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TRADE WARS
Trump dampens chances of trade deal with China
by Staff Writers
Washington (AFP) May 18, 2018

Mnuchin to lead US in trade talks with China
Washington (AFP) May 17, 2018 - US Treasury Secretary Steven Mnuchin will lead trade talks with China due to take place on Thursday and Friday as the countries try to head off a trade war.

"These meetings are a continuation of the talks held in Beijing two weeks ago and will focus on rebalancing the United States-China bilateral economic relationship," the White House said in a statement.

The US has threatened to impose 25 percent punitive duties on up to $150 billion in Chinese goods while China has targeted $50 billion in American exports.

China's Vice Premier Liu He leads the trade delegation from Beijing. US Commerce Secretary Wilbur Ross and US Trade Representative Robert Lighthizer will also participate.

In Beijing, the commerce ministry said China hoped the two sides could resolve the trade frictions during the talks.

"But of course we've prepared a response for various possibilities," said commerce spokesman Gao Feng at a Thursday press briefing.

The talks, part of a busy week of trade negotiations and tight deadlines in Washington, have become enmeshed in political intrigue after an adviser to President Donald Trump who is considered a hardliner on China was left out.

Peter Navarro, who was seen as having a more dominant role following the departure of White House economic advisor Gary Cohn over trade issues, was left off the list, although the statement said: "Additional senior Administration Officials will also participate."

According to press reports, Navarro sparred with Mnuchin over his handling of the China talks and was barred from attending the meetings this week.

- ZTE and Indonesia -

Meanwhile, Trump earlier on Wednesday denied caving to China over US sanctions on the telecoms equipment maker ZTE.

The comments followed Trump's surprise announcement on Sunday that the administration was exploring ways to soften the blow from a ban on exporting crucial US technology to the company, which Washington says violated sanctions and misled US officials.

"Nothing has happened with ZTE except as it pertains to the larger trade deal," Trump said on Twitter.

"China has seen our demands. There has been no folding as the media would love people to believe. The meetings haven't even started yet!"

Beijing said it had taken note of the positive words in Washington on lessening sanctions on ZTE.

"We hope the related departments quickly take real action," said Gao, while relaying some of China's other demands such as fair and equitable treatment for Chinese products and investment.

"We hope the US gets rid of economic and trade restrictions it should not have," Gao said.

Commerce Secretary Ross has said twice in the past week that the two sides had exchanged detailed lists of demands.

Trump's remarks followed an AFP report last week that a Chinese state enterprise was pumping hundreds of millions of dollars into an Indonesian real estate development linked to the American president's business empire, prompting questions of possible quid-pro-quo for ZTE.

ZTE was fined $1.2 billion in March 2017 but last month it was prohibited from buying crucial US parts after the commerce department found the company had lied multiple times and failed to take actions against employees responsible for sanctions violations on Iran and North Korea.

The company faced collapse as a result and Trump said Sunday he and Chinese President Xi Jinping were exploring ways to get the company "back into business fast," as he ordered the commerce department to take action.

US and Chinese officials face a new round of tough trade talks on Friday as President Donald Trump discounted chances of a deal, but Beijing extended a potential olive branch.

Trump met with a Chinese delegation headed by Vice Premier Liu He on Thursday as talks aimed at easing frictions between the economic powers got underway.

"The two sides agreed to continue the discussions on Friday," the White House said.

But speaking earlier in the day about the prospects for the talks to be successful, Trump was not optimistic, saying: "I tend to doubt it."

"China has become very spoiled... Because they always got 100 percent of whatever they wanted from the United States," he said.

Trump unleashed a barrage of criticism against former US administrations for allowing Beijing to take advantage of the United States.

"We have been ripped off by China. And an evacuation of wealth like no country has ever seen before given to another country that's rebuilt itself based on a lot of the money that they've taken out of the United States," he said.

"Trade has been a total one-way street," Trump said. "And I explained to (China's) President Xi (Jinping) that we can't do that anymore."

But hours later, China's commerce ministry announced that it was terminating its anti-dumping and anti-subsidy probe into US sorghum imports, saying punitive measures would increase costs for the Chinese livestock industry and consumers.

Provisional duties had been imposed last month. Tariffs on sorghum would hurt farmers in states such as Kansas, Texas, Colorado and Oklahoma, which are also major Republican-leaning states that make up Trump's electoral base.

Separately, the Chinese delegation has offered a $200 billion reduction in its annual trade surplus with the US by increasing American imports and other measures, according to Bloomberg News, which cited a Trump administration official. Such a reduction is among a list of US demands.

- 'Meet each other halfway' -

Trump also had harsh words for the European Union, which is likewise at loggerheads with Washington over US export tariffs on steel and aluminum.

"The European Union has been terrible to the United States on trade," he said. "They've been terrible to our workers."

China's Liu held talks with Trump and other top US officials, saying the two countries should "meet each other halfway, respect each other, and work together to push forward bilateral ties in a healthy and stable manner," according to China's official Xinhua news service.

The US has threatened to impose 25 percent punitive duties on up to $150 billion in Chinese goods while China has targeted $50 billion in American exports.

China said it hoped the two sides could resolve the trade frictions through talks.

"But of course we've prepared a response for various possibilities," commerce ministry spokesman Gao Feng said at a press briefing on Thursday.

The meetings, part of a busy week of US trade negotiations and tight deadlines in Washington, have become enmeshed in political intrigue after a Trump advisor considered a hardliner on China was left out.

Trump economic aide Peter Navarro, who was seen as having a more dominant role following the departure of White House economic advisor Gary Cohn over trade issues, was left off the list of participants, unlike for the talks in Beijing two weeks ago.

According to press reports, Navarro sparred with Treasury Secretary Steven Mnuchin over his handling of the China talks and was barred from attending the meetings this week.

Trump has also faced accusations of quid-pro-quo after vowing to soften punitive US sanctions on the Chinese telecoms equipment firm ZTE -- an announcement which came after AFP reported a Chinese state firm would pour cash into a Trump-tied real estate venture in Indonesia.

Trump, however, has denied weakening the US stance toward ZTE, and repeated Thursday that he told Xi he would "take a look at that."

"But anything we do with ZTE is a small component of the overall deal."

hs-lth/aph

NAVARRO

ZTE


Related Links
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TRADE WARS
US Iran sanctions to target auto, aircraft sectors first: French govt source
Paris (AFP) May 15, 2018
The United States will re-establish sanctions against Iran progressively, kicking off with the automobile and civil aviation sectors, a source close to the French government said on Tuesday. Energy and finance will follow, with companies facing punishment if they continue to do business with Iran, after US President Donald Trump withdrew from a landmark nuclear deal with Tehran. August 6 will see the re-introduction of auto and civil aviation sanctions, according to the source. Sanctions in ... read more

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