Tag Archives: trade war

China trade team still plans on U.S. talks as Trump vows to raise tariffs

FILE PHOTO: Chinese and U.S. flags are set up for a meeting during a visit by U.S. Secretary of Transportation Elaine Chao at China's Ministry of Transport in Beijing, China April 27, 2018. Picture taken April 27, 2018. REUTERS/Jason Lee/File Photo

By Ben Blanchard and Jeff Mason

BEIJING/WASHINGTON (Reuters) – China said on Monday that a delegation was still preparing to go to the United States for trade talks, even as U.S. President Donald Trump dramatically increased pressure on Beijing to reach a deal, saying he would hike tariffs on Chinese goods this week.

Trump’s comments on Sunday marked a major escalation in tensions between the world’s two largest economies, and a shift in tone from the president, who as recently as Friday had cited progress toward a deal.

Stock markets sank and oil prices tumbled on his remarks, as negotiations to end the months-long trade war were thrown into doubt.

“We are also in the process of understanding the relevant situation. What I can tell you is that China’s team is preparing to go to the United States for the discussions,” Chinese Foreign Ministry spokesman Geng Shuang told a news briefing.

But Geng did not say if Vice Premier Liu He, who is China’s lead official in the negotiations, will be part of the delegation as originally planned. Negotiations are set to start May 8 in Washington.

“What is of vital importance is that we still hope the United States can work hard with China to meet each other halfway, and strive to reach a mutually beneficial, win-win agreement on the basis of mutual respect,” Geng said.

The Wall Street Journal reported earlier that China was considering canceling this week’s meetings in Washington in light of Trump’s comments, which took Chinese officials by surprise.

Trump appeared to defend his decision in a tweet early Monday, slamming the U.S.-China trade deficit and vowing not to lose out to Beijing.

A less-than-rosy update from U.S. Trade Representative Robert Lighthizer, including details that China was pulling back from some previous commitments, prompted Trump’s weekend decision.

“The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” Trump said in a tweet.

Trump said tariffs on $200 billion of goods would increase on Friday to 25 percent from 10 percent, reversing a decision he made in February to keep them at 10 percent due to progress between the two sides.

The president also said he would target a further $325 billion of Chinese goods with 25 percent tariffs “shortly,” essentially covering all products imported to the United States from China.

‘ATMOSPHERE HAS CHANGED’

U.S. officials did not weigh in on whether they expected talks to go ahead this week. The White House and the U.S. Trade Representative’s Office declined to comment. China’s commerce ministry did not immediately respond to a request for comment.

“The atmosphere of the negotiations has changed,” said a Chinese official with knowledge of the situation.

Whether and how the talks proceed are being re-evaluated, the official told Reuters on condition of anonymity.

“All that depends on the attitude of the United States,” the official said.

Chinese news outlets have been told not to independently report on Trump’s tweets, and instead adhere to any report from the official Xinhua news agency, said a source with direct knowledge of the matter.

Global financial markets, which had been expecting news of a trade deal soon, went into a tailspin. U.S. equity futures fell more than 2 percent and stocks across trade-reliant Asia tumbled. China’s main indexes slid 5 percent.

“There is still a question of whether this is one of the famous Trump negotiation tactics, or are we really going to see some drastic increase in tariffs,” said Nick Twidale, Sydney-based analyst at Rakuten Securities Australia. “If it’s the latter, we’ll see massive downside pressure across all markets.”

Mindful of his 2020 re-election bid, Trump had also suggested the duties were not leading to price increases for U.S. consumers. “The Tariffs paid to the USA have had little impact on product cost, mostly borne by China,” he tweeted.

Tariffs on Chinese goods are actually paid to the United States by companies that import the goods, and most of those companies are U.S.-based. American businesses, while supportive of Trump’s crackdown on China’s trade practices, are eager for the tariffs to be removed, not expanded.

“Raising tariffs means raising taxes on millions of American families and inviting further retaliation on American farmers,” said Christin Fernandez, a spokeswoman for the Retail Industry Leaders Association.

‘HANG TOUGH’

Nevertheless, the president’s aggressive strategy drew rare bipartisan support from U.S. Senate Democratic leader Chuck Schumer, who urged Trump to “hang tough” in a tweet: “Don’t back down. Strength is the only way to win with China.”

One Chinese trade expert said recent signs of resilience in both economies were breeding over-confidence.

“The urgency is gone. So, it’s likely to see a longer trade war,” the expert said, speaking on condition of anonymity due to the sensitivity of the topic.

The trade war resulted in billions of dollars in losses for both sides in 2018, hitting autos, technology and above all, agriculture, while inflicting collateral damage on export-reliant economies and companies from Japan to Germany.

On Friday, Trump said talks with China were going well.

Last week, industry sources said they believed the talks were in the end game, but a Trump administration official said aides had told the president that significant hurdles remained.

The increase in U.S. tariffs on Friday would be the first since Trump imposed 10 percent tariffs on $200 billion of Chinese goods in September, coming on top of 25 percent tariffs on $50 billion of goods enacted earlier last year.

Negotiations about tariffs have been one of the remaining sticking points between the two sides. China wants the tariffs to be removed, while Trump wants to keep some, if not all, as part of any final deal to ensure China lives up to its commitments, a White House official said on Sunday.

(Reporting by Jeff Mason, David Shepardson, Timothy Gardner, Lawrence Hurley and Makini Brice in Washington; Sinead Carew in New York; and Ben Blanchard, Michael Martina, Shu Zhang, Jing Xu, Cheng Leng and Yawen Chen in Beijing; Editing by Simon Cameron-Moore and Jeffrey Benkoe)

U.S.-China trade talks will likely conclude in next two weeks: Mulvaney

FILE PHOTO: Mick Mulvaney testifies before the House Appropriations Subcommittee on Financial Services and General Government on Capitol Hill in Washington, U.S., April 18, 2018. REUTERS/Aaron P. Bernstein/File Photo

By Matt Scuffham and Svea Herbst-Bayliss

BEVERLY HILLS, Calif. (Reuters) – Talks between the United States and China aimed at resolving their trade dispute will likely be resolved “one way or the other” in the next two weeks, White House chief of staff Mick Mulvaney said on Tuesday.

“It won’t go on forever. I think, at some point, in any negotiation, you realize we’re close to getting something done so we’re going to keep going,” Mulvaney said at the Milken Institute Global Conference. “On the other hand, at some point, you can think this is not going to get anywhere. I think you will know, one way or the other, in the next couple of weeks.”

Mulvaney spoke only days after data came out showing that the United States economy grew stronger than expected 3.2 percent during the first three months of the year and said that strong growth is going to help support President Donald Trump as he prepares for the 2020 election.

“We think the economy has been good for everyone,” Mulvaney said. “We can ride that to the 2020 election. People know what is good for them.”

Mulvaney said policymakers are focusing on solving wage inequality.

He said the White House plans to make strong economic growth, at a time the expansion is well into its 10th year, healthcare and trade into key topics for the campaign. He also said Trump, a Republican, will benefit from the fact that Democrats have more than a dozen candidates running for president and “we have weak competitors.”

Mulvaney currently is acting chief of staff but he said he expects to keep the job permanently and that he has improved morale in the White House since replacing John Kelly in the job in January.

He said he does not expect a lot of change in top administration positions before the election. The Trump administration has had an especially high rate of turnover with his homeland security secretary being among the most recent to leave.

(Reporting by Matt Scuffham and Svea Herbst-Bayliss; Editing by Bill Trott)

Trade war and sagging prices push U.S. family farmers to leave the field

A crowd of mostly farmers watch the bidding as a retiring farmer's equipment is auctioned at Jim & Karen Taphorn's farm near Beattie, Kansas, U.S., February 27, 2019. REUTERS/Lane Hickenbottom

By P.J. Huffstutter

BEATTIE, KANSAS(Reuters) – Shuffling across his frozen fields, farmer Jim Taphorn hunched his shoulders against the wind and squinted at the auctioneer standing next to his tractors. After a fifth harvest with low grain prices, made worse last fall by the U.S.-China trade war, the 68-year-old and his family were calling it quits. Farming also was taking a physical toll on him, he said; he’d suffered a heart attack 15 months before.

It took less than four hours to sell off all the tractors, combines and other farm equipment at the Taphorn retirement sale, ending a family tradition that had survived nearly a century.

“We went through the bad times in the ’70s and ’80s,” said Jim, 68, broad-shouldered and stocky. “In some ways, this is worse.”

Across the Midwest, growing numbers of grain farmers are choosing to shed their machinery and find renters for their land, all to stem the financial strain on their families, a dozen leading farm-equipment auction houses told Reuters. As these older grain farmers are retiring, fewer younger people are lining up to replace them.

The trend has created boom times for the auction houses, which report that their retirement business has grown 30 percent or more over the past six months, compared to the same period a year earlier.

But it is expected to put a strain on the agricultural supply chain: It means fewer customers for seed and chemical companies, fewer machine buyers, and fewer suppliers for grain merchants.

The revival of the family farming tradition proved short-lived.

In the wake of the U.S. recession of 2007-2008, the lure of high grain prices drew young people from their city jobs to their family’s fields.

By 2012, farm profits were flourishing as corn and soybean prices soared amid global demand and tight supplies. For the first time in decades, the number of producers aged 44 or younger in the Midwest grew.

From the financial crisis in 2008 through 2012, their ranks increased more than 40 percent in Iowa and Illinois, nearly 57 percent in Indiana and 60 percent in Kansas, according to data from the U.S. Department of Agriculture.

Taphorn’s son Tom, who works as a district manager at a cattle feed company near Manhattan, Kansas, was among those who wanted to return home to farm with his parents.

But the father of three couldn’t make it work. During the boom, Tom sought to expand by renting more land – but as grain prices fell, most landlords refused to lower their rates. It was beyond Tom’s reach, leaving him and his parents with too little land to till to cover two families’ expenses.

Tom kept his job. His siblings, one also in Kansas and the other in Indiana, didn’t want to farm full-time.

Jim and Karen knew no one else within their family would take over their business. So they decided to sell their equipment and rent out their land.

COMES DOWN TO MATH

At the Taphorns’ auction, Karen, 68, reached for her husband’s hand, squeezing it hard.

“Karen, it’s ok to shed a tear,” auctioneer Dan Sullivan said, as she pressed her face into her husband’s shoulder. “It’s the end of an era.”

Farmer retirement rates are not tracked by either state or U.S. government agencies, but federal data shows the ranks of farmers are gradually aging. The average age of U.S. farm operators was 57.5 years in 2017, up from 54.3 years in 1997.

The number of farms is shrinking, too, as the industry increasingly is consolidated either into the hands of large-scale operators or tiny niche crop growers. Mid-sized farms and those with annual sales of more than $50,000 but less than $5 million – are dwindling.

For many families, leaving farming is a painful but simple calculation: The trade war with China, set off by tariffs imposed by the Trump Administration, has lasted nearly 10 months.

China, the top buyer of U.S. soybeans, the nation’s most valuable agricultural export, has dramatically reduced its purchases. Grain prices have remained stubbornly low and operating costs are rising fast.

Such factors now are “speeding things up” among farmers deciding to retire, says H. Andrew Pyron, chief executive of Big Iron Auctions in St. Edward, Nebraska.

ILL-TIMED BET

In the spring of 2018, Mike and Linda Manson of De Soto, Kansas, decided to plant soy on all their fields.

It was an ill-timed bet, coming just before China applied retaliatory tariffs on U.S. soybeans

By summer, U.S. soybean exports had plummeted. Heavy rains hammered the plants, reducing their crop. Finding help at harvest was tough, too, because healthy young people are hard to come by in the industry these days.

“I had one guy, a retiree, helping me. But he’s fat and his knees gave out on him, so he couldn’t get into the combine,” Mike Manson, 69, said wryly.

The erosion of multi-generational family farms is painful for sons and daughters as well.

“I’m the only son of an only son, and I was still trying to figure out my path back to the farm,” said Sam Hudson, 34, who co-owns an agricultural marketing firm in central Illinois.

His father has a small farm. Even if the men borrowed $1 million to get enough land, equipment and other supplies to scale up the operation, the business might only break even, given current grain prices and land rent costs.

“It doesn’t make any sense right now,” he said.

Farm equipment is on display at a retiring farmer's auction of all his equipment at Jim & Karen Taphorn's farm near Beattie, Kansas, U.S., February 27, 2019. REUTERS/Lane Hickenbottom

Farm equipment is on display at a retiring farmer’s auction of all his equipment at Jim & Karen Taphorn’s farm near Beattie, Kansas, U.S., February 27, 2019. REUTERS/Lane Hickenbottom

A BOON TO AUCTIONEERS

The budget-conscious farmers who remain seek deals on quality used equipment rather than splurging at dealerships, auctioneers say.

Steffes Group, a top auction firm in the upper Midwest, recently had to juggle staff to cover three large retirement auctions in three states on the same day, auctioneer Scott Steffes said. Big Iron Auction’s retirement farm business has surged 40 percent this year.

“Up until now, there wasn’t a lot of motivation to exit farming,” Steffes said. “Now, what I’m hearing from folks is, ‘It’s no longer fun to farm.'”

Many farmers don’t have 401Ks or other traditional retirement safety nets. Now they’re worried that if they keep going, they’ll have to take on debt against land they own, which will threaten their income stream long-term.

“We’re getting calls every day from farmers looking to sell off their equipment, but keep the land,” said Luke Sullivan of Sullivan Auctioneers, headquartered in Hamilton, Illinois. “They want to rent out their ground, because that land is their retirement.”

Some renters propose to split farm expenses and pay landlords in corn or soybeans, not cash, the modern equivalent of sharecropping. But typically retirees seek renters who pay top-dollar, tenants who are big and can farm thousands of acres.

The Taphorns were different: They turned down several huge operations as renters, instead choosing to be paid less by a young family trying to expand their business.

BIDDERS SWARM IN

For weeks, out-of-town farmers and machinery buyers had called the Taphorns to ask questions about their equipment.

On auction day, buyers from four different states joined the crowd of locals. Bidders also flocked to the Sullivan Auctioneers website.

Jim’s tractor went to a middle-aged farmer in Illinois. Another farmer from Iowa grabbed his planter. The soil ripper went to a guy in Kansas, about 100 miles away.

A couple weeks ago, old friends started calling, asking for help in their fields.

One was in his early 60s and had injured his leg over the winter. Jim assured his friend he’d be there – forever a farmer, even in retirement.

(Reporting By P.J. Huffstutter; Editing by Caroline Stauffer and Julie Marquis)

U.S. job openings hit 11-month low; quits rate stagnates

FILE PHOTO: A "Help Wanted" sign sits in the window of a shop in Harvard Square in Cambridge, Massachusetts, U.S., February 11, 2019. REUTERS/Brian Snyder/File Photo

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. job openings dropped to an 11-month low in February and hiring decreased, which could partially explain a sharp slowdown in job growth during that month.

Still, the labor market remains a pillar of support for the economy amid signs that activity was easing because of the fading boost from a $1.5 trillion tax cut package and the effects of interest rate increases over the last few years. The economy is also facing headwinds from slowing global growth and the United States’ trade war with China.

“The February job openings data reinforced that the labor market weakened in February but there isn’t any cause for concern,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania.

Job openings, a measure of labor demand, tumbled by 538,000 to a seasonally adjusted 7.1 million, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS, report on Tuesday. The drop was the biggest since August 2015. The level was the lowest since March 2018.

Vacancies in the accommodation and food services industry fell by 103,000 jobs in February. There were 72,000 fewer job openings in the real estate and rental and leasing sector. Job openings in the transportation, warehousing and utility sector dropped by 66,000.

Nonfarm payrolls increased by only 33,000 jobs in February, the fewest since September 2017. The near-stall in job gains was partially blamed on colder weather and also viewed as payback after robust increases in December and January.

Job growth picked up in March, with the economy creating 196,000 positions, the government reported last Friday.

WORKERS STILL SCARCE

The drop in job openings in February likely does not change the theme of labor shortages in the economy. A survey of small businesses published on Tuesday found that just over a fifth of owners reported difficulties finding qualified workers as their “single most important business problem” in March.

According to the survey from the NFIB, 39 percent of small business owners reported job openings they could not fill in March. Thirty-three percent said they had openings for skilled workers and 14 percent have vacancies for unskilled labor.

Economists expect monthly job growth to average roughly 150,000 this year, stepping down from 223,000 in 2018.

“There are still millions of help wanted signs out there in the country so we hesitate to revise our outlook for the labor market overall,” said Chris Rupkey, chief economist at MUFG in New York.

The dive in job openings in February pushed down the vacancies rate to 4.5 percent from 4.8 percent in January. Hiring fell to 5.7 million in February from 5.8 million in the prior month. The decrease in hiring was led by the construction sector, where hiring fell by 73,000.

Hiring in the nondurable goods manufacturing industry dropped by 33,000 in February. Hiring by state and local government education departments fell 22,000.

The number of workers voluntarily quitting their jobs was little changed at 3.5 million in February, keeping the quits rate at 2.3 percent for a ninth straight month.

The quits rate is viewed by policymakers and economists as a measure of job market confidence. The worker reluctance to switch jobs is despite the tight labor market conditions that are steadily driving up wages.

“This is not as many quits as you would expect in such a tight labor market, when workers are in higher demand,” said Nick Bunker, an economist at Indeed Hiring Lab. “Though perhaps this isn’t surprising in the short term given that the ratio of unemployed workers to job openings has been rising.”

Layoffs increased in February, lifting the layoffs rate to 1.2 percent from 1.1 percent in January. There were increases in layoffs in the professional and businesses services, and healthcare and social assistance sectors in February.

(Reporting By Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)

Trump says U.S.-China trade deal may be reached in four weeks

U.S. President Donald Trump talks with with China's Vice Premier Liu He in the Oval Office of the White House in Washington, U.S., April 4, 2019. REUTERS/Jonathan Ernst

By Jeff Mason and David Lawder

WASHINGTON (Reuters) – U.S. President Donald Trump said on Thursday the United States and China were close to a trade deal that could be announced within four weeks, while warning Beijing that it would be difficult to allow trade to continue without a pact.

The two countries are engaged in intense negotiations to end a months-long trade war that has rattled global markets, but hopes of a resolution soared after both sides expressed optimism following talks in Beijing last week.

Speaking to reporters at the White House at the start of a meeting with Chinese Vice Premier Liu He, Trump said some of the tougher points of a deal had been agreed but there were still differences to be bridged.

“We’re getting very close to making a deal. That doesn’t mean a deal is made, because it’s not, but we’re certainly getting a lot closer,” Trump said in the Oval Office.

“And I would think with, oh, within the next four weeks or maybe less, maybe more, whatever it takes, something very monumental could be announced.”

Trump said he would hold a summit with Chinese President Xi Jinping if there were a deal.

Xi assured Trump that text of the China-U.S. trade could be finalized soon, in a message conveyed by Liu He.

According to state-run news agency Xinhua, Liu He told Trump that Xi believed under his and Trump’s leadership, China-U.S. relations will make new and greater progress.

Xi said that in the past month or more, the two sides’ trade teams had maintained close contact and “achieved new and substantive progress on issues in the text of two countries’ trade agreement”.

“I hope the two sides’ trade teams can continue working in the spirit of mutual respect, equality, and mutual benefit to resolve each other’s concerns, and finish negotiations on the text of the China-U.S. trade agreement soon,” Xi said to Trump through Liu.

KEEPING LEVERAGE

Trump declined to say what would happen to U.S. tariffs on $250 billion worth of goods as part of a deal. China wants the tariffs lifted, while U.S. officials are wary of giving up that leverage, at least for now.

Asked about the benefits of an agreement for China, Trump said: “It’s going to be great for China, in that China will continue to trade with the United States. I mean, otherwise, it would be very tough for us to allow that to happen.”

Goods trade between the United States and China, the world’s two largest economies, totaled $660 billion last year, according to U.S. Census Bureau data, consisting of imports of $540 billion from China and $120 billion in exports to China.

On China’s behalf, Liu cited “great progress” in the talks because of Trump’s direct involvement and expressed hope that the talks would lead to “a good result.”

U.S. SEEKS SWEEPING CHANGES

Trump has previously threatened to impose punitive tariffs on all imports from China, more than a half-trillion dollars worth of products.

U.S. Trade Representative Robert Lighthizer, who is leading the talks for the Trump administration, said there were still some “major, major issues” to resolve and praised Liu’s commitment to reform in China.

Asked about the remaining sticking points, Trump mentioned tariffs and intellectual property theft. He said he would discuss tariffs with Liu in their meeting.

“Some of the toughest things have been agreed to,” Trump said. He later said that an enforcement plan for a deal remained a sticking point as well.

“We have to make sure there’s enforcement. I think we’ll get that done. We’ve discussed it at length,” he said.

Lighthizer and Treasury Secretary Steven Mnuchin are holding talks in Washington with a Chinese delegation this week after meeting together in Beijing last week. The current round of talks is scheduled to go through Friday and possibly longer.

Hopes that the talks were moving in a positive direction have cheered financial markets in recent weeks. But U.S. stocks were mixed on Thursday as investors waited for more developments in the trade negotiations, with the Dow Jones industrial Average slightly higher, and the S&P 500 and Nasdaq Composite slightly lower. [.N]

The United States is seeking reforms to Chinese practices that it says result in the theft of U.S. intellectual property and the forced transfer of technology from U.S. companies to Chinese firms.

Administration officials initially envisioned a summit between Trump and Xi potentially taking place in March, but some U.S. lawmakers and lobbying groups have said recently they were told that the administration was now aiming for a deal in late April.

OUTSTANDING ISSUES

White House economic adviser Larry Kudlow said last week that the talks were “not time-dependent” and could be extended for weeks or even months longer.

While some reform pledges by Beijing are largely set, including an agreement to avoid currency manipulation, an enforcement mechanism to ensure that China keeps its pledges and the status of U.S. tariffs on $250 billion worth of Chinese goods must be resolved.

“China has been very clear, publicly and privately, that they would like to see all the tariffs removed,” U.S. Chamber of Commerce international affairs chief Myron Brilliant told reporters on Tuesday.

“The (Trump) administration has been equally clear that they want to keep some of the tariffs in place as a way to have leverage over China fulfilling its obligations under whatever final package is reached.”

(Reporting by Jeff Mason and David Lawder; Additional reporting by Chris Prentice and Michael Martina in BEIJING; Editing by Peter Cooney, Simon Cameron-Moore and Michael Perry)

U.S.-China trade talks continue, Trump not expected to announce summit: official

FILE PHOTO: U.S. President Donald Trump and China's President Xi Jinping arrive for a state dinner at the Great Hall of the People in Beijing, China, November 9, 2017. REUTERS/Jonathan Ernst/File Photo

WASHINGTON (Reuters) – The White House is not expected to announce a date on Thursday for a trade summit between U.S. President Donald Trump and Chinese President Xi Jinping, a senior administration official said, as negotiators for the two sides launch another day of talks.

China and the United States are in the middle of intense negotiations to end a months-long trade war that has rattled global markets.

After meetings in Beijing last week, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are holding talks with a Chinese delegation in Washington this week.

Trump is slated to meet with China’s top trade negotiator, Liu He, at 4:30 p.m. (2030 GMT) at the White House. The Wall Street Journal and the New York Times reported that he was expected to announce a date for a summit at that time, but a senior administration official told Reuters that was incorrect.

“The White House is not expected to announce a date for a meeting,” the official said.

Trump administration officials have cited progress in the talks on tricky aspects, including reforming practices that Washington objects to by Beijing such as the intellectual property theft and forced transfer of technology from U.S. companies doing business in China.

Hopes that the talks were moving in a positive direction have cheered investors.

Administration officials initially envisioned a summit between Trump and Xi potentially taking place in March, but that period passed while talks continued.

How to enforce a deal as well as when and whether to lift tariffs on billions of dollars of goods have been sticking points in what appear to be the final stages of the talks.

(Reporting by Jeff Mason; Editing by Susan Thomas)

Exclusive: China shifts position on tech transfers, trade talks progress – U.S. officials

Members of the U.S. trade delegation Robert Lighthizer and Steven Mnuchin arrive at a hotel in Beijing, China March 28, 2019. REUTERS/Jason Lee

By Jeff Mason

WASHINGTON (Reuters) – China has made proposals in talks with the United States on a range of issues that go further than it has before, including on forced technology transfer, as the two sides work to overcome obstacles to a deal to end their protracted trade war, U.S. officials told Reuters on Wednesday.

U.S. President Donald Trump imposed tariffs on $250 billion of Chinese imports last year in a move to force China to change the way it does business with the rest of the world and to pry open more of China’s economy to U.S. companies.

Among Trump’s demands are for Beijing to end practices that Washington alleges result in the systematic theft of U.S. intellectual property and the forced transfer of American technology to Chinese companies.

U.S. companies say they are often pressured into handing over the technological know-how behind their products to Chinese joint venture partners, local officials or Chinese regulators as a condition for doing business in China. The U.S. government says that technology is often subsequently transferred to and used by Chinese competitors.

The issue has proved a tough one for negotiators as U.S. officials say China has previously refused to acknowledge the problem exists to the extent alleged by the United States, making discussing a resolution difficult.

China says it has no technology transfer requirements enshrined in its laws and any such transfers are a result of legitimate transactions.

China has put proposals on the table in the talks that went further than any in the past, including on technology transfer, said one of four senior U.S. administration officials who spoke to Reuters.

“They’re talking about forced technology transfer in a way that they’ve never wanted to talk about before – both in terms of scope and specifics,” he said, referring to Chinese negotiators. He declined to give further detail.

Negotiators have made progress on the details of the written agreements that have been hashed out to address U.S. concerns, he said.

Reuters reported previously that the two sides were working on written agreements in six areas: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade.

“If you looked at the texts a month ago compared to today, we have moved forward in all areas. We aren’t yet where we want to be,” the official said, speaking on condition of anonymity.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin arrive in Beijing on Thursday for a new round of talks with Chinese officials to work on a deal that would end a months-long trade war that has cost both sides billions of dollars and hurt global economic growth.

The in-person talks, which will be followed by a round in Washington next week, are the first face-to-face meetings the two sides have held in weeks after missing an initial end-of-March goal for a summit between U.S. President Donald Trump and Chinese President Xi Jinping to sign a pact.

Talks would continue as long as progress is being made on the core issues, the official said.

“It could go to May, June, no one knows. It could happen in April, we don’t know,” another administration official said.

The two sides still have differences over intellectual property and how to enforce a deal, he said.

‘SOME TARIFFS WILL STAY’

China wants the United States to lift its tariffs as part of a deal. Washington, which is cognizant that the tariffs give it leverage to ensure Beijing follows through on any commitments it makes, is wary of lifting them right away.

Trump said last week the United States may leave tariffs on Chinese goods for a “substantial period” to ensure compliance.

“Some tariffs will stay,” the second official said. “There’s going to be some give on that, but we’re not going to get rid of all the tariffs. We can’t.”

The topic will be addressed in upcoming talks.

“Obviously that is an issue that we need to resolve … and will be an important part of a final deal,” the first official said. He said there was some agreement on enforcement on what he termed the “backend” once a deal was in place: a structure in which both sides could raise grievances and implement tariffs if there were violations to the agreement.

Since July 2018, the United States has imposed duties on $250 billion worth of Chinese imports, including $50 billion in technology and industrial goods at 25 percent and $200 billion in other products including furniture and construction materials, at 10 percent.

China has hit back with tariffs on about $110 billion worth of U.S. goods, including soybeans and other commodities.

The first official said the focus of talks had shifted from Chinese purchases of U.S. goods to the trickier structural issues, which he said Trump wanted as part of a “great” deal.

Bipartisan support at home for his tough stance on China as well as from the business community have emboldened Trump as he pushes for a deal that addresses long-standing complaints on trade, the source said.

Some officials have expressed concern that Trump would accept a deal involving big-ticket Chinese purchases of U.S. goods and falling short on structural issues.

“Who would he be pleasing by .. selling out?” the source said.

He expressed optimism that a deal would be reached.

“I’m still confident, but it takes time,” he said.

“Until any deal is finalized, it can always go either way. And the president has made clear, both in word and in action, that he’s going to walk away from deals if they’re not good deals.”

(Reporting by Jeff Mason; Editing by Peter Cooney, Simon Webb, Shri Navaratnam and Nick Zieminski)

After devastating flooding, U.S. Midwest farms need more than ‘paper towels’ to recover

A combination of aerial photos show the farm of Richard Oswald near Langdon, Missouri after flooding March 20, 2019 and in the fall of 2018 at right. Courtesy of Richard Oswald/Handout via REUTERS.

By Andrew Hay

(Reuters) – Missouri farmer Richard Oswald needs a lot of help to recover from flooding that left his home and farm looking like a manmade island in an inland sea.

Relief groups are giving tetanus shots and handing out free meals and cleaning supplies near his farm in the Langdon-Rock Port area, about 100 miles (161 km) northwest of Kansas City. But what Oswald really needs is money.

Hit by the worst flooding in living memory, he and thousands of other farmers along the Missouri River will each require hundreds of thousands of dollars in disaster funds or loans to start over.

“The typical response on flood relief is groups like the Red Cross show up with paper towels and rubber gloves and scrub buckets,” said Oswald, 69, who does not expect to be able to get to his home or land for weeks. “The biggest thing farmers need is cash, or ways to access funds.”

‘BOUNCE BACK’

Slammed by a trade war and low commodity prices, Midwest family farms have been in the red and in decline for the last five years. The number of U.S farms fell by 100,000 between 2010 and 2017, according to U.S. Department of Agriculture (USDA) data.

Thousands more will now go under without emergency financial support for flooding, pummeling heartland economies almost entirely dependent on agriculture, farmers and aid groups said.

It is a call federal and state agencies, as well as non-governmental and faith-based relief groups are answering.

President Donald Trump has approved disaster declarations for Nebraska and Iowa, making federal disaster funding available in flood-hit areas. Missouri Governor Mike Parson declared a state of emergency, paving the way for similar actions in his state.

“I know we aim for bringing everything back up to where it was,” said Rosalynn Days-Austin, a USDA emergency coordinator helping direct Federal Emergency Management Agency (FEMA) efforts in flood-affected areas. “Sometimes that’s not always possible, for a variety of reasons, but the goal is definitely to help them bounce back from their loss.”

CASH PREFERRED

Relief groups like Farm Aid are tending to the immediate needs of farmers, distributing tens of thousands of dollars in “emergency grants” – $500 gifts from cash donations that help families pay for things like groceries. After that, the group and its partners advise farming families on how to access federal disaster funds they hope are coming soon.

“What we’re hearing, because of the snowpack and rain and the wet ground, is that farmers are going to be dealing with this throughout the spring. So we’re in it for the long haul,” said Jennifer Fahy, a spokeswoman for the group established by country singer and activist Willie Nelson.

The Evangelical Lutheran Church in America (ELCA) is coordinating a long-term response to get displaced families housed, navigate the red tape of insurance companies and federal agencies and tend to the mental health needs of people who have suffered extreme trauma, said Bishop Brian Maas.

“We have national partners and coalitions within the state,” said Maas, who is asking people to hold off donating more material goods, for now. “There will be stresses because we’ve not done anything of this magnitude.

“Now we have mountains of cleaning supplies and so forth that can’t be used,” Maas said, appealing to people to get back in touch in a month to see how they can donate then. “Cash is the most flexible way to respond.”

‘FEMA IS WORTHLESS’

Another immediate need is feed for livestock.

Relief organization Farm Rescue is collecting donations of hay in the Dakotas and trucking it to farmers whose cattle are starving after their feed stands were submerged in floodwater.

“I don’t know of anything this widespread that has ever affected so many people in our service area,” said Dan Erdmann, a spokesman for the group which helps family farms get through crises ranging from natural disasters to medical emergencies.

Farmworkers, some of them undocumented and legal migrants, have been hit hard. Lutheran Family Services of Nebraska is looking at housing assistance for displaced people who previously paid around $300 a month rent and now face rents triple that due to a dearth in properties, said Stacy Martin, chief executive of the social services charity.

While relief groups tend to urgent needs, farmers like Scott Olson say more federal relief money is needed at a time when low crop prices and high debt levels are limiting farmers’ access to credit. He is counting on a farm relief bill in Congress for extra disaster compensation after he successfully lobbied in Washington for similar funds following 2011 flooding.

“Flood insurance isn’t going to cover this worth a darn. FEMA is worthless,” said Olson, who farms 3,000 acres near Tekamah, Nebraska and runs a farm equipment business. “They don’t have any money, nobody has any money.”

(Reporting by Andrew Hay in New Mexico; Additional reporting by Tom Polansek in Chicago; editing by Bill Tarrant and Lisa Shumaker)

Flooding woes add to trade war stress in ‘Trump country’ farm belt

A farm which was damaged by heavy flooding is pictured outside Winslow, Nebraska, U.S., March 20, 2019. Picture taken on March 20, 2019. REUTERS/Humeyra Pamuk

By Humeyra Pamuk and P.J. Huffstutter

COLUMBUS, Neb./CHICAGO (Reuters) – Nebraska grain farmer Ryan Ueberrhein was barely breaking even after the U.S.-China trade war pushed prices for his soybean crop to a decade low. Then the nearby Elkhorn River burst its banks as flooding swept across the U.S. farm belt.

Uberrhein’s farm was left covered in debris after the roiling water receded. He has mounting debts. And he is worried that President Donald Trump may not be able to strike a trade deal with China that would end tariffs on U.S. soybean exports – and allow him to sell whatever grain is left intact at a better price.

Frustration is building across farm country at what feels like a never-ending season of bad news.

The trade war “keeps damaging us,” said Ueberrhein, 34, of Valley, Nebraska, who voted for Trump. “What the president is doing, we stand by him, but … we can’t keep getting hit just because a deal can’t be made quickly.”

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are set to arrive in China this week for another round of trade talks with their Chinese counterparts. The two sides have yet to agree on many core issues.

Farmers who spoke to Reuters remained supportive of Trump.

Soybean exports to China hit a four-year low in February because of the trade war. China is the biggest buyer of U.S. soybeans, which are the largest single U.S. agricultural export. A near halt in exports has hit a rural economy already struggling after years of oversupply cut farm incomes by 50 percent in the past five years.

Debt in the agrarian economy has hit levels last seen during the U.S. farm collapse of the 1980s. (Graphic: https://tmsnrt.rs/2TkUDjk)

The Nebraska Rural Response Hotline, which provides support to farmers and ranchers, has received a record number of calls about financial distress, said John Hansen, president of the Nebraska Farmers Union. Calls about suicide and depression were up, too, he said.

The latest piece of bad news came on March 11, when the Trump administration released its 2020 budget and proposed a 15 percent cut for the U.S. Department of Agriculture, calling its subsidies to farmers “overly generous.”

It did not matter to farmers, who helped vote Trump into office, that the budget will not pass muster with Democrats who control the House of Representatives, Hansen said. Some farmers took the proposed cut to subsidies for crop insurance as an insult.

“How many times do you have to kick us when we’re down?” he said.

That insurance is crucial to Richard Oswald, who farms near Phelps City, Missouri. The flood has already swallowed his childhood home, many of his fields and more than 20,000 bushels of corn. His four grain bins have burst after water-logged corn expanded and split open.

“If our government and leaders can’t step up and start to lead, we’re done for,” he said.

For years, Oswald paid extra for flood insurance. He hoped that government talk of investing in improving U.S. infrastructure would come through – and bolster the levees and dams throughout the Midwest.

But this year, as the trade war dragged on, he dropped the policy to reduce expenses. So he will get no insurance money for the lost corn, Oswald said.

A few days ago, one of his lenders called. Oswald didn’t have to pay the loan right away, the lender said, but he would have to repay it sooner or later.

“Help needs to come from Congress, but Congress is so divided, I don’t know what’s going to happen,” Oswald said.

DISASTER DECLARATION

Trump approved a disaster declaration for Nebraska on Thursday, making federal funding available in nine counties that bore the brunt of the recent floods. On Saturday, he approved one for flood-affected counties in Iowa.

Greg Ibach, a USDA undersecretary, is touring the damage in Nebraska, and Bill Northey, another undersecretary, will head to Iowa, agency officials told Reuters.

U.S. Senator Chuck Grassley of Iowa said the farm belt states would need more aid, suggesting a separate relief bill to offer compensation to farmers for livestock killed in the floods and grains in storage that will have to be destroyed.

“The United States government has always been the insurance of last resort,” Grassley said in a phone interview on Friday.

Nebraska Governor Pete Ricketts put agricultural flood damage for the state at nearly $1 billion. Iowa officials are projecting losses of at least $1.6 billion, with at least $214 million in damage to the agriculture sector. Iowa Governor Kim Reynolds said her state would need assistance beyond what is granted through disaster declarations.

Farmers, meanwhile, are staring at waterlogged fields and expecting more floods. The U.S. National Oceanic and Atmospheric Administration said last week that the flooding would worsen in coming weeks as snow on the ground melts and water flows downstream.

Iowa farmer Dave Newby said the standing water in his fields was already threatening his planned start to corn in mid-to-late April. Newby, like many farmers, had been looking to boost his corn plantings this year because such a large volume of soybeans had been left unsold because of the trade war.

The same was the case in nearby Nebraska. Parts of flooded farmland remained under water and farmers had yet to assess the damage the piled-up sand, silt and debris caused to the soil. Almost all said planting will likely be delayed, which could lead to lower yields.

“Normal planting would take place around May 1, but I doubt we will make it,” said Kendal Sock, a cattle and corn farmer in Genoa. “I wish they’d get this trade deal done, like now.”

(Reporting by Humeyra Pamuk and P.J. Huffstutter; Additional reporting by Mark Weinraub and Tom Polansek in Chicago and Jarrett Renshaw in New York; Editing by Caroline Stauffer, David Gaffen, Simon Webb and Leslie Adler)

U.S.-China trade talks progressing well via video conference: USDA official

FILE PHOTO: U.S. and Chinese flags are seen before Defense Secretary James Mattis welcomes Chinese Minister of National Defense Gen. Wei Fenghe to the Pentagon in Arlington, Virginia, U.S., November 9, 2018. REUTERS/Yuri Gripas

WASHINGTON (Reuters) – Trade negotiations between the United States and China are progressing well via video conference, a senior official at the U.S. Department of Agriculture said on Wednesday.

“The talks are going well,” Ted McKinney, Undersecretary for Trade and Foreign Agriculture Services told a press call. “Presently there’s a lot of discussions going on by digital video conference, also a very good and productive thing,” he said.

“Right now, I think there’s just a lot of work in getting words down … a contract or agreement, and that’s the current status,” he added.

Washington and Beijing have been locked in intense negotiations to end the trade war between the world’s two largest economies. President Donald Trump, citing progress in talks, last week delayed a planned tariff increase to 25 percent from 10 percent on $200 billion of Chinese goods.

The United States has demanded that China make substantial changes to its laws and practices to protect U.S. intellectual property, end forced transfers of U.S. technology to Chinese firms, curb generous industrial subsidies and open the domestic market to U.S. companies.

In addition, Washington has sought increased Chinese purchases of U.S. goods, including farm and energy commodities and manufactured products, to reduce a U.S. trade deficit with China that it estimates at more than $417 billion for 2018.

People familiar with the talks told Reuters the two sides still had substantial work ahead to reach agreement on a way to ensure China follows through on any pledges. Talks could still collapse if a deal cannot be reached on enforcement of these “structural” issues.

McKinney said he did not know of any firm plans for a U.S. delegation to go back to China for further negotiations but added that such a trip would not come as a surprise.

(Reporting by Humeyra Pamuk in Washington; Editing by James Dalgleish)