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US-China trade war heats up as surplus hits record $34 Billion (Video)

The Duran – News in Review – Episode 136.

Alex Christoforou

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According to a report by the AFP, China’s trade surplus with the United States ballooned to a record $34.1 billion in September, despite a raft of US tariffs, official data showed Friday, adding fuel to the fire of a worsening trade war.

Relations between the world’s two largest economies have soured sharply this year, with US President Donald Trump vowing on Thursday to inflict economic pain on China if it does not blink.
The two countries imposed new tariffs on a massive amount of each other’s goods mid-September, with the US targeting $200 billion in Chinese imports and Beijing firing back at $60 billion worth of US goods.

“China-US trade friction has caused trouble and pounded our foreign trade development,” customs spokesman Li Kuiwen told reporters Friday.

But China’s trade surplus with the US grew 10 percent in September from a record $31 billion in August, according to China’s customs administration. It was a 22 percent jump from the same month last year.

China’s exports to the US rose to $46.7 billion while imports slumped to $12.6 billion.

China’s overall trade — what it buys and sells with all countries including the US — logged a $31.7 billion surplus, as exports rose faster than imports.

Exports jumped 14.5 percent for September on-year, beating forecasts from analysts polled by Bloomberg News, while imports rose 14.3 percent on-year.

While the data showed China’s trade remained strong for the month, analysts forecast the trade war will start to hurt in coming months.

China’s export jump for the month suggests exporters were shipping goods early to beat the latest tariffs, said ANZ’s China economist Betty Wang, citing the bounce in electrical machinery exports, much of which faced the looming duties.

“We will watch for downside risks to China’s exports” in the fourth quarter, Wang said.

Analysts say a sharp depreciation of the yuan has also helped China weather the tariffs by making its exports cheaper.

“The big picture is the Chinese exports have so far held up well in the face of escalating trade tensions and cooling global growth, most likely thanks to the competitiveness boost provided by a weaker renminbi (yuan),” said Julian Evans-Pritchard, China economist at Capital Economics.

“With global growth likely to cool further in the coming quarters and US tariffs set to become more punishing, the recent resilience of exports is unlikely to be sustained,” he said.

According to Bloomberg US President Donald Trump’s new U.S.-Mexico-Canada Agreement isn’t that different from the North American Free Trade Agreement that it replaced. But hidden in the bowels of the new trade deal is a clause, Article 32.10, that could have a far-reaching impact. The new agreement requires member states to get approval from the other members if they initiate trade negotiations with a so-called non-market economy. In practice, “non-market” almost certainly means China. If, for example, Canada begins trade talks with China, it has to show the full text of the proposed agreement to the U.S. and Mexico — and if either the U.S. or Mexico doesn’t like what it sees, it can unilaterally kick Canada out of the USMCA.

Although it seems unlikely that the clause would be invoked, it will almost certainly exert a chilling effect on Canada and Mexico’s trade relations with China. Forced to choose between a gargantuan economy across the Pacific and another one next door, both of the U.S.’s neighbors are almost certain to pick the latter.

This is just another part of Trump’s general trade waragainst China. It’s a good sign that Trump realizes that unilateral U.S. efforts alone won’t be enough to force China to make concessions on issues like currency valuation, intellectual-property protection and industrial subsidies. China’s export markets are much too diverse:

If Trump cuts the U.S. off from trade with China, the likeliest outcome is that China simply steps up its exports to other markets. That would bind the rest of the world more closely to China and weaken the global influence of the U.S. China’s economy would take a small but temporary hit, while the U.S. would see its position as the economic center of the world slip into memory.

Instead, to take on China, Trump needs a gang. And that gang has to be much bigger than just North America. But most countries in Europe and East Asia probably can’t be bullied into choosing between the U.S. and China. — their ties to the U.S. are not as strong as those of Mexico and Canada. Countries such as South Korea, Germany, India and Japan will need carrots as well as sticks if they’re going to join a U.S.-led united trade front against China.

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the escalating trade war between the United States and China, and the record trade surplus that positions China with a bit more leverage than Trump anticipated.

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Via Zerohedge Trump Threatens China With More Tariffs, Does Not Seek Economic “Depression”

US equity futures dipped in the red after President Trump threatened to impose a third round of tariffs on China and warned that Chinese meddling in U.S. politics was a “bigger problem” than Russian involvement in the 2016 election.

During the same interview with CBS’s “60 Minutes”, in which Trump threatened to impose sanctions against Saudi Arabia if the Saudis are found to have killed WaPo reported Khashoggi, and which sent Saudi stock plunging, Trump said he “might,” impose a new round of tariffs on China, adding that while he has “great chemistry” with Chinese President Xi Jinping, and noting that Xi “wants to negotiate”, he doesn’t “know that that’s necessarily going to continue.” Asked if American products have become more expensive due to tariffs on China, Trump said that “so far, that hasn’t turned out to be the case.”

“They can retaliate, but they can’t, they don’t have enough ammunition to retaliate,” Trump says, “We do $100 billion with them. They do $531 billion with us.”

Trump was also asked if he wants to push China’s economy into a depression to which the US president said “no” before comparing the country’s stock-market losses since the tariffs first launched to those in 1929, the start of the Great Depression in the U.S.

“I want them to negotiate a fair deal with us. I want them to open their markets like our markets are open,” Trump said in the interview that aired Sunday. So far, the U.S. has imposed three rounds of tariffs on Chinese imports totaling $250 billion, prompting China to retaliate against U.S. products. The president previously has threatened to hit virtually all Chinese imports with duties.

Asked about his relationship with Vladimir Putin and the Kremlin’s alleged efforts to influence the 2016 presidential election, Trump quickly turned back to China. “They meddled,” he said of Russia, “but I think China meddled too.”

“I think China meddled also. And I think, frankly, China … is a bigger problem,” Trump said, as interviewer Lesley Stahl interrupted him for “diverting” from a discussion of Russia.

Shortly before an audacious speech by Mike Pence last weekend, in which the US vice president effectively declared a new cold war on Beijing (see “Russell Napier: Mike Pence Announces Cold War II”), Trump made similar accusations during a speech at the United Nations last month, which his aides substantiated by pointing to long-term Chinese influence campaigns and an advertising section in the Des Moines Register warning farmers about the potential effects of Trump’s tariffs.

Meanwhile, in a rare U.S. television appearance, China’s ambassador to the U.S. said Beijing has no choice but to respond to what he described as a trade war started by the U.S.

“We never wanted a trade war, but if somebody started a trade war against us, we have to respond and defend our own interests,” said China’s Ambassador Cui Tiankai.

Cui also dismissed as “groundless” the abovementioned suggestion by Vice President Mike Pence that China has orchestrated an effort to meddle in U.S. domestic affairs. Pence escalated the rhetoric in a speech Oct. 4, saying Beijing has created a “a whole-of-government approach” to sway American public opinion, including spies, tariffs, coercive measures and a propaganda campaign.

Pence’s comments were some of the most critical about China by a high-ranking U.S. official in recent memory. Secretary of State Michael Pompeo got a lecture when he visited Beijing days later, about U.S. actions that were termed “completely out of line.” The tough words followed months of increases tit-for-tat tariffs imposed by Washington and Beijing that have ballooned to cover hundreds of billions of dollars in bilateral trade.

During a recent interview with National Public Radio, Cui said the U.S. has “not sufficiently” dealt in good faith with the Chinese on trade matters, saying “the U.S. position keeps changing all the time so we don’t know exactly what the U.S. would want as priorities.”

Meanwhile, White House economic director Larry Kudlow said on “Fox News Sunday” that President Donald Trump and Chinese President Xi Jinping will “probably meet” at the G-20 summit in Buenos Aires in late November. “There’s plans and discussions and agendas” being discussed, he said. So far, talks with China on trade have been “unsatisfactory,” Kudlow said. “We’ve made our asks” on allegations of intellectual property theft and forced technology transfers, he added. “We have to have reciprocity.”

Addressing the upcoming meeting, Cui said he was present at two previous meetings of Xi and Trump, and that top-level communication “played a key role, an irreplaceable role, in guiding the relationship forward.” Despite current tensions the two have a “good working relationship,” he said.

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“If Trump cuts the U.S. off from trade with China, the likeliest outcome is that China simply steps up its exports to other markets. That would bind the rest of the world more closely to China and weaken the global influence of the U.S. China’s economy would take a small but temporary hit, while the U.S. would see its position as the economic center of the world slip into memory.” …and then many U.S. store shelves would have large empty spaces, and replacements imported from other countries would likely be more expensive. Watching the position of the U.S. as an… Read more »

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I think that is exactly what will happen. The sanctions give justification for China to pivot to other markets. This is just as stupid as sanctioning Russia which is self sufficient in food, minerals, energy, etc. Washington cannot spell geopolitics let alone understand it.

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BREXIT chaos, as May’s cabinet crumbles (Video)

The Duran Quick Take: Episode 18.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at the various scenarios now facing a crumbling May government, as the Brexit Withdrawal Agreement is forcing cabinet members to resign in rapid succession. The weekend ahead is fraught with uncertainty for the UK and its position within, or outside, the European Union.

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If Theresa May’s ill-fated Brexit Withdrawal Agreement is eventually rejected this could trigger a vote of no confidence, snap elections or even a new referendum…

Here are six possible scenarios facing Theresa May and the UK (via The Guardian)

1 Parliament blocks Theresa May’s draft withdrawal agreement and political declarations

May faces an enormous task to win parliamentary approval, given that Labour, the SNP, the DUP and 51 Tories have said they will not vote for it.

If the remaining 27 EU member states sign off the draft agreement on 25 November, the government will have to win over MPs at a crucial vote in early December.

If May loses the vote, she has 21 days to put forward a new plan. If she wins, she is safe for now.

2 May withdraws the current draft agreement

The prime minister could decide that she will not get the draft agreement through parliament and could seek to renegotiate with the EU.

This would anger Tory backbenchers and Brussels and would be seen as a humiliation for her government. It might spark a leadership contest too.

3 Extend article 50

May could ask the European council to extend article 50, giving her more time to come up with a deal that could be passed by parliament – at present, the UK will leave on 29 March 2019.

Such a request would not necessarily be granted. Some EU governments are under pressure from populist parties to get the UK out of the EU as soon as possible.

4 Conservative MPs trigger a vote of no confidence in the prime minister

If Conservative MPs believe May is no longer fit for office, they could trigger a no-confidence vote.

Members of the European Research Group claim that Graham Brady, the chair of the powerful 1922 Committee, will receive the necessary 48 letters this week.

A vote could be held as soon as early next week. All Tory MPs would be asked to vote for or against their leader. If May wins, she cannot be challenged for at least 12 months. If she loses, there would be a leadership contest to decide who will become prime minister.

5 General election – three possible routes

If May fails to get support for the current deal, she could call a snap general election.

She would table a parliamentary vote for a general election that would have to be passed by two thirds of MPs. She would then set an election date, which could be by the end of January.

This is an unlikely option. May’s political credibility was severely damaged when she called a snap election in 2017, leading to the loss of the Conservative party’s majority.

Alternatively, a general election could be called if a simple majority of MPs vote that they have no confidence in the government. Seven Tory MPs, or all of the DUP MPs, would have to turn against the government for it to lose the vote, triggering a two-week cooling-off period. May would remain in office while MPs negotiate a new government.

Another route to a general election would be for the government to repeal or amend the Fixed-term Parliaments Act which creates a five-year period between general elections. A new act would have to be passed through both the Commons and the Lords – an unlikely scenario.

6 Second referendum

May could decide it is impossible to find a possible draft deal that will be approved by parliament and go for a people’s vote.

The meaningful vote could be amended to allow MPs to vote on whether the country holds a second referendum. It is unclear whether enough MPs would back a second referendum and May has ruled it out.

 

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Brexit Withdrawal Agreement may lead to Theresa May’s downfall (Video)

The Duran – News in Review – Episode 151.

Alex Christoforou

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The Brexit Withdrawal Agreement has been published and as many predicted, including Nigel Farage, the document is leading to the collapse of Theresa May’s government.

During an interview with iTV’s Piers Morgan, remain’s Alistair Campell and leave’s Nigel Farage, were calling May’s Brexit deal a complete disaster.

Via iTV

Alastair Campbell: “This doesn’t do remotely what was offered…what is the point”

“Parliament is at an impasse”

“We have to go back to the people” …”remain has to be on the ballot paper”

Nigel Farage:

“This is the worst deal in history. We are giving away in excess of 40B pounds in return for precisely nothing. Trapped still inside the European Union’s rulebook.

“Nothing has been achieved.”

“In any negotiation in life…the other side need to know that you are serious about walking away.”

“What monsieur Barnier knew from day one, is that at no point did Theresa May intend to walk away.”

“Fundamental matter of trust to the electors of our country and those who govern us.”

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss Theresa May’s Brexit Withdrawal Agreement, and why the deal is a full on victory for the European Union and a document of subjugation for the United Kingdom.

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Coming in at 585 pages, the draft agreement will be closely scrutinized over the coming days but here are some of the highlights as outlined by Zerohedge

  • UK and EU to use the best endeavours to supersede Ireland protocol by 2020
  • UK can request extension of the transition period any time before July 1st, 2020
  • EU, UK See Level-Playing Field Measures in Future Relationship
  • Transition period may be extended once up to date yet to be specified in the text
  • EU and UK shall establish single customs territory and Northern Ireland is in same customs territory as Great Britain

The future relationship document is less than seven pages long. It says the U.K. and EU are seeking a free-trade area with cooperation on customs and rules: “Comprehensive arrangements creating a free trade area combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition.”

The wording might raise concerns among Brexiters who don’t want regulatory cooperation and the measures on fair competition could amount to shackling the U.K. to EU rules.

As Bloomberg’s Emma Ross-Thomas writes, “There’s a clear sense in the documents that we’re heading for a customs union in all but name. Firstly via the Irish backstop, and then via the future relationship.”

Separately, a government summary of the draft agreement suggests role for parliament in deciding whether to extend the transition or to move in to the backstop.

But perhaps most importantly, regarding the controversial issue of the Irish border, the future relationship document says both sides aim to replace the so-called backstop – the thorniest issue in the negotiations – with a “subsequent agreement that establishes alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing.”

On this topic, recall that the U.K.’s fear was of being locked into the backstop arrangement indefinitely in the absence of a broader trade deal. The draft agreement includes a review process to try to give reassurance that the backstop would never be needed. Basically, the U.K. could choose to seek an extension to the transition period – where rules stay the same as they are currently – or opt to trigger the backstop conditions. In fact, as Bloomberg notes, the word “backstop,” which has been a sticking point over the Irish border for weeks, is mentioned only once in the text.

As Bloomberg further adds, the withdrawal agreement makes clear that the U.K. will remain in a single customs area with the EU until there’s a solution reached on the Irish border. It’s what Brexiteers hate, because it makes it more difficult for the U.K. to sign its own free-trade deals, which they regard as a key prize of Brexit.

Predictably, EU Commission President Juncker said decisive progress has been made in negotiations.

Meanwhile, as analysts comb over the documents, Jacob Rees-Mogg, chairman of the European Research Group, has already written to Conservative lawmakers urging them to vote against the deal. He says:

  • May is handing over money for “little or nothing in return”
  • The agreement treats Northern Ireland differently from the rest of the U.K.
  • It will “lock” the U.K. into a customs union with the EU
  • It breaks the Tory election manifesto of 2017

The full document…

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4 resignations and counting: May’s government ‘falling apart before our eyes’ over Brexit deal

The beginning of the end for Theresa May’s government.

The Duran

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Via RT


Four high profile resignations have followed on the heels of Theresa May’s announcement that her cabinet has settled on a Brexit deal, with Labour claiming that the Conservative government is at risk of completely dissolving.

Shailesh Vara, the Minister of State at the Northern Ireland Office was the first top official to resign after the prime minister announced that her cabinet had reached a draft EU withdrawal agreement.

An hour after his announcement, Brexit Secretary Dominic Raab – the man charged with negotiating and finalizing the deal – said he was stepping down, stating that the Brexit deal in its current form suffers from deep flaws. Esther McVey, Secretary of State for Work and Pensions, submitted her letter of resignation shortly afterwards. More resignations have followed.

Labour’s shadow Cabinet Office minister, Jon Trickett, predicted that this is the beginning of the end for May’s government.

The government is falling apart before our eyes as for a second time the Brexit secretary has refused to back the prime minister’s Brexit plan. This so-called deal has unraveled before our eyes

Shailesh Vara: UK to be stuck in ‘a half-way house with no time limit’

Kicking off Thursday’s string of resignations, Vara didn’t mince words when describing his reservations about the cabinet-stamped Brexit deal.

Theresa May’s EU withdrawal agreement leaves the UK in a “halfway house with no time limit on when we will finally become a sovereign nation,” his letter of resignation states. Vara went on to warn that the draft agreement leaves a number of critical issues undecided, predicting that it “will take years to conclude” a trade deal with the bloc.

“We will be locked in a customs arrangement indefinitely, bound by rules determined by the EU over which we have no say,” he added.

Dominic Raab: Deal can’t be ‘reconciled’ with promises made to public

Announcing his resignation on Thursday morning, Brexit Secretary Dominic Raab tweeted: “I cannot in good conscience support the terms proposed for our deal with the EU.”

Raab claimed that the deal in its current form gives the EU veto power over the UK’s ability to annul the deal.

No democratic nation has ever signed up to be bound by such an extensive regime.

Former Conservative Party leader Iain Duncan Smith said that Raab’s resignation as Brexit secretary is “devastating” for May.

“It sounds like he has been ignored,” he told the BBC.

Raab’s departure will undoubtedly encourage other Brexit supporters to question the deal, political commentators have observed.

Esther McVey: Deal ‘does not honor’ Brexit referendum

Work and Pensions Secretary Esther McVey didn’t hold back when issuing her own letter of resignation. According to McVey, the deal “does not honour” the result of the Brexit referendum, in which a majority of Brits voted to leave the European Union.

Suella Braverman: ‘Unable to sincerely support’ deal

Suella Braverman, a junior minister in Britain’s Brexit ministry, issued her resignation on Thursday, saying that she couldn’t stomach the deal.

“I now find myself unable to sincerely support the deal agreed yesterday by cabinet,” she said in a letter posted on Twitter.

Suella Braverman, MP Parliamentary Under Secretary of State for the Department for Exiting the EU © Global Look Press / Joel Goodman
Braverman said that the deal is not what the British people voted for, and threatened to tear the country apart.

“It prevents an unequivocal exit from a customs union with the EU,” she said.

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