China wants tariffs cut to enable $50 billion imports from U.S.: Bloomberg

China wants tariffs cut to enable $50 billion imports from U.S.: Bloomberg
(Reuters) – China will struggle to buy $50 billion of U.S. farm goods annually unless the United States removes retaliatory tariffs on American products, Bloomberg reported on Tuesday.

China would make the purchases only if U.S. President Donald Trump rolls back levies put in place since the trade war began, Bloomberg said https://bloom.bg/2OR9dvt, citing people familiar with the matter.

Trump said on Friday that China had agreed to purchase $40 billion to $50 billion worth of agricultural goods from the U.S. in a first phase of an agreement to end the trade war.

(Reporting by Bhargav Acharya and Rama Venkat in Bengaluru; Editing by Andrew Heavens)

As tariff hike looms, China asks U.S. to meet it halfway, denies backtracking

FILE PHOTO: Chinese and U.S. flags are set up for a meeting during a visit by U.S. Secretary of Transportation Elaine Chao at China's Ministry of Transport in Beijing, China April 27, 2018. Picture taken April 27, 2018. REUTERS/Jason Lee/File Photo

By Yawen Chen and Se Young Lee

BEIJING (Reuters) – China appealed to the United States to meet it halfway to salvage a deal that could end their trade war, with its chief negotiator in Washington for two days of talks hoping to stave off U.S. tariff hikes set to be triggered on Friday.

The two sides had appeared to be converging on a deal until last weekend when U.S. President Donald Trump announced his intention to raise tariffs with his negotiators saying that China was backtracking on earlier commitments.

“The U.S. side has given many labels recently, ‘backtracking’, ‘betraying’ etc…China sets great store on trustworthiness and keeps its promises, and this has never changed,” Commerce Ministry spokesman Gao Feng said on Thursday.

Gao told reporters in Beijing that it was normal for both sides to have disagreements during the negotiating process.

Trump told supporters at a rally in Florida on Wednesday that China “broke the deal”, and vowed not to back down on imposing new tariffs on Chinese imports unless Beijing “stops cheating our workers”.

A protracted trade war between the world’s two largest economies would damage global economic growth, and investors pulled their money out of stock markets this week amid fears of the prospective agreement unraveling.

Gao said the decision to send the delegation led by Vice Premier Liu He to Washington despite the tariff threat demonstrated China’s “utmost sincerity”.

“We hope the U.S. can meet China halfway, take care of each others’ concerns, and resolve existing problems through cooperation and consultations,” he said.

Gao urged the United States to eschew unilateral action, while warning China was fully prepared to defend its interests.

“China’s attitude has been consistent and China will not succumb to any pressure. China has made preparations to respond to all kinds of possible outcomes.” He did not elaborate.

U.S. government and private sector sources previously told Reuters that a draft trade agreement was riddled with reversals by China that undermined core U.S. demands.

In each of the seven chapters of the draft, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: Theft of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

The stripping of binding legal language from the draft struck directly at the highest priority of U.S. Trade Representative Robert Lighthizer – who views changes to Chinese laws as essential to verifying compliance after years of what U.S. officials have called empty reform promises.

U.S. TARIFFS

Lighthizer’s office said tariffs on $200 billion of Chinese goods would rise to 25 percent from 10 percent at 12:01 a.m. (0401 GMT) on Friday, during the discussions in Washington.

The tariffs would target chemicals, building materials, furniture and some consumer electronics among other goods.

Trump also threatened on Sunday to levy tariffs on an additional $325 billion of China’s goods, on top of the $250 billion of its products already hit by import taxes.

Since July last year, China has cumulatively imposed counter-tariffs of up to 25 percent on about $110 billion of U.S. products. It last levied tariffs, of 5 percent to 10 percent, on $60 billion of U.S. goods including liquefied natural gas and small aircraft in September.

Based on 2018 U.S. Census Bureau trade data, China would only have about $10 billion in U.S. imports left to levy in retaliation for any future U.S. tariffs, including crude oil and large aircraft.

Gao did not answer directly when asked if China would consider imposing tariffs on imported U.S services.

While the United States wants to reduce the scale of its trade deficit with China, it is also seeking stronger protection for American intellectual property and more market access in China for U.S. companies.

Gao described accusations about Chinese firms stealing tech secrets as unreasonable and said they were not based on facts.

STRONG MENTALITY

Chinese state media on Thursday published and aired reports quoting U.S.-based organizations and individuals critical of Trump’s decision to raise tariffs, though playing down the impact of higher U.S. tariffs on the Chinese economy.

“China is well-prepared for an escalation in trade tensions. A variety of plans are in place, such as countermeasures for any tariff rise, and favorable policies to minimize losses for Chinese enterprises,” the Global Times, a tabloid published by the ruling Communist Party’s People’s Daily, said in an editorial.

“Mentally and materially, China is much better prepared than its U.S. counterpart.”

The country’s share markets have taken a battering due to the renewed trade tensions, however.

China’s blue-chip CSI300 index has slumped about 7 percent so far in May while in the United States, the benchmark S&P 500 index has only declined about 2 percent.

The Chinese yuan has also weakened to a four-month low, crossing the 6.80 per dollar level.

ECONOMIC IMPACT

While China’s overall economic growth has remained steady so far this year, the outlook for exporters has been challenging.

Exports unexpectedly declined in April, with some analysts attributing the drop to slumping shipments to the United States.

U.S.-bound shipments fell more than 13 percent last month, according to official data released this week.

But imports from the United States declined by even more – almost 26 percent, widening China’s trade surplus with the United States.

The U.S. Commerce Department said on Thursday the politically sensitive goods trade deficit with China fell 16.2 percent to $20.7 billion, the lowest level since March 2014, also as imports from the world’s No. 2 economy fell 6.1 percent. Exports to China jumped 23.6 percent in March.

“For months, U.S. companies and agricultural producers and their respective trade associations have desperately urged the two sides to come to some kind of trade agreement that would prevent the further use of tariffs by both countries, fearing such a scenario would cripple their already-damaged bilateral trading relationship,” said Nelson Dong, senior partner at international law firm Dorsey & Whitney.

“However, those urgent pleas seem to have been ignored. Once again, the two countries, and indeed, the entire world’s economy will be forced into a crisis mode that will likely inflict enormous losses on many individual companies and many thousands of workers and farmers in both countries.”

(Reporting by Yawen Chen and Se Young Lee; Writing by Ryan Woo; Editing by Simon Cameron-Moore/Mark Heinrich)

U.S., China haggle over toughest issues in trade war talks

U.S. Trade Representative Robert Lighthizer (2ndL), Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross (Top-L) pose for a photograph with China's Vice Premier Liu He (2ndR), Chinese vice ministers and senior officials before the start of US-China trade talks at the White House in Washington, U.S., February 21, 2019. REUTERS/Joshua Roberts

By Jeff Mason and David Lawder

WASHINGTON (Reuters) – Top U.S. and Chinese trade negotiators haggled on Thursday over the details of a set of agreements aimed at ending their trade war, just one week before a Washington-imposed deadline for a deal expires and triggers higher U.S. tariffs.

Reuters reported exclusively on Wednesday that the two sides are starting to sketch out an agreement on structural issues, drafting language for six memorandums of understanding on proposed Chinese reforms.

If the two sides fail to reach an agreement by March 1, U.S. tariffs on $200 billion worth of Chinese imports are set to rise to 25 percent from 10 percent. Tit-for-tat tariffs between the world’s two largest economic powers have disrupted international trade and slowed the global economy since the trade war started seven months ago.

Negotiators have struggled this week to overcome differences on specific language to address tough U.S. demands for structural changes in China’s economy, two sources familiar with the talks said. The issues include an enforcement mechanism to ensure that China complies with any agreements.

“It’s not surprising that this week has been more challenging,” said an industry source familiar with the talks. “Once you move from putting together outlines to filling out the details, that is where things would naturally become more challenging.”

Chinese officials did not answer questions as they left the U.S. Trade Representative’s office on Thursday evening after more than nine hours of talks on Thursday.

The discussions began with a photo opportunity where U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He faced each other silently across a table in the Eisenhower Executive Office Building next door to the White House.

U.S. President Donald Trump will meet with Liu at the Oval Office on Friday, the White House said late on Thursday. The two also met at the end of talks during Liu’s last visit to Washington in late January.

Trump, who has embraced an “America First” policy as part of an effort to rebalance global trade, has said the March 1 deadline could be extended if enough progress is made.

Sources familiar with the negotiations told Reuters the memorandums would cover forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade.

The two sides remain far apart on demands by Trump’s administration for China to end practices on those issues that led Trump to start levying duties on Chinese imports in the first place.

Chinese President Xi Jinping would need to undertake difficult structural economic reforms to meet U.S. demands. The United States is offering no real concessions in return, other than to remove the tariff barriers Trump has imposed to force change from China.

PEN TO PAPER

One of Trump’s demands that is easier to fix for Beijing is to reduce the trade imbalance between the two nations. The U.S. trade deficit with China reached a record $382 billion through the first 11 months of 2018.

The two sides have reached consensus on how to alleviate the trade imbalances, several Chinese government sources said. Washington and Beijing are looking at a 10-item list for that, including additional Chinese purchases of agricultural produce, energy and goods such as semiconductors.

U.S. Agriculture Secretary Sonny Perdue called China’s pledges to purchase U.S. agricultural produce premature.

“Those proposals are all contingent upon a grand deal,” he said on the sidelines of the U.S. Department of Agriculture’s annual forum in Washington.

“The real issue is structural reforms regarding intellectual property, enforceability of those types of provisions.”

The United States could quickly recover its lost agricultural markets in China if a deal is struck, he said.

Perdue has overseen $12 billion in federal aid to U.S. farmers for losses they have sustained because of the trade war. China had all but halted purchases of U.S. soybeans, which were the single biggest U.S. agricultural export, worth around $12 billion in 2017.

(Reporting by Jeff Mason and David Lawder; Additional reporting by Rajesh Kumar Singh, Humeyra Pamuk in Washington, Chris Prentice in New York and Michael Martina in Beijing; writing by Simon Webb; editing by Paul Simao, Richard Chang and Grant McCool)

China allows first-ever U.S. rice imports in ‘goodwill gesture’ ahead of trade talks

FILE PHOTO: Shipping containers are seen at a port in Shanghai, China July 10, 2018. REUTERS/Aly Song

BEIJING (Reuters) – China has opened the door to imports of rice from the United States for the first time ever in what analysts took to signal a warming of relations between the world’s two biggest economies after a frosty year marked by tensions and tit-for-tat tariffs.

The green light from Chinese customs, indicated in a statement posted on the customs authority’s website on Friday, comes in the run-up to talks between the countries in January after U.S. President Donald Trump and Chinese President Xi Jinping agreed to a moratorium on higher tariffs that would affect trade worth hundreds of billions of dollars.

It wasn’t immediately clear how much rice China, which sources rice imports from within Asia, might seek to buy from the United States. But the move, which comes after years of talks on the matter, follows pledges from China’s commerce ministry of further U.S. trade openings earlier this week.

As of Dec. 27, imports of brown rice, polished rice and crushed rice from the United States are now permitted, as long as cargoes meet China’s inspection standards and are registered with the United States Department of Agriculture.

“The permission for U.S. rice suggests an improving U.S. and China relationship,” said Cherry Zhang, an agriculture analyst with consultancy JCI. Zhang said she expected any imports would likely be ordered by state-owned companies.

Officials at a government-affiliated think-tank in Beijing said the price of U.S. rice is not competitive, compared with imports from South Asia, and said the move to formally permit import should be interpreted as a goodwill gesture.

China opened its rice market when it joined the World Trade Organization in 2001, but a lack of phytosanitary protocol between China and the United States effectively banned imports, according to trade group USA Rice.

Nonetheless, in July, China formally imposed additional tariffs of 25 percent on U.S. rice, even though imports were not permitted at the time.

(Reporting by Meng Meng and Ryan Woo; Editing by Kenneth Maxwell)

China issues order to implement U.N. sanctions on North Korea

A North Korean flag flies on a mast at the Permanent Mission of North Korea in Geneva

BEIJING (Reuters) – China’s Commerce Ministry issued a ban effective from Tuesday on several imports from North Korea, including coal, iron ore, lead concentrates and ore, lead and seafood, a move that is in line with U.N. sanctions announced this month.

Beijing issued the banning order on Monday.

U.N. sanctions must be implemented 30 days after the resolution was approved in a vote on Aug. 6.

The Chinese government said any cargoes already on their way to China would be cleared by customs as usual before the U.N. sanctions deadline.

 

(Reporting by Josephine Mason; Editing by Christian Schmollinger and Edmund Blair)

 

Wall Street retreats after Dow breaches 22,000

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 19, 2017. REUTERS/Brendan McDermid

By Tanya Agrawal

(Reuters) – The Dow breached the 22,000 mark briefly in early trading on Wednesday, powered by Apple’s stellar results, before stocks retreated sharply across sectors as investors locked in gains.

Apple <AAPL.O> jumped as much as 6.46 percent to a record high, after the world’s largest publicly listed company reported strong results and iPhone sales, and signaled its upcoming 10th-anniversary phone is on schedule. The stock is up about 30 percent this year.

Microsoft <MSFT.O> and Facebook <FB.O> were among the top drags on both the S&P and the Nasdaq.

However, the S&P 500 information technology index <.SPLRCT> is up about 22 percent year to date, leading other sectors, as investors look for growth in an otherwise low-growth environment.

“Typically at those big round numbers the market seems to hesitate … I’m looking at this as a situation where the underlying evidence as to why the stock market has responded well is the fertile climate for corporate profits which is likely to remain,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

The Dow has risen 11 percent in 2017, even as Wall Street is losing confidence that President Donald Trump and a Republican-controlled Congress would be able to cut taxes and increase infrastructure spending this year.

The Dow hit the 20,000 mark in late January and crossed the 21,000 mark in just over a month on March 1.

Two-thirds of S&P 500 companies have reported their second-quarter earnings so far and 72 percent of them have beaten Wall Street’s expectations, according to Thomson Reuters I/B/E/S. In a typical quarter, 64 percent of the companies beat expectations.

At 12:35 p.m. ET (1635 GMT), the Dow Jones Industrial Average <.DJI> was up 11.56 points, or 0.05 percent, at 21,975.48, the S&P 500 <.SPX> was down 7.04 points, or 0.28 percent, at 2,469.31.

The Nasdaq Composite <.IXIC> was down 34.35 points, or 0.54 percent, at 6,328.59.

Nine of the 11 major S&P 500 sectors were lower, with the telecommunications index’s <.SPLRCL> 1.05 percent loss leading the decliners.

Data showed U.S. private employers added 178,000 jobs in July, after adding 191,000 jobs in June. Economists polled by Reuters expected an addition of 185,000 jobs. The data comes ahead of the more comprehensive non-farm payrolls data on Friday.

AutoNation <AN.N> fell 6.19 percent after the largest U.S. auto retail chain, reported a fall in quarterly profit.

Cardinal Health <CAH.N> fell 9.34 percent after the drug distributor’s 2018 profit forecast missed analysts’ estimate.

Declining issues outnumbered advancers on the NYSE by 1,851 to 970. On the Nasdaq, 2,145 issues fell and 687 advanced.

(Reporting by Tanya Agrawal; Editing by Arun Koyyur)

Trump seeks crackdown on ‘Made in America’ fakes

FILE PHOTO: U.S. President-elect Donald Trump addresses the "Make America Great Again! Welcome Celebration" at the Lincoln Memorial in Washington, U.S., January 19, 2017. REUTERS/Mike Segar/File Photo

WASHINGTON (Reuters) – U.S. President Donald Trump is looking for ways to defend American-made products by certifying legitimate U.S. goods and aggressively going after imported products unfairly sporting the “Made in America” label, the White House said on Tuesday.

Trump, who campaigned on reviving the U.S. manufacturing sector, vowed on Monday that his administration would crack down on “predatory online sales of foreign goods” hurting U.S. retailers.

On Wednesday, Trump will discuss with small- and medium-sized manufacturers how to certify their products and keep out foreign counterfeits, a senior administration official told reporters. Their products include gutter filters, flags and pillows.

“There’s just too many examples of foreigners slapping on ‘Made in America’ labels to products and the worst insult is when they do it after they have actually stolen the product design,” the official said.

The United States loses about $300 billion a year to theft of intellectual property ranging from semiconductors to jeans, the official said.

In March, Trump signed an executive order that gave customs officials more authority to stop pirated and counterfeit items, the official told reporters.

The White House plans to work with the private sector on the new certification and verification system rather than create new regulations or spend taxpayer money, the official said, citing as a model the LEED system used to rate the environmental sustainability of building projects.

(Reporting by Roberta Rampton and Ayesha Rascoe; Editing by Howard Goller)

World food prices climb in May, import bill to rise in 2017: FAO

FILE PHOTO: Canadian pork shoulders are being prepped on a butcher's counter at North Hill Meats in Toronto, Ontario, Canada on May 10, 2017. Picture taken on May 10, 2017. REUTERS/Hyungwon Kang/File Photo

ROME (Reuters) – Global food prices rose in May from the month before after three months of decline, and the world’s food import bill is set to jump in 2017, the United Nations food agency said on Thursday.

Higher values for all food goods except sugar lifted prices on international markets 10 percent above the same month last year, the Food and Agriculture Organization (FAO) said.

Rising shipping costs and larger import volumes are due to push the cost of importing food globally to more than $1.3 trillion in 2017, FAO said.

This would be a 10.6 percent rise over 2016’s import bill, despite broad stability in markets buoyed by ample supplies of wheat and maize and higher production of oilseed products.

Poor countries that rely on imports to cover their food needs, and part of sub-Saharan Africa are on course for an even faster rise in their import costs as they buy in more meat, sugar, dairy and oilseed products.

All food categories except fish are due to add to rising import bills, as robust growth in aquaculture in many developing countries increasingly manages to meet domestic demand.

FAO’s food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 172.6 points in May, up 2.2 percent from April.

FAO trimmed its forecast for global cereals output in the 2017-18 season to 2.594 billion tonnes, down 0.5 percent year-on-year. Global wheat production is expected to decline 2.2 percent after a record harvest last year.

(Reporting by Isla Binnie, editing by Steve Scherer and Crispian Balmer)

Exclusive: U.S.-Mexico sugar deal struck ahead of NAFTA talks; industry divided

By Adriana Barrera and Dave Graham

MEXICO CITY (Reuters) – The U.S. and Mexican governments reached a deal in a dispute over trade in sugar on Monday, sources said, averting steep U.S. duties and Mexican retaliation by Mexico on imports of American high-fructose corn syrup ahead of the renegotiation of NAFTA.

Two sources, speaking on condition of anonymity, said the two sides were working on final details of a deal in Washington that would end a year of wrangling. The latest talks began in March, two months after President Donald Trump took power vowing a tougher line on trade to protect U.S. industry and jobs.

They are seen as a precursor as well as significant hurdle to the more complex discussions on the North American Free Trade Agreement between the United States, Mexico and Canada, which are expected to start in August.

One source said the sugar deal would benefit both the United States and Mexico, with another saying Mexico will agree to export less refined sugar and send a lower quality of crude sugar to the United States than it previously did.

Both sides also would avoid potentially inflammatory tariffs that could have kicked in if a deal was not reached.

Some members of the U.S. sugar industry, however, are not happy with the reported deal and were pressuring the Trump administration to stop it, one source said. Some of their Mexican counterparts also expressed anger at what they see as unfavorable terms.

ICE U.S. domestic raw sugar futures for July delivery finished down 2.9 percent at 27.66 cents per lb, in the largest one-day loss in over a year.

U.S. Commerce Secretary Wilbur Ross came close to hammering out a compromise deal before an earlier deadline in May, but it fell through as the U.S. sugar lobby upped its pressure on U.S. lawmakers, said two sources familiar with the talks.

The powerful lobby includes the politically connected Fanjul family, Imperial Sugar, owned by Louis Dreyfus Co, and U.S. cane and beet growers.

Mexico had free access to the U.S. sugar market under NAFTA, but U.S. sugar refiners accused it of dumping subsidized sugar, undercutting their businesses. In retaliation, the United States slapped large duties on the Mexican sweetener, but a 2014 agreement suspended the tariffs in return for quotas and price floors for Mexican sugar.

The new deal would lower the proportion of refined sugar Mexico can export to the United States to 30 percent of total exports, from 53 percent, one source said. It also cuts the quality of Mexico’s crude sugar exports to 99.2 percent, from 99.5 percent, the source said, tackling a key complaint of U.S. refiners, who said Mexican crude sugar was close to refined and going straight to consumers.

The U.S. sugar market is protected by a complex web of price supports and import quotas, which confection makers and other critics say artificially inflates domestic prices. NAFTA opened the doors to Mexican sugar in 2008.

(Reporting by Adriana Barrera, Dave Graham and Anthony Esposito; Additional reporting by Christine Prentice in New York; Editing by Frank Jack Daniel and Paul Simao)

U.S. core capital goods orders, shipments increase in March

FILE PHOTO - Honda Motor Co's Acura NSX luxury sports car is seen in assemble line at the company's Performance Manufacturing Center in Marysville, Ohio, U.S., November 11, 2016. REUTERS/Maki Shiraki/File Photo

WASHINGTON (Reuters) – New orders for key U.S.-made capital goods rose less than expected in March, but a second straight monthly increase in shipments suggested business investment accelerated in the first quarter amid a recovering energy sector.

The Commerce Department said on Thursday non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased 0.2 percent last month after an upwardly revised 0.1 percent gain in February.

Shipments of these so-called core capital goods rose 0.4 percent after jumping 1.1 percent in February. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement.

Economists polled by Reuters had forecast core capital goods orders rising 0.5 percent last month after a previously reported 0.1 percent dip. March’s modest increase suggests some loss of momentum in the manufacturing sector after recent strong growth.

Manufacturing, which accounts for about 12 percent of the U.S. economy, is being underpinned by the energy sector revival.

Energy services firm Baker Hughes said last Friday that U.S. oil rigs totaled 688 in the week ending April 21, the most in two years. U.S. drillers have added oil rigs for 14 straight weeks and shale production in May was set for its biggest monthly increase in more than two years.

Business spending on equipment is expected to have accelerated from the fourth-quarter’s annualized 1.9 percent growth pace and will likely be one of the few bright spots when the government publishes its advance first-quarter GDP estimate on Friday.

Manufacturing could get a lift from President Donald Trump’s proposed tax plan, announced on Wednesday, that includes cutting the corporate income tax rate to 15 percent from 35 percent.

Last month, orders for machinery slipped 0.2 percent, but shipments increased 0.7 percent. Orders for primary metals rose in March as did shipments of these products. Electrical equipment, appliances and components orders and shipments also increased last month.

There were, however, declines in orders for fabricated metal products and computers and electronic products.

Last month overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, increased 0.7 percent after surging 2.3 percent in February. Civilian aircraft orders increased 7.0 percent.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)