The USS Preble sailed near the Scarborough Shoal, a disputed area of the South China Sea as a sign of U.S. commitment to preserve waterways governed by international law. The move will certainly frustrate China as it claims the area as sovereign territory.
The Department of Homeland Security is warning that Chinese-made drones may be allowing China to steal sensitive data. The U.S. Army had already banned Chinese-made drones in 2017, saying that the drones shared sensitive data with the Chinese government.
With no end in sight for the trade war between the U.S. and China, Morgan Stanley is worried that a global recession is coming. The bank said, “If talks stall, no deal is agreed upon and the U.S. imposes 25% tariffs on the remaining ~US$300 billion of imports from China, we see the global economy heading towards recession.”
“U.S. President Donald Trump’s decision to blacklist Huawei Technologies Co. may just have scuppered any lingering hopes for more cross-border mergers in the semiconductor industry. On Friday, the administration barred U.S. firms from supplying components to the Chinese maker of telecommunications equipment, which it accuses of helping Beijing to spy. But uncertainty around the scope of the order means that chipmakers in Europe also decided to stop supplies to Huawei.”
Google has suspended business with Huawei that requires the transfer of hardware, software and technical services except those publicly available via open source licensing. This is a major blow to the Chinese tech company that the U.S. government has sought to blacklist around the world.
“Under the circumstances, it is legitimate for the United States to seek greater transparency from Huawei, both about its ownership and its strategic objectives in the global market. To the extent that the Trump administration’s latest step is an attempt to bolster its negotiating position on those issues, it may be justified. If it represents a deliberate attempt to bring down Huawei and provoke a broader economic rupture with China, it may not. In that sense, the administration owes the public more transparency about its intentions, as well.”
“A low social credit score will exclude you from well-paid jobs, make it impossible for you to get a house or a car loan or even book a hotel room. The government will slow down your internet connection, ban your children from attending private schools and even post your profile on a public blacklist for all to see.”
Following President Trump’s blacklisting of Huawei, American companies are no longer allowed to sell components to the Chinese company. This move could cost U.S. companies $11B in revenue.
“The easy, and wrongheaded, pro-tariff argument made by Trump and his fellow China hawks is that when he slaps a tax on goods from China, it will make it less attractive for companies to manufacture there and less appealing for American consumers to buy goods made in China. That will then create an incentive to make more in the United States. So, America wins, right? But the reality is that America and China are both going to lose, and they aren’t haggling in a vacuum. There are dozens of players ready to swoop in to take advantage when two titans start wounding each other.”
On the surface, it would seem that blacklisting Huawei and other Chinese businesses is a good thing. After all, Huawei is widely suspected of being a cover for Chinese espionage. But it’s not that simple. In addition to probably leading to Huawei’s destruction, the move could also depress the business of American chip giants like Qualcomm and Micron Technology, and potentially disrupt the global rollout of 5G wireless networks.
China is not taking the arrest of Huawei CFO Meng Wanzhou in Canada lightly and responded by leveling spurious spying charges against two Canadian citizens. Michael Spavor and Michael Kovrig are accused of stealing state secrets and could face years in prison and possibly the death penalty.
A building undergoing renovations in Shanghai, China, has collapsed. The collapse trapped dozens of people and killed at least five. Authorities have not determined what may have caused the collapse.
Amid a deepening trade war with China, President Trump on Wednesday declared a “national emergency” via executive order to protect U.S. communications networks in a move that gives the federal government broad powers to bar American companies from doing business with certain foreign suppliers. But instead of Russia, it appears to target China.
“To minimize the damage, Trump pushed for another $15 billion in subsidies to farmers losing out because their products now cost more. That’s above the $12 billion he authorized last year when he launched the trade war. Which means Americans pay for the tariffs not once, but twice. First, consumers lose by paying more for Chinese products. Second, taxpayers pick up the tab by bailing out ‘great patriot’ farmers who absorb economic pain for the motherland. With each new round of economic penalties, Trump tells Americans the clouds will break and the light will soon shine through. Right after they pay more, and more, and more.”
The trade war between China and the US is set to escalate even further as the Trump administration prepares to increase the scope of the tariffs even further. Trump has his mind set on having U.S. tariffs to cover all $540 billion in Chinese imports, a move that would raise the prices of everyday products by a fair amount.
Apple’s stock alone dropped nearly 5%. “Volatility is going to persist. People don’t know what to make of it,” said JJ Kinahan, chief market strategist at TD Ameritrade.
China said it would raise tariffs on roughly $60 billion worth of U.S. imports, in response to the U.S. increasing tariffs on $200 billion worth of Chinese goods. Because China’s entire imports from the United States are considerably less than $200 billion, it has not had the option of matching the United States dollar for dollar.
Donald Trump said on Monday he would meet Chinese President Xi Jinping next month as the trade war between the world’s two largest economies intensified, sending shivers through global markets.
President Trump’s chief economic adviser said on Sunday that American consumers would bear some pain from the escalating trade war with China, contradicting Mr. Trump’s claim that his tariffs are a multibillion-dollar, mostly one-way payment by China to the American Treasury.
“Mr. Trump could make an honest case for this tax increase. He could argue that Americans must endure higher prices because China will suffer too — while China does not bear the direct cost of the tariffs, it is likely to suffer a loss of sales — and the United States needs that leverage as it presses China to change its economic policies. Instead, Mr. Trump continues to repeat the false claim that the money will come from China, even though he has been told repeatedly that this claim has no basis in fact. He is willfully peddling a falsehood for political gain.”
Under the guise of rooting out Islamic extremism, China started state-sponsored persecution of Muslim and other ethnic minorities three years ago. Today, hundreds of thousands of Uighurs and other minorities are imprisoned in Xinjiang province. If one is so lucky to not be in prison, they are under constant surveillance by the Chinese state and are at risk for imprisonment at any time.
The Chinese negotiating team will return to China empty handed as trade talks collapsed between the two sides. U.S. officials are placing the blame on Xi Jinping, after he balked on agreeing to economic reforms necessary for a deal to work out.
Since being kidnapped in China last September, Meng Hongwei has not been seen or heard from. Recently the Chinese state officially charged the former Interpol president Meng Hongwei on corruption charges. It is not clear how long he will remain incarcerated or if he will ever be released.
China vowed to retaliate against the United States and President Trump on Friday for sharply hiking tariffs on exports from the world’s second-biggest economy. The U.S. increased tariffs on $200 billion worth of Chinese exports to 25 percent from 10 percent.
“While presidents are almost always the most public face of the policies they support, most will try to find allies that allow them to depersonalize things to some extent. Normal presidents love having bipartisan support; if that’s unavailable, they’ll at least fall back on their parties. Trump is out there alone on topic after topic, from his border wall to Yemen. On trade, he’s especially isolated. Yes, he’s brought a handful of Republicans with him, and on China in particular he may have a few added allies. But overall, Trump’s trade wars are going to result in some unusually personal successes or failures.”
The Trump administration has implemented a crippling new set of tariffs on Chinese goods. The dramatic, last-minute negotiations that included some of the top ranked officials of both governments, fell apart when the two sides were unable to reach a deal in time and prevent an escalation of the trade war.
U.S. equity futures were little changed Thursday as traders nervously awaited a midnight deadline for tariffs on China to increase. Meanwhile the Nasdaq and S&P 500 dropped for the fourth day in a row.
Two Chinese nationals were charged with the 2014 Anthem hack which exposed sensitive personal information of more than 78.8 million Americans. The hackers used extremely sophisticated techniques to hack Anthem’s servers.
China Mobile’s bid to provide U.S. telecommunications services was denied by the Federal Communications Commission (FCC). The FCC voted unanimously to keep China Mobile out of the U.S. over national security concerns.
After months of tough talks and agreements, U.S. trade officials were optimistic that a deal with China would be delivered soon. This hope has been extinguished as China returned to the negotiating table wanting to revisit areas that the U.S. considered to be closed and agreed upon. It seems that the Chinese are betting that the U.S. will blink first and that the U.S. will make very favorable concessions to China. Upon hearing this, Trump announced increasing tariffs on Chinese goods.
U.S. tariffs on $200 billion in Chinese imports are about to rise from 10% to 25% — an escalation of the trade war that could hurt major importers and trigger even more painful retaliation by China. US companies will likely be forced to pass increased costs of operation onto American consumers, and that’s something no one wants.
Just hours after Donald Trump tweeted that he was informed by Beijing that the Chinese vice premier would visit the U.S. to try to make a trade deal, China’s Commerce Ministry warned it would retaliate if U.S. tariffs on $200 billion of Chinese goods are hiked to 25% on Friday.
President Trump on Wednesday said top Chinese officials will travel to the U.S. later this week to resume trade talks, even as he accused Beijing of holding out for a better deal under a future Democratic president. No matter what happens this week, it looks like the issue of trade with China will become a focal point of the 2020 election for both sides.
Huawei Chief Financial Officer Meng Wanzhou is set to appear in a Canadian court on Wednesday to begin what is expected to be a long legal battle against the United States’ request that she be extradited to face fraud charges. The case that has escalated tensions between China and the United States, who are already in the middle of contentious trade dispute.
“Even a more comprehensive pact would remove only a couple of issues from what has become a lengthy list of disputes. There was a perception when the trade spat first erupted that an agreement might reset relations to ‘normal,’ or at least something close to it…Now that seems all but impossible.”
US trade officials have accused their Chinese counterparts of walking back concessions the two sides had already agreed upon earlier in talks that aim to craft a trade deal. Both sides previously seemed confident that a deal was close at hand.
The Dow had a lousy day. It fell 473 points, tumbling below 26,000 points. What happened? Trade Rep. Robert Lighthizer and Treasury Sec. Steven Mnuchin indicated late yesterday that Donald Trump was dead serious about his tariff threat — and new import penalties will be imposed on China on Friday. So the market freaked out, falling steadily throughout the day.
Investors are nervous as Trump continues to threaten more tariffs on Chinese goods, The Dow dropped 500 points as Trump’s trade war with China continues to escalate.
A deal brokered between China and Venezuela was supposed to revitalize Venezuela’s food production industry and feed its people, instead, corruption has made a few very rich and left the rest hungry.
“It’s welcome that China’s trade negotiators are still planning to travel to the U.S. this week, and it’s possible that the current volley is just some tough talk to get a final deal over the line. But at this point there’s little sign of the commitments that Chinese Vice Premier Liu He will be able to bring back to Beijing as evidence of his negotiating prowess – and without that, it’s worryingly easy to see this process sliding into a deeper dispute. If negotiators want to get to an agreement, they’re going to need to accept something much more limited than the hype might have suggested. It’s time to go small, or go home.”