Trade War with China

Bhurki said:

Without the paywall -

Bloomberg) -- The U.S. and China issued long lists of demands at talks in Beijing this week to resolve the simmering trade dispute between the world’s two biggest economies.

In a document entitled “Balancing the Trade Relationship,” seen by Bloomberg News, the U.S. divided its demands into eight sections, ranging from trade-deficit reduction to tariff barriers to implementation. Here’s a synopsis of the U.S. requests, which were presented to China at the outset of the talks:

Trade Deficit Reduction

• The U.S. wants China to cut the two nations’ trade deficit by at least $200 billion by the end of 2020 from 2018 levels.
• Chinese purchases of U.S. goods will represent at least 75 percent of a commitment to a $100 billion increase in purchases of U.S. exports for the 12 months beginning June 1, 2018, and at least 50 percent of China’s commitment to an additional $100 billion increase in purchases of U.S. exports in the 12 months beginning June 1, 2019.

Protection of American Technology and Intellectual Property

• China to immediately cease providing subsidies and government support that fuels excess capacity in industries targeted by the Made in China 2025 plan.
• Specific policies and practices linked to technology transfer are eliminated.
• A cessation of government-sponsored cyber intrusion and cyber theft.
• Strengthened intellectual property rights protection and enforcement.
• By Jan. 1, 2019, China will eliminate provisions of the Regulations on the Administration of the Import and Export of Technologies and the Regulations on the Implementation of the Law on Chinese-Foreign Equity Joint Ventures identified in the U.S.
• By July 1, 2018, China will withdraw its request for WTO consultations in United States – Tariff Measures on Certain Goods from China and take no further action on the matter
• The document also calls on China to take no retaliatory action in response to actions taken or to be taken by the U.S.

Restrictions on Investment in Sensitive Technology

• A demand that China does not “oppose, challenge, or otherwise retaliate against the United States’ imposition of restrictions on investments from China in sensitive U.S. technology sectors or sectors critical to U.S. national security.”

U.S. Investment in China

• A demand that China does not distort trade through investment restrictions and any restrictions are narrow and transparent
• U.S. investors in China to receive “fair, effective and non-discriminatory market access and treatment, including removal of the application of foreign investment restrictions and foreign ownership/shareholding requirements.”
• China to issue an improved nationwide negative list for foreign investment by July 1, 2018. Within 90 days the U.S. will identify existing investment restrictions that deny U.S. investors market access. China is then to remove all identified investment restrictions on a timetable to be decided by both nations.

Tariff and non-tariff barriers

• By July 1, 2020, China will reduce tariffs on all products in non-critical sectors to levels that are no higher than the levels of the U.S.’ corresponding tariffs
• China to remove specified non-tariff barriers and recognizes that the U.S. may impose import restrictions and tariffs on products in critical sectors, including sectors identified in the Made in China 2025 industrial plan.

U.S. Services and Services Suppliers

• A demand for China to improve market access in specified ways

U.S. Agricultural Products

• A demand for China to improve market access in specified ways

Implementation

• Both countries to meet quarterly to review targets and reforms
• If the U.S. declares China is not complying with the framework, the U.S. can impose tariffs or other restrictions on Chinese products or restrict supply of services
• A demand that China does not “oppose, challenge or take any form of action against the United States’ imposition of additional tariffs or restrictions.”
• China to withdraw its WTO complaints regarding designations of China as a non-market economy and will refrain from future challenges
• Within 15 days of receiving written notice of a prohibited product that may have been transshipped through one or more countries, China will provide full details of every shipment. Failure to do so will trigger tariffs.
• If China fails to uphold commitments the U.S. will impose tariffs on imports from China and will confiscate counterfeit and pirated goods or levy tariffs to compensate for lost technologies and intellectual property.
• A demand that China does not take any retaliatory action in response.

The following is a synopsis of China’s demands:

• In an official document seen by Bloomberg News, China stated that measures to open up its economy will not be applicable to U.S. investors if the U.S. doesn’t meet China’s request on equal treatment of Chinese investment. Other requests of the U.S. included:
  • Lift bans on exports of integrated circuits to China.
  • Stop imposing 25 percent extra tariffs against Chinese products.
  • Open government procurement to Chinese technology products and services.
  • Give equal treatment to Chinese companies in national security review.
  • Adjust the export ban on ZTE. Corp.
  • Drop surrogate-country approach in anti-dumping, anti-remedy cases.
  • Not to initiate any Section 301 investigation against China in the future.
  • Open its e-payment market to Chinese companies.
  • Approve China International Capital Corp.’s application for a financial license.
  • Open the e-payment market to Chinese companies

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localizer said:

So its the same demands they started with. As expected from this administration. We’ll see it they actually have the balls to go full trade war and a war on Iran.

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Biscuits said:

No, that’s a repost of the first ones from before the trade war started. ...

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Jura said:

googled the sentence
"The U.S. delegation is providing the below draft framework solely to help facilitate candid and constructive exchanges between the two sides."
to see it posted
The draft framework of U.S. solely on trade talks in Beijing

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(2018-05-04 18:24:30)

note the year LOL

also
霉国人妄想的欢乐颂

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(2018-05-10 14:49:38)
plus a few more inaccessible links, so it's kinda folklore

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• The US president told reporters that the letter said ‘Let’s work together, let’s see if we can get something done’
• He attributed his threats to raise tariffs on US$200 billion of imports had helped speed up the reconciliation process

US President Donald Trump said on Thursday that a trade deal with China is “possible” this week and that his Chinese counterpart Xi Jinping sent him a “beautiful letter”, in comments that contrasted with several hard-line tweets over the past week.

Speaking to reporters just as Vice-Premier Liu He arrived in Washington for an 11th round of negotiations aimed at ending a trade war between the world’s two largest economies, Trump suggested his order to raise tariffs on US$200 billion of imports from China had helped to speed up the reconciliation process.

“We put the tariffs on, we made the statement, and then they upped the meeting. ‘How about let’s go back to Thursday?’,” Trump said after claiming that the Chinese side suggested a delay in talks until a later date.

“So I have no idea what’s going to happen,” Trump added. “I did get last night very beautiful letter from President Xi [saying] ‘Let’s work together, let’s see if we can get something done.’

“I like the president a lot. He’s a good friend of mine, but I’m representing the USA and he’s representing China, and we’re not going to be taken advantage of anymore.”

Trump will meet Liu and other members of the Chinese delegation in the White House at 5pm to kick off talks that are scheduled to continue until Friday.

Still, Trump reiterated a threat he made via Twitter on Sunday to escalate the trade war if the talks do not proceed smoothly.

The US leader said his team was “starting the paperwork” for the imposition of 25 per cent tariffs on US$325 billion worth of Chinese imports not currently subject to the punitive measures.

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China on Thursday made it clear that it has prepared for either of the two possibilities ahead of trade negotiations in Washington, saying that it has the resolve and capability to safeguard its legitimate rights and interests in case of a further escalation, but was also willing to work toward a trade agreement.

The balanced approach from Chinese officials followed renewed tensions between the world's two largest economies after trading threats over the past few days, significantly dimming the outlook for a speedy agreement to end the trade war.

At a routine press briefing on Thursday, Gao Feng, a spokesperson for China's

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(MOFCOM), repeated the balanced tone by stressing China's readiness to hit back if the US pushed through with threats and urged the US to work with China for a trade agreement.

"We hope the US side could meet the Chinese side halfway to address the issue through dialogue rather than unilateral measures," Gao told the packed briefing, which was dominated by questions about the latest escalation in trade tensions.

But he immediately followed up that comment with a tough response, as he did a couple of times throughout the briefing.

"At the same time," he said, "the Chinese side is fully prepared and has the resolve and capability to safeguard its own legitimate rights and interests."

The spokesperson's comments came less than a day after the MOFCOM issued a response to repeated threats by US officials of higher duties on Chinese goods. In a statement Wednesday night, the ministry said that if the US makes good on its tariffs, China "will have to take countermeasures." It did not specify what measures China would take.

The US on Wednesday filed necessary paperwork to raise a 10 percent tariff to 25 percent on $200 billion in Chinese goods starting Friday.

Point of strength

Despite the threats, China still decided to send a high-level negotiating team headed by Vice Premier Liu He to Washington for the 11th round of talks, prompting questions such as why China would still send a delegation given the dimmed prospects for a deal and its long-held principle not to negotiate under pressure.

At the Thursday briefing, Gao painted the decision to show China's "responsible attitude and sincerity" to push forward with the trade talks.

"China's attitude and stance is persistent. We would never yield to any pressure and have the resolve and capability to protect our own interests," he stressed.

Chinese analysts also noted that Liu is not going there without any backup plan and that the MOFCOM statement as well as the great unity and resolve of Chinese society in the wake of the renewed tensions also strengthened the team's hand to face off with US officials.

"I think the core of the battle lies in the resilience of the Chinese and US economies. Which of the two systems is more resilient to potential shocks? Who is better able to cope with external pressure and resolve internal risks? Then, who will be the winner?" Liang Haiming, dean of Hainan University's

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Research Institute, who is closely following the talks, told the Global Times.

If China pushes through with measures to stabilize growth and jobs at home, it could weather the potential impact, he said.

Liang said that China also has tools to pressure the US economy, including imposing tariffs on US goods and targeting US financial markets.

He suggested that China could pump up the yield on the US 10-year Treasury bond, which affects US banks, to increase fundraising costs for companies and individuals to drag down consumption and investments.

"But I don't think we will reach that stage," he remarked. "I think there will be fights and negotiations."

Hope remains

It remains to be seen what would come out of the talks in Washington, scheduled on Thursday and Friday US time, including whether the two sides could reach a deal or a consensus, or whether the talks will fail and a full-fledged tariffs war would break out.

Chinese analysts said that, though risks exist, there is still hope for the two sides to walk back their threats and return to the negotiating table and iron out a mutually acceptable trade deal.

"Yes, there is pessimism, but I think as long as the two sides continue talking, there is a chance to reach a deal eventually," said Chen Fengying, a research fellow at the China Institutes of Contemporary International Relations.

Despite the threats and tough rhetoric from US officials over the past few days, Chinese analysts believe that the US is not ready for a full-blown trade war, but is simply seeking greater leverage.

The Trump administration also faces mounting pressure in the US, where a rising number of business groups and farmers associations have voiced opposition to tariffs and warned dire consequences.

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Icmer said:

I'm not sure why people here are upvoting a draft from last year that we already know was immediately rejected in Beijing. There are very few specifics released regarding the provisions that were added in the last several months of negotiations and which were recently presented to Xi.

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