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Westlake Legal Group > Posts tagged "Customs (Tariff)" (Page 7)

What’s Really in the Trade Deal Trump Announced With China

Westlake Legal Group 00DC-CHINATRADE-01-facebookJumbo What’s Really in the Trade Deal Trump Announced With China Xi Jinping United States International Relations United States Economy Trump, Donald J Protectionism (Trade) International Trade and World Market Foreign Investments Customs (Tariff) Currency Agriculture and Farming

President Trump portrayed the “Phase 1” agreement he announced on Friday with China with typical fanfare, describing the pact as “massive” and “the largest contract” ever signed.

“We made a fantastic deal,” Mr. Trump said during remarks on Tuesday at the White House.

There are good reasons to be skeptical about those claims. The deal appears likely to benefit American farmers by increasing Chinese purchases of agricultural goods and gives some other businesses more access to the Chinese market. But the “agreement in principle” is limited in scope and exact details have yet to be put in writing — a process that has derailed negotiations with China in the past.

American officials said Friday that they would work with China on completing an initial agreement in the coming weeks, with hopes of signing a deal when Mr. Trump and President Xi Jinping attend a summit of global leaders in Chile in mid-November.

Here’s what we know so far about what the agreement might contain.

From Mr. Trump’s perspective, the centerpiece of the pact is a commitment by China to purchase $40 billion to $50 billion of American agricultural products per year. Administration officials said that target would be reached in the second year of the pact’s enactment.

That volume would be a huge increase over what China was purchasing before the start of the trade war. American farm exports to China peaked at around $25.5 billion in 2016, according to the American Farm Bureau, then dipped to $24.3 billion in 2017.

Since then, exports of soybeans, pork and other products have collapsed under pressure from the trade war. American farm exports to China fell to just $13.4 billion in 2018, and are on track for a similar total this year, according to the same data.

American officials have not specified which products would be purchased, or how they arrived at a $50 billion figure. But to many analysts, that level of exports seems hard to achieve. Mr. Trump himself acknowledged this on Saturday, saying in a tweet that “there is a question as to whether or not this much product can be produced.”

“Our farmers will figure it out. Thank you China!” the president added.

One factor that could sharply drive up China’s imports is its African swine fever epidemic. China has already lost about 40 percent of its hog herd to the sickness, increasing demand for foreign pork and other meats.

The $50 billion target may also include a generous estimate of how other parts of the agreement would affect sales. American officials said they had negotiated speedier food safety checks for imports into China and approvals for genetically modified products, both of which could bolster trade.

Geng Shuang, a Chinese foreign ministry spokesman, confirmed at a news conference Tuesday that China would speed up its purchases of American farm goods. “What the U.S. is saying is the actual situation, which is consistent with what we know,” he said.

From China’s perspective, the biggest win is a promise by Mr. Trump to cancel an Oct. 15 tariff increase, when taxes on $250 billion of Chinese goods were set to rise to 30 percent from 25 percent.

American officials could also cancel plans to impose a 15 percent tax on another roughly $150 billion of goods in December if things go well.

But that still leaves a huge part of tariffs intact. Since the start of the trade war, the United States has imposed tariffs on more than $360 billion of Chinese products, while China has placed tariffs on roughly $100 billion of American imports.

Trump administration officials said that China had pledged to open its markets to American financial services firms, and that banks and credit card companies would be the primary beneficiaries. But few details have been offered and many of these changes are already in the works for other countries.

Under heavy American pressure, China has announced a series of moves over the past two years to open up its banking and other financial services sectors, allowing higher levels of foreign ownership or even removing ownership caps entirely. But China is unilaterally opening up its financial services sector to businesses from all over the world, not just from the United States.

Some trade experts say the gains to American companies may be limited, pointing out that China has delayed opening its markets for so long that Chinese companies already dominate the financial sector.

The White House initially began the trade war over concerns about China’s treatment of American intellectual property, including what the administration called outright theft of technology and trade secrets.

Mr. Trump said Friday that some measures concerning intellectual property and technology transfer would be included in the “Phase 1” agreement, with additional protections included in later phases. Officials have given few details, though people briefed on the negotiations said the measures include stronger protection for copyrights and patents.

Chinese negotiators have pointed to a foreign investment law passed this year as evidence that they have resolved some of the Trump administration’s concerns. That law contained assurances that China would even the playing field for foreign and domestic businesses, but it had few details. The crucial enforcement regulations are not scheduled to be issued until January.

The agreement also includes new guidelines for how China manages its currency — provisions aimed at resolving American complaints that China has intentionally weakened its currency to make its exports cheaper.

People briefed on the agreement said the provisions looked similar to the currency chapter in the Trump administration’s revised North American Free Trade Agreement. It also closely resembles a pledge that China gave when the Group of 20 nations’ finance ministers gathered in Shanghai in February 2016. Both texts call for countries not to devalue their currencies to achieve a trade advantage and to inform each other if they intervene by buying and selling large amounts of currency.

Some experts question whether requiring the Chinese government to disclose more data will do much to curb intervention. Beijing could respond by doing more of its intervention almost invisibly through state-owned banks, and there are some signs in Chinese data it has already begun doing so.

“The more disclosure there is of China’s formal intervention, the more China is likely to rely on shadow intervention,” said Brad W. Setser, a senior fellow at the Council on Foreign Relations and a former Obama administration Treasury official.

A big question has been whether China will stick to the promises it makes. Robert Lighthizer, Mr. Trump’s top trade negotiator, said the pact would set up “a very elaborate consultation process” with “escalation in various areas so that difficulties can be resolved.” But he added that the details were still being worked out.

American officials have emphasized that their current tariffs, and the threat of future ones, will act as an enforcement mechanism. If China violates the agreement, the Trump administration could move forward with additional tariffs on Chinese products. And if China follows through on its promises, some of Mr. Trump’s existing tariffs could be rolled back.

No agreement has yet been signed and some of it remains unwritten. Mr. Trump said Friday that the deal was “subject to getting everything papered,” but added he did not foresee a problem with that process.

But the United States and China have reached trade truces before — in Buenos Aires last December, and in Osaka, Japan in June — only to see them quickly crumble. That has left some critics hesitant.

“A deal that isn’t written down isn’t a real deal,” Senator Ron Wyden, Democrat of Oregon, said in a statement.

Longstanding concerns about Chinese economic policies that disadvantage American companies do not appear to have been addressed.

These policies, which are often called “structural issues,” include China’s generous subsidies to certain companies, the outsized role of the government in the economy and its systematic discrimination against foreign firms. In particular, the Trump administration has often criticized Beijing’s ambitious plan to dominate cutting-edge technologies like advanced microchips, artificial intelligence and electric cars, called Made in China 2025.

China has fiercely resisted any American demands that it sees as efforts to interfere with how it runs its economy. Negotiators have discussed some measures, like requiring China to disclose more information about how it subsidizes its industries, and people familiar with the talks say such talks will continue. But American officials made no mention of these issues with regard to the initial agreement.

The agreement also excludes provisions related to the manufacturing sector. And it appears to allow China to retain, for now, its high tariffs on American-made cars.

That is notable, because nonagricultural goods — including cars, car parts and aircraft — account for both the bulk of American exports to China, as well as the very large American trade deficit with China that Mr. Trump has criticized.

Mr. Trump tweeted on Saturday that the deal would include $16 billion to $20 billion in purchases of Boeing planes, but American officials have not shared any other details.

Officials have made no mention of a point that is as crucial for American competitiveness as it is hard to resolve: China’s treatment of data.

Chinese laws block multinational companies from moving much of the data they gather on Chinese customers out of the country, meaning that many technology and retail companies must silo off their China business from the rest of their global operations. Chinese officials insist this is a matter of national security and have signaled they are unlikely to yield on this point.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Tariffs Won’t Stop Turkey’s Invasion of Syria, Analysts Warn

Westlake Legal Group 15turkeyecon-sub-facebookJumbo Tariffs Won’t Stop Turkey’s Invasion of Syria, Analysts Warn Volkswagen AG Turkey Trump, Donald J Steel and Iron International Trade and World Market Economic Conditions and Trends Customs (Tariff)

FRANKFURT — Doubling tariffs on Turkish steel imports, as President Trump said he would do Monday, might make investors nervous. But it would take a much broader attack on the economy of Turkey to restrain its tanks from moving deeper into Syria, analysts say.

The reason is simple: Tariffs approved last year by White House officials have already gutted Turkey’s exports to the United States. They can hardly go any lower.

Mr. Trump’s threat to cut off talks on what he called a $100 billion trade deal with Turkey isn’t expected to have much of an effect, either. The figure was, to put it mildly, aspirational. Current two-way trade between Turkey and the United States is only about $21 billion.

Because neither American nor Turkish officials had detailed how they would more than quadruple trade, “analysts did not expect any immediate favorable impact on the Turkish economy,” said Selva Demiralp, economics professor at Koc University in Istanbul. “Thus, the withdrawal of this deal should not have much of an impact, either.”

The measures announced by the president are unlikely to destroy the Turkish economy, as he has warned, but plenty of other existing threats could. Economists have long regarded Turkey as a bubble waiting to burst because of government mismanagement, an inflated building boom and a shaky currency. Turkey’s military incursion into Kurdish-controlled northern Syria has unsettled investors who already had concerns about the region’s stability.

Mr. Trump’s tariff threat does give investors yet another reason to be apprehensive.

“The sanctions are ineffective, and they know they are ineffective,” said Sebastien Galy, senior macro strategist at Nordea Asset Management in Luxembourg. But he added: “Tariffs frighten both businesses and consumers. They save more and invest less because they are afraid of the future. The impact on expectations can be quite considerable.”

If the president really wanted to hurt Mr. Erdogan, Mr. Galy said, he would take steps to make it difficult for Turkish commercial banks and the central bank to conduct transactions in dollars.

The White House also said Monday that it would impose sanctions on several top officials in Ankara, including the defense and energy ministers and their ministries, essentially severing them from the global financial system. Mr. Trump’s executive order allows the sanctions to be expanded to other officials or government entities.

But comprehensive financial sanctions against the Turkish government would be seen as extremely hostile considering Turkey is still nominally a NATO ally.

Turmoil in Turkey has already caused the German carmaker Volkswagen to reconsider a big investment there. The company said Tuesday that it had postponed plans to build a $1.7 billion factory in the western part of the country that would employ 4,000 people and produce 300,000 Volkswagen and Skoda vehicles a year.

“We are monitoring the current situation with great concern,” Volkswagen said in a statement, without elaborating.

A nightmare for the Turkish government, led by Recep Tayyip Erdogan, would be a plunge in the value of the lira. That would cause the prices of imported goods to spike, fuel inflation inside Turkey and undermine popular support for Mr. Erdogan.

On Tuesday, the lira slipped about 0.6 percent versus the dollar, a relatively small amount for an often volatile currency. Analysts assume that the Turkish central bank and state-controlled commercial banks are using their dollar reserves to buy liras in the market and prevent a steeper decline.

Eventually, though, the central bank will run out of dollars. The longer Turkey continues fighting in Syria, the greater the stress on the Turkish currency, analysts say.

“History suggests that geopolitical tensions, especially involving the U.S., are not kind to the lira,” analysts at Oxford Economics said in a note to clients on Tuesday.

The Turkish steel industry is feeling plenty of pain without any help from the United States. Production is down 10 percent this year, said Ugur Dalbeler, a member of the board of the Turkish Steel Exporters Association and chief executive of Colakoglu Metalurji, a steel producer based in Istanbul.

“It is tough,” Mr. Dalbeler said by phone from Mexico, where he was attending an industry gathering.

Turkish steel makers have been slammed from numerous directions. Customers in the Middle East have suffered from tensions in the region. Europe has restricted steel imports in response to a glut in global supply. Demand from Japan, another important customer, has slumped. United States tariffs are, by comparison, a small problem.

Mr. Dalbeler expressed anger that the tariffs, originally justified on national security grounds, were being used to put pressure on Turkey.

“Doubling tariffs again proves that the president is not using his authority for national security,” he said. “He’s using it against Turkey politically.”

The United States imposed tariffs of 50 percent on Turkish steel last year amid a dispute over a detained American pastor. The Trump administration cut the tariffs to 25 percent in May, to the same level as tariffs imposed on most other foreign producers. But the damage was already done.

From January through August, imports of Turkish steel by the United States plunged 80 percent to 136,000 tons, “which is nothing, basically, on a global scale,” said Alex Griffiths, an analyst at Wood Mackenzie, a research firm.

“Exports were already to the level where I wouldn’t consider the United States to be a major export destination,” Mr. Griffiths said.

Mr. Trump mentioned the $100 billion trade deal with Turkey during a news conference with Mr. Erdogan in Japan in June. After Mr. Erdogan said the goal was to expand trade to $75 billion a year, Mr. Trump said that was too low.

“I think the $75 billion is small,” he said, according to an official transcript. “I think it’s going to be well over $100 billion soon.”

In September, Commerce Secretary Wilbur Ross acknowledged during a visit to Ankara that “$100 billion sounds like a lot.” But he added that it would be less than 2 percent of the United States’ total trade.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Tariffs Won’t Stop Turkey’s Invasion of Syria, Analysts Warn

Westlake Legal Group 15turkeyecon-sub-facebookJumbo Tariffs Won’t Stop Turkey’s Invasion of Syria, Analysts Warn Volkswagen AG Turkey Trump, Donald J Steel and Iron International Trade and World Market Economic Conditions and Trends Customs (Tariff)

FRANKFURT — Doubling tariffs on Turkish steel imports, as President Trump said he would do Monday, might make investors nervous. But it would take a much broader attack on the economy of Turkey to restrain its tanks from moving deeper into Syria, analysts say.

The reason is simple: Tariffs approved last year by White House officials have already gutted Turkey’s exports to the United States. They can hardly go any lower.

Mr. Trump’s threat to cut off talks on what he called a $100 billion trade deal with Turkey isn’t expected to have much of an effect, either. The figure was, to put it mildly, aspirational. Current two-way trade between Turkey and the United States is only about $21 billion.

Because neither American nor Turkish officials had detailed how they would more than quadruple trade, “analysts did not expect any immediate favorable impact on the Turkish economy,” said Selva Demiralp, economics professor at Koc University in Istanbul. “Thus, the withdrawal of this deal should not have much of an impact, either.”

The measures announced by the president are unlikely to destroy the Turkish economy, as he has warned, but plenty of other existing threats could. Economists have long regarded Turkey as a bubble waiting to burst because of government mismanagement, an inflated building boom and a shaky currency. Turkey’s military incursion into Kurdish-controlled northern Syria has unsettled investors who already had concerns about the region’s stability.

Mr. Trump’s tariff threat does give investors yet another reason to be apprehensive.

“The sanctions are ineffective, and they know they are ineffective,” said Sebastien Galy, senior macro strategist at Nordea Asset Management in Luxembourg. But he added: “Tariffs frighten both businesses and consumers. They save more and invest less because they are afraid of the future. The impact on expectations can be quite considerable.”

If the president really wanted to hurt Mr. Erdogan, Mr. Galy said, he would take steps to make it difficult for Turkish commercial banks and the central bank to conduct transactions in dollars.

The White House also said Monday that it would impose sanctions on several top officials in Ankara, including the defense and energy ministers and their ministries, essentially severing them from the global financial system. Mr. Trump’s executive order allows the sanctions to be expanded to other officials or government entities.

But comprehensive financial sanctions against the Turkish government would be seen as extremely hostile considering Turkey is still nominally a NATO ally.

Turmoil in Turkey has already caused the German carmaker Volkswagen to reconsider a big investment there. The company said Tuesday that it had postponed plans to build a $1.7 billion factory in the western part of the country that would employ 4,000 people and produce 300,000 Volkswagen and Skoda vehicles a year.

“We are monitoring the current situation with great concern,” Volkswagen said in a statement, without elaborating.

A nightmare for the Turkish government, led by Recep Tayyip Erdogan, would be a plunge in the value of the lira. That would cause the prices of imported goods to spike, fuel inflation inside Turkey and undermine popular support for Mr. Erdogan.

On Tuesday, the lira slipped about 0.6 percent versus the dollar, a relatively small amount for an often volatile currency. Analysts assume that the Turkish central bank and state-controlled commercial banks are using their dollar reserves to buy liras in the market and prevent a steeper decline.

Eventually, though, the central bank will run out of dollars. The longer Turkey continues fighting in Syria, the greater the stress on the Turkish currency, analysts say.

“History suggests that geopolitical tensions, especially involving the U.S., are not kind to the lira,” analysts at Oxford Economics said in a note to clients on Tuesday.

The Turkish steel industry is feeling plenty of pain without any help from the United States. Production is down 10 percent this year, said Ugur Dalbeler, a member of the board of the Turkish Steel Exporters Association and chief executive of Colakoglu Metalurji, a steel producer based in Istanbul.

“It is tough,” Mr. Dalbeler said by phone from Mexico, where he was attending an industry gathering.

Turkish steel makers have been slammed from numerous directions. Customers in the Middle East have suffered from tensions in the region. Europe has restricted steel imports in response to a glut in global supply. Demand from Japan, another important customer, has slumped. United States tariffs are, by comparison, a small problem.

Mr. Dalbeler expressed anger that the tariffs, originally justified on national security grounds, were being used to put pressure on Turkey.

“Doubling tariffs again proves that the president is not using his authority for national security,” he said. “He’s using it against Turkey politically.”

The United States imposed tariffs of 50 percent on Turkish steel last year amid a dispute over a detained American pastor. The Trump administration cut the tariffs to 25 percent in May, to the same level as tariffs imposed on most other foreign producers. But the damage was already done.

From January through August, imports of Turkish steel by the United States plunged 80 percent to 136,000 tons, “which is nothing, basically, on a global scale,” said Alex Griffiths, an analyst at Wood Mackenzie, a research firm.

“Exports were already to the level where I wouldn’t consider the United States to be a major export destination,” Mr. Griffiths said.

Mr. Trump mentioned the $100 billion trade deal with Turkey during a news conference with Mr. Erdogan in Japan in June. After Mr. Erdogan said the goal was to expand trade to $75 billion a year, Mr. Trump said that was too low.

“I think the $75 billion is small,” he said, according to an official transcript. “I think it’s going to be well over $100 billion soon.”

In September, Commerce Secretary Wilbur Ross acknowledged during a visit to Ankara that “$100 billion sounds like a lot.” But he added that it would be less than 2 percent of the United States’ total trade.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

For Both Trump and Xi, Trade Deal Comes Amid Growing Pressures at Home

Westlake Legal Group 12dc-tradechina-sub1-facebookJumbo-v2 For Both Trump and Xi, Trade Deal Comes Amid Growing Pressures at Home Xi Jinping United States Politics and Government United States International Relations United States Economy United States Trump, Donald J International Trade and World Market Customs (Tariff) China Agriculture and Farming

BEIJING — The interim trade pact announced Friday between the United States and China came together as both country’s leaders faced mounting political pressures and rising economic worries at home.

For months, President Trump has increased pressure on Beijing with higher tariffs on Chinese goods, insisting on a comprehensive trade deal that addressed a long list of concerns about how China manages its economy. And for months, senior Chinese officials met Mr. Trump’s escalating tariffs with their own as they remained equally emphatic that any deal must completely erase Mr. Trump’s tariffs.

On Friday, both sides decided that half a deal was better than none, consenting to a preliminary agreement that would involve China buying more American farm products and taking several other limited steps to open its economy in exchange for the United States foregoing its planned tariff increase next week.

The truce will help calm a trade fight that has taken a significant toll on the world’s two largest economies and threatened to further slow global growth at a precarious moment. Perhaps more important, it will help both Mr. Trump and his Chinese counterpart, Xi Jinping, secure a win in the midst of domestic tumult.

Mr. Xi faces violent street protests in Hong Kong, as well as sharply rising grocery prices that could be brought down with imports of American food. Mr. Trump is eager to change the conversation away from an impeachment inquiry and a rapidly widening series of questions about his team’s involvement in Ukraine. And both leaders are confronting a steady drip of negative economic news, as the trade war weighs on manufacturing and business investment.

“It’s pretty clear that the U.S. and China have fought this trade war to a stalemate,” said Edward Alden, a senior fellow at the Council on Foreign Relations. “At the moment, neither side sees any real advantage in escalation. The president wants an off-ramp for electoral reasons, and I think the Chinese want an off-ramp primarily for economic reasons.”

Mr. Trump and his advisers have denied that the trade war has caused any economic damage in the United States, instead blaming a strong dollar as well as the Federal Reserve, which has already begun cutting interest rates. But the evidence is becoming harder to ignore. On Tuesday, the International Monetary Fund warned that the trade war with China could cost the global economy around $700 billion by 2020 — a loss equivalent to the size of Switzerland’s entire economy.

Top Fed officials have also warned of economic risks from Mr. Trump’s trade war and cautioned that while the Fed will do what it can to keep the expansion going, its powers are limited. And stock markets, whose performance Mr. Trump has pointed to in the past as a barometer of his success as president, have been whipsawed by every escalation.

“Every time there’s a little bad news, the market would go down incredibly,” Mr. Trump said on Friday as he announced the deal. “Every time there was a little bit of good news, the market would go up incredibly.”

With Mr. Trump’s re-election campaign approaching, he and his advisers are increasingly conscious of the need to limit any economic damage, particularly among key political constituencies like farmers, who have suffered the most.

The American farm economy has stumbled into recession, hurt by a sharp drop-off in sales to China, among the largest export markets for agricultural goods like soybeans, pork and corn. While the administration has tried to blunt the pain with two rounds of financial assistance, farmers have increasingly pleaded with the White House to end the trade war, saying the handouts are not enough to make up for the lost sales.

That pain was set to get worse next week. Until Friday’s truce, Mr. Trump had planned to increase tariffs on $250 billion worth of goods to 30 percent from 25 percent, a hike that would likely have been met with further retaliation by China and been particularly burdensome for consumers and businesses going into the holiday season.

Mr. Trump said on Friday that China has agreed to buy $40 billion to $50 billion worth of American farm goods annually, after scaling up over a period of two years. He compared the figures to annual Chinese purchases before the trade war, which were about $24 billion.

“The deal I just made with China is, by far, the greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country,” Mr. Trump tweeted on Saturday morning. “In fact, there is a question as to whether or not this much product can be produced? Our farmers will figure it out. Thank you China!”

The compromise is even more timely for Mr. Xi. Sharply rising food prices have become a national issue in China. A lethal epidemic among the country’s pigs, with mortality as high as what people in Europe faced during the Black Death of the mid-14th century, has sent prices skyward for pork as well as for alternatives like beef and lamb.

As the Chinese public has begun asking, “Where’s the beef?”, China’s trade negotiators suddenly have an answer: It can come from the United States, along with a lot of pork, soybeans and other food.

But while the agreement will benefit certain industries, it will likely not reverse a trend toward greater economic divisions between the two countries.

If the understanding on Friday holds together, it would allow the United States to retain tariffs imposed over the past 16 months on a wide array of Chinese industries. That could prompt many companies to continue efforts to shift production away from China, possibly to the United States but more likely to American allies in Southeast Asia.

Eswar Prasad, a professor of trade policy at Cornell University and a senior fellow at the Brookings Institution, said the agreement will defer new sanctions but do little to resolve the major underlying sources of friction between the two countries.

“It’s hard to see this really amounting to an actual de-escalation of tensions or anything that businesses can take to the bank,” Mr. Prasad said.

Mr. Trump has often criticized past administrations for ceding too much to China, and negotiating endlessly with limited results. China experts say that the many months of painful standoff have perhaps shown the limits to Mr. Trump’s winner-take-all approach.

“We can’t get Cuba to do what we want,” said Elizabeth C. Economy, the director for Asia studies at the Council on Foreign Relations. “I don’t know why we could get China to do what we want.”

Negotiators say they will continue discussing other issues once the deal is signed. But the compromise does signal a shift in strategy for officials in the Trump administration, who had previously said they would settle for no less than a comprehensive pact that addressed so-called “structural issues.”

“What we want is fair trade,” Robert Lighthizer, Mr. Trump’s top negotiator, told Congress in February. “That requires structural change.”

American negotiators have talked about curbing various Chinese industrial policies that they view as harmful to American businesses, including China’s generous subsidies to its state-owned companies, policies that coerce technology away from multinational firms and a pernicious history of cybertheft.

But while the agreement includes some new protections on intellectual property, greater access for financial services companies and guidelines as to how China manages its currency, it does not appear to address several of these deeper concerns.

In a statement, the U.S.-China Business Council, which represents American companies that do business in China, said it hoped the tentative agreement would restore sufficient confidence to allow negotiators to tackle other issues, including “market-distorting subsidies for state-owned enterprises and equal treatment for U.S. and other foreign companies.”

Whether China will agree to deeper concessions is not guaranteed, particularly given Mr. Xi’s political sensitivities at home. Those crises have come at a bad time for Mr. Xi in terms of China’s political calendar.

In the next three weeks, Mr. Xi will face a long-awaited session of the 204-member Central Committee of the Chinese Communist Party. The committee, which has not gathered since February of last year, holds enormous power in China and has authority to change the country’s leaders.

While Mr. Xi’s political dominance seems secure, he appears to be facing renewed pressure to share some of that power. His colleagues, particularly Premier Li Keqiang, who oversees government ministries while Mr. Xi oversees the Communist Party, have become slightly more visible lately, although still in Mr. Xi’s shadow.

As the Central Committee session approaches, Mr. Xi has taken personal responsibility to an unusual degree for both the status of China’s relationship with the United States as well as the general health of the Chinese economy. To handle the trade talks with the United States, Mr. Xi chose a Communist Party commission that he personally oversees, and put one of his closest advisers, Vice Premier Liu He, in charge of it.

“In the current dilemma, he to some extent needs to answer to the Central Committee members who attend the meeting,” wrote Deng Yuwen, a former editor at an influential Communist Party journal in Beijing, in an opinion column on Thursday.

The possibility that the deal announced on Friday falls apart after the Central Committee meets remains a real one. The Chinese appear to be hedging their bets. Chinese state media did not describe the arrangement on Saturday as an actual deal. Mr. Trump himself was quick to say on Friday that legal details of the deal had not yet been worked out and committed to paper.

China and the United States have reached two previous truces in their trade war — the first in December in Buenos Aires and the second in June in Osaka, Japan. The Buenos Aires accord lasted five months. The Osaka accord crumbled in a month.

“Anything can happen,” Mr. Trump said Friday when asked if the deal could fall apart before the two sides plan to sign it, at a summit of global leaders in Chile next month. “That can happen. I don’t think it will. I think we know each other very well.”

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Trump Reaches ‘Phase One’ Deal With China and Delays Planned Tariffs

Westlake Legal Group 11dc-trade-sub1-facebookJumbo Trump Reaches ‘Phase One’ Deal With China and Delays Planned Tariffs United States Politics and Government United States International Relations United States Economy International Trade and World Market Economic Conditions and Trends Customs (Tariff)

WASHINGTON — President Trump said Friday that he had reached a “substantial” deal with China that will forestall a planned tariff increase on Oct. 15, providing a temporary détente in a yearlong trade war.

Mr. Trump, speaking from the Oval Office, said the two sides had reached a verbal “phase one” agreement that would take several weeks to write and could be signed by both sides in November.

The initial deal, which Mr. Trump said had been reached “in principle” would involve China buying $40 billion to $50 billion worth of American agricultural products, along with agreeing to guidelines on how it manages its currency. The agreement also includes some provisions on intellectual property, including forced technology transfer and would give American financial services firms more access to China’s market, the president said.

In exchange, the United States will not go ahead with plans to raise tariffs on $250 billion worth of Chinese goods to 30 percent next week. But the president has not made a final decision on whether to increase tariffs further on Dec. 15, as he has threatened.

Mr. Trump, who just weeks ago said he was looking for a “complete” China deal, said that the two sides would now break the agreement into phases.

“It’s such a big deal that doing it in sections, in phases, is really better,” Mr. Trump said during a meeting with Liu He, China’s vice premier. “So you’ll either have two phases or three phases.”

The first phase could be signed when Mr. Trump appears alongside his Chinese counterpart at a meeting of global leaders in Santiago, Chile, in November. The next phase would begin soon after, Mr. Trump said.

Despite the announcement, the deal has not been finalized and Steven Mnuchin, the Treasury secretary, said that more work remained.

“We have a fundamental agreement on the key issues,” Mr. Mnuchin said. “But there is a significant amount of work to do.”

The agreement, which came during the 13th round of negotiations, will help defuse a prolonged trade fight that has begun inflicting pain on the global economy and was set to escalate next week. In his quest to force China to acquiesce to America’s terms, Mr. Trump has already taxed $360 billion worth of Chinese products and was poised to tariff nearly every laptop, dresser and toy that China sells to the United States before year-end.

Stock and commodity prices climbed as investors anticipated a trade agreement that could help resolve economic concerns about ongoing damage from the dispute.

The S&P 500 rose 1.1 percent. The tech-heavy Nasdaq composite index rose 1.3 percent. The Russell 2000 index of small capitalization stocks, typically viewed as closely tied to the health of the American domestic economy rose 1.8 percent.

Crude oil prices rose as did prices for key industrial metals such as copper and iron ore, often looked to as a barometer of the outlook for China’s large industrial economy.

But the deal is far from the type of comprehensive agreement Mr. Trump has been pushing for and leaves many of the administration’s biggest concerns about China’s economic practices unresolved. Although exact terms of the agreement are still under discussion, the details Mr. Trump announced include many of the concessions that China has previously floated, including purchases of agricultural products and limits on Beijing devaluing its currency to gain a competitive advantage.

And it does not appear to address some of the thorniest issues that the two countries have been grappling over.

Mr. Mnuchin said on Friday that the United States would decide whether to rescind the designation of China as a currency manipulator in a future phase of negotiations.

In August, the Treasury Department formally designated China a currency manipulator for the first time since 1994 at the direction of Mr. Trump. The largely symbolic move came amid frustration among American officials that China was counteracting Mr. Trump’s tariffs by devaluing the renminbi.

And Robert Lighthizer, Mr. Trump’s top trade negotiator, said the deal did not resolve the fate of Chinese telecom giant Huawei, which has been placed on a United States blacklist, much to China’s dismay.

“In this agreement we’re not dealing specifically with Huawei. It’s not part of this agreement. That’s a separate process,” he said.

Still, any pause in future tariff increases and reduction in trade tensions will provide welcome relief to businesses, farmers, investors and others who have suffered financially from a bitter trade dispute that has dragged on for more than a year.

Mr. Lighthizer said that the deal would require China to make structural changes that would allow more American farm goods to flow there.

“It will be much easier now for American farmers to be able to ship to China,” he said. “And we’ve made some changes on our side too that will help the Chinese.”

Mr. Mnuchin said the United States and China had reached “almost a complete agreement” on both the currency issues, and China’s moves to open up to financial services firms.

“The banks and all of the financial services companies will be very, very happy with what we’ve been able to get,” Mr. Trump said, adding that the pact would be a “tremendous thing for banks and financial services companies.”

The stakes for an agreement were high with the trade war set to worsen if the two sides did not made progress and some of Mr. Trump’s biggest political constituencies — including farmers and small businesses — in the cross hairs. In addition to the October tariff increase, Mr. Trump had planned to impose another round of levies in December, at which point the United States would have taxed nearly every Chinese import.

Those additional tariffs have prompted concern from farmers and businesses, who say the levies Mr. Trump has already placed on more than $360 billion of Chinese goods are weighing on sales and investment. While the president and his advisers maintain that the trade war is having a limited impact on the economy, they have admitted that these tariffs could impact American consumers as the holiday season approaches.

Mr. Trump’s defenders say China’s concessions will generate positive momentum for future talks and result in more business for farmers and manufacturers as they continue to press China for a comprehensive pact to correct longstanding economic abuses. Critics say the move will go only partway toward resolving a crisis of the president’s own making, and that the trade war will continue to inflict pain across the global economy.

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Trump to Meet Chinese Envoy Amid Hopes of Trade War Truce

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WASHINGTON — President Trump will meet with China’s top trade envoy at the White House Friday afternoon amid growing expectations that the United States could soon announce a trade truce that would help defuse tensions with China.

After months of the United States pushing China for a comprehensive trade deal, negotiators now appear to be focused on securing a more limited agreement that would help alleviate some of the economic pain that the trade war is inflicting across the global economy.

Stocks rose Friday, in a third straight day of gains that has lifted the S&P 500 more than 2.5 percent as investors have anticipated progress in the talks, which began on Thursday. On Friday, the index was up more than 1.5 percent in early trading, with trade-sensitive sectors like semiconductor makers faring particularly well.

Negotiators were set to continue talks on Friday morning, but people familiar with the discussions said the two sides were weighing an agreement that would have China buy more American agricultural goods and limit its currency intervention, among other potential provisions. In exchange, the United States may agree not to go ahead with a plan to raise tariffs to 30 percent on $250 billion worth of goods on Oct. 15.

American officials have emphasized that the final decision over whether to agree to an “early harvest” agreement will rest with Mr. Trump. But with the president’s domestic problems mounting around an impeachment inquiry and with another painful tariff increase set to go into effect, Mr. Trump could be eager to announce that China has agreed to even a few of America’s demands.

On Friday, Mr. Trump continued to suggest he was more open to a deal than he has seemed in the past. “Good things are happening at China Trade Talk Meeting,” he said in a tweet. “Warmer feelings than in recent past.”

Such a move would constitute a compromise by the American team, which has insisted they are pushing for a comprehensive trade deal to correct longstanding problems with China’s economy, including a requirement that American companies hand over trade secrets and China’s subsidization of state-owned firms.

Chinese officials have expressed willingness to update some intellectual property protections, open their automotive and financial markets to American companies, increase their purchases of American agricultural products, and take other steps. However, they have resisted the Trump administration’s demands to make more significant changes to structural issues they say are key to managing their economy and protecting national security.

But pressure is growing to at least pause the trade war, which is set to worsen if the two sides do not make progress. In addition to the October tariff increase, Mr. Trump plans to impose another round of levies in December, at which point the United States will tax nearly every product China exports to America. That has prompted concern from farmers and businesses, who say the tariffs are weighing on sales and investment. While the president and his advisers maintain that the trade war is having a limited impact on the economy, they have admitted that these tariffs could impact American consumers as the holiday season approaches.

Business groups have welcomed the idea of announcing an agreement that would help to cool tensions that have spiraled as the Trump administration has placed tariffs on more than $360 billion of Chinese products, and China has retaliated with levies of its own.

On Thursday, a U.S. Chamber of Commerce official who had recently met with both negotiating teams said he was hopeful that the countries would announce a deal that would set rules around how China manages its currency and prevent Mr. Trump’s planned tariff increase from going into effect next week.

Myron Brilliant, the executive vice president and head of international affairs at the Chamber of Commerce, said that the two sides might announce a more comprehensive pact that strengthened China’s protections for intellectual property and further opened markets like financial services and automobiles to American companies.

The Trump administration could also contemplate removing the threat of additional tariffs that are scheduled to be imposed in December or roll back some of the tariffs it has already levied on more than $360 billion of Chinese goods based on the package of offers brought by the Chinese negotiating team, he said.

Officials from both sides have sounded relatively optimistic headed into this week’s talks. But Mr. Trump’s penchant for keeping negotiating partners guessing, and the on-again, off-again history of the trade war, has continued to cast uncertainty over the gathering. The countries appeared on the cusp of an agreement in April, only to have the deal fall apart and result in an escalation that has resulted in even more tariffs on Chinese and American goods.

Mr. Trump and the Chinese vice premier, Liu He, will meet in the Oval Office at 2:45 p.m.

Lower-level negotiations between the countries began in Washington on Monday. On Thursday, Robert Lighthizer, Mr. Trump’s top trade negotiator, and Treasury Secretary Steven Mnuchin met with the for negotiations that dragged on late into the day.

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China Trade Talks Restart as White House Explores Escalation Options

Westlake Legal Group merlin_159733326_365ee0f3-4455-4e35-ac0d-5d771ddbe5bc-facebookJumbo China Trade Talks Restart as White House Explores Escalation Options United States Politics and Government United States International Relations United States Economy Trump, Donald J Securities and Exchange Commission Regulation and Deregulation of Industry Pillsbury, Michael (1945- ) Kudlow, Lawrence A International Trade and World Market Embargoes and Sanctions Economic Conditions and Trends Customs (Tariff) China

WASHINGTON — American and Chinese officials met for the 13th round of trade negotiations on Thursday amid growing expectations of a limited deal that could ease tensions and address some of President Trump’s concerns about China’s economic practices.

“We had a very, very good negotiation with China,” Mr. Trump said on Thursday afternoon, adding that the two sides would continue discussions on Friday. “It’s going very well.”

But administration officials are separately weighing options that could inflict additional economic pain on Beijing as the United States continues looking for ways to force China to change longstanding rules that have put American companies at a disadvantage.

The ideas under consideration would move the White House’s negotiating tool of choice beyond tariffs toward limiting China’s access to American capital markets and imposing greater scrutiny on its companies, according to people familiar with the discussions.

Administration officials, including members of the National Security Council, have begun pressing the Securities and Exchange Commission to increase scrutiny of Chinese firms. They are also looking for ways to reduce the exposure of American retirement funds to certain Chinese companies.

Many of the efforts have been proceeding independently from the trade talks and are fueled by longer-term considerations of China’s economic and security threats. Some White House advisers now view the escalation options as an additional lever to force China to make the kinds of deep economic concessions that have so far proved elusive in the talks, which have dragged on for more than a year.

On Thursday, Treasury Secretary Steven Mnuchin and Robert Lighthizer, Mr. Trump’s top trade negotiator, greeted the Chinese vice premier, Liu He, on the steps of the Office of the United States Trade Representative. The meetings stretched into the afternoon, and at one point a black S.U.V. was seen delivering large brown bags from Clyde’s, a Washington restaurant, for a working lunch.

“Big day of negotiations with China,” Mr. Trump wrote on Twitter on Thursday morning. “They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House.”

A U.S. Chamber of Commerce official briefed by both negotiating teams said that the United States and China could announce a limited trade agreement this week that would prevent Mr. Trump’s planned tariff increase from going into effect this month and set rules around how China manages its currency.

Myron Brilliant, the executive vice president and head of international affairs at the Chamber of Commerce, said that a more comprehensive pact could still be announced but that the scope of the deal would depend on what Chinese negotiators offered. The Trump administration could also contemplate removing the threat of additional tariffs that are scheduled to be imposed in December or roll back some of the tariffs it has already levied on more than $360 billion of Chinese goods based on what the Chinese negotiating team offers, he said.

There have been some recent signs of accommodation between the two countries in recent weeks. China has resumed purchases of American agricultural goods. And in what is likely to be viewed as a gesture of good will by the Chinese, the Trump administration plans to approve licenses soon that will allow some companies to sell nonsensitive goods to the Chinese telecom provider Huawei, which has been blacklisted from buying American products.

But China has resisted many of the administration’s demands to make more transformative changes to the way it runs its economy. Chinese officials appear unlikely to agree to the administration’s longstanding demands that Beijing limit its subsidies to Chinese firms, change its policies surrounding the treatment of data or make other structural changes, people familiar with the negotiations said.

The potential for such a limited agreement has fueled private deliberations within the White House on options for escalating economic pressure on China.

Officials have held meetings in recent weeks to consider options if the current round of negotiations fails to address the administration’s primary concerns. Mr. Trump’s top economic advisers have publicly played down the discussions, which have centered on tightening scrutiny of Chinese companies listed on American stock exchanges and limiting the direct exposure of government-run retirement funds to China.

Larry Kudlow, the director of the National Economic Council, acknowledged on Tuesday that the administration was looking for ways to protect Americans who were investing in Chinese companies.

“We’ve opened up a study group to take a look at it,” Mr. Kudlow said on the Fox Business Network.

But the options under consideration go further than that. According to a memo circulated within the White House and reviewed by The New York Times, the administration is studying a menu of actions that, if carried out, would most likely rattle the Chinese government.

The memo was drafted by Michael Pillsbury, a China scholar at the Hudson Institute and an outside adviser to the White House. It proposes holding Chinese companies and their employees criminally liable for financial disclosure violations, broadening the criteria that could get prominent Chinese companies blacklisted in the United States and blocking public and private pension funds and university endowments from certain Chinese investments.

Other options go beyond financial scrutiny of Chinese companies. The memo describes the possibility of fostering deeper ties between the United States and Taiwan and disrupting the flow of capital between Hong Kong and mainland China if it is determined that Hong Kong’s autonomy is not being respected.

It also lays out legislation in Congress, which Mr. Trump has yet to endorse, that would impose sanctions on China for activity in contested areas of the South China Sea and crack down on Chinese-funded Confucius Institutes at American universities.

Mr. Pillsbury declined to comment on his conversations with the White House but acknowledged that he had been analyzing such possibilities for a coming study on China strategy for the Hudson Institute.

“It appears that tariffs alone are not enough, but we also need to meet some of the Chinese demands to get the kind of deal the president wants,” Mr. Pillsbury said.

A White House spokesman declined to comment.

Mr. Trump’s tariffs have already pushed some companies to move their operations out of China. But the raft of new investment restrictions and export controls that the administration is mulling would further sever supply chains and discourage financial integration between the countries, potentially to the detriment of financial markets.

On Monday, the White House clamped down on Chinese firms it accused of human rights violations by adding eight companies and 20 government organizations to an entity list that will prevent them from buying American products. On Tuesday, the State Department announced visa restrictions for Chinese officials allegedly involved in the detention and abuse of Muslim minorities.

An array of initiatives related to American capital markets and investments made by retirement funds in Chinese entities are also under consideration.

The most advanced discussions have centered on the Thrift Savings Plan, the retirement plan for federal employees and the military. As of next year, that plan, which holds nearly $50 billion in assets, is expected to begin investing in an index fund that includes more Chinese and Russian companies, as part of an effort to diversify its exposure.

The index fund includes companies that the United States government has imposed sanctions on — including Hangzhou Hikvision Digital Technology, which was among the companies blacklisted on Monday. It also includes AviChina Industry & Technology, an affiliate of China’s major military aircraft and weapons manufacturer; ZTE, which was hit with sanctions for providing technology to North Korea and Iran; and several Russian companies that the Treasury Department’s Office of Foreign Assets Control has put under sanctions.

Officials have also been discussing efforts to close loopholes that give Chinese companies access to American capital markets with less stringent disclosure requirements than American firms or those from other countries.

Chinese law requires the records of companies based in China to be kept there, and restricts the kind of documentation that auditors can transfer out of the country. The rules mean that hundreds of Chinese firms, with a collective market capitalization of more than $1 trillion, have received looser oversight than companies in other jurisdictions, according to the Securities and Exchange Commission.

A bipartisan group of senators has introduced legislation that would force Chinese companies to comply with S.E.C. disclosure regulations or be delisted from American exchanges in three years. White House officials have debated throwing their support behind the bill, but several officials, including Mr. Kudlow and Mr. Mnuchin, have opposed delisting as a draconian option that could throw American stock markets into turmoil.

“Delisting is not on the table,” Mr. Kudlow told reporters on Monday. He said the administration was responding to complaints to the commission about a lack of transparency and compliance, “but we’re very early in our deliberations.”

Elizabeth Economy, the director for Asia studies at the Council on Foreign Relations, said that addressing the lack of compliance among Chinese companies was “overdue” but that a solution would ideally be negotiated between Chinese companies and the S.E.C.

“Nobody benefits from a mass delisting of Chinese companies on U.S. stock exchanges,” Ms. Economy said.

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U.S. and China May Be Headed for Mini-Deal on Trade This Week

Westlake Legal Group 10dc-trade2-facebookJumbo U.S. and China May Be Headed for Mini-Deal on Trade This Week United States Politics and Government United States International Relations United States Economy United States Chamber of Commerce Trump, Donald J International Trade and World Market Intellectual Property Economic Conditions and Trends Customs (Tariff) China

WASHINGTON — The United States and China could announce a limited trade agreement this week that would prevent President Trump’s planned tariff increase from going into effect this month and set rules around how China manages its currency, according to a U.S. Chamber of Commerce official who has been briefed by both negotiating teams.

Top officials from the two countries are meeting again this week to try to resolve a yearlong trade war that has dragged on amid disagreements over the types of provisions any pact should include. But as the clash begins to inflict economic pain on the global economy, negotiators from both sides seem increasingly focused on reaching a mini-deal that would resolve just a portion of the trade dispute.

Myron Brilliant, the executive vice president and head of international affairs at the Chamber of Commerce, told reporters on Thursday that he was “hopeful” that a limited arrangement stopping a planned tariff increase on Oct. 15 would emerge from this week’s meetings.

Mr. Brilliant, who recently spoke with both negotiating teams, added that a more comprehensive pact could be announced this week but that the scope of the deal would depend on what Chinese negotiators brought to the table. The Trump administration could also contemplate removing the threat of additional tariffs that are scheduled to be imposed in December or roll back some of the tariffs it has already levied on more than $360 billion of Chinese goods based on the package of offers brought by the Chinese negotiating team, he said.

Such a limited arrangement would not constitute a full resolution and is unlikely to satisfy Mr. Trump’s demands that China change many of its economic practices, such as limiting state subsidies to its firms. The deal appears likely to repackage concessions that China has made to the United States in previous months and years — including an agreement reached on currency this year, before a falling-out between the countries in May brought progress to a standstill.

Still, a limited deal — which Washington officials have begun referring to as an “early harvest” or a “confidence building” measure — could lower tensions between the United States and China and help to mitigate some of the damage that tariffs and other punitive measures have begun to take on companies on both sides of the fight. Considerations of a limited deal involving currency promises were first reported by Bloomberg.

Mr. Trump said on Twitter on Thursday morning that he planned to meet China’s top trade envoy, Liu He, on Friday, raising speculation that a more limited deal might be at hand.

“Big day of negotiations with China,” the president wrote. “They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House.”

The trade meetings come amid a growing recognition on both sides that the bilateral relationship has been headed in a troubling direction. Trade between the United States and China has slumped, dragging on both economies. In the United States, uncertainty about the prospect for future tariffs has discouraged businesses from making new hires and investments, an unwelcome development at a time of gathering economic gloom.

“We can’t afford a further escalation of the trade war that will only accelerate the chance of a recession,” Mr. Brilliant said. “I am confident the U.S. administration understands the stakes here on that front.”

Administration officials have denied that they are seeking any kind of “partial” or “interim” deal. Yet people familiar with their thinking say many are open to the possibility of an arrangement that would roll back some tariffs in return for Chinese agricultural purchases, stronger protections on intellectual property or other concessions.

But they caution that it is unclear whether the president will ultimately agree to such an arrangement. Mr. Trump and his advisers are wary of being criticized by both Democrats and Republicans for making a deal that is too weak and giving up the leverage Mr. Trump has created with his tariffs.

Announcing some kind of package of concessions this week might pave the way for a larger trade deal when Mr. Trump is next expected to meet President Xi Jinping of China in person, in November at the Asia-Pacific Economic Cooperation meetings in Santiago, Chile, Mr. Brilliant said.

Other trade experts expressed support for a positive turn in relations, regardless of what an agreement would be labeled.

“On eve of China trade talks, I welcome both sides making sufficient progress to forestall future tariff hikes and even some rollbacks,” Wendy Cutler, a vice president at the Asia Society Policy Institute and a chief trade negotiator for the Obama administration, tweeted on Wednesday. “Some call this a partial deal — but i call it announcements of tangible progress that gives momentum to the overall talks.”

It is unclear whether the provisions that might be announced this week would be new, or how much they might change China’s economic actions.

In meetings in February, China and the United States agreed to avoid devaluing their currency to make their products cheaper abroad and give their exporters an advantage, Chinese officials said in March. They also agreed to continue to comply with previous currency agreements among the Group of 20 countries, and disclose detailed information in accordance with standards set by the International Monetary Fund.

But this and other agreements were put off in late April, when the Chinese changed the draft trade agreement and American officials accused them of reneging on a pact that was nearly complete. Since then, relations have steadily worsened. In August, the Treasury Department formally labeled China a currency manipulator after Beijing allowed its currency to weaken — a decline that many economists said was done in line with market forces.

Since then, both sides have brandished a series of carrots and sticks in an attempt to pressure each other into a favorable deal. China resumed buying American agricultural goods last month, after ceasing its purchases to put more pressure on American farmers. Chinese officials also quietly dropped earlier public demands that any deal must immediately get rid of all of Mr. Trump’s levies, paving the way for a potential interim agreement.

Mr. Trump said last month that he would delay a round of tariff increases from Oct. 1 to Oct. 15. Last week, he gave a green light for his administration to issue some licenses allowing American companies to supply goods to the Chinese telecom firm Huawei, which he previously put on a blacklist barring it from buying American goods.

But other interim measures have ratcheted up the tension. The Trump administration announced on Monday that it would add 28 more entities to that blacklist, including some of China’s leading artificial intelligence firms. On Tuesday, the State Department announced visa restrictions for Chinese officials accused of involvement in human rights abuses.

Many uncertainties remain in the trade talks. In particular, China has appeared unwilling to make many of the more significant changes to its economy that the Trump administration has demanded, including restraining its subsidies to state-owned firms and allowing for the flow of data across its borders.

Mr. Brilliant said on Thursday that China’s promises on intellectual property still revolved around “20th century” issues, like copyrights for movies and software, rather than “21st century” issues involving the use of data. He said that while there could be an announcement on intellectual property this week, it appeared that more fundamental concerns about China’s treatment of technology would not be addressed.

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China Trade Talks Restart and White House Weighs Escalation Options

Westlake Legal Group merlin_159733326_365ee0f3-4455-4e35-ac0d-5d771ddbe5bc-facebookJumbo China Trade Talks Restart and White House Weighs Escalation Options United States Politics and Government United States International Relations United States Economy Trump, Donald J Securities and Exchange Commission Regulation and Deregulation of Industry Pillsbury, Michael (1945- ) Kudlow, Lawrence A International Trade and World Market Embargoes and Sanctions Economic Conditions and Trends Customs (Tariff) China

WASHINGTON — Trump administration officials are weighing a range of options that could inflict additional economic pain on China as the United States continues looking for ways to force Beijing to change longstanding practices that have put American companies at a disadvantage.

The ideas under consideration would move the White House’s negotiating tool of choice beyond tariffs toward limiting China’s access to American capital markets and imposing greater scrutiny on its companies, according to people familiar with the discussions.

Administration officials, including members of the National Security Council, have begun pressing the Securities and Exchange Commission to tighten its checks on Chinese firms. They are also looking for ways to reduce the exposure of American retirement funds to certain Chinese companies.

Many of those efforts have been proceeding independently from the trade talks — which resumed again on Thursday — and are fueled by longer-term considerations of China’s economic and security threats. Some White House advisers now view those options as an additional lever to force China to make the kinds of deep economic concessions that have so far proved elusive in the talks, which have dragged on for more than a year.

Top-level officials from both countries began their 13th round of trade negotiations on Thursday. They are expected to discuss proposals for a somewhat limited trade deal that would address some of President Trump’s criticisms of China’s economic practices but still be acceptable to Beijing.

“Big day of negotiations with China,” Mr. Trump tweeted Thursday morning. “They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House.”

Some administration officials have been hopeful that a deal will lock in more intellectual property protections for American companies and provide those firms with greater access to Chinese markets. They also want to avoid further tariffs on Chinese goods that have begun to weigh on American consumers.

If China makes sufficient concessions, some in the administration are willing to roll back a portion of the tariffs that Mr. Trump has placed on more than $360 billion of Chinese goods, people familiar with the discussions said. In what is likely to be viewed as a gesture of good will by the Chinese, the Trump administration plans to go ahead with approving licenses soon that will allow some companies to sell nonsensitive goods to the Chinese telecom provider Huawei, which has been blacklisted from buying American products.

But China has resisted many of the administration’s demands to make more transformative changes to the way it runs its economy. Chinese officials have come to Washington this week eager to settle on a narrow deal that would involve tariff reductions in exchange for a resumption of Chinese purchases of American food. They appear unlikely to agree to the administration’s longstanding demands that Beijing limit its subsidies to Chinese firms, change its policies surrounding the treatment of data or make other structural changes, people familiar with the negotiations said.

The potential for such a limited agreement has fueled private deliberations within the White House on options for escalating economic pressure on China.

Officials have held meetings in recent weeks to consider escalation options if the current round of negotiations fails to address the administration’s primary concerns. Mr. Trump’s top economic advisers have publicly played down the discussions, which have centered on tightening scrutiny of Chinese companies listed on American stock exchanges and limiting the direct exposure of government-run retirement funds to China.

Larry Kudlow, the director of the National Economic Council, acknowledged on Tuesday that the administration was looking for ways to protect Americans who were investing in Chinese companies.

“We’ve opened up a study group to take a look at it,” Mr. Kudlow said on the Fox Business Network.

But the options under consideration go further than that. According to a memo circulated within the White House and reviewed by The New York Times, the administration is studying a menu of actions that, if carried out, would most likely rattle the Chinese government.

The memo was drafted by Michael Pillsbury, a China scholar at the Hudson Institute and an outside adviser to the White House. It proposes holding Chinese companies and their employees criminally liable for financial disclosure violations, broadening the criteria that could get prominent Chinese companies blacklisted in the United States and blocking public and private pension funds and university endowments from certain Chinese investments.

Other options go beyond financial scrutiny of Chinese companies. The memo describes the possibility of fostering deeper ties between the United States and Taiwan and disrupting the flow of capital between Hong Kong and mainland China if it is determined that Hong Kong’s autonomy is not being respected.

It also lays out legislation in Congress, which Mr. Trump has yet to endorse, that would impose sanctions on China for activity in contested areas of the South China Sea and crack down on Chinese-funded Confucius Institutes at American universities.

Mr. Pillsbury declined to comment on his conversations with the White House but acknowledged that he had been analyzing such possibilities for a coming study on China strategy for the Hudson Institute.

“It appears that tariffs alone are not enough, but we also need to meet some of the Chinese demands to get the kind of deal the president wants,” Mr. Pillsbury said.

A White House spokesman declined to comment.

Mr. Trump’s tariffs have already pushed some companies to move their operations out of China. But the raft of new investment restrictions and export controls that the administration is mulling would further sever supply chains and discourage financial integration between the countries, potentially to the detriment of financial markets.

On Monday, the White House clamped down on Chinese firms it accused of human rights violations by adding eight companies and 20 government organizations to an entity list that will prevent them from buying American products. On Tuesday, the State Department announced visa restrictions for Chinese officials allegedly involved in the detention and abuse of Muslim minorities.

An array of initiatives related to American capital markets and investments made by retirement funds in Chinese entities are also under consideration.

The most advanced discussions have centered on the Thrift Savings Plan, the retirement plan for federal employees and the military. As of next year, that plan, which holds nearly $50 billion in assets, is expected to begin investing in an index fund that includes more Chinese and Russian companies, as part of an effort to diversify its exposure.

The index fund includes companies that the United States government has imposed sanctions on — including Hangzhou Hikvision Digital Technology, which was among the companies blacklisted on Monday. It also includes AviChina Industry & Technology, an affiliate of China’s major military aircraft and weapons manufacturer; ZTE, which was hit with sanctions for providing technology to North Korea and Iran; and several Russian companies that the Treasury Department’s Office of Foreign Assets Control has put under sanctions.

Officials have also been discussing efforts to close loopholes that give Chinese companies access to American capital markets with less stringent disclosure requirements than American firms or those from other countries.

Chinese law requires the records of companies based in China to be kept there, and restricts the kind of documentation that auditors can transfer out of the country. The rules mean that hundreds of Chinese firms, with a collective market capitalization of more than $1 trillion, have received looser oversight than companies in other jurisdictions, according to the Securities and Exchange Commission.

A bipartisan group of senators has introduced legislation that would force Chinese companies to comply with S.E.C. disclosure regulations or be delisted from American exchanges in three years. White House officials have debated throwing their support behind the bill, but several officials, including Mr. Kudlow and Treasury Secretary Steven Mnuchin, have opposed delisting as a draconian option that could throw American stock markets into turmoil.

“Delisting is not on the table,” Mr. Kudlow told reporters on Monday. He said the administration was responding to complaints to the commission about a lack of transparency and compliance, “but we’re very early in our deliberations.”

Elizabeth Economy, the director for Asia studies at the Council on Foreign Relations, said that addressing the lack of compliance among Chinese companies was “overdue” but that a solution would ideally be negotiated between Chinese companies and the S.E.C.

“Nobody benefits from a mass delisting of Chinese companies on U.S. stock exchanges,” Ms. Economy said.

Henrietta Treyz, the director of economic policy at Veda Partners, outlined the extensive array of economic weapons at Mr. Trump’s disposal for investors this year. She said she would not be surprised if the S.E.C. stepped up scrutiny of Chinese firms or if the United States imposed penalties on China’s electronic payments systems, such as Alipay, on national security grounds.

Such moves could be far more severe than the tariffs on $550 billion of Chinese imports that the United States will have imposed by the end of the year, leading to a decoupling not just of the American and Chinese economies but of the financial sector as well.

“Tariffs are just a tax, a cost of doing business, but those costs can be digested by passing costs on to consumers or squeezing margins or diversifying your end consumer,” Ms. Treyz said. “If you’re no longer allowed to ship or buy products from Huawei or other entity list companies, you’ve shut out an entire pipeline of access, not to mention lost 1.3 billion potential customers in China.”

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Trump Administration Weighs Economic Escalation Against China

Westlake Legal Group merlin_159733326_365ee0f3-4455-4e35-ac0d-5d771ddbe5bc-facebookJumbo Trump Administration Weighs Economic Escalation Against China United States Politics and Government United States International Relations United States Economy Trump, Donald J Securities and Exchange Commission Regulation and Deregulation of Industry Pillsbury, Michael (1945- ) Kudlow, Lawrence A International Trade and World Market Embargoes and Sanctions Economic Conditions and Trends Customs (Tariff) China

WASHINGTON — Trump administration officials are weighing a range of options that could inflict additional economic pain on China as the United States continues looking for ways to force Beijing to change longstanding practices that have put American companies at a disadvantage.

The ideas under consideration would move the White House’s negotiating tool of choice beyond tariffs toward limiting China’s access to American capital markets and imposing greater scrutiny on its companies, according to people familiar with the discussions.

Administration officials, including members of the National Security Council, have begun pressing the Securities and Exchange Commission to tighten its checks on Chinese firms. They are also looking for ways to reduce the exposure of American retirement funds to certain Chinese companies.

Many of those efforts have been proceeding independently from the trade talks — which resume again this week — and are fueled by longer-term considerations of China’s economic and security threats. Some White House advisers now view those options as an additional lever to force China to make the kinds of deep economic concessions that have so far proved elusive in the talks, which have dragged on for more than a year.

Top-level officials from both countries will convene on Thursday for their 13th round of trade negotiations. They are expected to discuss proposals for a somewhat limited trade deal that would address some of President Trump’s criticisms of China’s economic practices but still be acceptable to Beijing.

Some administration officials have been hopeful that a deal will lock in more intellectual property protections for American companies and provide those firms with greater access to Chinese markets. They also want to avoid further tariffs on Chinese goods that have begun to weigh on American consumers.

If China makes sufficient concessions, some in the administration are willing to roll back a portion of the tariffs that Mr. Trump has placed on more than $360 billion of Chinese goods, people familiar with the discussions said. They may also approve licenses that would allow some companies to sell nonsensitive goods to the Chinese telecom provider Huawei, which has been blacklisted from buying American products.

But China has resisted many of the administration’s demands to make more transformative changes to the way it runs its economy. Chinese officials have come to Washington this week eager to settle on a narrow deal that would involve tariff reductions in exchange for a resumption of Chinese purchases of American food. They appear unlikely to agree to the administration’s longstanding demands that Beijing limit its subsidies to Chinese firms, change its policies surrounding the treatment of data or make other structural changes, people familiar with the negotiations said.

The potential for such a limited agreement has fueled private deliberations within the White House on options for escalating economic pressure on China.

Officials have held meetings in recent weeks to consider escalation options if the current round of negotiations fails to address the administration’s primary concerns. Mr. Trump’s top economic advisers have publicly played down the discussions, which have centered on tightening scrutiny of Chinese companies listed on American stock exchanges and limiting the direct exposure of government-run retirement funds to China.

Larry Kudlow, the director of the National Economic Council, acknowledged on Tuesday that the administration was looking for ways to protect Americans who were investing in Chinese companies.

“We’ve opened up a study group to take a look at it,” Mr. Kudlow said on the Fox Business Network.

But the options under consideration go further than that. According to a memo circulated within the White House and reviewed by The New York Times, the administration is studying a menu of actions that, if carried out, would most likely rattle the Chinese government.

The memo was drafted by Michael Pillsbury, a China scholar at the Hudson Institute and an outside adviser to the White House. It proposes holding Chinese companies and their employees criminally liable for financial disclosure violations, broadening the criteria that could get prominent Chinese companies blacklisted in the United States and blocking public and private pension funds and university endowments from certain Chinese investments.

Other options go beyond financial scrutiny of Chinese companies. The memo describes the possibility of fostering deeper ties between the United States and Taiwan and disrupting the flow of capital between Hong Kong and mainland China if it is determined that Hong Kong’s autonomy is not being respected.

It also lays out legislation in Congress, which Mr. Trump has yet to endorse, that would impose sanctions on China for activity in contested areas of the South China Sea and crack down on Chinese-funded Confucius Institutes at American universities.

Mr. Pillsbury declined to comment on his conversations with the White House but acknowledged that he had been analyzing such possibilities for a coming study on China strategy for the Hudson Institute.

“It appears that tariffs alone are not enough, but we also need to meet some of the Chinese demands to get the kind of deal the president wants,” Mr. Pillsbury said.

A White House spokesman declined to comment.

Mr. Trump’s tariffs have already pushed some companies to move their operations out of China. But the raft of new investment restrictions and export controls that the administration is mulling would further sever supply chains and discourage financial integration between the countries, potentially to the detriment of financial markets.

On Monday, the White House clamped down on Chinese firms it accused of human rights violations by adding eight companies and 20 government organizations to an entity list that will prevent them from buying American products. On Tuesday, the State Department announced visa restrictions for Chinese officials allegedly involved in the detention and abuse of Muslim minorities.

An array of initiatives related to American capital markets and investments made by retirement funds in Chinese entities are also under consideration.

The most advanced discussions have centered on the Thrift Savings Plan, the retirement plan for federal employees and the military. As of next year, that plan, which holds nearly $50 billion in assets, is expected to begin investing in an index fund that includes more Chinese and Russian companies, as part of an effort to diversify its exposure.

The index fund includes companies that the United States government has imposed sanctions on — including Hangzhou Hikvision Digital Technology, which was among the companies blacklisted on Monday. It also includes AviChina Industry & Technology, an affiliate of China’s major military aircraft and weapons manufacturer; ZTE, which was hit with sanctions for providing technology to North Korea and Iran; and several Russian companies that the Treasury Department’s Office of Foreign Assets Control has put under sanctions.

Officials have also been discussing efforts to close loopholes that give Chinese companies access to American capital markets with less stringent disclosure requirements than American firms or those from other countries.

Chinese law requires the records of companies based in China to be kept there, and restricts the kind of documentation that auditors can transfer out of the country. The rules mean that hundreds of Chinese firms, with a collective market capitalization of more than $1 trillion, have received looser oversight than companies in other jurisdictions, according to the Securities and Exchange Commission.

A bipartisan group of senators has introduced legislation that would force Chinese companies to comply with S.E.C. disclosure regulations or be delisted from American exchanges in three years. White House officials have debated throwing their support behind the bill, but several officials, including Mr. Kudlow and Treasury Secretary Steven Mnuchin, have opposed delisting as a draconian option that could throw American stock markets into turmoil.

“Delisting is not on the table,” Mr. Kudlow told reporters on Monday. He said the administration was responding to complaints to the commission about a lack of transparency and compliance, “but we’re very early in our deliberations.”

Elizabeth Economy, the director for Asia studies at the Council on Foreign Relations, said that addressing the lack of compliance among Chinese companies was “overdue” but that a solution would ideally be negotiated between Chinese companies and the S.E.C.

“Nobody benefits from a mass delisting of Chinese companies on U.S. stock exchanges,” Ms. Economy said.

Henrietta Treyz, the director of economic policy at Veda Partners, outlined the extensive array of economic weapons at Mr. Trump’s disposal for investors this year. She said she would not be surprised if the S.E.C. stepped up scrutiny of Chinese firms or if the United States imposed penalties on China’s electronic payments systems, such as Alipay, on national security grounds.

Such moves could be far more severe than the tariffs on $550 billion of Chinese imports that the United States will have imposed by the end of the year, leading to a decoupling not just of the American and Chinese economies but of the financial sector as well.

“Tariffs are just a tax, a cost of doing business, but those costs can be digested by passing costs on to consumers or squeezing margins or diversifying your end consumer,” Ms. Treyz said. “If you’re no longer allowed to ship or buy products from Huawei or other entity list companies, you’ve shut out an entire pipeline of access, not to mention lost 1.3 billion potential customers in China.”

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