U.S., China rekindle trade talks ahead of Trump-Xi G20 meeting

[webfact]

U.S., China rekindle trade talks ahead of Trump-Xi G20 meeting

By Jeff Mason

 

FILE PHOTO: U.S. President Donald Trump and China's President Xi Jinping meet business leaders at the Great Hall of the People in Beijing, China, November 9, 2017. REUTERS/Damir Sagolj

 

WASHINGTON (Reuters) - China and the United States are rekindling trade talks ahead of a meeting next week between Presidents Donald Trump and Xi Jinping, cheering financial markets with hope that an escalating trade war between the two countries would abate.

 

Trump said on Tuesday that teams from the two sides would begin preparations for the leaders to sit down at the G20 summit in Osaka. China, which previously declined to say whether the two leaders would meet, confirmed the get-together.

 

"Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting," Trump said in a post on Twitter.

 

The world's two largest economies are in the middle of a costly trade dispute that has pressured financial markets and damaged the world economy.

Talks to reach a broad deal broke down last month after U.S. officials accused China of backing away from previously agreed commitments. Interaction between the two sides since then has been limited, and Trump has threatened, repeatedly, to slap more tariffs on Chinese products in an escalation that businesses in both countries want to avoid.

 

White House officials declined to go into detail about the preparations or expected outcomes from the talks in Japan, but both sides reiterated long-held positions: U.S. officials called for structural changes in the Chinese economy and in how Beijing treats U.S. businesses; China called for dialogue instead of expensive tariffs.

 

“The key is to show consideration to each other's legitimate concerns,” Xi said, according to Chinese state media. “We also hope that the United States treats Chinese companies fairly. I agree that the economic and trade teams of the two countries will maintain communication on how to resolve differences.”

 

Washington has already imposed 25% tariffs on $250 billion of Chinese goods, ranging from semi-conductors to furniture, that are imported to the United States.

 

Trump has threatened to put tariffs on another $325 billion of goods, covering nearly all of the remaining Chinese imports into the United States, including products such as cellphones, computers and clothing.

 

Trump had made no secret that, despite his threat to escalate the dispute, he wanted to meet with Xi while they are both in Japan. China's confirmation of the meeting avoids the possibility of a snub to Washington that could have triggered another round of tariffs.

 

Trump praised his relationship with Xi and spoke optimistically about getting a deal.

 

"I think we have a chance. I know that China wants to make a deal. They don't like the tariffs, and a lot of companies are leaving China in order to avoid the tariffs," he told reporters at the White House.

 

"I think the meeting might very well go well, and frankly our people are starting to deal as of tomorrow. The teams are starting to deal. So we'll see. China would like to make a deal. We'd like to make a deal, but it has to be a good deal for everybody."

 

Trump’s tweet offered fresh fuel to a rally on Wall Street as investors bet renewed talks could diffuse the trade war between the two economic giants. The S&P 500 gained nearly 1%, while the Nasdaq and Dow Jones Industrial Average both gained around 1.4% . All closed at their highest levels since early May when Trump knocked global stock markets by ratcheting up tariff rates on $200 billion of imported Chinese goods.

 

“This is a very positive development," said Clete Willems, a former trade negotiator with Trump's team, who cited the importance of a meeting between Xi and the U.S. president at the last G20 in Argentina.

 

"Leader level engagement at last year’s G20 was critical to jumpstarting the talks. It will be essential to managing the current political dynamic and getting the talks back on track once again,” he said.

 

White House economic adviser Larry Kudlow declined to give details on how the two countries would prepare for the Xi-Trump meeting and said the United States would continue to press for China to change its practices on intellectual property theft and requirements that U.S. companies share their technology to do business in China.

 

"The fact that they are meeting is a good thing," he told reporters about the Japan summit. "Our position will continue to be (that) we want structural changes. We want structural changes on all the items ... theft of IP, forced transfers of technology, cyber hacking. Of course trade barriers. We've got to have something that's enforceable."

 

According to Chinese state media, Xi told Trump that the China-U.S. relations had encountered difficulties. “If China and the United States cooperate, both benefit. If they fight, both get hurt,” state media paraphrased Xi as saying.

 

China wants the United States to lift its tariffs, but U.S. Trade Representative Robert Lighthizer, who has spearheaded negotiations, said on Tuesday that talks alone were not enough.

 

“I don’t know if it will get them to stop cheating, tariffs alone. I think you don’t have any other option," Lighthizer told a congressional hearing. "I know one thing that won’t work and that is talking to them. Because we’ve done that for 20 years," he said.

 

(Additional reporting by Susan Heavey, David Alexander, Makini Brice, Alexandra Alper, and Ben Blanchard; editing by Susan Thomas and Tom Brown)

 

-- © Copyright Reuters 2019-06-19

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[Gecko123]

China's not going to make concessions to Trump. When China backtracked on agreements that had tentatively previously agreed upon it signaled that they are going to wait for the elections next year in the hopes that Trump will not be re-elected. China, along with a sizeable majority of the American people, and virtually the entire rest of the world are praying that he will be voted out of office next year, that is if he is not impeached beforehand.

[TopDeadSenter]

 Really wonderful watching Trump in action. This was a major league game, the attempt to end China's unfair practices. Trump played the leaders and media like Carlos Kleiber plays an orchestra. Through the crescendos, swells and subdued moments it was all scripted and directed by the Donald. After all the stunts and economic face slaps poor Xi looks out of his depth. He just doesn't know how to counter Trumps broadsides. Maybe Xi needs a Twitter account to stop him looking so weak?

 

 Good luck getting your trade deal signed off, Mr Trump. 

[Tug]

I for one hope that all goes well for ALL concerned but I have my doubts imo gecko 123 is correct 

[pegman]

8 minutes ago, TopDeadSenter said:

 Really wonderful watching Trump in action. This was a major league game, the attempt to end China's unfair practices. Trump played the leaders and media like Carlos Kleiber plays an orchestra. Through the crescendos, swells and subdued moments it was all scripted and directed by the Donald. After all the stunts and economic face slaps poor Xi looks out of his depth. He just doesn't know how to counter Trumps broadsides. Maybe Xi needs a Twitter account to stop him looking so weak?

 

 Good luck getting your trade deal signed off, Mr Trump. 

What's weak are Trump's poll numbers against Joe in swing states. The FOX poll has Joe up by 10% nationwide. Trump folded like a cheap suit on the NAFTA update because of poor polls nearing the mid-terms. Same will happen with China and the Chinese know it. At his core Trump is a 4x bankrupt Silver Spooner and all but the coolaid drinkers know that. 

[Gecko123]

I think China is prepared for the global economy to slide into recession because it will pressure Trump to make concessions ahead of the elections, and if he doesn't make concessions, it increases the likelihood that he will not be re-elected.

[Tug]

Spot on pegman and gecko 123

[Dumbastheycome]

Reading  analytical assessments of this "war" is interesting in that there is a view that in the end it will be in the favor of China. China's domestic market is second only to the US. It has long  been a desire of the administration  for China to move away from mass production of cheap goods onto higher value-added items. Circumventing the impact of tariffs is not so difficult anyway by supplying components to lower wage cost countries such as Vietnam for assembly and sale. That was  happening  before Trump's tariffs due to the rapid rise in  wage costs in China.

While China's trade with the US accounts for about 25- 27% of production it is ongoing but at increased  costs to Americans. The  major impact  has been on the overall  slowing of the global economy but it certainly has not and will not break China's back!

 

[Gecko123]

2 hours ago, TopDeadSenter said:

 Really wonderful watching Trump in action. This was a major league game, the attempt to end China's unfair practices. Trump played the leaders and media like Carlos Kleiber plays an orchestra. Through the crescendos, swells and subdued moments it was all scripted and directed by the Donald. After all the stunts and economic face slaps poor Xi looks out of his depth. He just doesn't know how to counter Trumps broadsides. Maybe Xi needs a Twitter account to stop him looking so weak?

 

 Good luck getting your trade deal signed off, Mr Trump. 

Contrary to your assertion that Trump has played Xi like a Stadavarius violin, I can point to numerous examples that the exact opposite is true:

 

• Trump opened trade disputes on multiple fronts (Mexico, Canada, Europe, India) which detracted from what he claimed was his primary focus, China. This multi-front approach undercut what could have been support from traditional allies to correct trade inequities with China. It also caused a number of other countries to seek out bilateral trade deals with other countries to offset the US's aggressive tactics. This also caused several countries to enter into agreements where the trade was conducted in currency other than the USD, which plays into China's long-term strategic interests. Finally, his threat to impose tariffs on Mexico over immigration policy, and the ensuing rebellion in Congress which forced him to back down, undercut and weakened his negotiating hand with China.

 

• Xi has done a far better job of preparing his domestic audience for a sustained trade war. He has framed it as an existential threat and successfully appealed to Chinese patriotic and nationalistic sentiment to marshall support for his resistance to capitulating to Washington's demands. Trump on the other hand has had to spend billions of dollars in farm subsidies to limit widespread discontent by farmers who have been hit badly by China's tariffs on farm products. He has also resorted to outright lying and propaganda to deflect attention away from the fact that American consumers are the ones who end up paying for the tariffs he has imposed on Chinese products.

 

• Xi has also positioned himself in terms of world opinion far better than Trump. Trump is seen as a bully who has attempted to impose unilateral terms on the Chinese. Much of the world empathizes with the Chinese because they have suffered the same high-handed treatment from Trump themselves.

 

• Trump has also made enormous blunders in terms of respecting China's self-image as an economic, military and political force on the world stage. Trump has talked to them as if they were a second-rate country, totally dependent on the US for a market for their manufactured goods, and constantly accusing them of "stealing American jobs." He has tried to humiliate them on the world stage with his threats and bluster, and even though they have not openly displayed it, I am sure the Chinese leadership is deeply angered by the lack of respect he has shown. Negotiation with China had to be approached as a win-win proposition in order to be successful, but Trump couldn't break out of the NYC real estate magnate style of negotiating where only he won and everyone else loses.

 

• The lack of respect shown to one of Asia's most economically important countries, as well as the lack of respect shown to other developing countries in Latin America, Africa, and the Middle East, has generated so much resentment towards the US that it has damaged the marketing interests of US corporations wishing to sell into these markets, which is completely counterproductive to the US economic interests Trump claims to be protecting. Furthermore, the damage caused by this lasting resentment will likely undermine marketing efforts by US corporate long into the future which plays into China's long-term strategic interests.

[zydeco]

This is all to pump up the stock market. That is all Trump and his ETF in the S&P care about, actually. Yesterday, news also came out that he wanted to "demote" Jay Powell, which was denied, and then later confirmed by Larry Kudlow. All because Trump wants lower rates from the Fed and more QE. A $22 trillion debt is not enough for the "King of Debt" who plans on walking away from the debacle he is creating and leaving his successor and the country caught in an economic disaster.

[car720]

43 minutes ago, Dumbastheycome said:

Reading  analytical assessments of this "war" is interesting in that there is a view that in the end it will be in the favor of China. China's domestic market is second only to the US. It has long  been a desire of the administration  for China to move away from mass production of cheap goods onto higher value-added items. Circumventing the impact of tariffs is not so difficult anyway by supplying components to lower wage cost countries such as Vietnam for assembly and sale. That was  happening  before Trump's tariffs due to the rapid rise in  wage costs in China.

While China's trade with the US accounts for about 25- 27% of production it is ongoing but at increased  costs to Americans. The  major impact  has been on the overall  slowing of the global economy but it certainly has not and will not break China's back!

 

Ten years ago when I first arrived in China, I said that if they build their domestic economy they will be much stronger than the US.  They have done that and are doing more.

[Gecko123]

2 minutes ago, zydeco said:

This is all to pump up the stock market. That is all Trump and his ETF in the S&P care about, actually. Yesterday, news also came out that he wanted to "demote" Jay Powell, which was denied, and then later confirmed by Larry Kudlow. All because Trump wants lower rates from the Fed and more QE. A $22 trillion debt is not enough for the "King of Debt" who plans on walking away from the debacle he is creating and leaving his successor and the country caught in an economic disaster.

Exactly. The vague announcement about trade talks during the G-20 meeting was made because after Draghi signalled more quantitative easing was coming in Europe due to weakness in the economy, the Treasury market started cratering with the 10 year threatening to break below 2%. This is signaling a potential recession is around the corner. Even though falling interest rates are propping up the stock and real estate markets, these markets are absolutely teetering on the edge of the precipice, and everyone knows it. But does Trump care? Of course not. All he cares about is getting re-elected at all costs.

[Pedrogaz]

I think Trump desperately needs a big win here. The pressure is really on him. And Trump's pressure is earlier, with the election next year; a recession looming that he has tried to blame on Powell, but can now perhaps blame China for; inflation is coming and food prices are expected to rise dramatically as the recent flooding in the mid west has caused many farmers not to plant crops this year; and military action, which will rapidly become n war, on which the public have not been sold....public approval for a war with Iran is less than 35% and there is huge scepticism in Trump's base about the recent false flags. Of course, any popular war will raise Trump's approval ratings into the 80% range as happens with all wars, so a lot is riding on the current 'full court press' propaganda campaign.

 

Xi still has the nation behind him, but only really needs to ensure he doesn't take his eye off the ball with the HK fiasco.

 

Between them, they need to find a way for both to maintain their faces instead of a win-lose. Xi is a political goner if he is perceived to do a deal where he does not win big after all the pain inflicted on the farmers. A bit like NAFTA, expect the reality of any deal something much less than Trump claims. 

[Kasane]

America cannot live without China and India. 

[neeray]

4 hours ago, webfact said:

All closed at their highest levels since early May when Trump knocked global stock markets by ratcheting up tariff rates on $200 billion of imported Chinese goods.

"since early May when Trump knocked global stock markets"

Yes, he sure as hell did. My Canadian business took a dump starting early May, timed exactly to his tariffs. Same thing happened a little over a year ago when he first started talking about tariffs on Chinese imports; that "dump" lasted 4 months. Hopefully for me, this one won't.

Canada, being next door neighbour to America, and America's largest trading partner, is particularly susceptible to jittery markets. When America sneezes, we catch a cold.

While I supply new and expanding businesses (obviously none of that right now), I'm told that the retail market is feeling the same slump; people just aren't spending.

Many countries around the world are feeling the negative effects of this tariff war. Like them, I can only hope that it ends soon (it is seriously delaying my Thai plans).

 

[jany123]

8 hours ago, TopDeadSenter said:

 Really wonderful watching Trump in action. This was a major league game, the attempt to end China's unfair practices. Trump played the leaders and media like Carlos Kleiber plays an orchestra. Through the crescendos, swells and subdued moments it was all scripted and directed by the Donald. After all the stunts and economic face slaps poor Xi looks out of his depth. He just doesn't know how to counter Trumps broadsides. Maybe Xi needs a Twitter account to stop him looking so weak?

 

 Good luck getting your trade deal signed off, Mr Trump. 

Who let Adam Sandler Into the darn White House? Hollywood’s gone too far this time ( maybe the pinkos under the bed are getting their revenge), turning the presidency into a nightly comedy show to be ridiculed daily by hundreds of millions of viewers.

 

oh... this isn’t a tv show? It’s real life you say? Holy bat crap Batman! I suppose all that’s left is thoughts and prayers.