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Trump says he's inclined to extend China trade deadline and meet Xi soon

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Trump says he's inclined to extend China trade deadline and meet Xi soon

By Jeff Mason and David Lawder

 

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U.S. President Donald Trump meets with Chinese Vice Premier Liu He (R) in the Oval Office at the White House in Washington, U.S., February 22, 2019. REUTERS/Carlos Barria

 

WASHINGTON (Reuters) - President Donald Trump said on Friday there was "a very good chance" the United States would strike a deal with China to end their trade war and that he was inclined to extend his March 1 tariff deadline and meet soon with Chinese President Xi Jinping.

 

U.S. and Chinese negotiators had made progress and will extend this week's round of negotiations by two days through Sunday, Trump told reporters at the White House as he met with his top negotiators and their counterpart, Chinese Vice Premier Liu He.

 

"I think that we both feel there's a very good chance a deal will happen," Trump said.

 

Liu agreed there had been "great progress".

 

"From China, we believe that (it) is very likely that it will happen and we hope that ultimately we'll have a deal. And the Chinese side is ready to make our utmost effort," he said at the White House.

 

The Republican president said he probably would meet with Xi in March in Florida to decide on the most important terms of a trade deal.

 

Extending the deadline would put on hold Trump's threatened tariff increase to 25 percent from 10 percent on $200 billion of Chinese imports into the United States. That would prevent a further escalation in a trade war that already has disrupted commerce in goods worth hundreds of billions of dollars, slowed global economic growth and roiled markets.

 

Optimism that the two sides will find a way to end the trade war lifted stocks, especially technology shares. The S&P 500 stock index reached its highest closing level since Nov. 8. Oil prices rose to their highest since mid-November, with Brent crude reaching a high of $67.73 a barrel. [.N] [O/R]

 

CURRENCY AGREEMENT

 

Trump and Treasury Secretary Steven Mnuchin said the two sides had reached an agreement on currency. Trump declined to provide details, but U.S. officials long have expressed concerns that China's yuan is undervalued, giving China a trade advantage and partly offsetting U.S. tariffs.

 

Announcement of a pact aimed at limiting yuan depreciation was putting "the currency cart before the trade horse," but would likely be positive for Asian emerging market currencies, said Alan Ruskin, global head of currency strategy at Deutsche Bank in New York.

 

"How can you agree to avoid excessive Chinese yuan depreciation or volatility if you have not made an agreement on trade that could have huge FX implications?" Ruskin asked in a note to clients.

 

In a letter to Trump read aloud by an aide to Liu at the White House, Xi called on negotiators to work hard to strike a deal that benefits both country.

 

Trump said a deal with China may extend beyond trade to encompass Chinese telecommunications companies Huawei Technologies and ZTE Corp.

 

The Justice Department has accused Huawei of conspiring to violate U.S. sanctions on Iran and of stealing robotic technology from T-Mobile US Inc.

 

Chinese peer ZTE was last year prevented from buying essential components from U.S. firms after pleading guilty to similar charges, crippling its operations.

 

MEMORANDUMS NO MORE

 

Trump appeared at odds with his top negotiator, U.S. Trade Representative Robert Lighthizer, on the preliminary terms that his team is outlining in memorandums of understanding for a deal with China. Trump said he did not like MOUs because they are short term, and he wanted a long-term deal.

 

"I don't like MOUs because they don't mean anything," Trump said. "Either you are going to make a deal or you're not."

Lighthizer responded testily that MOUs were binding, but that he would never use the term again.

 

Reuters reported exclusively on Wednesday that the two sides were drafting the language for six MOUs covering the most difficult issues in the trade talks that would require structural economic change in China.

 

Negotiators have struggled this week to agree on specific language within those memorandums to address tough U.S. demands, according to sources familiar with the talks. The six memorandums include cyber theft, intellectual property rights, services, agriculture and non-tariff barriers to trade, including subsidies.

 

An industry source briefed on the talks said both sides have narrowed differences on intellectual property rights, market access and narrowing a nearly $400 billion U.S. trade deficit with China. But bigger differences remain on changes to China's treatment of state-owned enterprises, subsidies, forced technology transfers and cyber theft of U.S. trade secrets.

 

Lighthizer pushed back when questioned on forced technology transfers, saying the two sides made "a lot of progress" on the issue, but did not elaborate.

 

The United States has said foreign firms in China are often coerced to transfer their technology to Chinese firms if they want to operate there. China denies this.

 

The U.S. Chamber of Commerce on Friday urged the U.S. government to ensure the deal was comprehensive and addressed core issues, rather than one based on more Chinese short-term purchases of goods.

 

China has pledged to increase purchases of agricultural produce, energy, semiconductors and industrial goods to reduce its trade surplus with the United States.

 

China committed to buying an additional 10 million tonnes of U.S. soybeans on Friday, U.S. Agriculture Secretary Sonny Perdue said on Twitter. China bought about 32 million tonnes of U.S. soybeans in 2017. The commitments are a "show of good faith by the Chinese" and "indications of more good news to come," Perdue wrote.

 

China was the top buyer of U.S. soybeans before the trade war, but Beijing's retaliatory tariffs on U.S. soybeans slashed business that had been worth $12 billion annually.

 

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-- © Copyright Reuters 2019-02-23

 

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Intellectual property theft, forced technology transfer, and opening up of China markets are the big issues. Everything else is chump change. Personally, I think the Chinese currency is overvalued with the Chinese government hiding the true figures on the shadow banking system and ghost cities. As for soybeans, it is chump change. Of course, the USA's gains will be Brazil's loss. The Chinese will agree to lots but the devil is in the details and they will deliver on nothing insisting that these things will take time, as in another 50 years to implement. Trump will make big announcements, and while I will give him an "A" for effort, nothing will change except for the soybean and other Chineses needed agricultural imports. Just my opinion. 

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23 minutes ago, kevin612 said:

of course, Trump wants to do something famous while he is in the office.

 

This will be a great accomplishment if it sticks and that's a big if. However should it stick it is something that is historical. If half of it sticks it is great news. Soy bean as another poster says are "peanuts" until you are the one growing them. That's lots of money for red states. If he can get the farmers on to the gravy train they could turn out in record numbers.

 

I am sure in a matter of moments the outrage will begin about what a bad thing this is. However if these things personally impact your bottom line and money this is fantastic. Any American with a retirement account may want to think before they criticize.

Edited by Cryingdick

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I recently me with a good friend from HK and then while flying through China a couple of people who are on the ground with how all this is affecting China.    The information is anecdotal, but may be of interest.

 

The Chinese friend sees the US as winning the trade war.   He sees the Chinese economy slowing and the situation with pork and soybeans as harming china.   According to him they imported pigs from China and they have caused disease.   I have not been able to corroborate this, but will try.

 

While going through China, I got a slightly different picture.   Although the economy has slowed, most don't attribute it to anything specific, at least not tariffs.   The one thing they did note was that the Chinese people have turned their back on US products.   Whether it is Apple electronics, or American Fast Food chains and other goods, US products have lost their luster.   It's a nationalistic pride thing for many.

 

Just posted for what it's worth.

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7 minutes ago, Credo said:

 The one thing they did note was that the Chinese people have turned their back on US products.   Whether it is Apple electronics, or American Fast Food chains and other goods, US products have lost their luster.   It's a nationalistic pride thing for many.

 

Just posted for what it's worth.

 

It's a dystopian "social credit" thing.

 

https://www.sciencealert.com/china-s-dystopian-social-credit-system-science-fiction-black-mirror-mass-surveillance-digital-dictatorship

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3 hours ago, Credo said:

I recently me with a good friend from HK and then while flying through China a couple of people who are on the ground with how all this is affecting China.    The information is anecdotal, but may be of interest.

 

The Chinese friend sees the US as winning the trade war.   He sees the Chinese economy slowing and the situation with pork and soybeans as harming china.   According to him they imported pigs from China and they have caused disease.   I have not been able to corroborate this, but will try.

 

While going through China, I got a slightly different picture.   Although the economy has slowed, most don't attribute it to anything specific, at least not tariffs.   The one thing they did note was that the Chinese people have turned their back on US products.   Whether it is Apple electronics, or American Fast Food chains and other goods, US products have lost their luster.   It's a nationalistic pride thing for many.

 

Just posted for what it's worth.

Its a lot of current pain for the US versus if they are likely to get long term gain from the less than clean Chinese practices. We trade into China and have several key indicators of both the US and Chinese economies. And we are seeing the same in China and the small slow down which is also typical this time of year with the Chinese New Year is not being tariff forced but local internal economics. And the key indicators are backing it up. The US deficit with China has blown out by billions month on month with the huge volume of US crops that the Chinese religiously buy being the huge driver. Not only has the US not gained the income from China for those crops but Trump has had to pay added subsidies as farmers with warehouses full have had to plow them in. And correct the Chinese consumer is sticking it to the US and their products with a turn to Chinese produced and Asian products with raw resources now being purchased elsewhere in the world. The modern day Chinese machine can change tact to prevailing conditions a hell of a lot quicker than the US. At the moment the US is taking a hammering. Will be interesting where the US economy is going to be in a year or two at the rate it is bleeding money under Trump's astute 😂 leadership 

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Trump, or rather Trump's minions in the Commerce Dept, cannot afford a full blown trade war with China.  They are thinking about 2020.  If the US economy is still going well, Trump will probably be re-elected.  If the US economy and job growth slows, he will probably not be re-elected.

 

Expect a glorious "WIN" from Trump's negotiating team that will throw a bone to Trump's rural voting base (perhaps the Chinese will buy US coal in addition to soybeans and corn) while the fine print will benefit the Chinese in the long term.

Edited by otherstuff1957

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Trump is caving. Slowly but surely. His precious stock market, along with the ETF he owns that tracks the S&P, means more to him than stopping China from stealing technology and industrial secrets and building an army that challenges the US. It will be just like the renegotiated nafta, which has actually made some things worse than they were before. The man is simply a failure at everything but garnering attention to himself.

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