Treasury sends warning shot to China on currency

The Trump administration avoided a major escalation in its trade fight with China after the Treasury Department said in a report released Wednesday that Beijing was not intentionally devaluing its currency.

Still, Treasury Secretary Steven Mnuchin sent a warning about the lack of transparency and the relative weakness of China’s currency, the renminbi.

“Those pose major challenges to achieving fairer and more balanced trade, and we will continue to monitor and review China’s currency practices, including through ongoing discussions with the People’s Bank of China,” he said in a statement.

The report offers a bit of a reprieve in the ongoing trade war by concluding that China’s direct intervention by its central bank has been limited. The U.S. has imposed tariffs on more than $250 billion worth of Chinese imports.

Still, Treasury is critical of Beijing for not pursuing more market-based reforms that could bolster confidence in the renminbi.

Continue reading “Treasury sends warning shot to China on currency”

Democrats could control trade deal’s fate

Congress is unlikely to have the time or political will to approve a new U.S.-Mexico-Canada trade agreement by the end of the year — increasing the chances that President Donald Trump will need to bring Democrats on board if he wants to put in place his replacement for NAFTA.

Congressional staff members from both parties say there’s little desire to finish the job before the next session of Congress begins in January.

“It’s premature to start talking about voting on an agreement before the Congress and the American people even understand the deal’s broad economic effects, or what it means for jobs in the United States,” said Sen. Ron Wyden, ranking member of the Senate Finance Committee. “We are many, many months from having these answers.”

Republicans would either have to negotiate an almost insurmountable series of procedural steps to get an up or down vote with Continue reading “Democrats could control trade deal’s fate”

From shouts to smiles: How Trump got to ‘yes’ on a new NAFTA deal

Everyone from President Donald Trump to Canadian Foreign Minister Chrystia Freeland was smiling Monday as they announced a new NAFTA deal, but it took months of shouting sessions and mutual suspicion to get there.

The two sides clashed about issues as broad as auto-production rules and as tangential as world history.

Negotiations were especially tense at one point last fall when one story after another popped up on Canadian news sites about unusual U.S. proposals. U.S. Trade Representative Robert Lighthizer scolded his Canadian counterparts over media leaks. The Americans fumed as their proposals went from the negotiating table to the internet and their counterparts whispered in the hallways.

"We could literally see them [leaking]," one American official later observed.

But all those differences were swept aside over the weekend. Sources close to the action say the eleventh-hour deal came together as a result of deadline pressure, willingness to Continue reading “From shouts to smiles: How Trump got to ‘yes’ on a new NAFTA deal”

China braces for long road ahead in Trump’s trade war

BEIJING — President Donald Trump may believe that China will eventually wave the white flag in a trade war, but his posture is inviting only more resistance from Beijing, where skepticism of his administration’s ability to negotiate in good faith is growing.

“Our U.S. counterparts need to assure us they will abide by any agreement,” said Yu Dunhai, deputy director general at China’s Ministry of Foreign Affairs. “How can we trust them next time?”

The question was raised just before China announced that it would accept an invitation to begin a fresh round of talks, reportedly initiated by Treasury Secretary Steven Mnuchin.

“China always believes that an escalating trade conflict serves no one’s interests,” Chinese Foreign Ministry chief spokesman Geng Shuang said during a news conference on Thursday.

Despite the official response welcoming new talks, there is little indication that the government in Beijing is ready to change Continue reading “China braces for long road ahead in Trump’s trade war”

U.S., Canada square off on NAFTA as leaders dig in

Senior U.S. and Canadian officials resumed NAFTA talks on Wednesday with the aim of wrapping up by the end of the month, even as their leaders this week reasserted that any compromise would be hard-earned.

“As I’ve said, no NAFTA is better than a bad NAFTA deal for Canadians,” Canadian Prime Minister Justin Trudeau told reporters on Tuesday.

President Donald Trump set the tone earlier this week by warning on Twitter that “there is no political necessity to keep Canada in the new NAFTA deal.”

“If we don’t make a fair deal for the U.S. after decades of abuse, Canada will be out,” he tweeted.

The U.S. and Canada have yet to agree on nettlesome issues such as opening up Canada’s dairy markets to U.S. exports. On Wednesday, Canadian Foreign Minister Chrystia Freeland arrived on a hot and muggy day for a second week of Continue reading “U.S., Canada square off on NAFTA as leaders dig in”

Trump woos labor unions as he tears up NAFTA

U.S. labor unions and President Donald Trump have always had one thing in common: a mutual hatred for the North American Free Trade Agreement.

The Trump administration and its top trade negotiator have been openly wooing labor union leaders and rank-and-file workers as it tries to renegotiate NAFTA — and by some measures, it’s working.

Labor leaders who for decades have been firmly in the Democratic Party’s camp say they’re open-minded toward Trump and many leaders have been given White House access as the deal has been renegotiated.

Behind the scenes, some union officials are lavishing praise on U.S. Trade Representative Robert Lighthizer for adopting their suggestions — a stark change from the icy relationship on trade that developed between labor unions and the Obama administration.

Politically, Trump and his allies know that the president needs to keep the blue-collar vote, which has been slipping since he took Continue reading “Trump woos labor unions as he tears up NAFTA”

U.S., Mexico set to unveil two-way deal on NAFTA

The United States and Mexico will announce a two-way deal on NAFTA Monday, clearing the way for Canada to return to the table to try to reach a final updated agreement in the coming days, according to a source close to the negotiations.

The development follows months of stalemate and comes just over a year after negotiators from the U.S., Mexico and Canada first sat down to discuss modernizing the 24-year-old trade pact. Despite the progress between the U.S. and Mexico on issues that were widely seen as more integral to the U.S.-Mexico relationship, it remains unclear how long it will take NAFTA negotiators to resolve the remaining issues between the three countries. Canada has not been at the negotiating table for more than two months.

“A big deal looking good with Mexico!” President Donald Trump tweeted this morning.

U.S. trade negotiators briefed Continue reading “U.S., Mexico set to unveil two-way deal on NAFTA”

Low expectations as U.S., China send ‘second-level’ officials to ‘token’ trade talks

China and the U.S. will restart trade talks in Washington, D.C., later this month, but the move is unlikely to de-escalate President Donald Trump’s trade war with Beijing.

China is sending a lower-level functionary without any real power to meet with a second-tier official at the U.S. Treasury, a sign of Chinese irritation that Treasury Secretary Steven Mnuchin was unable to deliver when they thought they had a deal a few months ago, said a source close to the talks.

And meanwhile, the Trump administration is showing no signs of conciliation. Trump economic adviser Larry Kudlow on Thursday spoke dismissively about the talks, describing them as “second-level” in one television interview and issuing a tough warning to the Chinese government in another.

“The Chinese government in its totality must not underestimate President Trump’s toughness and willingness to continue this battle,” Kudlow, the director of Trump’s National Continue reading “Low expectations as U.S., China send ‘second-level’ officials to ‘token’ trade talks”

China hits back with tariffs on $60B in U.S. goods

China announced Friday it would hit about $60 billion worth of U.S. exports with new tariffs in response to President Donald Trump’s decision this week to escalate potential trade penalties on Beijing.

China’s Ministry of Commerce said it would impose the tariffs at four different tax rates. The statement didn’t detail what U.S. products would be targeted but said they would be implemented subject to U.S. action.

China said it was taking the action “because the U.S. side has repeatedly escalated the situation despite the interests of both enterprises and consumers,” according to an informal translation. “China has to take necessary counter-measures to defend the country’s dignity and the interests of the people, defend free trade and the multilateral system and defend the common interests of all countries in the world.“

The Trump administration on Wednesday announced it would consider increasing proposed tariffs on $200 Continue reading “China hits back with tariffs on $60B in U.S. goods”

Farm groups go on anti-tariff blitz after Trump offers trade aid

Farm groups are going on the offensive with a multimillion-dollar advertising and advocacy campaign against President Donald Trump’s tariffs just days after the administration rolled out a $12 billion bailout for farmers harmed by a mounting trade war.

The launch of the campaign also comes as Trump is due to be in Iowa on Thursday, where he is likely to reassure farmers growing increasingly anxious over trade retaliation that has targeted soybeans, pork and other major farm commodities.

“Agriculture is a giant and it takes a while to wake it up, but when it wakes up you better watch out,” said Brian Kuehl, executive director of Farmers for Free Trade, which is organizing the campaign.

The nonprofit group, which is backed by the American Farm Bureau Federation and major commodity groups like the National Pork Producers Council, is investing $2.5 million in the four-month campaign aimed at showcasing how Continue reading “Farm groups go on anti-tariff blitz after Trump offers trade aid”

Trump: U.S. ready to ‘do something’ about EU auto imports

President Donald Trump on Monday threatened Europe’s car exports ahead of European Commission President Jean-Claude Juncker’s visit to Washington later this week, saying the European Union has been “very tough” on the U.S.

“They’re coming in to see me Wednesday and we’ll see if we can work something out,” Trump said at a White House event celebrating American-made goods. “Otherwise, we’ll have to do something with respect to the millions of cars that they send in every year. Maybe we can work something out."

Trump is weighing a 20 percent tariff on imports of automobiles and auto parts under a law that allows the executive to impose tariffs and other trade restrictions if the Commerce Department determines that imports of certain goods threaten national security.

Trump has consistently targeted the EU for maintaining a 10 percent tariff on imported vehicles while the U.S. has a 2.5 Continue reading “Trump: U.S. ready to ‘do something’ about EU auto imports”

Kudlow: Chinese leader doesn’t want a trade deal

White House National Economic Council Director Larry Kudlow said Chinese President Xi Jinping is showing no signs of wanting to compromise on U.S. trade demands and said the onus is on Beijing to try to reach a deal.

“I don’t think President Xi at the moment has any intention of following through on the discussions we made, and I think the president is so dissatisfied with China on these so-called talks that he is keeping the pressure on, and I support that,” Kudlow said Wednesday morning at the Delivering Alpha conference.

Kudlow said China has not responded “at all” to U.S. demands that Beijing address the Trump administration’s accusations that China engages in widespread intellectual property theft and forced transfer of technology. The U.S. has already hit $34 billion worth of Chinese imports with tariffs and is considering penalties on an additional $200 billion worth of Chinese Continue reading “Kudlow: Chinese leader doesn’t want a trade deal”

Trump gets ready to slap China with investment restrictions, export controls

Round two of President Donald Trump’s trade assault on Beijing is expected by the end of this week, when the Treasury Department rolls out new restrictions on Chinese investment in the United States and on the technologies that can be sold to China.

After an internal debate, the administration appears to have settled on more aggressive restrictions favored by U.S. Trade Representative Robert Lighthizer and White House trade adviser Peter Navarro over a more conservative approach favored by Treasury Secretary Steven Mnuchin, two private-sector sources privy to the deliberations said.

Like the tariffs that Trump imposed on $50 billion in Chinese imports — and those he has threatened to impose on $400 billion more if Beijing retaliates — the new investment restrictions and export controls are intended to pressure China to stop unfair trade practices that threaten the United States’ technological leadership. Trump is expected to invoke his emergency Continue reading “Trump gets ready to slap China with investment restrictions, export controls”

Trump threatens tariff on European cars

President Donald Trump on Friday threatened to hit imports of European automobiles with a 20 percent tariff if Brussels doesn’t remove tariffs and other trade barriers.

“Based on the Tariffs and Trade Barriers long placed on the U.S. and it (sic) great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20 [percent] Tariff on all of their cars coming into the U.S. Build them here!“ Trump wrote in a tweet.

The president has become fixated on automotive trade, viewing it as a major irritant between the U.S. and its trading partners in Asia and Europe.

The threat comes after Trump directed the Commerce Department to launch an investigation into whether imports of foreign autos were a risk to U.S. national security and should be subject to tariffs or other Continue reading “Trump threatens tariff on European cars”

Hatch rips commerce secretary over Trump tariffs

Senate Finance Chairman Orrin Hatch Wednesday blasted the Trump administration’s steel and aluminum tariffs, arguing that they threaten to damage U.S. manufacturing and agriculture and “utterly fail” to address China’s overproduction.

“I just don’t see how the damage posed on all of these sectors could possibly advance our national security,” he said at the start of a hearing to grill Commerce Secretary Wilbur Ross on the administration‘s recent trade actions.

The Utah Republican also expressed outrage over a similar investigation by the administration into whether imports of automobiles threaten national security. He said he was “stunned“ to hear the administration launch the additional probe under Section 232 of the Trade Expansion Act of 1962.

“This investigation covers more than $200 billion worth of trade, four times larger than that under the steel and aluminum investigations combined,” he said.

“A car isn’t a can of soup, Mr. Secretary,” he added, Continue reading “Hatch rips commerce secretary over Trump tariffs”

White House: China has more to lose in trade fight

A top trade adviser to President Donald Trump said Tuesday that China has more to lose than the U.S. in an escalating trade conflict that threatens American businesses and farmers caught in the crossfire.

Following Trump’s decision Monday night to order tariffs on an additional $200 billion in Chinese imports — a move which Beijing pledged to respond to in kind — the administration’s stance is that the president’s latest actions may cause temporary pain but will reap larger benefits ahead.

“I understand that there is going to be concern about what the impact might be, both in the financial markets and the global economy,” White House trade adviser Peter Navarro told reporters during a press call. “But our view is that these actions are necessary to defend this country.”

“I assure you, this country is in good hands,” he added.

The call comes as industries and markets Continue reading “White House: China has more to lose in trade fight”

Trump could slap China with tariffs as soon as Friday

President Donald Trump is expected to impose tariffs on Chinese goods as soon as Friday or next week, according to two sources briefed on internal deliberations, a move that is sure to further inflame tensions and spark almost immediate retaliation from Beijing.

The administration on Friday is planning to publish a final list of Chinese goods that will take the hit.

The aggressive stance calls into question the future of talks between the two trade powers, which took a friendly turn in the weeks leading up to the North Korea summit as the U.S. sought China’s help. China was seen as playing a key role in getting North Korean leader Kim Jong Un to the table with Trump, who has consistently linked his trade demands to Beijing’s willingness to help on North Korea.

After the summit, Trump defended his personal friendship with Chinese President Xi Jinping and said he Continue reading “Trump could slap China with tariffs as soon as Friday”

North Korea gives China leverage in U.S. trade talks

U.S.-China trade talks have bounced between Washington and Beijing in recent weeks, but the real breakthrough could happen after President Donald Trump meets with North Korean leader Kim Jong Un in Singapore.

Trump has consistently linked his trade demands on China with its willingness to help put a check North Korea’s nuclear ambitions. And although Commerce Secretary Wilbur Ross returned from a trip to Beijing without any deals to announce, senior administration officials appear upbeat about the direction of the talks, according to one administration source.

“The flight back from Singapore goes right through China, so I wouldn’t be at all surprised” if Trump stops to meet with Chinese President Xi Jinping, said Scott Kennedy, a China expert at the Center on Strategic and International Studies.

“That personal interaction between the two does seem to be so critical, especially on this,” he added.

Trump’s closest advisers are still Continue reading “North Korea gives China leverage in U.S. trade talks”

Commerce: No deal with ZTE reached

The Trump administration has not yet reached a “definitive” deal that would roll back harsh sanctions on Chinese telecommunication company ZTE, a Commerce Department spokesman said.

“No definitive agreement has been signed by both parties,” the spokesman said in a statement. “We have no updates at this time."

The statement comes after Reuters reported that a deal in principle had been reached with the Chinese firm, backtracking from a decision in April to ban U.S. companies from doing any business with ZTE for seven years.

Last month, Commerce notified officials on Capitol Hill of a deal, which will instead have ZTE pay a bigger fine, hire American compliance officers and replace the firm’s current management team.

President Donald Trump appeared to confirm the outlines of the deal on Twitter last month when he said that he had shut down the company but "let it reopen" after a series Continue reading “Commerce: No deal with ZTE reached”

Kudlow: Trump wants to break NAFTA into 2 deals

President Donald Trump wants to end three-way talks on NAFTA and deal with Canada and Mexico separately, White House National Economic Council director Larry Kudlow said Tuesday.

“He is very seriously contemplating kind of a shift in the NAFTA negotiations. His preference now, and he asked me to convey this, is to actually negotiate with Mexico and Canada separately,” Kudlow said on Fox News. “He prefers bilateral negotiations and he‘s looking at two, much different countries.”

Kudlow added that the president “may be moving quickly toward these bilateral discussions“ but cautioned that Trump does not want to pull out of NAFTA.

“The president is not going to leave NAFTA, he‘s not going to withdraw from NAFTA. He’s just going to try a different approach,” Kudlow said.

Kudlow said the idea of pursuing two, separate negotiations was presented to Canada on Monday, but Canadian officials have not yet responded.

“Oftentimes, Continue reading “Kudlow: Trump wants to break NAFTA into 2 deals”