Tag Archives: U.S. trade

U.S., China grant trade concessions as fresh talks loom

By Jeff Mason and Yawen Chen

WASHINGTON/BEIJING (Reuters) – U.S. President Donald Trump on Wednesday welcomed China’s decision to exempt some U.S. anti-cancer drugs and other goods from its tariffs and announced a short delay to scheduled tariff hikes on billions worth of Chinese goods.

Stock markets in Asia rose on the news in early Thursday trade, as the concessions came days ahead of a planned meeting aimed at defusing the escalating trade war between the world’s two largest economies.

China’s decision to exempt some U.S. goods was a “big move” by Beijing and a positive gesture before trade negotiators from both countries meet in Washington, Trump told reporters at the White House.

China on Wednesday announced its first batch of tariff exemptions for 16 types of U.S. products, including some anti-cancer drugs and lubricants, as well as animal feed ingredients whey and fish meal, according to a Ministry of Finance statement on its website.

“They made a couple of moves … that were pretty good,” Trump said at an unrelated event on vaping. “I think it was a gesture, okay? But it was a big move.”

On Wednesday, Trump wrote in a post on Twitter that the United States had agreed to delay increasing tariffs on $250 billion worth of Chinese imports from Oct. 1 to Oct. 15 “as a gesture of goodwill.” The tariffs were set to increase to 30% from 25% on the goods.

Trump said he hoped to reach a trade agreement with China following more than a year of tit-for-tat exchanges of tariffs that have roiled global markets.

“I deal with them and I know them and I like them,” he said. “I hope we can do something.”

Asian stocks rose on Thursday, while China’s yuan currency was also up 0.27 percent in offshore trade, as investors hoped for a thaw in U.S.-China trade frictions.

Deputy trade negotiators are due to meet in Washington in mid-September, with minister-level talks to follow in October. Exact dates for the meetings have not been released.

The gestures may ease tensions ahead of the negotiations, but some analysts don’t see it as a signal that both sides are readying a deal.

“The exemption could be seen as a gesture of sincerity towards the U.S. ahead of negotiations in October but is probably more a means of supporting the economy,” ING’s Greater China economist Iris Pang wrote in a note.

“There are still many uncertainties in the coming trade talks. An exemption list of just 16 items will not change China’s stance,” she said.

Indeed, the exempted list pales in comparison to over 5,000 types of U.S. products that are already subject to China’s additional tariffs. Moreover, major U.S. imports, such as soybeans and pork, are still subject to hefty additional duties, as China has ramped up imports from Brazil and other supplying countries.

Beijing has said it would work on exempting some U.S. products from tariffs if they are not easily substituted from elsewhere. The United States is by far China’s largest supplier of whey, which is an important ingredient in piglet feed and difficult to source in large volumes from elsewhere.

Analysts say that with its duties on soybeans and U.S.-made cars, China is taking aim at a key political support base of Trump, mainly the factories and farms across the Midwest and South at a time of receding momentum in the world’s top economy.

China has imposed several rounds of duties on U.S. goods in retaliation against U.S. Section 301 tariffs, beginning last year in July and August with a 25% levy on about $50 billion of U.S. imports.

In all, the United States and China have slapped tariffs on hundreds of billions of dollars worth of goods in a bitter trade war that has raised the specter of a global recession, with further tariffs slated to take effect in coming months.

The items on the two tariff exemption lists – posted on the ministry’s website – will not be subject to additional duties imposed by China on U.S. goods “as countermeasures to U.S. Section 301 measures,” the ministry said in its statement.

The exemption will take effect on Sept. 17 and be valid for a year through to Sept. 16, 2020, it said. Beijing said in May that it would start a waiver program, amid growing worries over the cost of the protracted trade war on its already slowing economy.

ING’s Pang noted the United States had also exempted imports of 110 Chinese products from tariffs in July, including high-value items such as medical equipment and parts.

TALKS

Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are expected to meet in early October in the U.S. capital, but key officials are tamping down expectations for a major accord.

For two years, the Trump administration has sought to pressure China to make sweeping changes to its policies on intellectual property protection, forced transfers of technology to Chinese firms, industrial subsidies and market access.

Beijing and Washington were close to a deal last spring but U.S. officials said China backed away from an agreed text over a reluctance to change laws to address U.S. complaints.

The South China Morning Post reported, citing an unidentified source, that China was expected to buy more agricultural products in hopes of a better trade deal with the United States.

Senior White House adviser Peter Navarro this week urged investors, businesses and the public to be patient about the trade dispute.

Earlier on Wednesday, a survey by a prominent American business association showed the trade dispute was souring the profit and investment outlook for U.S. companies operating in the world’s second-biggest economy.

(Reporting by Se Young Lee, Judy Hua, Dominique Patton, Yawen Chen, Huizhong Wu and Ben Blanchard in Beijing and Jeff Mason in Washington; Additional reporting by Makini Brice and Doina Chiacu; Writing by Yawen Chen and Andrea Shalal; Editing by Sam Holmes & Shri Navaratnam)

U.S. trade representative hopes U.S., China in final weeks of talks

FILE PHOTO - U.S. trade representative Robert Lighthizer, a member of the U.S. trade delegation to China, arrives at a hotel in Beijing, China February 12, 2019. REUTERS/Jason Lee

(Reuters) – U.S. Trade Representative Robert Lighthizer said on Tuesday he hopes the United States and China are in the final weeks of talks to secure a deal that will ease a trade war between the world’s two largest economies.

“Our hope is we are in the final weeks of having an agreement,” Lighthizer said at a Senate Finance Committee hearing, though he cautioned that issues remained.

“If those issues are not resolved in favor of the United States, we won’t have a deal.”

(Reporting by David Lawder and Humeyra Pamuk; Writing by Chris Prentice; Paul Simao)

Trump meets Japan, Australia leaders over trade, North Korea threat

U.S. President Donald Trump holds a trilateral meeting with Japan's Prime Minister Shinzo Abe and Australia's Prime Minister Malcolm Turnbull alongside the ASEAN Summit in Manila, Philippines November 13, 2017.

MANILA (Reuters) – U.S. President Donald Trump raised North Korea’s missile tests during talks on Monday with the prime ministers of Japan and Australia, and said “a lot” of progress had been made in negotiations on trade.

On the sidelines of a summit of East and Southeast Asian leaders in Manila, Trump met with Japan’s Shinzo Abe and Australia’s Malcolm Turnbull, and said discussions at the meeting would include tensions on the Korean Peninsula and trade.

In brief remarks prior to news media being ushered out of the meeting, Turnbull said North Korea’s “recklessness” needed to be stopped, while Abe said the most immediate challenge was to ensure regional peace and stability.

Following the meeting, the White House said “the three leaders reaffirmed their commitment to maintaining maximum pressure on North Korea in the effort to denuclearize the Korean Peninsula.”

“They also discussed expanded security cooperation for enhanced deterrence and defense against North Korean aggression,” the White House said in a statement.

The three men also discussed the need for “free and open” trade in the Indo-Pacific region and “the need to pursue fair and reciprocal trade,” the White House added.

Trump, who campaigned heavily on U.S. trade issues, made pulling out of the Trans-Pacific Partnership (TPP) Asian trade deal one of his first acts in office. His administration has instead pledged to reach bilateral pacts with individual nations.

Countries remaining in the pact have said the deal is advancing without the United States.

 

(Reporting by Steve Holland; Writing by Martin Petty and Susan HeaveyEditing by Raju Gopalakrishnan and Jonathan Oatis)

 

U.S. job growth speeds up, unemployment rate falls

FILE PHOTO: Job seekers listen to a recruiter at the Colorado Hospital Association job fair in Denver, Colorado, U.S. on October 4, 2017

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. job growth accelerated in October after hurricane-related disruptions in the prior month, but a sharp retreat in annual wage gains and surge in the number of people dropping out of the work force cast a cloud over the labor market.

Nonfarm payrolls increased by 261,000 jobs last month as 106,000 leisure and hospitality workers returned to work, the Labor Department said in its closely watched employment report on Friday. That was the largest gain since July 2016 but below economists’ expectations for an increase of 310,000 jobs.

Data for September was revised to show a gain of 18,000 jobs instead of a decline of 33,000 as previously reported. Some aspects of the report, however, were downbeat.

Average hourly earnings slipped by one cent, leaving them unchanged in percentage terms, in part because of the return of the lower-paid industry workers. That lowered the year-on-year increase to 2.4 percent, which was the smallest since February 2016. Wages shot up 0.5 percent in September, lifting the annual increase in that month to 2.9 percent.

Still, October’s job growth acceleration reinforced the Federal Reserve’s assessment on Wednesday that “the labor market has continued to strengthen,” and probably does little to change expectations it will raise interest rates in December. The U.S. central bank has lifted rates twice this year.

“The weakness in wages will not go unnoticed at the Fed, particularly for members that remained more concerned over the inflation outlook,” said Michael Hanson, chief U.S. economist at TD Securities in New York. “Overall, sustained job growth and labor market slack at pre-crisis lows keeps December in play.”

Although the unemployment rate fell to near a 17-year low of 4.1 percent, it was because the labor force dropped by 765,000 after a surprise jump of 575,000 in September.

The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, fell four-tenths of a percentage point to 62.7 percent.

Prices of U.S. Treasuries rose after the data. The dollar <.DXY> gained against a basket of currencies and stocks on Wall Street were largely flat.

 

LABOR MARKET TIGHTENING

The sharp moderation in job growth in September was blamed on hurricanes Harvey and Irma, which devastated parts of Texas and Florida in late August and early September and left workers, mostly in lower-paying industries such as leisure and hospitality, temporarily unemployed.

Economists, however, remain optimistic that wage growth will accelerate with the labor market near full employment. Last month’s one-tenth percentage point drop in the unemployment rate took it to its lowest reading since December 2000. The jobless rate is now below the Fed’s median forecast for 2017.

A broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, dropped to 7.9 percent last month, the lowest level since December 2006, from 8.3 percent in September.

Tepid wage growth supports the view that inflation will continue to undershoot the Fed’s 2 percent target and could raise concerns about consumer spending, which appears to have been largely supported by savings this year.

The economy grew at a 3.0 percent annualized rate in the third quarter. Growth has remained strong even as President Donald Trump and the Republican-led Congress have struggled to enact their economic program.

Republicans in the U.S. House of Representatives on Thursday unveiled a bill that proposed slashing the corporate tax rate to 20 percent from 35 percent, cutting tax rates on individuals and families and ending certain tax breaks. The plan has been met with opposition from small businesses, realtors and homebuilders.

A separate report from the Commerce Department on Friday showed the U.S. trade deficit increased 1.7 percent to $43.5 billion in September as rising exports were offset by a surge in imports. Exports, which were the highest since December 2014, are being buoyed by a weakening dollar and strong global growth.

Monthly job growth has averaged 162,000 over the past three months. The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population.

The slowing job growth trend largely reflects employers’ difficulties in finding qualified workers. Some economists believe the impact of the hurricanes was still holding back employment growth.

Private payrolls surged by 219,000 jobs in October after falling by 3,000 in September. Manufacturing employment increased by 24,000 jobs. The retail sector lost 8,300 jobs last month.

Construction payrolls gained 11,000 in October, likely boosted by hiring related to the clean-up and rebuilding efforts in the wake of the hurricanes. There were increases in professional and business services payrolls. Healthcare employment also rose last month.

 

(Reporting by Lucia Mutikani; Editing by Paul Simao)

 

U.S. trade deficit rises to ten-month high in June

Freighters and cargo containers sit idle at the Port of Los Angeles as a back-log of over 30 container ships sit anchored outside the Port in Los Angeles

WASHINGTON, Aug 5 (Reuters) – The U.S. trade deficit rose to a 10-month high in June as rising domestic demand and higher oil prices boosted the import bill while the lagging effects of a strong dollar continued to hamper export growth.

The Commerce Department said on Friday the trade gap increased 8.7 percent to $44.5 billion in June, the biggest deficit since August 2015. May’s trade deficit was revised slightly down to $41.0 billion.

June marked the third straight month of increases in the deficit. Economists polled by Reuters had forecast the trade gap widening to $43.1 billion in June after a previously reported $41.1 billion shortfall. When adjusted for inflation, the deficit rose to $64.7 billion from $60.9 billion in May.

The government in its snapshot of second-quarter gross domestic product published last week said trade had contributed two-tenths of a percentage point to the 1.2 percent annualized growth pace during the period.

The dollar’s sharp rally against the currencies of the United States’ main trading partners between June 2014 and December 2015 has undercut export growth.

With the dollar weakening this year on a trade-weighted basis, some of the drag on exports had started to ebb. But the dollar has been regaining strength in the wake of Britain’s June 23 vote to leave the European Union, and economists say that could renew pressure on exports.

Exports of goods and services edged up 0.3 percent in June.

Exports to the European Union jumped 7.8 percent, with goods shipped to the United Kingdom soaring 18.2 percent. China bought more U.S.-made goods in June, with exports to that country rising 3.6 percent.

Imports of goods and services increased 1.9 percent to $227.7 billion in June, with oil prices accounting for part of the rise. Oil prices averaged $39.38 per barrel in June, the highest level since October of last year, from $34.19 in May.

The $5.19 increase in the average oil price in June from May was the biggest since May 2011.

June’s increase in imports also reflected a pickup in domestic demand. Imports from China increased 2.8 percent. With imports outpacing exports, the politically sensitive U.S.-China trade deficit rose 2.5 percent to $29.8 billion in June, the biggest gap since last November.