Trade War with China

Biscuits said:

No. No country enjoys getting it’s face repeatedly bashed in. The US economy won’t be able to threaten China’s any more in 2020 than it could in 2018.

He will seek an easy victory somewhere else.

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tidalwave said:

Most of the politicians from both Republican and Democrats won't let him off the hook if the trade deal doesn't address structural changes from China. Trump has mentioned that before, right now he declared trade truce strictly for reelection. It will come back

China is rushing to accomplish some of things during this trade truce down time.

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President Donald Trump declared Monday he would participate in a "signing summit" with Chinese leader Xi Jinping as the world's two largest economies edged closer to a trade deal.
It was yet another optimistic signal by the American President that a long-standing trade impasse that has resulted in a series of tit-for-tat tariffs may finally be nearing a close as negotiators inched closer to a 90-day deadline of March 1.
"I told you last night -- there was a lovely dinner -- but I told you how well we did with our trade talks in China and it looks like they'll be coming back quickly again, and we're going to have another summit, we're going to have a signing summit, which is even better, so hopefully we can get that completed, but we're getting very, very close," Trump told the nation's governors at the White House.
In a tweet Sunday evening,

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he would delay an increase in tariffs on Chinese goods set to take effect at 12:01 a.m. on Saturday, citing "substantial progress" on top priority issues for the administration tied to intellectual property and technology transfers after a weekend of talks.
The US President also floated the prospect of a summit "to conclude an agreement" with China's Xi should progress continue.
He didn't specify how long the extension of a trade truce would be or when a summit might be scheduled. During a

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in the Oval Office, suggested it would take place sometime in March at his Mar-a-Lago resort in Florida.
The Trump administration had been planning to escalate tariffs on $200 billion of Chinese goods from 10% to 25% this weekend if they were unable to broker a deal.
"China is paying us right now billions and billions of tariffs a month, I love it personally, I love it, but it's hurting them," Trump said and then recounted his fentanyl deal with Xi. Fentanyl is a substance that has been tied to an epidemic of overdose deaths in the United States, which has been a top priority issue for the Trump administration.
Over the weekend, Chinese trade negotiators echoed Trump's remarks, saying the countries' teams had "achieved substantial progress on specific issues," according to a statement released to Xinhua, China's state news agency.
The two countries have been making progress nailing down text in the form of Memoranda of Understanding in six areas: non-tariff barriers, forced technology transfers, intellectual property, cyber theft, agriculture and currency, according to public statements from both countries.
Trump praised on Sunday evening at this year's Governors' Ball, his top trade negotiator Robert Lighthizer and Treasury Secretary Steven Mnuchin for the progress achieved after negotiations last week in Washington were extended for two-and-half more days.
His remarks followed a moment of tension between Trump and Lighthizer over the use of the term "memorandum of understanding" to signify a trade agreement between the United States and China.
"I don't like MOUs because they don't mean anything ... I think you're better off just going into a document," Trump said on Friday to reporters. "I was never a fan of an MOU."
Lighthizer appeared to steer Trump away from his understanding of the use of term, describing it as a "contract," a legal term that has been historically used to refer to trade agreements.
But Trump still wasn't pleased, disagreeing with his US trade representative in front of reporters. "To me, the final contract is really the thing, Bob. And I think you mean that too -- is really the thing that means something."
To which, Lighthizer acquiesced, saying he would use the term "trade agreement" instead.
"I like that much better," Trump replied.

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Jura said:

noted
Trump declares 'signing summit' for imminent trade deal with China

Updated 12:12 PM ET, Mon February 25, 2019

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• China’s English-speaking vice-premier, special envoy and chief trade negotiator is President Xi Jinping’s top economic aide who is respected the world over
• The 67-year-old was in Washington last week for the latest round of talks with US negotiators and President Donald Trump

Nine months ago, Liu He, the top economic aide to President Xi Jinping, told state media that China and the United States had agreed during talks in Washington not to fight a trade war.

His words were short lived, as only a few days later US President Donald Trump unexpectedly decided to impose trade sanctions on China and start a prolonged economic battle between the world’s two largest economies.

Last week, Liu, carrying the title of special envoy in addition to those of chief trade negotiator and vice-premier, was again in Washington for continued talks to put an end to the seven-month-old tariff war that has shaken global economic confidence.

In addition to pledges to buy more American products from soybeans to natural gas, China is expected to offer compromises on a number of structural issues that could curtail the government’s involvement in China’s domestic economy.

An agreement to end the trade war will be a major feather in Liu’s cap, but more important to his reputation, and to the future of his country, will be his ability to shepherd through the changes in the economy required by the deal.

Liu, 67, spent most of his career as an economic adviser working behind the scenes, but in recent months has become one of the most closely watched figures by global investors and policymakers alike.

The stakes in his negotiations with the US are high, not only the future relations between the world’s two largest economies, but also China’s ability to reinvent itself through further economic liberalisation.

Li Weisen, an economics professor at Fudan University in Shanghai, said that a trade deal with the US would help China to push ahead much-needed market-oriented changes.

“A deal with the US will be helpful for China’s domestic reforms,” Li said.

This process was initiated by former paramount leader Deng Xiaoping four decades ago, but which has gradually lost momentum in the last decade as China gained confidence in its state-led growth model after the global financial crisis of 2008.

Many of the reported US demands for structural change to how the Chinese economy operates – including better protection of intellectual property and equal treatment for foreign investors – echo the long-standing views of Liu, who maintains ties to the country’s liberal economic thinkers through the China 50 Economists Forum, a club he co-founded.

With Liu seemingly on the brink of bringing home a trade agreement with US, hopes are on the rise that the deal will create the chance for China to rethink its economic policies and seek to rely more on the market than on the state for future growth.

A trade deal with US would also start a new mission for Liu in China of taking on the government apparatus and tweaking policies and rules to align with the new agreement in the same way China changed hundreds, if not thousands, of domestic regulations in the process of its effort to qualify for entry into World Trade Organisation in 2001.

But this mission will not be easy as the pain involved in making the necessary changes will be acute in light of China’s current economic slowdown, and the process could still be frustrated by resistance from the massive vested interests in the Chinese system.

Liu’s vision for the Chinese economy has been made public before as in early 2012, when he was the head of the Development Research Centre (DRC), a think tank under the State Council; it and the World Bank jointly published a report that recommended China conduct a series of “structural reforms” to help grow a vibrant private economy.

Then in late 2013, when Liu was a top adviser to Xi helping to draft economic policies, the Chinese Communist Party published a grand policy statement vowing to give the market “a decisive role” in allocating resources and outlining 363 specific reform items to accomplish that goal, although many of them remain unrealised.

“His importance will even increase after the many rounds of China-US trade talks, as he has apparently received political backing from the Chinese president,” said Iris Pang, chief Greater China economist for ING Bank.

Still, Liu’s performance in the trade talks has not been flawless. While he speaks fluent English, he and Trump misunderstood each other over the timing of US soybean purchases, which required the White House to walk back a statement on the issue.

The tit-for-tat retaliation that plunged relations between the countries to their lowest level in decades delivered a body blow to investor confidence in China, resulting in a greater than expected economic slowdown and a sharp drop in stock prices.

While the government’s official position on the trade war did not waver, criticism of its strategy did emerge, although none targeted Liu personally.

Li Ruogu, former president of the Export-Import Bank of China, warned in September that a head-on confrontation with the US on trade was not a good strategy.

Robert Rogowsky, a professor of trade and economic diplomacy at Middlebury Institute of International Studies, said there was “no better candidate” than Liu to handle Trump’s harsh demands and complex negotiating style.

“I am impressed with him: strong record, exceedingly bright and well-trained, trusted by President Xi, responsible for a great deal of the Chinese economy – and especially those areas high on the list of negotiation topics,” said Rogowsky, a former director of operations at the US International Trade Commission.

Rogowsky added that Liu faced “perhaps an even more difficult challenge in Beijing” than Washington as he needs to bring all the stakeholders there into line with a single negotiating position for China.

Liu has also stepped up to soothe the domestic market, telling investors in October that they should not panic.

“China-US trade friction has led to some impact on the market. To be honest, its psychological impact is larger than the real impact. We still maintain contacts [with US side],” he said.

“A concession is not a surrender, it is intended to win advantages [down the road]. I don’t think a tit-for-tat approach is workable,” he said.

There was even speculation that Vice-President Wang Qishan, who had deep experience in dealing with US investors, might be drafted to help in the trade talks.

But sources told the South China Morning Post that Liu’s role as the man in charge of trade talks was never questioned.

“From the beginning to the end, Liu is the man in charge of trade talks for China,” one source said. “There’s no second choice.”

A source in Beijing said that June to October last year, especially after the US announced that it would impose tariffs on US$200 billion worth of China products in September, was probably “the darkest moment” for Liu, as economic and financial risks grew and prospects for a trade deal dimmed.

Hopes for a settlement emerged as both Beijing and Washington began to realise the economic and political risks of a prolonged battle.

This re-evaluation crystallised in the summit between Xi and Trump on the sidelines of the G20 summit on December 1 in Argentina and created a 90-day ceasefire during which negotiators would step up their efforts to find common ground.

Trump, citing “substantial progress” in the negotiations, announced on Sunday that he was postponing the deadline indefinitely to give negotiators a chance to finalise a deal.

Still, even with a deal, few expect the bilateral relationship to be the same as it was a year ago, and many question how long the agreement will last and whether Trump, as he did a year ago, will reverse his decision and decide to escalate the trade war again.

Derek Scissors of the American Enterprise Institute warned that any deal signed by negotiators cannot be expected to survive more than a year and that China should expect a harder US policy stance after the 2020 presidential election, unless it makes the policy changes it promises.

“The Chinese side clearly hopes President Trump will return to the policies of presidents [Barack] Obama and [George W.] Bush, where China pretends to make a few changes and the US claims a victory,” Scissors said.

“The central government has declined to undertake pro-market reform for at least a decade. What the US is doing now means little in comparison to internal Chinese decision-making [on necessary structural changes].”

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Jura said:

noted
Trump declares 'signing summit' for imminent trade deal with China

Updated 12:12 PM ET, Mon February 25, 2019

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