Tag Archives: Trade Deal

U.S., Chinese trade deputies face off in Washington amid deep differences

By David Lawder

WASHINGTON (Reuters) – U.S. and Chinese deputy trade negotiators were set to resume face-to-face talks for the first time in nearly two months on Thursday, as the world’s two largest economies try to bridge deep policy differences and find a way out of a bitter and protracted trade war.

The negotiations, on Thursday and Friday, are aimed at laying the groundwork for high-level talks in early October that will determine whether the two countries are working toward a solution or headed for new and higher tariffs on each other’s goods.

A delegation of about 30 Chinese officials, led by Vice Finance Minister Liao Min, arrived at the U.S. Trade Representative’s (USTR) office near the White House for the talks scheduled to start at 9 a.m. (1300 GMT). Deputy U.S. Trade Representative Jeffrey Gerrish also arrived to represent the United States.

The discussions are likely to focus heavily on agriculture, including U.S. demands that China substantially increase purchases of American soybeans and other farm commodities, a person with knowledge of the planned discussions told Reuters.

Two negotiating sessions over the two days will cover agricultural issues, while just one will be devoted to the strengthening of China’s intellectual property protections and the forced transfer of U.S. technology to Chinese firms.

“Sessions on agriculture will get a disproportionate amount of air time,” the source said, adding that one of these sessions also will include a focus on U.S. President Donald Trump’s demand that China cut off shipments of the synthetic opioid fentanyl to the United States.

The president is eager to provide export opportunities for U.S. farmers, a key Trump political constituency that has been battered by China’s retaliatory tariffs on U.S. soybeans and other agricultural commodities.

U.S. Commerce Secretary Wilbur Ross, in an interview on Fox Business Network on Thursday, said it remained unclear what China wanted and that “we will find out very, very shortly in the next couple of weeks.”

“What we need is to correct the big imbalances, not just the current trade deficit,” Ross said. “It’s more complicated than just buying a few more soybeans.”

CURRENCY ON TABLE

U.S. Treasury Secretary Steven Mnuchin, who will participate in the October talks along with USTR Robert Lighthizer and Chinese Vice Premier Liu He, has said that currency issues will be a focus of the new rounds of talks.

Mnuchin formally declared China a currency manipulator last month after the yuan weakened against the dollar, accusing Beijing of reducing the strength of its currency to gain a trade advantage.

Trump has said that China failed to follow through on agricultural purchase commitments made by its president, Xi Jinping, at a G20 leaders summit in Osaka, Japan as a goodwill gesture to get stalled talks back on track. China has denied making such commitments.

When such purchases failed to materialize during U.S.-China trade talks in late July, Trump quickly moved to impose 10% tariffs on virtually all remaining Chinese imports untouched by previous rounds of tariffs.

But in an easing of tensions last week, Trump delayed a scheduled Oct. 1 tariff increase on $250 billion worth of Chinese imports until mid-month, as China postponed tariffs on some U.S. cancer drugs, animal feed ingredients and lubricants.

White House officials signaled warming negotiations as the deputies were set to begin their sitdown.

U.S. Vice President Mike Pence, in a Fox Business Network interview that aired on Thursday, said: “The atmospherics are improving but … President Trump is going to stand firm.”

“There’s a little softening in the air,” White House adviser Larry Kudlow said in a separate interview on the television network Thursday morning.

Beijing also is seeking an easing of U.S. national security sanctions against telecom equipment maker Huawei Technologies, which has been largely cut off from buying sensitive U.S. technology products.

The trade war, which has dragged on for 14 months, has rattled financial markets as policymakers and investors worry about the broadening global economic fallout of the dispute.

The specter of a global recession has prompted central banks around the world to loosen policy in recent months. The Federal Reserve on Wednesday cut rates for the second time this year, saying the reduction provided “insurance against ongoing risks,” including weak world growth and resurgent trade tensions.

Trade experts, executives and government officials in both countries say that even if the September and October talks produce an interim deal that includes purchases and a reprieve for Huawei, the U.S.-China trade war has hardened into a political and ideological battle that runs far deeper than tariffs and could take years to resolve.

Jon Lieber, a principal in PwC’s national tax services practice, said a “very narrow agreement” in October would do little to solve fundamental differences between the two countries.

To keep markets steady, the two sides could well “string along the talks for a longer period of time,” he added.

(Additional reporting by Andrea Shalal and Susan Heavey; Editing by Shri Navaratnam, Steve Orlofsky and Alex Richardson)

Trump favors ‘whole deal’ with China, two sides prepare for trade talks

By Jeff Mason and Chris Prentice

WASHINGTON (Reuters) – President Donald Trump said on Thursday he preferred a comprehensive trade deal with China but did not rule out the possibility of an interim pact, even as he said an “easy” agreement would not be possible.

“I’d rather get the whole deal done,” Trump told reporters at the White House. “I see a lot of analysts are saying an interim deal, meaning we’ll do pieces of it, the easy ones first. But there’s no easy or hard. There’s a deal or there’s not a deal. But it’s something we would consider, I guess.”

The president’s remarks came as the world’s two largest economies prepare for new rounds of talks aimed at curbing a more-than-year-long trade war that has hurt global economic growth and rattled financial markets.

The two sides have been making conciliatory gestures ahead of the talks, lowering the temperature between them and cheering investors.

China renewed purchases of U.S. farm goods, which the United States welcomed, and Trump delayed a tariff increase on certain Chinese goods by two weeks in honor, he said, of Chinese President Xi Jinping.

Lower-level U.S. and Chinese officials are expected to meet next week in Washington ahead of talks between senior trade negotiators in early October. Top-level negotiators last met face-to-face in China in July.

Washington is pressing China to end practices it considers unfair, including intellectual property theft, industrial subsidies, currency manipulation, and forced technology transfer from U.S. companies to Chinese counterparts.

Trump has made clear he wants such elements to be part of a deal and has demonstrated his resolve through tariff increases, even when they dented gains in the stock market.

Meeting U.S. demands would require structural change in China, which so far it has been unwilling to make. The two sides came close to a deal in May, but Chinese officials balked at requirements that Chinese laws be altered as part of the deal.

ECONOMIC IMPACT

The trade war is affecting the global economy. The International Monetary Fund on Thursday forecast that U.S. and Chinese tit-for-tat tariffs could reduce global GDP in 2020 by 0.8% and trigger more losses afterward.

Still, global stocks rose on Thursday after the conciliatory gestures from both sides.

China importers bought at least 10 cargoes, or 600,000 tonnes, of U.S. soybeans for October-December shipment, the country’s most significant purchases since at least June, U.S. traders with direct knowledge of the deals said.

That came after Trump on Wednesday announced his delay in the increase in tariffs on some Chinese goods by two weeks and China exempted some U.S. drugs and other goods from tariffs.

While welcoming China’s overtures, U.S. Treasury Secretary Steven Mnuchin sought to temper optimism in markets that the gestures might lead to a trade deal. He told CNBC that Trump was prepared to keep or even raise tariffs on Chinese imports and that Beijing had asked for more concessions beyond the removal of tariffs.

“The next month is important,” Mnuchin said at a later event hosted by the New York Times. “We’re hopeful we’ll make progress. If we can get the right deal, we’ll do a deal.”

NO CHANGE ‘ON THE FUNDAMENTALS’

The Wall Street Journal reported that China was seeking to narrow the scope of negotiations to trade matters by excluding national security issues. National security issues have not, however, been a key topic in the trade talks so far.

The soybean purchases sent benchmark prices of the commodity, of which China is the top buyer, soaring. They were the largest by private Chinese importers since Beijing raised import tariffs on the U.S. oilseed by 25% in July 2018 in retaliation for U.S. duties on Chinese goods. Duties were raised an additional 5% this month.

U.S. farmers, a core component of Trump’s political base, have been among the hardest hit by the tariff battle that began more than a year ago and has escalated in recent weeks.

Earlier in the day in Beijing, Commerce Ministry spokesman Gao Feng said Chinese firms have started to inquire about prices for U.S. farm goods. He also said that China welcomed the U.S. delay to its scheduled tariff hike on billions of dollars worth of Chinese goods.

“(China) hopes both sides would continue to meet each other half way and adopt concrete actions to create favorable conditions for negotiations,” Gao told a briefing, noting that possible purchases included pork and soybeans, both of which are still subject to hefty Chinese duties.

China has bought U.S. pork despite tariffs of 62% in place since last year because huge numbers of pigs have been culled across the country as Beijing struggles to contain an outbreak of African swine fever. The world’s biggest pork consumer has hiked imports to make up the shortfall.

China said it would reduce purchases of U.S. farm products in August after Trump vowed to impose new tariffs on around $300 billion of Chinese goods.

On Wednesday Trump announced a delay in increasing tariffs on $250 billion worth of Chinese imports to Oct. 15 from Oct. 1. The tariffs on those goods were set to increase to 30% from 25%.

Earlier that day China announced it was exempting 16 types of U.S. products from tariffs, including some anti-cancer drugs and lubricants, as well as animal feed ingredients whey and fish meal.

William Reinsch, a former senior U.S. Commerce Department official, said the goodwill gestures should help, but big hurdles remained.

“Both sides are trying to find a way out of the box,” he said. “Short term, that’s good. But I don’t think anything’s changed on the fundamentals, and once they get back to the table, they’ll discover that.”

(Additional reporting by Stella Qiu, Ben Blanchard, Michael Martina, and Dominique Patton in Beijing, and Andrea Shalal in Washington; Editing by Sandra Maler)

U.S.-Japan trade deal may be finished, announced at U.N. General Assembly: Kudlow

FILE PHOTO: White House chief economic advisor Larry Kudlow speaks with reporters on the driveway outside the West Wing of the White House in Washington, U.S. July 26, 2019. REUTERS/Yuri Gripas

WASHINGTON (Reuters) – A final trade deal between the United States and Japan may be finished and announced at the U.N. General Assembly meetings later this month, White House economic adviser Larry Kudlow said on Friday.

“We announced at the G7 in France – I was over there – the outline of a deal with Japan, that deal may be finished and announced in its entirety at the U.N. meetings coming up in a couple of weeks,” Kudlow said in an interview with Fox Business Network.

(Reporting by Tim Ahmann; Writing by Makini Brice; Editing by Chizu Nomiyama)

U.S.-Mexico-Canada trade deal will help stave off U.S. recession: U.S. Chamber CEO

By Andrea Shalal and Jonas Ekblom

WASHINGTON (Reuters) – Approval and implementation of the U.S.-Mexico-Canada (USMCA) trade agreement will provide a major boost to the U.S. economy and help stave off a recession, Thomas Donohue, chief executive of the U.S. Chamber of Commerce, said on Thursday.

Donohue, whose organization is spearheading a major campaign to win passage of the trade agreement, said moving ahead with the USMCA would also help pave the way for trade agreements with China, the European Union, Japan and other countries.

“It is a major component in keeping us out of a recession,” Donohue told Reuters after a news conference with other trade associations pushing the U.S. Congress to ratify the replacement for the current North American Free Trade Agreement (NAFTA).

He said the timing was critical given other drags on the U.S. economy, including troubles at top U.S. exporter Boeing Co, which this week reported its biggest-ever quarterly loss due to the spiraling cost of resolving issues with its 737 MAX.

Boeing has reduced production of the grounded jet and suspended deliveries, but on Wednesday warned it might have to shut production completely if it runs into new hurdles with global regulators.

The single-aisle plane was grounded worldwide in March after two fatal crashes in Ethiopia and Indonesia.

“A reduction in our economic growth and our trade is taking place with the Boeing problem,” Donohue said. “They’ll survive this, they’ll move forward.”

House of Representatives Republican Leader Kevin McCarthy on Thursday criticized House Speaker Nancy Pelosi and other House Democrats, who control the chamber, for not bringing the USMCA up for a vote before lawmakers leave for their summer recess.

“What will this do? Only make our country stronger, more prosperous, create more jobs, make the debate with China even in a stronger position for America and make the future better than it is today. But they didn’t do anything about it,” McCarthy told reporters at a news conference.

Donohue and other business leaders cited growing bipartisan support for the USMCA and expressed optimism that the House would move to ratify the agreement in September.

Nearly 600 trade and commerce groups sent a letter urging lawmakers to approve the deal as soon as possible.

“If we don’t move positively on Canada and Mexico, it will be very, very difficult for us to muster the goodwill in other places to get agreements with China, with Japan and the EU,” Donohue told a news conference.

Leaders from the United States, Mexico and Canada signed the agreement in November, but it must be ratified by lawmakers in all three countries.

House Democrats have promised to block the deal until their concerns over environmental, labor and pharmaceutical aspects of the agreement are met, but Donohue and others said they were upbeat those issues could be resolved.

White House officials say the agreement would add about half a percentage point of economic growth to the U.S. economy, creating several hundred thousand jobs and sparking up to $100 billion in new investments in the United States.

U.S. Trade Representative Robert Lighthizer is due to meet with Democratic lawmakers about the agreement again this week, with a focus on enforcement issues.

Industry leaders said moving forward would reduce uncertainty and free businesses to make new investments.

“The thing we hear most about the need to move forward with this agreement is the need to provide certainty,” said Matthew Shay, president of the National Retail Federation.

The group said it would use state fairs and events in local districts in coming weeks to pressure lawmakers to back passage of the deal while campaigning against its opponents.

“We will be activating our grassroots network and targeting key districts,” Donohue said. “You can’t be pro-jobs and anti-USCMA.”

(Additional reporting by Susan Cornwell; editing by Chizu Nomiyama and Jonathan Oatis)

Explainer: What extra U.S. farm products could China buy?

FILE PHOTO: Corn is loaded onto a truck as a silo is emptied at a farm in Tiskilwa, Illinois, U.S., July 6, 2018. REUTERS/Daniel Acker/File Photo

BEIJING (Reuters) – China has agreed to make unspecified new purchases of farm products from the United States, President Donald Trump said after meeting his Chinese counterpart Xi Jinping in Japan.

China was the top buyer on average of U.S. agriculture exports from 2010 to 2017, making purchases worth $21.6 billion a year, U.S. Department of Agriculture (USDA) showed.

While investors await details of the agreement and confirmation from China, analysts and traders say there are limits to how much more China can buy from the country that is typically one of its top suppliers of soybeans, grains and meat.

Below are details of where future Chinese purchases could rise.

SOYBEANS

The United States is usually China’s No. 2 supplier of soybeans, a product likely to make the list of new purchases even though an African swine fever epidemic in China has dented demand from Chinese pig farmers.

Soybean imports in the 2019/20 crop year are forecast by USDA at 87 million tonnes.

The USDA reported a large soybean sale on Friday of 544,000 tonnes to China, an apparent goodwill gesture a day before Trump and Xi met for the first time in seven months.

There could be a few more similar purchases in coming months as tensions ease, said Darin Friedrichs, senior Asia commodity analyst at INTL FCStone.

But any large deals were expected to be conditional on progress in talks and would be made over a long timeframe, he added.

GRAINS

China has typically been the top buyer of U.S. sorghum and, despite a 25% U.S. trade tariff on the grain, it has still bought a few cargoes in recent months.

But sorghum prices are rising, making it less viable for Chinese buyers to import the grain when they already face such a high tariff.

Demand for sorghum and corn, whose prices have climbed due to adverse weather conditions, were both very weak because of the African swine fever epidemic, said a trader with a state-owned firm who was not allowed to be identified.

“I don’t think chances are high” for more purchases, he said.

Regarding Dried Distillers Grains with Solubles (DDGS), China has announced it would keep anti-dumping duties on the feed ingredient, which the trader said made it clear Beijing did not plan to boost its imports.

Purchases of U.S. wheat have historically been relatively small. Beijing has been pushing Chinese growers to plant more high-quality wheat and boosting imports would undermine this policy, said a Chinese trader, who was not allowed to be identified.

ETHANOL

U.S. ethanol imports could feature in upcoming purchases, said Friedrichs, helping Trump win support from ethanol producers, one of his voter bases which has been hit by waning Chinese demand and U.S. initiatives affecting the industry.

But Chinese trade tariffs are prohibitive and there are no government reserves for the biofuel, limiting the amount that could be purchased by state buyers under Beijing’s orders, said an industry source who was not allowed to be quoted.

PORK

China, which usually accounts for half the world’s pork production, is expected to need all the pork it can find abroad as African swine fever devastates domestic farms.

It has already made some large purchases from the United States, even with U.S. trade tariffs of 50% in place.

Still, much bigger exports of pork to China threaten to drive up prices in the United States, which would hurt U.S. consumers and runs the risk of backfiring on Trump as he seeks re-election, Friedrichs said.

(Reporting by Dominique Patton and Hallie Gu; Editing by Edmund Blair)

Trump prepares for ‘productive’ talks with Xi on trade war

Japan's Prime Minister Shinzo Abe is flanked by U.S. President Donald Trump and China's President Xi Jinping during a meeting at the G20 leaders summit in Osaka, Japan, June 28, 2019. REUTERS/Kevin Lamarque

By Roberta Rampton

OSAKA (Reuters) – U.S. President Donald Trump on Friday said he hoped for productive talks with Chinese President Xi Jinping on a trade war that is casting a shadow on global growth, but said he had not made any promises about a reprieve from escalating tariffs.

The trade feud and signs of a global slowdown have loomed over a two-day Group of 20 (G20) summit in the Japanese city of Osaka, where Trump and Xi met in passing and prepared for one-on-one talks on Saturday.

To lay the groundwork, Chinese Vice Premier Liu He met Trump’s treasury secretary, Steven Mnuchin, and Trade Representative Robert Lighthizer at the hotel where the U.S. delegation was staying, a source familiar with the talks said.

Expectations have dimmed that the world’s two biggest economies can ease tension when Trump and Xi meet.

“At a minimum it will be productive. We’ll see what happens and what comes out of it,” Trump told reporters after a series of meetings with leaders where he made clear that his priority was two-way trade deals to boost the U.S. economy.

Asked, however, if he had promised Xi a six-month reprieve on imposing new tariffs on a $300 billion list of Chinese imports, Trump said: “No.”

Trump has already imposed tariffs on $250 billion of Chinese imports and is threatening to extend those to another $300 billion of goods, effectively everything China exports to the United States. China has retaliated with tariffs on U.S. imports.

Asian shares stumbled and gold slipped on Friday, as doubts grew that the highly anticipated meeting between the two leaders would bring progress.

In Beijing, foreign ministry spokesman Geng Shuang said he hoped the U.S. side could meet China halfway.

“This accords with the interests of both countries and is what the international community is hoping for,” he told a news briefing.

China has consistently pushed back against criticism from Western countries, especially the United States and European Union, about things like intellectual property rights and the difficulty of doing business in China.

“China’s promise to expand its opening up is not just a cheque that can’t be cashed,” Xi told German Chancellor Angela Merkel at a side meeting in Osaka.

THREAT TO GLOBAL GROWTH

Trump’s administration also has trade feuds with India, Japan and Germany, whose leaders he met on Friday.

Trump said he saw U.S. trade prospects improving, days after criticizing the U.S.-Japan security treaty and demanding that India withdraw retaliatory tariffs.

“I think we’re going to have some very big things to announce. Very big trade deal,” Trump said before he began talks with Indian Prime Minister Narendra Modi. He gave no details.

A White House official said the two leaders had called on their teams to work on mutually beneficial trade solutions.

Trump also made a push to discuss U.S. concerns about Chinese telecoms equipment maker Huawei.

The United States has pressed its allies to shun Huawei in their fifth generation, or 5G, networks on security grounds, and it has also suggested it could be a factor in a trade deal with Xi.

“We actually sell Huawei many of its parts,” Trump said at his meeting with Modi. “So we’re going to be discussing that and also how India fits in. And we’ll be discussing Huawei.”

Several leaders warned that the growing Sino-U.S. trade friction was threatening global growth.

“The trade relations between China and the United States are difficult, they are contributing to the slowdown of the global economy,” European Commission President Jean-Claude Juncker told a news conference.

Xi also warned about the protectionist steps he said some developed countries were taking.

“All this is destroying the global trade order … This also impacts common interests of our countries, overshadows peace and stability worldwide,” Xi told a gathering of leaders of the BRICS grouping on the sidelines of the G20.

Japanese Prime Minister Shinzo Abe, other leaders and delegates attend a family photo session at G20 leaders summit in Osaka, Japan, June 28, 2019. REUTERS/Kim Kyung-Hoon/Pool

Japanese Prime Minister Shinzo Abe, other leaders and delegates attend a family photo session at G20 leaders summit in Osaka, Japan, June 28, 2019. REUTERS/Kim Kyung-Hoon/Pool

REFORMING WORLD TRADE RULES

Modi, at the same meeting, called for a focus on reforming the World Trade Organization (WTO) and Russian President Vladimir Putin decried what he called efforts to destroy the Geneva-based body.

“We consider counter-productive any attempts to destroy WTO or to lower its role,” Putin said.

The situation of the global economy was worrying, as trade felt the effect of “protectionism (and) politically motivated restrictions”, he added.

Russian Economy Minister Maxim Oreshkin said there was no agreement on how to reform the WTO system, whose rules Washington believes are outdated, though a Japanese official said G20 members agreed on the importance of reform.

The G20 leaders were also struggling to find common ground on issues such as information security, climate change and migration, said Svetlana Lukash, a Russian official helping to coordinate the meetings.

A White House official took a more positive view, saying there was a “good sense of unity in the room” between most leaders on working together on economic issues.

“China was less positive in its outlook which was in stark contrast to basically everybody else,” said the official, who spoke on condition of anonymity.

Trump, who often castigates trading partners on Twitter and at raucous political rallies, put a positive spin on trade developments.

“I appreciate the fact that you’re sending many automobile companies into Michigan and Ohio and Pennsylvania and North Carolina,” Trump told Japanese Prime Minister Shinzo Abe, who had presented him with a map showing the locations of Japanese auto investments in the United States.

Abe urged G20 leaders to send a strong message in support of free and fair trade, warning that trade and geopolitical tensions were rising and downside risks to the global economy prevailed. He also said he wanted to see momentum toward WTO reform.

Japanese and U.S. officials will meet next month to accelerate progress toward a trade deal, Economy Minister Toshimitsu Motegi told reporters after meeting Lighthizer, but added that they did not discuss a target date.

(Additional reporting by Leika Kihara, Kiyoshi Takenaka and Katya Golubkova; Additional reporting by Ben Blanchard in BEIJING; Writing by Linda Sieg in Tokyo; Editing by Clarence Fernandez, Robert Birsel and Nick Macfie)

Mexico Immigration deal reached, Trump says must be approved or tariffs

Central American migrants cross the Suchiate river on a raft from Tecun Uman, in Guatemala, to Ciudad Hidalgo, as seen from Ciudad Hidalgo, Mexico, June 10, 2019. REUTERS/Jose Cabezas

By Makini Brice

WASHINGTON (Reuters) – President Donald Trump on Monday hinted more details were to come about a migration pact the United States signed with Mexico last week, saying another portion of the deal with Mexico would need to be ratified by Mexican lawmakers.

He did not provide details but threatened tariffs if Mexico’s Congress did not approve the plan.

“We have fully signed and documented another very important part of the Immigration and Security deal with Mexico, one that the U.S. has been asking about getting for many years. It will be revealed in the not too distant future and will need a vote by Mexico’s legislative body,” Trump tweeted.

“We do not anticipate a problem with the vote but, if for any reason the approval is not forthcoming, tariffs will be reinstated.”

Last month, Trump threatened 5% tariffs on Mexican goods to be imposed on Monday. The duties would have increased every month until they reached 25% in October, unless Mexico stopped illegal immigration across its border with Mexico.

On Friday, the tariffs were called off, after the United States and Mexico announced an agreement on immigration. The joint communique issued by the two countries provided few details.

Critics have said there have been no new major commitments to slow the migration of Central Americans to the United States.

FILE PHOTO: Trucks cross the borderline into the U.S. and into Mexico at the World Trade Bridge, as seen from Laredo, Texas U.S., June 3, 2019. REUTERS/Carlos Jasso

FILE PHOTO: Trucks cross the borderline into the U.S. and into Mexico at the World Trade Bridge, as seen from Laredo, Texas U.S., June 3, 2019. REUTERS/Carlos Jasso

The agreement would expedite a program known as the Migration Protection Protocols, which sends people seeking asylum in the United States to wait in Mexico as their cases are processed.

That program, announced in December, would be expanded across the entire U.S.-Mexico border under the terms of the agreement, according to the State Department.

The deal would also send the Mexican National Guard police force to its own southern border, where many Central Americans enter Mexico.

“We’re very pleased with this agreement. It has an enforcement mechanism. It has an enforcement feature to it because these tariffs can go on at any time,” White House adviser Kellyanne Conway said in an interview with Fox News Channel.

Mexican Foreign Minister Marcelo Ebrard wrote in a tweet on Monday morning that he would brief the Mexican President Andres Manuel Lopez Obrador on the details of the agreement.

Ebrard said Lopez Obrador would discuss the deal during his morning news conference.

Marta Barcena Coqui, the Mexican ambassador to the United States, said in an interview with CBS’ “Face the Nation” on Sunday that Mexican officials had agreed to take steps to reduce illegal immigration “to previous levels that we had maybe last year or in 2018.”

During the talks last week, Mexican sources said officials were resisting safe third country status, which would mean migrants seeking asylum would have to make such a request in the first safe country they crossed.

Under such safe third country status, that country for many Central American migrants fleeing poverty, violence and corruption in their native countries would be Mexico.

Such a change would require legal changes that would take at least 90 days and would need to be ratified by Mexico’s Congress.

(Reporting by Makini Brice; Additional reporting by Doina Chiacu in Washington and Frank Jack Daniel in Mexico City; Editing by Larry King and Chizu Nomiyama)

Trump says U.S. likely to go ahead with tariffs on Mexico over immigration

U.S. President Donald Trump meets with Britain's Prime Minister Theresa May (not pictured) in Downing Street, as part of Trump's state visit in London, Britain, June 4, 2019. REUTERS/Henry Nicholls/Pool

By Steve Holland and Dave Graham

LONDON/MEXICO CITY (Reuters) – President Donald Trump on Tuesday said he would probably order new tariffs on all Mexican goods imported to the United States next week despite a diplomatic push to avoid the levies, citing high flows of migrants entering the United States from Mexico.

Trump said last week Mexican goods would pay new tariffs beginning June 10 if Mexico did not halt a surge in the U.S-bound immigrants, mostly from Central America.

Mexico was preparing a proposal on immigration to present to U.S. officials at a meeting in Washington on Wednesday but Trump said the talks might not be enough.

“We’re going to see if we can do something, but I think it’s more likely that the tariffs go on,” Trump said at a news conference in London, describing large flows of migrants into America as an “invasion.”

“Mexico should step up and stop this onslaught, this invasion into our country,” Trump said, also calling on the U.S. Congress to pass immigration laws to address the situation and blaming Democrats for stalling any such effort.

Asked to comment on Trump’s remarks, Mexican President Andres Manuel Lopez Obrador told his regular morning news conference he was optimistic that a deal could be reached.

“The most important thing now is to reach an agreement,” Lopez Obrador said, indicating that he would continue to negotiate even if Trump did go ahead with the tariffs.

Before Trump spoke, Lopez Obrador told the two-hour news conference he expected Mexico to reach a deal with the United States over immigration ahead of the June 10 deadline.

“There are signs that it matters to the U.S. officials that there’s a deal,” he told his regular morning news conference.

The inflow of migrants, many asylum seekers escaping criminal violence in Central America, have long sparked Trump’s ire and helped fuel his successful bid for White House amid a campaign promise that he would make Mexico pay for a wall along the southern U.S. border. Efforts to get Mexico or U.S. lawmakers in Congress to fund the barrier have failed.

Trump’s tariff threat last week was aimed at pressuring Mexico, but it also spooked global markets and put a joint trade pact between the two countries and Canada further in doubt.

Despite Trump’s rhetoric, Mexico is now detaining double the number of migrants per day than a year ago, and three times as many as in January, when Lopez Obrador’s new government opted instead to give visas to Central Americans, hoping they would stay in Mexico.

Instead, most of them made their way to the border, contributing to the recent surge. Under pressure from the United States, the Mexican government changed strategy, and in May detentions surged past 20,000.

Lawmakers from Trump’s Republican Party have begun discussing whether they may have to vote to block the tariffs, according to a report by the Washington Post that cited people familiar with talks in Congress.

Trump said that sort of congressional action was unlikely. “I think if they do, it’s foolish.”  

Mexican Foreign Minister Marcelo Ebrard, in Washington for the talks with U.S. officials, said he hoped Wednesday’s meeting could be a starting point for negotiations. Mexican lawmakers and private sector officials will also be visiting Washington this week to press Mexico’s case, he added.

Mexican officials on Monday vowed to reject a U.S. idea to take in all Central American asylum seekers if it was raised at talks this week with the Trump administration.

“We’re going to find common ground, I think,” Ebrard said at a news conference.

(Reporting by Steve Holland In London and Dave Graham in Mexico City; Additional reporting by Jason Lange and Makini Brice in Washington and by Stefanie Eschenbacher in Mexico City; Writing by Jason Lange in Washington; Editing by Nick Zieminski and Alistair Bell)

As meetings begin and U.S. tariffs loom, Mexico hopes for migration deal

Vehicles and people cross the border bridge into the U.S., as seen from Laredo, Texas June 2, 2019. REUTERS/Carlos Jasso

By Alexandra Alper

WASHINGTON (Reuters) – Mexico can reach an agreement with the United States to resolve a dispute over migration that prompted U.S. President Donald Trump to threaten punitive tariffs, Mexican officials said on Monday as high-level talks were set to begin in Washington.

Trump has proposed the tariffs on Mexican imports to pressure Mexico into action against migrants passing through on the way to the United States, as well as drug cartels.

Mexican President Andres Manuel Lopez Obrador, speaking at his regular morning news conference in Mexico City, also reiterated that he believed a deal could be reached to avert the tariffs.

The Mexican officials, speaking to reporters in Washington, warned that Trump’s tariffs could backfire.

Mexican Foreign Minister Marcelo Ebrard said such tariffs would be devastating and would not stop waves of Central American migrants from crossing the southern U.S. border.

“Tariffs, along with the decision to cancel aid programs to the northern Central American countries, could have a counterproductive effect and would not reduce migration flows,” Mexico’s ambassador to the United States, Martha Barcena, also said at the news conference.

The tariffs also “could cause financial and economic instability,” reducing Mexican authorities’ capacity to address migration flows and “offer alternatives” to migrants fleeing Guatemala, El Salvador and Honduras, she said.

The discussions in Washington will include a meeting of Mexican Agriculture Minister Victor Villalobos and U.S. Agriculture Secretary Sonny Perdue on Monday, Mexican officials said.

U.S. Trade Representative Robert Lighthizer and acting U.S. Homeland Security Secretary Kevin McAleenan also are expected to participate in talks, Mexican officials said.

Mexican Economy Secretary Graciela Marquez and U.S. Commerce Secretary Wilbur Ross will meet this week, as will Ebrard and U.S. Secretary of State Mike Pompeo.

Trump’s latest threat of tariffs further roiled global markets, which are already under pressure amid a trade war between the United States and China.

U.S. stock index futures fell on Monday as the multi-front trade war made investors increasingly risk averse and fueled worries of a recession.

Mexico has cited the economic risk of U.S. tariffs on its goods as it seeks to soothe relations with Washington. A separate trade deal involving Mexico, the United States and Canada also is pending.

Ebrard told reporters Lopez Obrador had not yet decided if he would attend the Group of 20 summit for the world’s leading economies in Japan but would do so this week.

(Reporting by Alexandra Alper and Makini Brice; Additional reporting by Dave Graham in Mexico City; Writing by Susan Heavey; Editing by Chizu Nomiyama and Bill Trott)

Trump vows rapid, high tariffs on Mexico unless illegal immigration ends

FILE PHOTO: Joe Alvarado, a U.S. Customs and Border Protection (CBP) Agriculture Specialist, checks imported broccoli from Mexico at the Pharr Port of Entry in Pharr, Texas, October 4, 2018. REUTERS/Adrees Latif/File Photo

By Steve Holland and Frank Jack Daniel

WASHINGTON/MEXICO CITY (Reuters) – U.S. President Donald Trump, responding to a surge of illegal immigrants across the southern border, vowed on Thursday to impose a tariff on all goods coming from Mexico, starting at 5% and ratcheting much higher until the flow of people ceases.

Trump’s move dramatically escalates his battle to control a wave of tens of thousands of asylum seekers, including many Central American families fleeing poverty and violence, that has swelled alongside his promises to make it harder to get U.S. refuge and his efforts to build a wall on the Mexican border.

The announcement rattled investors who feared that worsening trade friction could hurt the global economy. The Mexican peso, U.S. stock index futures and Asian stock markets tumbled on the news, including the shares of Japanese automakers who ship cars from Mexico to the United States.

The president’s decision, announced on Twitter and in a subsequent statement, was a direct challenge to Mexican President Andres Manuel Lopez Obrador and took the Mexican government by surprise on a day when it had started a formal process to ratify a trade deal with the United States and Canada (USMCA).

It raised the risk of devastating economic relations with the biggest U.S. trade partner for goods. Mexico, heavily dependent on cross-border trade, rose to that ranking as a result of Trump’s trade war with China.

The measures against Mexico open up a new front on trade and if implemented are bound to trigger retaliation that would hit heartland, Trump-supporting farming and industrial states.

Higher tariffs will start at 5% on June 10 and increase monthly up to 25% on Oct. 1, unless Mexico takes immediate action, he said.

“If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the tariffs will be removed,” Trump said.

Lopez Obrador responded in a letter he posted on Twitter, calling Trump’s policy of America First “a fallacy” and accusing him of turning the United States into a “ghetto,” that stigmatized and mistreated migrants.

“President Trump, social problems are not resolved with taxes or coercive measures,” he wrote, adding that a delegation led by Foreign Minister Marcelo Ebrard would travel to Washington on Friday. He did not threaten to retaliate, saying he wanted to avoid confrontation.

Lopez Obrador pushed back against Trump’s assertion that Mexico let immigration happen through “passive cooperation,” saying: “you know we are fulfilling our responsibility to stop (migrants) moving through our country, as much as possible and without violating human rights.”

Determined to avoid a break down in Mexico’s most important bilateral relationship, since Trump threatened to close the world’s busiest land border over the migrant surge, Lopez Obrador’s government has drastically tightened controls on the movement of migrants, detaining and deporting thousands in recent months, while calling for U.S. aid to tackle root causes.

“We’re in a good moment building a good relationship (with the United States) and this comes like a cold shower,” said Mexico’s deputy foreign minister for North America, Jesus Seade, who had been in Mexico’s Senate delivering the USMCA trade deal for ratification shortly before the news broke.

In Beijing, Chinese foreign ministry spokesman Geng Shuang expressed sympathy with Mexico.

“The United States has repeatedly taken trade bullying action. China is not the only victim,” Geng told reporters.

Cross border trade between Mexico and the United States: https://tmsnrt.rs/2V59n2R

SIDING WITH HAWKS

Despite Trump’s assertion that Mexico could easily end Central American immigration, its relatively small security forces, also struggling with a record level of gang violence and homicide, are having a hard time controlling the flows.

In the biggest migrant surge on the U.S-Mexican border in a decade, U.S. officials say 80,000 people are being held in custody with an average of 4,500 mostly Central American migrants arriving daily, overwhelming the ability of border patrol officials to handle them. A senior White House official said Trump was particularly concerned that U.S. border agents apprehended a group of 1,036 migrants as they illegally crossed the border from Mexico on Wednesday. Officials said it was the largest single group since October. Before unveiling the tariff threat, Trump posted a video purporting to be of the crossing on his Twitter feed.

A source close to Trump said there had been a debate inside the White House over whether to go forward with the new policy, with immigration hawks fighting for it and others urging a more diplomatic approach. Trump sided with the hawks.

“The last thing he wants is to look weak,” said the source, who spoke on condition of anonymity.

Trump’s directive also spelled the potential for chaos for his efforts to get the U.S. Congress to approve the USMCA deal, which he negotiated as a replacement to the North American Free Trade Agreement between the United States, Mexico and Canada.

Doug Ducey, the governor of Arizona, which shares a 370-mile (595-km) border with Mexico, said on Twitter that he spoke to the White House and it was time for Congress to act on border security and the United States-Mexico-Canada Agreement.

“Everyone knows I am opposed to tariffs and deeply value Arizona’s relationship with Mexico. I prioritize national security and a solution to our humanitarian crisis at the border above commerce,” he said on Twitter.

Trump said he was acting under the powers granted to him by the International Emergency Economic Powers Act. He campaigned for election in 2016 on a vow to crack down on immigration.

Jaime Serra, Mexico’s former trade minister who negotiated the original NAFTA, told Reuters the announcement was unacceptable and “in total violation of NAFTA.” Another negotiator said Trump risked violating World Trade Organization rules.

WHITE HOUSE WANTS ACTION ‘TONIGHT’

White House acting chief of staff Mick Mulvaney, asked in a conference call with reporters which products from Mexico could be affected by the tariffs, said: “All of them.”

Mulvaney added, “We are interested in seeing the Mexican government act tonight, tomorrow.”

Shares in Toyota Motor Corp, Nissan Motor Co and Honda Motor Co all fell around 3% or more, while Mazda Motor Co fell nearly 7%. All four operate vehicle assembly plants in Mexico.

“Mexico is the U.S.’s largest trading partner and a flare-up in trade tensions was definitely not on the market radar,” said Sean Callow, a senior currency analyst at Westpac.

The benchmark S&P 500 e-mini futures dropped 0.82% to the lowest the contract has traded since early March. Investors scooped up safe assets, driving the yield on the 10-year U.S. Treasury note to 2.18%, the lowest since September 2017.

The dollar surged more than 2.5 percent against the Mexican peso.

(Reporting by Steve Holland, Eric Beech and Mohammed Zargham; additional reporting by Mica Rosenberg in New York,Noe Torres and Anthony Esposito in Mexico City, and Cate Cadell in Beijing; Editing by Grant McCool and Clarence Fernandez)