Tag Archives: trade wars

China, U.S. agree to roll back tariffs as part of trade deal: officials

China, U.S. agree to roll back tariffs as part of trade deal: officials
By Yawen Chen and Jeff Mason

BEIJING/WASHINGTON (Reuters) – China and the United States have agreed to roll back tariffs on each others’ goods as part of the first phase of a trade deal, officials from both sides said on Thursday, offering a new sign of progress despite ongoing divisions about the months-long dispute.

The Chinese commerce ministry, without laying out a timetable, said the two countries had agreed to cancel the tariffs in phases.

A U.S. official, speaking on condition of anonymity, confirmed the planned rollback as part of a “phase one” trade agreement that President Donald Trump and President Xi Jinping are aiming to sign before the end of the year.

Trump has used tariffs on billions of dollars of Chinese goods as his primary weapon in the trade war between the world’s two largest economies.

The prospect of lifting them, even in phases, has drawn fierce opposition from many of his advisers in and outside of the White House and his re-election campaign.

The interim trade pact is widely expected to include a U.S. pledge to scrap tariffs scheduled for Dec. 15 on about $156 billion worth of Chinese imports, including cell phones, laptop computers and toys.

Tariff cancellation was an important condition for any agreement, Chinese Commerce Ministry spokesman Gao Feng said, adding that both must simultaneously cancel some tariffs on each other’s goods to reach the phase one pact.

“The trade war started with tariffs, and should end with the cancellation of tariffs,” Gao told a regular news briefing.

The proportion of tariffs cancelled for both sides to reach a “phase one” deal must be the same, but the number to be cancelled can be negotiated, he added, without elaborating.

“In the past two weeks, the lead negotiators from both sides have had serious and constructive discussions on resolving various core concerns appropriately,” Gao said.

“Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations.”

A spokesman for the U.S. Treasury department declined to comment and the U.S. Trade Representative’s office did not immediately respond to a request for comment.

Republican lawmakers are urging the Trump administration to tie any tariff rollbacks to Beijing’s compliance with specific elements of the agreement. “The tariffs should be phased out piece by piece as China complies,” one congressional source said.

TRUMP-XI MEETING

In what could be another gesture to boost optimism, China’s state news agency Xinhua reported late on Thursday that the Chinese customs and Ministry of Agriculture are considering removing restrictions on U.S. poultry imports.

China has banned all U.S. poultry and eggs since January 2015 due to an avian influenza outbreak.

Beijing’s signal that a “phase 1” trade deal with the United States was close to being sealed helped Europe’s share markets hit a more than 4-year peak on Thursday and bond yields shuffled higher.

A source previously told Reuters that Chinese negotiators wanted the United States to drop 15% tariffs on about $125 billion worth of Chinese goods that took effect on Sept. 1.

They also sought relief from earlier 25% tariffs on about $250 billion of imports, ranging from machinery and semiconductors to furniture.

A person familiar with China’s negotiating position said it was pressing Washington to “remove all tariffs as soon as possible”.

A deal may be signed this month by Trump and Xi at a yet-to-be determined location.

Dozens of venues have been suggested for a meeting, which had originally been set to take place on the sidelines of a now-cancelled mid-November summit of Asia-Pacific leaders in Chile, a senior Trump administration official told Reuters on Wednesday.

One possible location was London, where the leaders could meet after a NATO summit that Trump is due to attend from Dec. 3-4, the official said.

Gao declined to say when and where such a meeting could be.

Since Trump took office in 2017, his administration has been pressing China to curb massive subsidies to state-owned firms and end the forced transfer of American technology to Chinese firms as a price of doing business in China.

(Reporting by Yawen Chen, Martin Pollard and Jeff Mason; additional reporting by David Lawder, Andrea Shalal, and Heather Timmons; Writing by Ryan Woo and Jeff Mason; Editing by Simon Cameron-Moore and Daniel Wallis)

U.S., China have come to understanding on trade relationship direction: Kushner

U.S., China have come to understanding on trade relationship direction: Kushner
By David Lawder

RIYADH (Reuters) – The United States and China have come to an understanding on the direction of their trade relationship after a nearly 16-month trade war, White House adviser Jared Kushner said on Tuesday.

Kushner, President Donald Trump’s son-in-law, told a panel at the Future Investment Initiative conference in Riyadh that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin “have made a fabulous deal” with Beijing.

“I think people understand the president, that he’s firm, they know that he’s going to make the decisions that he thinks are right, and I think ultimately that we’ve come to an understanding with China now on where we want to head,” Kushner said.

Kushner did not mention any details of an emerging “Phase 1” trade deal that Trump outlined on Oct. 11, covering Chinese purchases of U.S. agricultural goods, intellectual property protections, currency practices and increased access for U.S. companies to China’s financial services market.

U.S. and Chinese negotiators are working to try to complete a text for the agreements for Trump and Chinese President Xi Jinping to sign at an Asia-Pacific Economic Cooperation summit in Chile Nov. 16-17.

The U.S. Trade Representative’s office said on Friday that Washington and Beijing are “close to finalizing” some sections of a trade agreement after a phone call between top negotiators.

Kushner acknowledged that the trade dispute with China, which has heaped tariffs on hundreds of billions of dollars worth of each others’ goods, has had political costs for Trump.

“All of the costs of it, the tariffs, the retaliation that people have put on, he’s paid the price for, during his presidency,” Kushner said.

But he said the trade deals that result from such disputes will bring back jobs to the United States.

(Additional reporting by Stephen Kalin in Riyadh; Editing by Chizu Nomiyama and Jonathan Oatis)

Many U.S. farmers fume at Washington, not Trump, over biofuel, trade policies

FILE PHOTO: A crop scout walks through a soybean field to check on crops during the Pro Farmer 2019 Midwest Crop Tour, in Allen County, Indiana, U.S., August 19, 2019. REUTERS/P.J. Huffstutter

By P.J. Huffstutter and Tom Polansek

ROCHESTER, Minn./CHICAGO (Reuters) – American farmers helped elect President Donald Trump in 2016 on hopes he would shake up Washington and turn around a struggling agricultural economy, but many of his policies have actually stung farmers, notably his trade war with China and biofuel waivers for oil refiners.

Many farmers are angry, and some are directing their anger not at the Republican president, but at Washington’s bureaucracy.

Trump has faced backlash from agricultural groups, ethanol producers and Midwestern politicians upset that his trade war with China has slashed export sales of U.S. soybeans and other crops. Also, Corn futures tumbled after the government forecast a big crop when a flood-ridden spring stalled plantings. Corn-based ethanol plants shuttered after the administration granted waivers to dozens of exempting oil refineries.

Yet polls show that while Trump’s support in farm country has slipped, it remains substantial.

Instead of directing their anger at Trump, dozens of farmers interviewed by Reuters blasted the U.S. Department of Agriculture (USDA) and other Washington institutions they believe are thwarting his true agenda. Unsubstantiated conspiracy theories involving USDA staff are circulating in farm country and gaining traction online.

USDA did not respond to Reuters’ questions on Monday.

Farmers are struggling with how to emotionally process their pain from the Trump administration’s policies, and anger at the USDA may be a coping mechanism, said Ted Matthews, a Minnesota psychologist who has spent 30 years counseling farmers and rural residents across the Midwest.

“The question I hear from farmers who voted for (Trump) is, ‘We believed him when he said he would help make the farm economy better, that we could save our farms. Now, who do we blame?'” Matthews said.

Many farmers told Reuters they intend to support Trump again in his re-election bid in 2020.

“It’s much easier to be angry at a faceless Washington bureaucracy than at the man you voted for,” said Jere Solvie, 69, grain and hog farmer from west-central Minnesota who voted for Trump and still supports him.

Ahead of Democratic nominating contests, that party’s presidential candidates have been campaigning hard in Iowa and other Midwestern states where farms have lost billions of dollars in crop sales to China.

Still, the latest Reuters/Ipsos poll conducted last month shows five in 10 U.S. adults in rural areas approved of Trump’s performance in office, higher than his 41% approval nationwide.

Trump’s approval rating was 71% as of Aug. 23, down from 79% in July, according to trade publication Farm Journal Pulse’s poll of 1,153 farmers.

Of the farmers who supported the president, 43% said they “strongly approve” – down 10% from July and the first time the number fell below 50%. The farm journal’s poll came as ethanol groups complained that demand was decimated when Trump’s Environmental Protection Agency granted biofuel waivers to dozens of refineries, saving the oil industry hundreds of millions of dollars.

ALREADY FURIOUS

The USDA is a natural scapegoat and a topic of conspiracy theories among farmers suspicious of its sprawling bureaucracy, career employees and its research who sometimes conflicts with what they see on their own farms.

One farmer, enraged by the USDA’s corn crop estimate, threatened an agency employee last month. The threat of violence prompted USDA to pull all staff from a privately run crop tour that surveys Midwest crops.

This is a sharp contrast to the early days in the administration when Agriculture Secretary Sonny Perdue was a reliable point person. His folksy southern charm and his appeals to patriotism helped sell Trump’s policies to farmers, even the trade war.

But Perdue’s honeymoon in farm country has ended. Farmers booed the agriculture secretary in Minnesota last month after he joked: “What do you call two farmers in a basement? A whine cellar.”

“He’s supposed to support us, especially during times of distress,” said Gary Wertish, a fourth-generation Minnesotan who farms 500 acres of corn, soybeans and navy beans, and heard the remarks in person.

Grain farmers were already furious that corn futures prices <Cv1> posted their biggest drop in three years after USDA estimated a bigger-than-expected crop on Aug. 12, despite floods that slowed planting.

Market analysts said farmers have more of a localized view on crop health and are often skeptical of the national focus of USDA forecasts.

Trump voter Byron Heppler, a soybean and corn farmer from Calhoun, Kentucky, said he is open to considering other Republican candidates if any emerge. He said he believes USDA’s research methods are flawed and he feels its employees want to unseat Trump, although he offered no evidence to back up those views.

Other disgruntled farmers have also alleged, without offering evidence, that federal agriculture employees are overestimating corn plantings as part of a plot to hurt Trump in the 2020 election. These farmers said they believe USDA employees are upset the administration is relocating hundreds of economists and other researchers to Kansas City from Washington.

The agency has stood by its forecasts, saying they are in part based on surveys of thousands of farmers. On Trump’s order, the agency has rolled out $28 billion in trade aid support for farmers over the past two years.

Wes Hitchcock, a corn farmer and Trump supporter in Sparks, Nebraska, wrote a 1,700-word paper titled “USDA vs. Trump” and has repeatedly posted it on Facebook in a grain market discussion group with 13,000 members.

Hitchcock said he was unable to plant about 30% of the 2,200 corn acres he had planned to grow because of heavy rains this spring. The corn he did manage to plant is not looking great, either, he said.

“I’m going bankrupt and everybody else will this year too,” he said in a phone interview with Reuters.

His Facebook posts received some skeptical responses.

“To think the USDA deliberately is skewing numbers to make their boss look bad and that people appointed by the president allowed this to happen is delusional,” wrote a user named Zach Alger from Palmyra, Pennsylvania.

(Additional reporting by Rajesh Kumar Singh in Decatur, Illinois; Editing by Caroline Stauffer and David Gregorio)

Trump ‘not ready’ for China trade deal, dismisses recession fears

FILE PHOTO: U.S. President Donald Trump meets with China's President Xi Jinping at the start of their bilateral meeting at the G20 leaders summit in Osaka, Japan, June 29, 2019. REUTERS/Kevin Lamarque/File Photo/File Photo

By Howard Schneider

WASHINGTON (Reuters) – U.S. President Donald Trump and top White House officials dismissed concerns that economic growth may be faltering, saying on Sunday they saw little risk of recession despite a volatile week on global bond markets, and insisting their trade war with China was doing no damage to the United States.

“We’re doing tremendously well, our consumers are rich, I gave a tremendous tax cut, and they’re loaded up with money,” Trump said on Sunday.

But he was less optimistic than his aides on striking a trade deal with China, saying that while he believed China was ready to come to an agreement, “I’m not ready to make a deal yet.”

He hinted that the White House would like to see Beijing resolve ongoing protests in Hong Kong first.

“I would like to see Hong Kong worked out in a very humanitarian fashion,” Trump said. “I think it would be very good for the trade deal.”

White House economic adviser Larry Kudlow said trade deputies from the two countries would speak within 10 days and “if those deputies’ meetings pan out… we are planning to have China come to the USA” to advance negotiations over ending a trade battle that has emerged as a potential risk to global economic growth.

Even with the talks stalled for now and the threat of greater tariffs and other trade restrictions hanging over the world economy, Kudlow said on “Fox News Sunday” the United States remained “in pretty good shape.”

“There is no recession in sight,” Kudlow said. “Consumers are working. Their wages are rising. They are spending and they are saving.”

Their comments follow a week in which concerns about a possible U.S. recession weighed on financial markets and seemed to put administration officials on edge about whether the economy would hold up through the 2020 presidential election campaign. Democrats on Sunday argued Trump’s trade policies were posing an acute, short-term risk.

U.S. stock markets tanked last week on recession fears with all three major U.S. indexes closing down about 3% on Wednesday, paring their losses by Friday due to expectations the European Central Bank might cut rates.

The U.S. Federal Reserve and 19 other central banks have already loosened monetary policy in what Fitch Ratings last week described as the largest shift since the 2009 recession.

Markets are expecting more cuts to come. For a brief time last week, bond investors demanded a higher interest rate on 2-year Treasury bonds than for 10-year Treasury bonds, a potential signal of lost faith in near-term economic growth.

White House trade adviser Peter Navarro on Sunday dismissed the idea that last week’s market volatility was a warning sign, saying “good” economic dynamics were encouraging investors to move money to the United States.

“We have the strongest economy in the world and money is coming here for our stock market. It’s also coming here to chase yield in our bond markets,” Navarro told ABC’s “This Week.”

For bond markets, the sort of movement Navarro described is often driven by trouble – in this case the possibility that the trade battle with China is lasting far longer than expected and becoming disruptive to business investment and growth.

The U.S. economy does continue to grow and add jobs each month. Retail sales in July jumped a stronger-than-expected 0.7%, the government reported last week, and Kudlow said that number showed that the main prop of the U.S. economy was intact.

But manufacturing growth has slowed and lagging business investment has become a drag.

A slowdown would be bad news for Trump, who is building his 2020 bid for a second term around the economy’s performance. He told voters at a rally last week they had “no choice” but to vote for him to preserve their jobs and investments.

The president and his advisers have repeatedly accused the Fed of undermining the administration’s economic policies. On Sunday, Kudlow again pointed the finger at the central bank, describing rate hikes through 2017 and 2018 as “very severe monetary restraint.”

The Fed hiked rates seven times over those two years as part of a plan to restore normal monetary policy following emergency steps taken to battle the 2007-2009 global financial crisis and recession.

Even with those steps, the Fed’s target interest rate has remained well below historic norms, and policymakers have started cutting rates in response to growing global risks.

Democratic presidential candidates on Sunday joined the many economic analysts who have said the administration’s sometimes erratic policies on trade – at one point threatening tariffs on Mexico over immigration issues – are to blame for increased uncertainty, disappointing business investment and market volatility.

“I’m afraid that this president is driving the global economy and our economy into recession,” Democratic candidate Beto O’Rourke said on NBC’s “Meet the Press.”

Speaking to CNN’s “State of the Union” on Sunday, Democratic candidate Pete Buttigieg criticized the administration for failing to deliver a deal with China.

“There is clearly no strategy for dealing with the trade war in a way that will lead to results for American farmers, or American consumers,” he said.

(Reporting by Howard Schneider; Additional reporting by Humeyra Pamuk and Ginger Gibson; editing by Michelle Price, Lisa Shumaker and Rosalba O’Brien)