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.”
“The U.S. Constitution vests Congress with the authority to regulate commerce, but over the years it has ceded that authority. If the current environment does not invigorate Republican members of Congress to work to take back this responsibility, it is hard to take claims that they value trade as a benefit for Americans seriously. Meanwhile, polls suggest that most Americans support free trade, and Democrats have surpassed Republicans as its most ardent supporters. We have yet to see whether Democrats will take up the mantle of free traders, but in the meantime, the Republicans certainly can no longer claim that title, as they continue to make excuses for the president’s actions. The party of free trade? No. More like the Grand Old Protectionists.”
The Trump administration has finally reached a deal with Canada and Mexico to lift steel tariffs, opening the door for the USMCA trade deal to be passed. U.S. lawmakers previously signaled resistance to passing the new trade deal if steel tariffs on U.S. allies remained.
“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.”
Walmart Chief Financial Brett Biggs said that higher tariffs will increase prices for consumers but the company is working on mitigation strategies. The US tariffs are widely expected to raise prices on thousands of products including clothing, furniture and electronics.
“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.”
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.”
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.
“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.
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.
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.
Economists within the Department of Agriculture published research which showed how Trump’s trade policies hurt American farmers. This research caused the economists to receive heavy criticism from the Trump administration, which eventually led to their departure from the administration.
“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.”
Senior U.S. officials accused Beijing on Monday of reneging on commitments it had agreed to during negotiations for a comprehensive trade deal and vowed that punishing tariffs on Chinese imports would more than double Friday. Despite the tough talk, the administration expects to host Chinese Vice Premier Liu He and a Chinese team for further talks in Washington on Thursday evening.
Trade war fears briefly returned to Wall Street, wiping out a chunk of the stock market’s recent surge. The Dow plunged 450 points at the open Monday morning after President Trump threatened to impose higher tariffs on China in a late Sunday tweet. The sudden escalation of U.S.-China trade tensions was unexpected, as Washington and Beijing were reportedly on the verge of a trade deal. By the end of the day, the market had rallied, closing 66 points down.
A sharp sell-off is expected on Wall Street this week after President Trump said on Sunday that the U.S. will hike tariffs on goods imported from China, casting doubt on recent optimism that the world’s two largest economies were close to a resolution to their trade battle. Dow Jones Industrial Average futures implied an opening decline of more than 450 points Sunday evening stateside. S&P 500 and Nasdaq-100 Index futures also pointed to declines for the two indexes at Monday’s open.
Treasury Secretary Steven Mnuchin said on Sunday that trade talks between the United States and China were entering a critical point as an American delegation heads to Beijing this week to try to finalize a long-awaited deal. But questions still remain on how the two sides would enforce any trade agreement.
“President Trump has threatened to rip up NAFTA. To shut the border with Mexico. To impose tariffs on the thriving car industry in Mexico. ‘They’re killing us on jobs and trade,’ he said as a candidate. And yet, two years into his presidency, a strange thing has happened. Mexico has become the No. 1 U.S. trading partner. … Mexico is an increasingly vital economic partner of the United States, despite Trump’s frequent disparagement of the country.”
Despite the president claiming the success of his new trilateral trade deal with Canada and Mexico, the deal has not yet been ratified and Congress has not yet received an analysis of how the deal would affect the US economy. The analysis is expected to show minimal gain for the US and will be delivered to Congress within the next day.
Tech giants Apple and Qualcomm are dropping legal disputes after Apple paid Qualcomm an undisclosed amount. The two companies plan to still work together in future, signing a six-year license contract.
The EU has agreed upon two mandates which it will pursue with the US, “[O]ne to cut tariffs on industrial goods, the other to make it easier for companies to show products meet EU or U.S. standards.” The EU hopes to begin negotiations soon and finish with a secured trade deal with the US by the end of 2019.
Amid Donald Trump’s latest trade spat with the EU over Airbus, China and the EU agreed to strengthen their trading relationship. As Trump distances himself from Europe, China and President Xi Jinping are more than happy to get closer.
Trade tensions between the EU and U.S. flared Monday after President Trump said he is considering $11 billion worth of retaliatory tariffs on a range of goods in response to subsidies the EU granted to Airbus.
Trade negotiations between the U.S. and China continue as President Trump meets with Chinese Vice Premier Liu He. Though both sides originally expected negotiations to be finished by March 1, U.S. negotiators believe talks are progressing and a deal could be reached by the end of April.
Any deal currently on the table involves China promising to buy hundreds of billions of dollars of American products, but that arrangement could, and most likely would, put major U.S industries under the thumb of state-controlled Chinese businesses.
President Trump’s effort to rework a major trade deal with Canada and Mexico is showing increasing signs of faltering on Capitol Hill, as both parties are unhappy with elements of the USMCA. Congress won’t act to implement the deal until the International Trade Commission’s analysis of its economic impact is released on April 19, so they have some time to work out their squabbles. However, “They’ve got some serious hurdles, and the clock is not their friend,” said Sen. Pat Toomey.
Senate Democrats introduced legislation which would limit the president’s power to impose tariffs for national security reasons on products. The bill would require congress to authorize such tariffs quickly after they are imposed otherwise the tariffs would sunset.
The United States sent Navy and Coast Guard ships through the Taiwan Strait on Sunday, the U.S. military said, as part of an increase in the frequency of movement through the strategic waterway despite opposition from China.
Record floods have devastated a wide swath of the Farm Belt across Iowa, Nebraska, South Dakota, and several other states and early estimates of lost crops and livestock are approaching $1 billion in Nebraska alone. To make matters worse, Midwestern farmers have been gambling they could ride out the U.S.-China trade war by storing their corn and soybeans anywhere they could — in bins, plastic tubes, in barns, or even outside. Much of those have been destroyed.
“The U.K. embraced a political fantasy in June 2016, when a slight majority of Brexit referendum participants voted for the country to leave the EU. This was already apparent to some at the time. Not long after the vote, for example, pro-Brexit campaigners were forced to walk back claims that leaving the EU would free up 350 million pounds a week for spending on the National Health Service—which is now facing huge staff shortages, partly as a result of the limits on immigration that Brexit was designed to reinforce. But now that the terms of the Brexit agreement have been released, the scale of that fantasy is readily apparent to all.”
Though embattled U.K. Prime Minister Theresa May still hopes to avoid a no-deal Brexit, Britain will eliminate import tariffs on a wide range of goods and keep the border between Ireland and Northern Ireland free of customs checks if it leaves the EU without a deal. It’s cold comfort to many. “No policy on tariffs can come close to compensating for the disruption, cost and job losses that would result,” said Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders.
U.S. Trade Rep. Robert Lighthizer told the Senate Finance Committee that the U.S. was working on removing steel and aluminum tariffs placed on Mexico and Canada. The U.S. originally placed the tariffs on national security grounds, a claim that has caused offense and bewilderment to Mexico and Canada.