China strikes back at U.S. with new tariffs on $75 billion in goods

FILE PHOTO: A U.S. flag on an embassy car is seen outside a hotel near a construction site in Shanghai, China, July 31, 2019. REUTERS/Aly Song

By Se Young Lee and Judy Hua

BEIJING (Reuters) – China said on Friday it will impose retaliatory tariffs against about $75 billion worth of U.S. goods, putting as much as an extra 10% on top of existing rates in the dispute between the world’s top two economies.

The latest salvo from China comes after the United States unveiled tariffs on an additional $300 billion worth of Chinese goods, including consumer electronics, scheduled to go into effect in two stages on Sept. 1 and Dec. 15.

China will impose additional tariffs of 5% or 10% on a total of 5,078 products originating from the United States including agricultural products such as soybeans, crude oil and small aircraft. China is also reinstituting tariffs on cars and auto parts originating from the United States.

“China’s decision to implement additional tariffs was forced by the U.S.’s unilateralism and protectionism,” China’s Commerce Ministry said in a statement, adding that its retaliatory tariffs would also take effect in two stages on Sept. 1 and Dec. 15.

The White House and U.S. Trade Representative’s office did not immediately respond to Reuters’ request for comment on China’s latest tariffs.

Though Chinese and U.S. trade negotiators held another discussion earlier in August, neither side appears ready to make a significant compromise and there have been no sign of a near-term truce.

The protracted dispute has stoked fears about a global recession, shaking investor confidence and prompting central banks around the world to ease policy in recent months. U.S. stocks fell on Friday on the news of China’s tariffs, underscoring growth concerns.

In an interview on CNBC, Federal Reserve Bank of Cleveland President Loretta Mester said she viewed the Chinese retaliatory tariffs as “just a continuation” of the aggravated trade policy uncertainty that has begun weighing on American business investment and sentiment.

AGRICULTURE, AUTO SECTORS HIT

The knock-on effects of the U.S.-China trade dispute was a key reason behind the Fed’s move to cut interest rates last month for the first time in more than a decade.

“It is unclear as things stand whether the U.S.-China trade negotiations will continue as planned in early September,” said Agathe Demarais, global forecasting director at The Economist Intelligence Unit, in an e-mail statement.

“All eyes will now turn to the U.S. Fed to see whether Jerome Powell, the Fed Chairman, will react to these developments by accelerating rate cuts.”

Among U.S. goods targeted by Beijing’s latest tariffs were as soybeans, which will be hit with an extra 5% tariff starting Sept. 1. China will also tag beef and pork from the United States with an extra 10% tariff.

China is also reinstituting an additional 25% tariff on U.S.-made vehicles and 5% tariffs on auto parts that had been suspended at the beginning of the year. Carmakers such as Daimler <DAIGn.DE> and Tesla <TSLA.O> had adjusted their prices in China when the auto and auto parts tariffs had been suspended.

Ford <F.N>, a net exporter to China, said in a statement it encouraged the United States and China to find a near term solution.

“It is essential for these two important economies to work together to advance balanced and fair trade,” the company said.

White House trade adviser Peter Navarro told Fox Business News that trade negotiations with China would still go on behind closed doors.

(Reporting by Judy Hua, Min Zhang, Se Young Lee, Stella Qiu, Hallie Gu and Dominique Patton in BEIJING, Yilei Sun in SHANGHAI, Doina Chiacu and David Shepardson in WASHINGTON; Editing by Alison Williams)

On the front lines: Trade war sinks North Dakota soybean farmers

Paul and Vanessa Kummer check the soybeans on their farm near Colfax, North Dakota, U.S., August 6, 2019. REUTERS/Dan Koeck

By Karl Plume

COLFAX, North Dakota (Reuters) – North Dakota bet bigger on Chinese soybean demand than any other U.S. state.

The industry here – on the far northwestern edge of the U.S. farm belt, close to Pacific ports – spent millions on grain storage and rail-loading infrastructure while boosting plantings by five-fold in 20 years.

Now, as the world’s top soybean importer shuns the U.S. market for a second growing season, Dakota farmers are reeling from the loss of the customer they spent two decades cultivating.

The state’s experience underscores the uneven impact of the U.S.-China trade war across the United States. Although China’s tariffs target many heartland states that, like North Dakota, supported President Donald Trump’s 2016 election, those further south and east are better able to shift surplus soybeans to other markets such as Mexico and Europe. They also have more processing plants to produce soymeal, along with larger livestock and poultry industries to consume it.

For North Dakota, losing China – the buyer of about 70% of the state’s soybeans – has destroyed a staple source of income. Agriculture is North Dakota’s largest industry, surpassing energy and representing about 25% of its economy.

“North Dakota has probably taken a bigger hit than anybody else from the trade situation with China,” said Jim Sutter, CEO of the U.S. Soybean Export Council.

In its second-quarter agricultural credit conditions survey this month, the Federal Reserve Bank of Minneapolis said 74% of respondents in North Dakota reported lower net farm income.

China shut the door to all U.S. agricultural purchases on Aug. 5 after Trump intensified the conflict with threats to impose additional tariffs on $300 billion in Chinese imports, some as soon as Sept. 1.

Some farmers were relying on the Trump administration’s $28 billion in farm aid payments to compensate them for trade war losses, only to be disappointed with new payment rates for counties in North Dakota.

The rates are below those for some southern states that rely much less on exports to China. The U.S. Department of Agriculture determined other states had a higher “level of exposure” to tariffs than North Dakota because they also grow other crops, such as cotton and sorghum, that were hit by Chinese tariffs, according to a brief written statement from the USDA in response to questions from Reuters.

With record soy supplies still in storage and another crop to be harvested soon, farmers in the U.S. soybean state with the best access to ports serving China are unable to sell their crops at a profit.

Rail shippers would normally send more than 90 percent of the North Dakota soybeans they buy to Pacific Northwest export terminals. Now they are trying unsuccessfully to make up the shortfall by hauling corn, wheat and other crops with limited demand. Some are moving soybeans south and east to domestic users, a costlier endeavor that ultimately thins margins for both shippers and farmers.

LOST DEMAND

Soy farmers who planted this spring – when the White House was talking up a nearly finished trade deal with China – watched as those trade talks collapsed in May, sending prices well below their costs of production.

Vanessa Kummer checks the quality of their 2018 soybean crops on the family farm near Colfax, North Dakota, U.S., August 6, 2019. REUTERS/Dan Koeck

Vanessa Kummer checks the quality of their 2018 soybean crops on the family farm near Colfax, North Dakota, U.S., August 6, 2019. REUTERS/Dan KoeckVanessa Kummer’s farm in Colfax, North Dakota, has yet to sell a single soybean from the fall harvest because of the low prices. Normally, the farm would have forward-sold 50% to 75% of the upcoming harvest.

 

Vanessa Kummer’s farm in Colfax, North Dakota, has yet to sell a single soybean from the fall harvest because of the low prices. Normally, the farm would have forward-sold 50% to 75% of the upcoming harvest

She fears the U.S.-China soy trade is now “permanently damaged” as China shifts its purchases to Brazil, uses less soy in animal feed and consumes less pork as African swine fever kills of millions of the nation’s pigs.

“It will take years to get back to any semblance of what we had over in China,” Kummer said, standing in a sparse field of ankle-high soy plants, where two weeks earlier she hosted a delegation of soy importers from Ecuador and Peru.

Though it is the No. 4 soy state overall, North Dakota is home to two of the top three U.S. soy producing counties in the nation.

Options for North Dakota farmers are limited. U.S. wheat has been losing export market share for years. Demand for specialty crops such as peas and lentils, which grow well in the northern U.S., has been dampened by retaliatory tariffs imposed by India, a major importer of both products.

ROOTS OF DEPENDENCE

North Dakota’s farmers never set out to become so dependent on a single buyer of one crop. But with wheat profits shrinking and Chinese demand for soy growing, soybeans increasingly seemed like the obvious choice.

Companies including Berkshire Hathaway’s BNSF expanded rail capacity to open up a West Coast shipping corridor, and Pacific Northwest seaports expanded to handle more exports to China. Seed companies offered North Dakota farmers new varieties that allowed soybeans to thrive in the state’s colder climate and shorter growing season.

A $200 million crop two decades ago blossomed into a $2 billion crop, topping the value of wheat, once North Dakota’s top crop.

The number of high-speed shuttle train loading terminals in North Dakota tripled from about 20 in 2007 to more than 60 currently, according to industry data, with investments totaling at least $800 million.

But one of those facilities, CHS Dakota Plains Ag elevator in Kindred, North Dakota, has gone three or four months without loading a soybean train this year, said Doug Lingen, a grain merchant there. Normally the elevator would load at least one train a month with beans bound for the Pacific Northwest.

LIMPING ALONG

The drop in demand has soybean prices in North Dakota trading at a historic discount to U.S. futures prices, and farmers are putting investments on hold.

Justin Sherlock, who grows corn, soybeans and other crops near Dazey, North Dakota, had been planning to buy a used grain drier this year for around $100,000 to $150,000, passing on a new one that would be at least $350,000.

But an uncertain future has now shelved those plans, even with the latest promise for government aid. According to rates published last month, farmers in Sherlock’s county can apply for aid of $55 per acre, well below the maximum $150 rate offered in 22 counties nationwide.

Sherlock called the latest announcement “disappointing.”

“I’m just going to defer all my investment,” he said, “and try to limp along for a few years.”

(Reporting by Karl Plume in Chicago, additional reporting by P.J. Huffstutter; Editing by Caroline Stauffer and Brian Thevenot)

China buys U.S. soybeans after declaring ban on American farm goods

FILE PHOTO: Soybeans fall into a bin as a trailer is filled at a farm in Buda, Illinois, U.S., July 6, 2018. REUTERS/Daniel Acker

By Tom Polansek

CHICAGO (Reuters) – China snapped up a small volume of U.S. soybeans last week after pledging to halt purchases of American farm products due to the escalating trade war between Washington and Beijing, U.S. Department of Agriculture data showed on Thursday.

The world’s largest soybean importer struck deals from Aug. 9 to 15 to buy 9,589 tonnes for delivery in the current marketing year and 66,000 tonnes, approximately one cargo, for the next year, the data showed.

China’s Commerce Ministry said on Aug. 5 that Chinese companies stopped buying U.S. farm products in the latest escalation of the trade war between the world’s two largest economies.

“You do have some buying going on,” said Arlan Suderman, chief commodities economist for INTL FCStone. “It’s a little bit of a surprise.”

China last year imposed retaliatory tariffs that remain in place on imports of U.S. farm products including soybeans and pork. The duties have slashed exports of U.S. crops and prompted the Trump administration to compensate American farmers for losses over two years with as much as $28 billion.

China said on Thursday it hopes the United States will stop a plan to impose new tariffs, adding that any new duties would lead to a further escalation.

China has largely turned to South America for soybeans since the trade war began last year. U.S. soybean sales to China in 2018 dropped 74% from the previous year.

“Compared to what they used to buy, they essentially have halted – but some have gotten through,” Suderman said.

The sales of 9,589 tonnes for delivery in the current marketing year will probably be rolled ahead to be delivered in the next year, which begins on Sept. 1, said Don Roose, president of Iowa-based broker U.S. Commodities.

The cargo sold for delivery in the next marketing year could have been in the works before Beijing said Chinese companies would suspend purchases of U.S. farm goods, said Terry Reilly, senior commodity analyst for Futures International.

“The government may have just given the green light to say, ‘Let this one go through,'” Reilly said.

“One cargo is not going to change the fact that they’re not buying millions of tons of soybeans.”

(Reporting by Tom Polansek; Editing by Marguerita Choy)

Hong Kong protesters clash with police, angry at lack of prosecutions after subway mob attack

Protesters fire nitrogen extinguishers during a stand off at Yuen Long MTR station, the scene of an attack by suspected triad gang members a month ago, in Yuen Long, New Territories, Hong Kong, China August 21, 2019. REUTERS/Thomas Peter

By James Pomfret and Greg Torode

HONG KONG (Reuters) – Thousands of jeering Hong Kong residents held a raucous anti-government protest on Wednesday at a suburban subway station that was attacked by a mob last month, angry that nobody has yet been prosecuted for the violence.

Some masked protesters clashed with police in the sub-tropical heat, spraying fire extinguishers from the inside of Yuen Long station as others smeared the floor with cooking oil to stop the police advancing.

Some demonstrators blocked station exits and sealed roads outside the station, aiming green laser beams at the lines of shield-bearing officers. Others threw empty fire extinguishers at police lines from overpasses.

It was the latest in a series of demonstrations, which have sometimes turned violent, since June against a perceived erosion of freedoms in the Chinese-ruled former British colony.

Wednesday’s protest marked the night of July 21, when more than 100 white-shirted men stormed the Yuen Long station hours after protesters had marched through central Hong Kong and defaced China’s Liaison Office – the main symbol of Beijing’s authority.

Using pipes and clubs, the men attacked black-clad protesters returning from Hong Kong island as well as passers-by, journalists and a lawmaker, wounding 45 people.

Democratic Party legislator Lam Cheuk-ting, who was wounded in the attack by suspected triad gangsters, said he believed the protesters wanted a peaceful night on Wednesday but he could not rule out further violence – from gangsters or the police.

“It is impossible to predict… It is deeply disappointing that all these weeks later we still don’t have an independent inquiry into those events,” he told Reuters.

Squads of police were stationed on the station perimeter and some protesters jeered and shone lasers at them. A small crowd of masked young men gathered on a station balcony, swearing and cursing at police vans down a side street.

Anger erupted in June over a now-suspended bill that would allow criminal suspects in Hong Kong to be extradited to mainland China for trial. Hong Kong leader Carrie Lam said again on Tuesday the legislation was dead.

The unrest has been fueled by broader worries about the erosion of freedoms guaranteed under the “one country, two systems” formula adopted after Hong Kong’s return to China in 1997, including an independent judiciary and the right to protest. Demonstrations have included the storming of the legislature and havoc at the airport.

SHARP REACTION FROM BEIJING

At a speakers’ corner beneath the MTR station on Wednesday, people denounced police violence and their perceived desertion of duty on July 21.

“They just walked away,” one woman said. “What kind of police are these?”

Peter, a 17-year-old student handing out free drinks and masks, said he wanted the night to be peaceful.

“We need to give the frontline fighters a rest from fighting the police, so they can fight again later if we need,” he said.

The protests have prompted sharp reactions from Beijing, which has accused foreign countries, including the United States, of fomenting unrest. China has also sent clear warning that forceful intervention is possible, with paramilitary forces holding drills in neighboring Shenzhen.

U.S. Secretary of State Mike Pompeo reiterated Washington’s calls for China to honor its commitment to “one country, two systems”.

Speaking to CBS program “This Morning” on Tuesday, Pompeo highlighted remarks by President Donald Trump at the weekend warning against a crackdown like Beijing’s suppression of pro-democracy protests in Tiananmen Square in 1989.

Trump said this would make reaching a deal he has been seeking to end a trade war with China “very hard”.

In an editorial on Tuesday, China’s influential state-run tabloid, the Global Times, called Monday’s comments by U.S. Vice President Mike Pence linking the trade talks to the Hong Kong protests “outrageous”.

Likely worsening already strained ties between Beijing and London, a Chinese national working at Britain’s Hong Kong consulate has been detained in China’s border city of Shenzhen for violating the law.

Some Hong Kong companies have been dragged into controversy amid the protests.

Pilots and cabin crew at Cathay Pacific Airways described a “white terror” of political denunciations, sackings and phone searches by Chinese aviation officials.

The Hong Kong Pharmacists’ Union said it was concerned about the spread of toxic chemicals from the tear gas used by police in some of the protests.

“We would suggest the protective measures and decontamination actions to be taken after the release of tear gas in your community and the mass transit system,” it said in a statement.

Police responded by reading out from Wikipedia that tear gas does not harm humans.

(Additional reporting by Felix Tam; Writing by Nick Macfie; Editing by Frances Kerry)

Russia, China accuse U.S. of stoking tensions with missile test

FILE PHOTO: National flags of Russia and the U.S. fly at Vnukovo International Airport in Moscow, Russia April 11, 2017. REUTERS/Maxim Shemetov/File Photo

By Tom Balmforth and Maria Kiselyova

MOSCOW (Reuters) – Russia and China accused the United States on Tuesday of stoking military tensions by testing a ground-launched cruise missile, but the foreign ministry in Moscow said it would not be drawn into an arms race.

The Pentagon said on Monday it had tested a conventionally-configured cruise missile that hit its target after more than 500 km (310 miles) of flight, its first such test since the demise of a landmark nuclear pact this month.

The United States formally withdrew from the Cold War-era Intermediate-Range Nuclear Forces Treaty (INF) with Russia on Aug. 2 after accusing Moscow of violating it, a charge dismissed by the Kremlin.

The text would have been banned under the INF, which prohibited land-based missiles with a range of between 310 and 3,400 miles, reducing the ability of both countries to launch a nuclear strike at short notice.

Washington had “obviously taken the course of escalating military tensions,” Russian Deputy Foreign Minister Sergei Ryabkov said

Russia would, however, not allow itself “to be pulled into a costly arms race” and did not plan to deploy new missiles unless the United States did so first, he was quoted as saying by TASS news agency.

The Kremlin said the U.S. missile test showed that Washington had long been preparing to exit the nuclear pact.

“It is simply not possible to prepare for such tests in a few weeks or a few months. This …shows that it was not Russia, but the United States with its actions that brought the breakdown of the INF,” Kremlin spokesman Dmitry Peskov said.

China also expressed concern.

In Beijing, Chinese Foreign Ministry spokesman Geng Shuang said the test showed the United States was stoking a new arms race and confrontation, which would have a serious negative impact on regional and global security.

“We advise the U.S. side to abandon outdated notions of Cold War thinking and zero-sum games, and exercise restraint in developing arms,” Geng told a daily news briefing.

(Reporting by Maria Kiselyova; Additional reporting by Ben Blanchard in BEIJING; Writing by Tom Balmforth; Editing by Andrew Heavens and John Stonestreet)

Hong Kong leader says dialogue and ‘mutual respect’ offer way out of chaos

Hong Kong's Chief Executive Carrie Lam holds a news conference in Hong Kong, China, August 20, 2019. REUTERS/Ann Wang

By Noah Sin and Felix Tam

HONG KONG (Reuters) – Hong Kong leader Carrie Lam said on Tuesday she hoped a peaceful weekend anti-government protest was the start of efforts to restore calm and that talks with non-violent protesters would provide “a way out” for the Chinese-ruled city.

Hundreds of thousands of protesters rallied peacefully in torrential rain on Sunday in the eleventh week of what have been often violent demonstrations.

“I sincerely hope that this was the beginning of society returning to peace and staying away from violence,” Lam said.

“We will immediately start the work to establish a platform for dialogue. This dialogue, I hope, will be based on a mutual understanding and respect and find a way out for today’s Hong Kong.”

Anger erupted in June over a now-suspended bill that would allow criminal suspects in the former British colony to be extradited to mainland China for trial.

The unrest has been fueled by broader worries about the erosion of freedoms guaranteed under the “one country, two systems” formula put in place after Hong Kong’s return to China in 1997, including an independent judiciary and the right to protest.

Three people were wounded, one critically, in a knife attack by an unknown assailant near a “Lennon Wall” of colorful pro-protest messages in the city’s Tseung Kwan O district in the New Territories overnight, police said. One man was arrested.

The protests have prompted sharp reactions from Beijing, which has accused foreign countries, including the United States, of fomenting unrest in the territory. China has also sent clear warning that forceful intervention is possible, with paramilitary forces holding drills in neighboring Shenzhen.

Britain’s Foreign Office said it was extremely concerned about reports that a Hong Kong staff member had been detained in mainland China, but there was no immediate suggestion that there was any link to the protests.

Staff member Simon Cheng did not return to work on Aug. 9 after visiting the neighboring mainland city of Shenzhen the previous day, Hong Kong news website HK01 reported. China’s Foreign Ministry declined to comment. Hong Kong police did not respond immediately to requests for comment.

Twitter Inc and Facebook Inc also said on Monday they had dismantled a state-backed social media campaign originating in mainland China that sought to undermine protests in Hong Kong.

Chinese Foreign Ministry spokesman Geng Shuang declined direct comment on the Twitter and Facebook actions, but defended the right of Chinese people to make their voices heard.

Further demonstrations are planned in the next few days, including by MTR subway workers on Wednesday, secondary school students on Thursday and accountants on Friday.

The protests are exacting a toll on the city’s economy and tourism, with the Asian financial hub on the verge of its first recession in a decade.

Singapore universities have canceled exchange programs to Hong Kong after Singapore warned its citizens to defer travel there, news website Today reported.

Singapore’s foreign ministry said in an advisory last week large protests in Hong Kong had become unpredictable and could turn violent with little or no notice.

AGGRESSIVE TACTICS

Sunday’s protest turnout, which organizers put at 1.7 million, showed that the movement still has widespread support despite chaotic scenes last week when protesters occupied the airport.

Some activists had apologized for the airport turmoil and protesters could be seen on Sunday night urging others to go home peacefully.

Aside from seeking Lam’s resignation, demonstrators have five demands – complete withdrawal of the extradition bill, a halt to descriptions of the protests as “rioting”, a waiver of charges against those arrested, an independent inquiry and resumption of political reform.

“The bill is dead,” Lam told Tuesday’s news briefing. “There is no plan to revive the bill, especially in light of the public concerns.”

Police have been criticized for using increasingly aggressive tactics to break up demonstrations but there was a minimal police presence on Sunday and no arrests were made. More than 700 people have been arrested since June.

Lam said the police watchdog had set up a task force to investigate complaints.

She said she hoped Hong Kong had “unique advantages in attracting overseas companies”, stressing the rule of law, but warned of the risk of pressure on the economy which shrank 0.4% in April-June from the previous quarter.

“The Hong Kong economy is facing the risk of downturn. We can see this from the data in the first half. Actually, I think the data in the first half has not fully reflected the seriousness of the problem,” she said.

China has put strong pressure on big companies in Hong Kong over the protests, especially Cathay Pacific Airways. CEO Rupert Hogg quit in a shock move last week after Beijing targeted the airline over staff involvement in the protests.

Hogg’s departure was announced by Chinese state television and was seen as a signal to other multinationals, such as HSBC Holdings and Jardine Matheson Holdings, to support Beijing.

Cathay also fired two pilots for taking part in protests.

China’s State Council called on Monday for greater development of the southern city of Shenzhen and integration of its culture and economy with neighboring Hong Kong and Macau, a former Portuguese-run enclave that returned to China in 1999.

(Reporting by Felix Tam, Clare Jim, Noah Sin, Donny Kwok, Frah Master and Anne Marie Roantree; Writing by Nick Macfie; Editing by Paul Tait)

Twitter, Facebook accuse China of using fake accounts to undermine Hong Kong protests

FILE PHOTO: A 3-D printed Facebook logo is seen in front of displayed binary code in this illustration picture, June 18, 2019. REUTERS/Dado Ruvic/Illustration/File Photo

By Katie Paul and Elizabeth Culliford

(Reuters) – Twitter Inc and Facebook Inc said on Monday they had dismantled a state-backed information operation originating in mainland China that sought to undermine protests in Hong Kong.

Twitter said it suspended 936 accounts and the operations appeared to be a coordinated state-backed effort originating in China. It said these accounts were just the most active portions of this campaign and that a “larger, spammy network” of approximately 200,000 accounts had been proactively suspended before they were substantially active.

Facebook said it had removed accounts and pages from a small network after a tip from Twitter. It said that its investigation found links to individuals associated with the Chinese government.

Social media companies are under pressure to stem illicit political influence campaigns online ahead of the U.S. election in November 2020. A 22-month U.S. investigation concluded Russia interfered in a “sweeping and systematic fashion” in the 2016 U.S. election to help Donald Trump win the presidency.

The Chinese embassy in Washington and the U.S. State Department were not immediately available to comment.

The Hong Kong protests, which have presented one of the biggest challenges for Chinese President Xi Jinping since he came to power in 2012, began in June as opposition to a now-suspended bill that would allow suspects to be extradited to mainland China for trial in Communist Party-controlled courts. They have since swelled into wider calls for democracy.

Twitter in a blog post said the accounts undermined the legitimacy and political positions of the protest movement in Hong Kong.

Examples of posts provided by Twitter included a tweet from a user with photos of protesters storming Hong Kong’s Legislative Council building, which asked: “Are these people who smashed the Legco crazy or taking benefits from the bad guys? It’s a complete violent behavior, we don’t want you radical people in Hong Kong. Just get out of here!”

In examples provided by Facebook, one post called the protesters “Hong Kong cockroaches” and claimed that they “refused to show their faces.”

In a separate statement, Twitter said it was updating its advertising policy and would not accept advertising from state-controlled news media entities going forward.

Alphabet Inc’s YouTube video service told Reuters in June that state-owned media companies maintained the same privileges as any other user, including the ability to run ads in accordance with its rules. YouTube did not immediately respond to a request for comment on Monday on whether it had detected inauthentic content related to protests in Hong Kong.

(Reporting by Katie Paul in Aspen, Colorado, and Elizabeth Culliford in San Francisco; Additional reporting by Sayanti Chakraborty in Bengaluru; Editing by Lisa Shumaker)

Trump ‘not ready’ for China trade deal, dismisses recession fears

FILE PHOTO: U.S. President Donald Trump meets with China's President Xi Jinping at the start of their bilateral meeting at the G20 leaders summit in Osaka, Japan, June 29, 2019. REUTERS/Kevin Lamarque/File Photo/File Photo

By Howard Schneider

WASHINGTON (Reuters) – U.S. President Donald Trump and top White House officials dismissed concerns that economic growth may be faltering, saying on Sunday they saw little risk of recession despite a volatile week on global bond markets, and insisting their trade war with China was doing no damage to the United States.

“We’re doing tremendously well, our consumers are rich, I gave a tremendous tax cut, and they’re loaded up with money,” Trump said on Sunday.

But he was less optimistic than his aides on striking a trade deal with China, saying that while he believed China was ready to come to an agreement, “I’m not ready to make a deal yet.”

He hinted that the White House would like to see Beijing resolve ongoing protests in Hong Kong first.

“I would like to see Hong Kong worked out in a very humanitarian fashion,” Trump said. “I think it would be very good for the trade deal.”

White House economic adviser Larry Kudlow said trade deputies from the two countries would speak within 10 days and “if those deputies’ meetings pan out… we are planning to have China come to the USA” to advance negotiations over ending a trade battle that has emerged as a potential risk to global economic growth.

Even with the talks stalled for now and the threat of greater tariffs and other trade restrictions hanging over the world economy, Kudlow said on “Fox News Sunday” the United States remained “in pretty good shape.”

“There is no recession in sight,” Kudlow said. “Consumers are working. Their wages are rising. They are spending and they are saving.”

Their comments follow a week in which concerns about a possible U.S. recession weighed on financial markets and seemed to put administration officials on edge about whether the economy would hold up through the 2020 presidential election campaign. Democrats on Sunday argued Trump’s trade policies were posing an acute, short-term risk.

U.S. stock markets tanked last week on recession fears with all three major U.S. indexes closing down about 3% on Wednesday, paring their losses by Friday due to expectations the European Central Bank might cut rates.

The U.S. Federal Reserve and 19 other central banks have already loosened monetary policy in what Fitch Ratings last week described as the largest shift since the 2009 recession.

Markets are expecting more cuts to come. For a brief time last week, bond investors demanded a higher interest rate on 2-year Treasury bonds than for 10-year Treasury bonds, a potential signal of lost faith in near-term economic growth.

White House trade adviser Peter Navarro on Sunday dismissed the idea that last week’s market volatility was a warning sign, saying “good” economic dynamics were encouraging investors to move money to the United States.

“We have the strongest economy in the world and money is coming here for our stock market. It’s also coming here to chase yield in our bond markets,” Navarro told ABC’s “This Week.”

For bond markets, the sort of movement Navarro described is often driven by trouble – in this case the possibility that the trade battle with China is lasting far longer than expected and becoming disruptive to business investment and growth.

The U.S. economy does continue to grow and add jobs each month. Retail sales in July jumped a stronger-than-expected 0.7%, the government reported last week, and Kudlow said that number showed that the main prop of the U.S. economy was intact.

But manufacturing growth has slowed and lagging business investment has become a drag.

A slowdown would be bad news for Trump, who is building his 2020 bid for a second term around the economy’s performance. He told voters at a rally last week they had “no choice” but to vote for him to preserve their jobs and investments.

The president and his advisers have repeatedly accused the Fed of undermining the administration’s economic policies. On Sunday, Kudlow again pointed the finger at the central bank, describing rate hikes through 2017 and 2018 as “very severe monetary restraint.”

The Fed hiked rates seven times over those two years as part of a plan to restore normal monetary policy following emergency steps taken to battle the 2007-2009 global financial crisis and recession.

Even with those steps, the Fed’s target interest rate has remained well below historic norms, and policymakers have started cutting rates in response to growing global risks.

Democratic presidential candidates on Sunday joined the many economic analysts who have said the administration’s sometimes erratic policies on trade – at one point threatening tariffs on Mexico over immigration issues – are to blame for increased uncertainty, disappointing business investment and market volatility.

“I’m afraid that this president is driving the global economy and our economy into recession,” Democratic candidate Beto O’Rourke said on NBC’s “Meet the Press.”

Speaking to CNN’s “State of the Union” on Sunday, Democratic candidate Pete Buttigieg criticized the administration for failing to deliver a deal with China.

“There is clearly no strategy for dealing with the trade war in a way that will lead to results for American farmers, or American consumers,” he said.

(Reporting by Howard Schneider; Additional reporting by Humeyra Pamuk and Ginger Gibson; editing by Michelle Price, Lisa Shumaker and Rosalba O’Brien)

Hong Kong readies for further protests after huge, peaceful rally

Riot police officers detain an anti-extradition bill protester during a demonstration in Tsim Sha Tsui neighbourhood in Hong Kong, China, August 11, 2019. REUTERS/Issei Kato

HONG KONG (Reuters) – Hong Kong is gearing up for further protests this week after hundreds of thousands of anti-government demonstrators braved heavy rain to rally peacefully on Sunday, marking a change to what have often been violent clashes.

Sunday’s massive turnout, which organizers put at 1.7 million, showed that the movement still has widespread support despite chaotic scenes last week when protesters occupied the Chinese-ruled city’s airport.

Some activists had apologized for the airport turmoil and on Sunday night protesters could be seen urging others to go home peacefully.

Police said on Monday that while Sunday’s demonstration was mostly peaceful, there were breaches of the peace in the evening when some protesters defaced public buildings and aimed laser beams at officers.

It was a far cry from the violent clashes between protesters and riot police throughout the summer, with activists storming the legislature and targeting China’s main Liaison Office in the city. The weekend was also noteworthy for a lack of tear gas use by police.

The protests, which have presented one of the biggest challenges for Chinese President Xi Jinping since he came to power in 2012, began in June as opposition to a now-suspended bill that would allow suspects to be extradited to mainland China for trial in Communist Party-controlled courts. They have since swelled into wider calls for democracy.

Hong Kong returned from British to Chinese rule in 1997 under a “one country, two systems” formula that promised wide-ranging freedoms denied to citizens in mainland China, including an independent judiciary, but many in the city believe Beijing has been eroding those freedoms.

Aside from Lam’s resignation, demonstrators have five demands – complete withdrawal of the extradition bill, a halt to descriptions of the protests as “rioting”, a waiver of charges against those arrested, an independent inquiry and resumption of political reform.

One protester, speaking at a “citizen’s press conference” on Monday, was asked what path the protests would take now, peaceful or violent.

“We have started our rallies very peacefully but after two and a half months it seems that the Hong Kong government has not responded to our five demands so one thing leads to another and it may cause escalation,” the speaker, named Wang, said.

“If you ask me, I personally hope there will be a quick resolution to this from the government so we don’t have to protest anymore.”

On Sunday, protesters spilling out from Victoria Park, the designated rally area on Hong Kong island, streamed onto major thoroughfares toward the city’s financial center, chanting for Beijing-backed leader Carrie Lam to step down.

Police estimated the size of the crowd in Victoria Park at 128,000 at its peak, although that excludes the masses of umbrella-carrying demonstrators who packed the streets.

CHINESE FORCES ACROSS THE BORDER

The Hong Kong government said in a statement on Sunday night it was important to restore social order as soon as possible and that it would begin talks with the public and “rebuild social harmony when everything has calmed down”.

The Global Times, a nationalist Chinese tabloid published by the ruling Communist Party’s official People’s Daily, attributed the change in the character of Sunday’s protest to the presence of Chinese paramilitary forces, which have been conducting exercises in Shenzhen, just across the border from Hong Kong.

“This was widely seen as a stern warning to the violent elements in Hong Kong,” it said, adding that a backlash from Hong Kong residents over last week’s airport occupations was another factor.

The Chinese Communist Party’s official People’s Daily newspaper warned again in an editorial on Monday that hostile foreign influences were inciting the protest movement. Beijing has accused some countries, including the United States, of fomenting unrest.

U.S. President Donald Trump hinted on Sunday that the White House would like to see Beijing resolve the protests before the world’s two largest economies could reach a trade deal.

“I would like to see Hong Kong worked out in a very humanitarian fashion,” Trump said. “I think it would be very good for the trade deal.”

Further demonstrations are planned in coming weeks, including protests planned by Christians and even an accountants’ group.

Police have come under criticism for using increasingly aggressive tactics to break up demonstrations, but there was a minimal police presence on Sunday and no arrests were made. More than 700 people have been arrested since June.

The central government has sought to deepen integration between the mainland and the special administrative regions of Hong Kong and nearby Macau, a former Portuguese-run enclave which returned to China in 1999. The State Council called on Monday for greater development of the so-called Greater Bay Area and to enrich the “one country, two systems” policy.

China has also put strong pressure on big companies, especially Cathay Pacific Airways <0293.HK>. CEO Rupert Hogg quit in a shock move last week after Beijing targeted the airline over staff involvement in the protests.

Hogg’s sudden departure was announced by Chinese state television on Friday and was seen as a signal to other multinationals, such as HSBC Holdings and Jardine Matheson Holdings, to support Beijing.

Cathay also fired two pilots for taking part in the protests.

Shares in Cathay rose more than 2% early on Monday before paring gains to be down 0.6%. Jeffries analysts wrote in a note on Monday that it maintained its “buy” rating on Cathay and that it expected the company to remain profitable.

(Additional reporting by Michael Martina in Beijing; Writing by Farah Master; Editing by Michael Perry and Nick Macfie)

Democratic, Republican lawmakers back $8 billion F-16 sale to Taiwan

FILE PHOTO: A U.S. Air Force F-16 fighter taking part in the U.S.-led Saber Strike exercise flies over Estonia June 6, 2018. REUTERS/Ints Kalnins/File Photo

By Bryan Pietsch

WASHINGTON (Reuters) – Congress should move quickly with an $8 billion sale of F-16 fighter jets to Taiwan as China “seeks to extend its authoritarian reach” over the region, leading U.S. Democratic and Republican lawmakers said on Friday.

Senate Foreign Relations Committee Chairman Jim Risch, a Republican, said in a statement that he welcomed the sale of Lockheed Martin Corp’s F-16 jets to boost Taiwan’s “ability to defend its sovereign airspace, which he said is “under increasing pressure” from China.

The deal “sends a strong message” about U.S. commitment to security and democracy in the region, House of Representatives Foreign Affairs Committee Chairman Eliot and Michael McCaul, the panel’s ranking Republican, said in a joint statement.

They said the move will deter China as Beijing threatens “our strategic partner Taiwan and its democratic system of government.”

The United States is the main arms supplier to Taiwan, which China deems a wayward province. Beijing has never renounced the use of force to bring the self-governed island under its control.

Senator Marco Rubio urged Congress to move forward with the deal, which he said in a statement is “an important step in support of Taiwan’s self-defense efforts” as China “seeks to extend its authoritarian reach” in the region.

Senator Ted Cruz said in a statement that it is critical “now more than ever” for Taiwan to boost its defense capabilities.

After the United States approved sales of tanks and Raytheon Co’s <RTN.N> anti-aircraft Stinger missiles to Taiwan in July, China said it was “ready to go to war” if people “try to split Taiwan from the country.”

Beijing said it would impose sanctions on U.S. companies involved in any deals. The United States and China are embroiled in a wider trade war.

On Thursday, Taiwan unveiled its largest defense spending increase in more than a decade, to T$411.3 billion ($13.11 billion.)

The United States has no formal ties with self-ruled and democratic Taiwan but is bound by law to help provide it with the means to defend itself. China has repeatedly denounced U.S. arms sales to the island.

(Reporting by Bryan Pietsch; editing by Jonathan Oatis)