUTERS/Jonathan Ernst/File Photo

FILE PHOTO: U.S. President Donald Trump listens to a question as he meets with former hostage Danny Burch, an oil engineer who was taken hostage in Yemen in September 2017, in the Oval Office at the White House in Washington, U.S. March 6, 2019. REUTERS/Jonathan Ernst/File Photo

QUIETLY ROOTING FOR TRUMP

European Union members, traditional allies of the United States, are still smarting about the steel and aluminum tariffs Trump imposed on imports into the United States last year. The EU is also worried that Trump will impose duties on autos. But the bloc shares many of the same frustrations over China’s technology transfer policies and market access constraints.

“We get complaints every day from our companies,” one European official told Reuters in Beijing, noting that despite repeated pledges from the Chinese government to make life easier for foreign companies, little had changed.

EU trade commissioner Cecilia Malmstrom’s assessment of China’s behavior sounds almost like it was written by the U.S. Trade Representative’s office, charging that China has abused global trading rules.

China has “blurred the lines between state and private sector. The state has undue influence,” she said in a Washington speech this month. “Intellectual properties of companies are stolen. State subsidies, direct or indirect, are common. And these impacts are felt at home and abroad.”

Malmstrom says that while the U.S. and EU “agree on the diagnosis,” they differ on tactics, and she argues for a more multilateral approach, citing the EU’s work with the United States and Japan to address the issues through reform of World Trade Organization rules.

Some worry that Europe could lose out if Washington and Beijing strike a deal to purchase billions of dollars more in products to try to shrink the U.S. goods trade deficit with China.

“If China is buying more from America then inevitably it will buy less from Europe,” a second European official based in Beijing said, adding that could, in particular, affect large European multinationals.

But European diplomats and officials acknowledge a begrudging support for Trump’s goals, even if they are repulsed by his blunt tactics. Many are secretly rooting for his success.

“We are against unilateral measures, but nobody is exactly sorry for China. On content we think he does have a point,” said one EU diplomat who spoke on condition of anonymity in Brussels. “Beijing has to understand that without reform, the system could just stop working.”

Trump administration officials insist that he has gotten the message and is holding out for “structural changes” to the U.S.-China relationship, along with an enforcement mechanism that holds China to its pledges.

Clete Willems, a White House trade adviser, told the Georgetown Law School forum that Trump is determined to fix problems with China’s trade relationship that he has railed against for years, long before he ever sought office.

“The notion that he’s just going to suddenly accept a bad deal is totally inaccurate. The president is going to walk away from bad deals,” said Willems, who announced on Friday that he is leaving the White House for family reasons.

(Reporting by David Lawder; Editing by Simon Webb and James Dalgleish)

Trump’s U.N. envoy Nikki Haley quits, denies 2020 ambitions

U.S. President Donald Trump talks with U.N. Ambassador Nikki Haley in the Oval Office of the White House after it was reported the president had accepted the Haley's resignation. REUTERS/Jonathan Ernst

By Steve Holland and Roberta Rampton

WASHINGTON (Reuters) – The U.S. ambassador to the United Nations, Nikki Haley, announced on Tuesday she is resigning, and immediately denied she was preparing to challenge President Donald Trump in the 2020 presidential election.

Sitting beside Trump in the Oval Office, Haley said her 18-month stint at the United Nations had been “an honor of a lifetime” and said she would stay on until the end of the year.

Haley, 46, is the latest in a long line of high-profile departures from the administration, such as former Secretary of State Rex Tillerson, who was fired in March, and Steve Bannon, Trump’s chief strategist, who left in August 2017.

Describing her time at the United Nations as “fantastic” and “incredible,” Trump said he had accepted Haley’s resignation and would name her successor within two or three weeks.

A former governor of South Carolina who is the daughter of Indian immigrants, Haley is a rising star in the Republican Party and is often mentioned as a possible candidate for the 2020 presidential elections.

But she said on Tuesday she would not be running and would campaign for Trump. “No, I am not running for 2020.” she said.

Echoing previous statements from Trump, Haley said the United States under his presidency is now respected around the world.

“Now the United States is respected. Countries may not like what we do, but they respect what we do. They know that if we say we’re going to do something, we follow it through,” she said.

Haley has been the face of Trump’s “America First” policy at the United Nations, steering the U.S. withdrawal from several U.N. programs and ardently defending his hard-line policies against Iran and North Korea over their nuclear programs.

“She has done an incredible job. She is a fantastic person, very importantly, but she also is somebody that gets it,” Trump said on Tuesday. She told Trump around six months ago that she was thinking of quitting by the end this year “to take a little time off,” he said.

“She’s done a fantastic job and we’ve done a fantastic job together. We’ve solved a lot of problems and we’re in the process of solving a lot of problems,” he said.

Haley discussed her resignation with Trump last week when she visited him at the White House, Axios news site reported.

Her U.N. counterparts described her as charming and yet very tough. She saw herself as a fighter.

“I don’t see (my role) as pushing an ‘America First’ policy, I see it as defending America because every day I feel like I put body armor on. I just don’t know who I’m fighting that day,” Haley told Reuters earlier this year.

(Reporting by Roberta Rampton and Steve Holland; Additional reportng by Doina Chiacu, Makini Brice, Susan Heavey and Lisa Lambert in Washington and Michelle Nichols at the United Nations; Writing by Alistair Bell; Editing by Jonathan Oatis)

‘America First’ protesters face off with opponents at California beach rally

People protest during an America First rally in Laguna Beach, California, U.S., August 20, 2017. REUTERS/Sand

By Olga Grigoryants

LAGUNA BEACH, Calif. (Reuters) – Anti-immigration demonstrators faced off against a much bigger crowd of counter-protesters in the Southern California town of Laguna Beach on Sunday, as police kept the opposing sides apart.

Around 2,500 people in total showed up for what became a raucous shouting match but did not descend into the kind of violence seen at this month’s clashes at a white nationalist rally in Charlottesville, Virginia, where one person was killed.

A demonstrator faces off with a counter-protester during an America First rally in Laguna Beach, California, U.S., August 20, 2017.

A demonstrator faces off with a counter-protester during an America First rally in Laguna Beach, California, U.S., August 20, 2017. REUTERS/Sandy Huffaker

Police erected barricades along the oceanfront to deter car attacks like the one in Charlottesville which killed a woman when a suspected white nationalist drove into the crowd.

Dozens of anti-immigration protesters rallying behind President Donald Trump’s campaign slogan “America First” were escorted by police through opposing demonstrators who chanted: “Shame” and “No white supremacy”.

Trump’s opponents blame him for boosting far-right sentiment, forcing the president to deny he tacitly supports racists.

“We are not a white supremacism movement but an ‘America First’ movement,” said Beverly Welch, 56, a health assistant protesting against illegal immigration. “We’re trying to save our country.”

Police later declared the remaining protesters an unlawful assembly and forced them to disperse. They made three arrests.

On Saturday, tens of thousands of people protested in Boston against a “free speech” rally featuring far-right speakers.

 

(Additional reporting by Ian Simpson in Washington; Writing by Alex Dobuzinskis; Editing by Robin Pomeroy)

 

U.S. needs to balance foreign alliances: Tillerson

U.S. Secretary of State Rex Tillerson delivers remarks to the employees at the State Department in Washington, U.S., May 3, 2017. REUTERS/Yuri Gripas

By Yeganeh Torbati

WASHINGTON (Reuters) – U.S. Secretary of State Rex Tillerson on Wednesday outlined for his staff how an “America First” agenda translates into foreign policy, but did not address the Trump administration’s proposed budget cuts, which worry many diplomats.

It was the first time Tillerson had addressed all employees since his first day on the job on Feb. 2, when he spoke to hundreds of State Department officials in the building’s lobby, and the most thorough explanation yet of the Trump administration’s approach to foreign policy.

Some allies and even some U.S. officials have interpreted Republican President Donald Trump’s “America First” agenda, which puts Americans’ interests at home ahead of those of its partners overseas, as a threat to retreat from the world.

Tillerson said U.S. foreign policy priorities had gotten “a little bit out of balance” in the previous decades, with the United States too focused on promoting economic activity and trade with emerging economies.

“These are really important relationships to us, and they’re really important alliances, but we’ve got to bring them back into balance,” he said, speaking without notes and walking around the stage in a packed State Department auditorium.

He also signaled that the United States would de-emphasize human rights concerns in some of its interactions with other countries, saying that while U.S. values remain constant, its policies can adapt.

“If we condition too heavily that others must adopt this value that we’ve come to over a long history of our own, it really creates obstacles to our ability to advance our national security interests, our economic interests,” Tillerson said.

TILLERSON’S WORLD TOUR

Tillerson gave a tour of U.S. priorities around the world, including in East Asia, Russia, Africa, and the Western Hemisphere, omitting Europe.

With regard to North Korea’s nuclear program, Tillerson said the administration is willing to use so-called secondary sanctions to target foreign companies that continue to do business with Pyongyang in contravention of United Nations sanctions.

The pressure campaign on North Korea is “at about dial setting 5 or 6 right now,” Tillerson said.

On China, Tillerson said the United States has a “tremendous opportunity” to define its relationship with the superpower for the next several decades, and that he sensed great interest by the Chinese leadership to do that as well.

He and Defense Secretary Jim Mattis will chair a dialogue with their Chinese counterparts in June, in addition to a dialogue focused on economics and trade and led by Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross.

Tillerson said he had told Russian President Vladimir Putin during his visit to Moscow last month that U.S.-Russia relations were at their lowest point since the Cold War.

“He did not disagree,” Tillerson said. “He shrugged his shoulders and nodded in agreement.”

But in remarks lasting nearly 40 minutes, Tillerson did not address the administration’s proposed 28 percent budget cut for U.S. diplomacy and foreign aid, which would reduce funding for the United Nations, climate change and cultural exchange programs. That proposal has made many American diplomats and aid workers anxious.

The Trump administration also has not named candidates for the vast majority of State Department positions requiring Senate confirmation, and many are being filled by career diplomats in “acting” positions. Tillerson began his remarks by thanking those officials, to applause from the crowd.

One veteran official who watched the speech criticized Tillerson’s use of the “America First” slogan. The phrase was used in the 1930s by isolationists who sought to keep the United States out of World War Two.

“The fact that they still use ‘America First’ shows they know nothing about history, and what’s worse is they don’t care.

“It’s offensive,” said the official, who requested anonymity.

Tillerson’s remarks followed an invitation to State Department and U.S. Agency for International Development employees this week to participate in an online survey to help identify “efficiency improvements,” in line with a March directive from Trump to “reorganize governmental functions and eliminate unnecessary agencies.” In his speech, the secretary urged employees to fill out the survey and give input on how to reform the agency.

Tillerson said the State Department, like many institutions, was built for the Cold War era.

He said he recognized that deep change to the State Department “is really stressful for a lot of people” and said the administration has “no preconceived notions on the outcome” of a review.

One State Department official faulted Tillerson for not talking in detail about the budget cuts, as well as for not taking questions from employees.

Previous secretaries of state, including Colin Powell, Condoleezza Rice and Hillary Clinton, held question-and-answer sessions with State Department employees within weeks of taking office.

“They wanted to make this look like he was talking to us, but it was more about the appearance than any substance,” said the official, speaking on the condition of anonymity.

Two other State Department officials, however, spoke highly of Tillerson’s remarks, saying it was early to expect him to take questions from the rank and file and saying he provided guidance both on foreign policy and on the challenge of reorganizing the department.

“I can understand folks wanting more details. I just don’t think we are in a place where he can provide more details,” said one of these officials about the expected State Department budget cuts. “My big takeaway was put on your big-girl britches, and when you look back you will feel like you were part of making this reform happen.”

(Additonal reporting by Arshad Mohammad, Jonathan Landay and John Walcott; Editing by Jonathan Oatis)

World stocks pause near record highs ahead of Trump landmark

People walk through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett/File photo

By Vikram Subhedar

LONDON (Reuters) – Concern about global trade and U.S. President Donald Trump’s “America First” policies kept appetite for risky assets in check on Friday, setting world stocks on the path to a sluggish end to what will be their sixth straight month of gains.

In an interview with Reuters, Trump called the U.S. trade pact with South Korea “unacceptable” and said it would be targeted for renegotiation after his administration completed a revamp of the North American Free Trade Agreement (NAFTA) with Canada and Mexico.

Trump’s comments sent Seoul stocks <.KS11> and the won <KRW=> into reverse.

Global stocks <.MIWO00000PUS> were steady, however, little changed on the day and holding near all-time highs and on track for a sixth straight month of gains.

Stock futures on Wall Street <ESc1> were up 0.1 percent, also near their highest ever levels.

Saturday marks Trump’s 100th day in office and his attacks on free trade and scepticism about his administration’s ability to see through a tax and spending campaign promises has dented some of the enthusiasm in markets that followed his election win.

“Trump is reaching the 100-day mark with nothing to show for it and these recent comments just coincide with that. They (the U.S. administration) are finding it hard to push through fiscal plans and all this rhetoric is probably related,” Kiran Kowshik, strategist at Unicredit.

EUROPE POWERING AHEAD

The mood on Europe, however, remains upbeat.

Euro zone bond yields rose across the board on Friday and the euro strengthened, rising 0.6 percent against the dollar <EUR=> to $1.0944, as output data from several countries reaffirmed a picture of economic strength in the bloc.

At the same, inflation blew past expectations to hit a three-year high, keeping pressure on the European Central Bank to start dialing back its stimulus measures.

Regional banking shares <.SX7P> added to recent gains.

Barclays <BARC.L> shares were an outlier, however, sliding 5 percent after disappointing investment banking results and weighing on the broader STOXX 600 <.STOXX> index which fell 0.2 percent.

European stocks are still up more than 2 percent on the week. Bank of America Merrill Lynch (BAML) noted that the $2.4 billion of inflows into European equity funds over the past week were the highest since December 2015.

“The hard data for equities is earnings — and they are powering ahead. Q1 earnings season is very strong and revisions trends are positive and broad-based,” said analysts at BAML, who forecast 15 percent earnings growth for European companies and a further 8 percent rally for the STOXX 600.

Healthy earnings, particularly from companies closely geared to economic growth, have underpinned the rally in global stocks, which have added nearly $5 trillion to their market value so far this year, according to Thomson Reuters data.

In commodities, oil prices rose but were still on track for a second straight weekly loss on concerns that an OPEC-led production cut had failed to significantly tighten an oversupplied market.

U.S. West Texas Intermediate (WTI) crude <CLc1> was at $49.43 per barrel at 0649 GMT, up 46 cents, or 0.94 percent, from its last close. WTI is still set for a small weekly loss and is around 8 percent below its April peak.

Brent crude <LCOc1> was at $51.91 per barrel, up 47 cents, or 0.91 percent. Brent is around 8.5 percent down from its April peak and is also on track for a second, albeit small, weekly decline.

(Additional reporting by Sujata Rao, Editing by Jeremy Gaunt and John Stonestreet)