Top U.S. trade envoys to meet China's Xi, no decision on deadline extension

WASHINGTON/BEIJING (Reuters) – The Trump administration’s top two negotiators in trade talks with China will meet on Friday with Chinese President Xi Jinping, but there has been no decision to extend a March 1 U.S. deadline for a deal, White House economic adviser Larry Kudlow said on Thursday.

“The vibe in Beijing is good,” Kudlow told Fox News Channel in an upbeat assessment of the U.S.-China talks that are set to conclude on Friday in Beijing.

The two sides are pushing to de-escalate a tariff war that has dimmed global growth forecasts, roiled financial markets and disrupted manufacturing supply chains.

U.S. tariffs on $200 billion worth of imports from China are scheduled to rise to 25 percent from 10 percent if the two sides don not reach a deal by March 1, increasing pressure and costs in sectors from consumer electronics to agriculture.

Although U.S. President Donald Trump said earlier this week that an extension of the deadline was possible if a “real deal” was close, Kudlow, director of the National Economic Council, said the White House had made no decision on that.

“I can’t speak to that. No such decision has been made so far,” Kudlow said when asked if there would be a 60-day extension.

The talks, scheduled to run through Friday, follow three days of deputy-level meetings to work out technical details, including a mechanism for enforcing any trade agreement.

China proposed in the talks this week to increase purchases of U.S. semiconductors to $200 billion over six years as part of a deal to ease American tariffs, a person briefed on the talks told Reuters. But the semiconductor proposal, first reported by the Wall Street Journal, was part of a “recycled” package of goods purchase offers that Beijing first presented in the spring of 2018, the source said.

The person also said little progress had been made so far this week on the most difficult issues involving U.S. demands that China make sweeping changes to curb forced technology transfers and industrial subsidies and to enforce intellectual property rights.

Mnuchin and U.S. Trade Representative Robert Lighthizer opened the high-level talks at the Diaoyutai state guest house with Chinese Vice Premier Liu He, the top economic adviser to Chinese President Xi.

Trump told reporters on Wednesday that the negotiations had been progressing “very well.”

A Bloomberg report cited sources as saying Trump was considering pushing back the deadline by 60 days to give negotiators more time after the Chinese side requested a 90-day extension.

A source familiar with the talks told Reuters on Wednesday before the high-level talks began that the Chinese had not raised the idea of a 90-day extension.

Hu Xijin, the editor-in-chief of China’s nationalist Global Times tabloid, also tweeted that speculation on an extension was “inaccurate,” citing a source close to talks.

Chinese Commerce Ministry spokesman Gao Feng told reporters he had no information on the trade talks’ progress.

Trump has said he did not expect to meet with Xi before March 1, but White House spokeswoman Sarah Sanders has raised the possibility of a meeting between the leaders at the president’s retreat at Mar-a-Lago in Florida.

Chinese Foreign Ministry spokeswoman Hua Chunying said she noted Trump had said many times he wished to meet with Xi, and that China was willing to maintain “close contact” with the U.S. side, but said she had no information to share on any visit by the Chinese president.

‘TESTED BY THE TRADE WAR’

The Chinese government has offered few details about the state of negotiations this week.

Chinese January trade data released on Thursday showed imports from the United States fell 41.2 percent from a year earlier to $9.24 billion, the lowest amount in dollar terms since February 2016.

Exports to the United States also declined 2.4 percent to $36.54 billion, the lowest amount since last April.

China’s trade surplus with the United States narrowed to $27.3 billion in January, from $29.87 billion in December.

China’s soybean imports fell 13 percent in January from a year earlier, customs data showed, as a hefty duty on shipments from the United States, its second largest supplier, curbed purchases.

The United States has used tariffs as leverage to demand Beijing make major structural policy changes such as enforcing intellectual property rights.

But China has denied accusations of trade abuses. While Chinese officials have repeatedly pledged to improve market access for foreign investors, few experts expect Beijing to agree to anything that would force fundamental changes to what Washington complains is its state-led approach to trade.

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China January trade surplus with U.S. narrows to $27.3 billion

BEIJING (Reuters) – China’s trade surplus with the United States narrowed to $27.3 billion in January, from $29.87 billion in December, customs data showed on Thursday.

China’s exports to the United States fell 2.4 percent in January from a year earlier, while imports from the United States plunged 41.2 percent.

China’s large trade surplus with the United States has long been a sore point with Washington, and is at the centre of a bitter dispute between the world’s two biggest economies.

The two countries have hit each other with tit-for-tariffs on goods worth hundreds of billions of dollars.

A new round of Sino-U.S. trade talks began in Beijing on Monday as the two sides’ renewed efforts to hammer out a deal ahead of a March 1 deadline when U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.        

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Exclusive: FBI investigating top Vitol executives in Americas – sources

RIO DE JANEIRO (Reuters) – The FBI is investigating trading firm Vitol’s top two executives in the Americas in connection with a Brazil bribery case involving deals with Petroleo Brasileiro SA, two sources with direct knowledge of the matter told Reuters.

Mike Loya, Houston-based head of Vitol in the United States, and Antonio Maarraoui, the company’s head for Latin American and the Caribbean, are under investigation by the U.S. law enforcement agency, the sources said, speaking on condition of anonymity. Brazilian prosecutors previously said the pair had direct knowledge of a Vitol kickback scheme with Petrobras.

London-headquartered Vitol, the world’s biggest independent oil trader, said it has a zero tolerance policy for bribery and corruption. Neither Loya nor Maarraoui responded to requests for comment via email.

John Marzulli, a spokesman for U.S. Attorney for the Eastern District of New York Richard Donoghue, declined to confirm or deny that an investigation into the men is underway by the office.

The FBI’s media relations office said by email that it “neither confirms nor denies the existence of investigations.”

The FBI’s role is the second recent sign that U.S. authorities are stepping up their involvement in the trading fraud case, the latest twist in Brazil’s sweeping “Car Wash” corruption probe.

Last week, Reuters reported that the U.S. Justice Department was investigating a former U.S.-based oil trader for Petrobras who already is charged in Brazil with taking part in the alleged corruption scheme involving commodity companies Vitol SA, Glencore Plc and Trafigura AG.

The trader, Rodrigo Garcia Berkowitz, 39, is cooperating with U.S. authorities in the investigation and may face charges in the United States, sources said.

Brazilian prosecutors said Loya and Maarraoui had direct knowledge of a Vitol kickback scheme with Petrobras.

The men are not yet facing charges in Brazil. It was not immediately known if they were being charged in the United States.

Vitol rivals Trafigura and Glencore have declined to comment on the U.S. investigation. Glencore reiterated past statements that it is cooperating with Brazilian authorities. Trafigura said it takes the allegations seriously. All of the companies have been suspended from business dealings with Petrobras.

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US Treasury Secretary Steven Mnuchin hopes for 'productive' trade meetings in China

BEIJING (REUTERS) – United States Treasury Secretary Steven Mnuchin said on Wednesday (Feb 13) that he hopes for “productive” trade meetings in China this week, as the two countries seek to hammer out an agreement amid a festering dispute that has seen both level tariffs at each other.

US tariffs on US$200 billion (S$271 billion) worth of imports from China are scheduled to rise to 25 per cent from 10 per cent if the two sides cannot reach a deal by a March 1 deadline, increasing pain and costs in sectors from consumer electronics to agriculture. 

Mr Mnuchin, asked by reporters as he left his Beijing hotel what his hopes were for the visit, said “productive meetings”. He did not elaborate. 

Mr Mnuchin, along with US Trade Representative Robert Lighthizer, arrived in the Chinese capital on Tuesday. 

US President Donald Trump said on Tuesday that he could let the deadline for a trade agreement “slide for a little while”, but that he would prefer not to and expects to meet Chinese President Xi Jinping to close the deal at some point. 

Mr Trump’s advisers have previously described March 1 as a “hard deadline”, but Mr Trump has told reporters for the first time that a delay was now possible.

A growing number of US businesses and lawmakers have expressed hopes for a delay in the tariff increase while the two sides tackle the difficult US demands for major “structural” policy changes by China aimed at ending the forced transfer of American trade secrets, curbing Beijing’s industrial subsidies and enforcing intellectual property rights.

Mr Trump said last week that he did not plan to meet Mr Xi before the March 1 deadline. 

Mr Mnuchin and Mr Lighthizer are scheduled to hold talks on Thursday and Friday with Vice-Premier Liu He, the top economic adviser to Mr Xi. 

The latest round of talks in Beijing kicked off on Monday with discussions among deputy-level officials to try to work out technical details, including a mechanism for enforcing any trade agreement.

A round of talks at the end of January ended with some progress reported, but no deal and US declarations that much more work was needed.

China and the US, the world’s two largest economies, have a series of other disagreements too, including over Chinese telecoms giant Huawei Technologies. US Secretary of State Mike Pompeo cautioned allies on Monday against deploying equipment from Chinese telecoms giant Huawei on their soil, saying it would make it more difficult for Washington to “partner alongside them”. 

The US and its Western allies believe Huawei’s apparatus could be used for espionage, and see its expansion into central Europe as a way to gain a foothold in the European Union market. 

Both the Chinese government and Huawei have dismissed these concerns. 

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China upbeat on U.S. trade talks, but South China Sea tensions weigh

BEIJING (Reuters) – China struck an upbeat note on Monday as trade talks resumed with the United States, but also expressed anger at a U.S. Navy mission through the disputed South China Sea, casting a shadow over the prospect for improved Beijing-Washington ties.

The United States is expected to keep pressing China on longstanding demands that it reform how it treats American companies’ intellectual property in order to seal a trade deal that could prevent tariffs from rising on Chinese imports.

The latest talks will begin with working level discussions from Monday-Wednesday before high-level discussions at the end of the week. Negotiations concluded in Washington last month without a deal and with the top U.S. negotiator declaring that a lot more work needed to be done.

Lower-level officials will kick off the meetings on Monday, led on the American side by Deputy U.S. Trade Representative Jeffrey Gerrish.

Higher principal-level talks will take place Thursday and Friday with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

Chinese Foreign Ministry spokeswoman Hua Chunying told reporters that Beijing hopes to see good results from the talks.

The two sides are trying to hammer out a deal ahead of the March 1 deadline when U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.

U.S. President Donald Trump said last week he did not plan to meet with Chinese President Xi Jinping before that deadline, dampening hopes that a trade pact could be reached quickly.

Escalating tensions between the United States and China have cost both countries billions of dollars and roiled global financial markets.

The same day the latest talks began, two U.S. warships sailed near islands claimed by China in the disputed South China Sea, a U.S. official told Reuters.

Hua said the ships entered the waters without China’s permission, and that China expressed firm opposition and dissatisfaction at the move.

China claims a large part of the South China Sea, and has build artificial islands and air bases there, prompting concern around the region and in Washington.

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More outcomes expected from US-China trade talks: Analysts

BEIJING (CHINA DAILY/ASIA NEWS NETWORK) – Chinese Vice-Premier Liu He will hold a new round of high-level China-US economic and trade consultations with United States Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Beijing on Thursday (Feb 14) and Friday.

Analysts said the two sides are likely to propose weightier measures to address economic and trade differences and to broaden overall cooperation.

According to the Ministry of Commerce, based on recent talks in Washington, China and the US will engage in further discussions on issues of common concern. The US delegation arrives in Beijing on Monday.

China and the US have been embroiled in trade frictions for several months. The two sides are now in the midst of a 90-day tariff truce, which began on Dec 1, when President Xi Jinping and his US counterpart, Donald Trump, met on the sidelines of the G20 summit in Buenos Aires.

Wei Jianguo, vice-chairman of the China Center for International Economic Exchanges, said China-US trade consultations have made “a big stride forward”.

“In the next stage, the two sides will still be subject to various global pressures. However, I believe that the two sides will be able to propose more weighty measures to solve differences in their further consultations,” Wei said.

Zhou Mi, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, said companies in the two countries definitely do not want to end their cooperation. Calling for a stable environment, Zhou said more and more achievements may be made through cooperation at different levels.

This year marks the 40th anniversary of the establishment of Sino-US diplomatic ties. In 2018, trade volume between China and the US exceeded US$630 billion (S$854 billion), and two-way investment surpassed US$240 billion, according to the Ministry of Commerce.

Nicholas Burns, former US undersecretary of state, said the Sino-US relationship is “the most important relationship that both of our countries have.” The US and China, though facing certain challenges in bilateral relations, should learn how to compete with each other as well as how to work together, the official Xinhua News Agency cited him as saying.

Zhang Yansheng, a senior CCIEE researcher, said the two countries can properly handle trade conflicts and foster cooperation despite some headwinds, adding that cooperation is the best and only choice for the two sides.

Xue Rongjiu, deputy director of the Beijing-based China Society for WTO Studies, stressed that the US should not consider China as an economic threat. A country shouldn’t be measured by the size of its economy, but by its development level, pointing out that in terms of per capita GDP, China still ranks as a developing country, Xue said.

The global community should give China more room for gradual reform including offering more access to foreign companies and supporting investment in industrial upgrading, infrastructure, environmental protection and urbanization, which will further stimulate economic growth, he said.

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U.S.-China trade talks resume next week, focus on intellectual property

WASHINGTON (Reuters) – U.S. negotiators are preparing to press China next week on longstanding demands that it reform how it treats American companies’ intellectual property in order to seal a trade deal that could prevent tariffs from rising on Chinese imports.

A new round of trade talks begins in Beijing on Monday, following up on the most recent set of negotiations concluded in Washington last week without a deal and with the top U.S. negotiator declaring a lot more work needed to be done.

A White House official said on Friday preparations were underway and the focus of talks would continue to be pressing Beijing to make structural reforms.

The White House announced a timeframe for the Beijing talks in a statement. It said lower level officials will kick off the meetings on Monday, led on the American side by Deputy U.S. Trade Representative Jeffrey Gerrish.

Higher principal-level talks will take place Thursday and Friday with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

Lighthizer, who Trump named to spearhead the process after agreeing a 90-day truce in a trade war with Beijing, has been a strong proponent of pushing China to make such reforms and end what the United States views as unfair trade practices including stealing intellectual property and forcing U.S. companies to share their technology with Chinese firms.

China has denied it engages in such practices.

“The United States is a great producer of technology, and innovation, and know-how, and trade secrets. And we have to operate in an environment where those things are protected,” Lighthizer said last week after talks at the White House.

“I’m by no means predicting success; there is a lot of work that has to be done,” he said about the talks.

The sides are trying to hammer out a trade deal weeks ahead of a March deadline when U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.

Escalating tensions between the United States and China have cost both countries billions of dollars and roiled global financial markets.

Trump said on Thursday he did not plan to meet with Chinese President Xi Jinping before the March 1 deadline, dampening hopes that a trade pact could be reached quickly.

If negotiations in China do not progress sufficiently, the U.S. officials said increased tariffs will take effect. Washington could agree to extend the deadline without a deal if talks are progressing. Trump said last week he did not think the deadline would need to be extended, though he said a deal might not be on paper by then.

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Germany's foreign trade hit a fresh record in 2018

BERLIN (Reuters) – The volume of Germany’s foreign trade hit a record in 2018, the Federal Statistics Office said, underlining how exposed Europe’s largest economy is to a global trading system that is under threat from protectionism and the threat of a trade war.

The annual figures — showing that Germany had exported 1.3 trillion euros’ worth of goods and imported 1.1 trillion euros — exceeded the previous record set in 2017. The trade surplus for the year narrowed slightly.

Germany, the continent’s economic motor, has boomed for a decade thanks to its role as a supplier of equipment to the world’s industrial nations. That makes it vulnerable to a possible trade war between China and the United States, which has taken a more protectionist stance under President Donald Trump.

But the latest monthly figures, showing unexpected month-on-month growth in both exports and imports, appeared to snap a long run of gloomy economic indicators, possibly indicating that the economy’s long-expected slowdown may yet be postponed.

Seasonally adjusted exports rose 1.5 percent month-on-month – up from a 0.4 percent fall in the previous month, and confounding forecasts of 0.2 percent growth. Imports meanwhile rose 1.2 percent, compared to a 1.6 percent decline in the previous month.

That meant the trade surplus widened to 19.4 billion euros from 18.4 billion euros the month before.

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U.S. and China to resume trade talks next week in Beijing

WASHINGTON (Reuters) – U.S. Treasury Secretary Steven Mnuchin said on Wednesday that he and other U.S. officials will travel to Beijing next week for trade talks, aiming to clinch a deal to avert a March 2 increase in U.S. tariffs on Chinese goods.

Mnuchin said in an interview with CNBC that the talks he and U.S. Trade Representative Robert Lighthizer led in Washington last week with China’s Vice Premier Liu He were “very productive.”

“Ambassador Lighthizer and myself and a large team are on our way to Beijing next week. We are committed to continue these talks,” Mnuchin said. “We’re putting in an enormous amount of effort to try to hit this deadline and get a deal. So that’s our objective.”

President Donald Trump said in his State of the Union address on Tuesday that any new trade deal with China “must include real, structural change to end unfair trade practices, reduce our chronic trade deficit and protect American jobs.”

Trump has vowed to increase U.S. tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent currently if the two sides cannot reach a deal by 12:01 a.m. (0501 GMT) on March 2.

The two sides remain far apart on addressing U.S. demands that China make deep structural changes to its trade and economic policies and shrink the U.S. goods trade deficit. The Commerce Department on Wednesday reported the U.S. goods trade deficit with China reached $382 billion through the first 11 months of 2018, eclipsing the $375 billion gap during all of 2017, though the deficit narrowed for the month of November from October.

Trump’s negotiators want Beijing to more strenuously enforce American intellectual property rights, stop cyber-hacking of trade secrets, curb industrial subsidies and end policies that coerce U.S. companies to turn over technology to Chinese competitors as a price of doing business in China’s vast market.

A critical part of any deal, they say, would be a mechanism to verify and enforce China’s follow-through on any commitments it makes.

“We are also very focused on free and fair trade for U.S. companies to have access there and to having a more level playing field which will bring down the trade deficit,” Mnuchin said, though he said there is still have much to do to reach an agreement.

“I don’t think it would be productive to speculate on the outcome because we have a lot of work left to do. … If we can’t get to the deadline, that’s not because we haven’t worked around the clock,” Mnuchin said.

Lighthizer held a closed-door briefing with U.S. senators on Wednesday on the upcoming China talks and the proposed new trade agreement between United States, Mexico and Canada.

“He is optimistic” about the talks with China, said Republican Senator Tim Scott, who was in the meeting. He said Lighthizer told senators that purchases of agricultural products looked to remain a sticking point.

“That’s one of those things, he says, one of those outliers of an issue that still raises real concern, and that he is still looking for ways to continue to address that and hammer on that,” Scott told reporters.

China, which bought about 60 percent of the 2017 U.S. soybean crop, cut off purchases of U.S. supplies during the trade war between the two countries.

China’s Liu, during last week’s talks with Trump, promised further Chinese purchases of soybeans. Since then, Beijing has bought 2.6 million tonnes of the product.

Before the trade war, U.S. sold more than 30 million tonnes of soybeans to China annually.

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Republican senators to Trump: Do not terminate NAFTA

WASHINGTON (Reuters) – Republican senators on Wednesday urged the top U.S. trade negotiator to counsel President Donald Trump against formally terminating the North American Free Trade Agreement as a way to pressure Congress to act quickly to approve a replacement deal.

Senator John Cornyn, a Texas Republican, told reporters it would be “immeasurably harder if the president decided to withdraw from NAFTA and then tried to jam Congress.”

Cornyn said U.S. Trade Representative Robert Lighthizer told senators that it was not his decision and he would pass their concerns onto Trump. Lighthizer declined to comment after meeting with senators for more than 90 minutes.

Senator Charles Grassley, who chairs the Finance Committee that overseas trade issues, said after the meeting that the issue of withdrawing from NAFTA was discussed “and we all said that that would be a bad thing to do.”

Asked why he opposed a withdrawal, Grassley added: “I think it is very unrealistic in any environment to think you’re ever going to get Canada and Mexico back to the bargaining table.”

Trump told reporters on Dec. 1 he planned to give formal notice “within a relatively short period of time” and set a six-month deadline for ratification.

But more than two months later, Trump has not acted. A report on the economic impacts of the new U.S.-Mexico-Canada Agreement has been delayed by the 35-day partial government shutdown and is now not expected until April.

Several Republican senators also said they oppose any effort to impose up to 25 percent tariffs on imported cars and trucks on national security grounds. The Commerce Department must deliver the results of its investigation to the White House by Feb. 17.

“It was made very clear in there that tariffs on autos don’t have much to do with national security,” Grassley said.

Senators also said the White House must get rid of tariffs on imported Canadian and Mexican aluminum and steel if they want to win approval of the trade deal in the U.S. Senate.

Senator Lamar Alexander, a Tennessee Republican, said the metal tariffs are hurting automakers. “They are making it harder to build cars in Tennessee,” he said Wednesday. “You can’t build more cars and have more jobs in the United States if you have the highest priced steel.”

Administration officials told Reuters previously that the auto tariff investigation was a tool to try to win trade concessions from the European Union and Japan. Trump has vowed not to impose new auto tariffs as long as progress is being made.

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