Stocks up, yen slips as Xi calms US-China trade fears

Marsha Scott
April 14, 2018

At the same time, Ezell and other longtime China observers cautioned that Beijing has promised in the past to open its market and curb hardball tactics to acquire foreign technology without following through on those pledges.

The vehicle tariffs were the target of a Trump tweet Monday, saying China charges much higher levies than the United States, "Does that sound like free or fair trade". First, by stealing it: China's commercial espionage is estimated to cost USA companies over $20 billion a year, with a cumulative total of $600 billion over 20 years. He did not, however, address some key irritants for Washington, including a requirement that foreign companies work through joint ventures that require them to give technology to potential local competitors.

Further to that strategy, it has been learned that The Trump Administration is working on a program, which could cost billions of dollars, to compensate farmers suffering from Chinese retaliatory tariffs on U.S. crops.

China is threatening the tariffs in response to Trump moving to enact protectionist measures as punishment for Chinese theft of USA intellectual property.

Within hours, Beijing counterpunched with similar plans to impose tariffs on $50 billion in American products, including soybeans and small aircraft.

Trump is right about this: There is a human cost to the flood of cheap imports, and it's reflected in the loss of manufacturing jobs as companies shift production outside the USA and automate to stay competitive.

In March, China established a host of new agencies such as the State Administration for Market Regulation as part of a major readjustment of government institutions.

Rising trade tensions reflect that China is becoming less complementary to the U.S. and more directly competitive, according to David Loevinger, a former China specialist at the U.S. Treasury and now an analyst at fund manager TCW Group Los Angeles. Till then, the tough talk continues.

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A more open, fair and dynamic Chinese financial market is on the way.

"We support companies that are willing to come together on their own", he said in an interview on Wednesday on the sidelines of the Boao Forum in Hainan province.

Yet, as North Korea's most important trade partner and political ally, China wields considerable influence and its willingness to enforce United Nations sanctions has built up its credibility as a reliable global partner. "We hope some people in the United States don't misjudge the situation".

The story so far: after Trump announced a 25 per cent tariff on steel, which account for around $1 billion (Rs 6.4 thousand crore) of China's exports, Beijing hit back with tariffs on 120 American products worth around $3 billion (Rs 19.4 thousand crore), from wine to pork. Australian Prime Minister Malcolm Turnbull said Vanuatu also assured his government that "no such request has been made" by China.

"China relied mainly on providing favorable policies for foreign investors in the past, but now we will have to rely more on improving the investment environment", he said.

And this year several high-profile attempts at Chinese investment have been blocked - including the sale of money transfer firm Moneygram to China's Ant Financial, the digital payments arm of Alibaba.

On Thursday China's government denied that Xi was trying to resolve the dispute and said negotiations with the US aren't possible right now. In that speech he framed China as the world's new champion of free trade in an implicit rebuke to Trump.

With his new actions on trade with China, President Trump has brought the era of bipartisan pusillanimity to an end.

Other reports by MaliBehiribAe

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