Financial Times writers Colby Smith and Stephanie Stacey reported yesterday that, "The dollar hit a three-month low on Tuesday and US Treasury yields slid as investors grew increasingly confident that…
Reuters writers Jeff Mason and David Shepardson reported this week that, “President Donald Trump dramatically increased pressure on China to reach a trade deal by announcing on Sunday he would hike U.S. tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon.
....of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!— Donald J. Trump (@realDonaldTrump) May 5, 2019
The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!— Donald J. Trump (@realDonaldTrump) May 6, 2019
“The move marked a major escalation in trade tensions between the world’s two largest economies and a shift in tone from Trump, who cited progress in talks as recently as Friday.”
The article explained that, “A less than rosy update from United States Trade Representative Robert Lighthizer, including details that China was pulling back from some commitments it made previously, prompted Trump’s decision and jab on Twitter at Beijing, officials said.”
Mason and Shepardson noted that, “Trump said tariffs on $200 billion of goods would increase to 25 percent on Friday from 10 percent, reversing a decision he made in February to keep them at the 10 percent rate after progress between the two sides.
“The president also said he would target a further $325 billion of Chinese goods with 25 percent tariffs ‘shortly,’ essentially targeting all products imported to the United States from China.”
Washington Post writers David Lynch, Damian Paletta and Robert Costa reported on Sunday that,
Trump acted out of frustration over Chinese resistance to some of his most far-reaching demands, according to several analysts following the negotiations.
“For their part, Chinese officials are insisting that the U.S. remove all of the tariffs that Trump imposed last year as part of any deal — a demand that the president so far is refusing,” the Post article said.
James Politi and Courtney Weaver reported at The Financial Times Online on Sunday that, “Among the biggest sticking points in the talks is the fate of existing US tariffs on Chinese goods, which Beijing would like to see completely erased but Washington would like to retain in part so that it can keep pressure on China to comply with the deal.”
Share of China's Soybean Imports by Country: pic.twitter.com/c8oSQHmYxR— Michael McDonough (@M_McDonough) May 6, 2019
Also Sunday, New York Times writer Ana Swanson and Keith Bradsher reported that, “But it remains to be seen whether Mr. Trump’s threat will produce a beneficial trade agreement for the United States — or whether his attempts to pressure China will backfire by pushing already-tense relations past the breaking point. While the United States believes it has leverage over China, huge swaths of the American economy depend on access to the Chinese market for materials, products and sales.”
From FY2014 - FY2017, #China imported an average of $26.2 billion of US #agricultural products. However, @USDA forecasts China’s imports of US agricultural products to decline to $20.5 billion in FY2018 & to $13.6 billion in FY2019 as a result of the US-China #trade dispute (CRS) pic.twitter.com/LTN7y33Mpw— Farm Policy (@FarmPolicy) May 4, 2019
On Monday, Bloomberg writers Jenny Leonard, Saleha Mohsin, and Jennifer Jacobs reported that, “Donald Trump’s top trade negotiator told him that Beijing was back-tracking on a trade deal following a round of talks last week, angering the president and leading him to threaten on Sunday to raise tariffs on Chinese goods, according to people familiar with the matter.
“In talks last week in Beijing, Chinese officials told their U.S. counterparts they would not agree to a trade deal that required changes to Chinese law, the people said. China had previously agreed to change its laws in the text of the deal, they said.”
The Bloomberg article noted that, “The U.S. side, led by Trade Representative Robert Lighthizer, thought that issues around what’s known as forced technology transfer were resolved and considered the Chinese position on changing its laws to be an attempt to renegotiate, the people said. Lighthizer was angered by the move and briefed Trump.”
“Trump’s trade negotiators weren’t particularly surprised by his tweets, the people said. The White House didn’t immediately comment,” the Bloomberg writers said.
Words (and tweets) have consequences, and it's the rural economy that pays the price. https://t.co/rBQYUSXPzn— House Agriculture Committee (@HouseAgDems) May 6, 2019
Meanwhile, Bloomberg writers Michael Hirtzer and Mario Parker reported Monday that, “Soybean and corn futures slumped after tweets from Donald Trump that threaten an escalation of the U.S.-China trade war, frustrating battered American producers hoping for a quick resolution.
July soybean futures capped a seventh straight loss as the contract slumped to a record. Soy has been one of the hardest hit commodities by the trade war as China, the world’s top consumer, snubbed American imports.
Hirtzer and Parker indicated that, “The bad weather that farmers are facing is a double blow, according to Scott Irwin, an agricultural economist at the University of Illinois in Urbana-Champaign. Not only are they unable to plant, he said, but this leaves them more time to stew on the current conditions from trade to the overall downturn, Irwin said.
“Recent news reports on the U.S.-China trade talks had led many farmers to believe a resolution might be near. ‘The sense in farm country was ‘my gosh we’re finally going to get out of this nightmare’,’ he said. ‘And then boom.’
It’s ‘like a bad version of the movie ‘Groundhog Day’ for the U.S. farmer,’ Irwin said.”
And Bloomberg writer Shawn Donnan reported on Monday that, “President Donald Trump’s top trade negotiator said the U.S. plans to raise tariffs on Chinese goods on Friday, accusing Beijing of backpedaling on commitments it made during negotiations.
“Still, the trade talks will continue and a Chinese delegation will visit Washington on Thursday and Friday, U.S. Trade Representative Robert Lighthizer told reporters Monday in Washington. Amid those discussions, the Trump administration plans to increase duties on Chinese imports at 12:01 a.m. on May 10, he said.
“‘We felt we were on track to get somewhere. Over the course of last week we have seen an erosion of commitments by China. That in our view is unacceptable,’ Lighthizer said, adding that significant issues remain unresolved, including whether tariffs will remain in place.”
On Tuesday, Bloomberg writers Jenny Leonard, Steven Yang and Shawn Donnan reported that,
China’s top trade negotiator Liu He will travel to the U.S. this week for high-stakes talks as prospects dimmed for maintaining a fragile truce after President Donald Trump threatened to raise tariffs on Chinese goods starting Friday.
“Vice Premier Liu will meet with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, on May 9 and 10, according to a statement Tuesday on the Chinese Ministry of Commerce website. At the same time, China is preparing retaliatory tariffs on U.S. imports should Trump carry out his threat, according to people familiar on the matter.”
The article stated that, “The latest twist sets up Thursday as a crucial moment in the yearlong trade war with potentially huge ramifications for companies, markets, consumers and politicians in both nations. In light of the U.S. ultimatum, attention will turn to whether Liu offers enough concessions to stave off higher tariffs or whether China plays hardball with retaliatory measures.”
Leonard, Yang and Donnan added that, “China would make its retaliatory tariffs effective one minute after the U.S., if the decision to add an extra 25 percent in duties on $200 billion of Chinese imports comes into force, the people said, who asked not to be named as the matter isn’t public. The State Council and Commerce Ministry didn’t respond to requests for comment on the tariff plans.”