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US-China Trade Talks Collapse As Geopolitical Superpower Fight Begins (Video)

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the breakdown in trade talks between the United States and China.

After the talks reached an impasse, US President Donald Trump said that he would raise tariffs on $200 billion of imports from China from 10% to 25%. The increase will take effect on Friday, according to a special filing announced on Wednesday in the US government’s Federal Register.

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Via Zerohedge


Readers who have been paying close attention to every leak related to the ongoing US-China trade talks might remember this FT story from six weeks ago about Beijing’s penchant for returning trade-deal draft proposals to Washington riddled with red-line stikeouts.

We only bring it up now because, according to a play-by-play published by Reuters Wednesday morning, it appears President Trump finally lost his patience with Beijing when they returned a draft trade deal with strikeouts eliminating virtually all of the major concessions made during the past few weeks.

Though reports about Beijing’s unwillingness to compromise had begun appearing with more regularity during the preceding week, according to Reuters, it appears Beijing was deliberately trying to provoke President Trump. And if this was indeed China’s goal, it appears it succeeded.

The diplomatic cable from Beijing arrived in Washington late on Friday night, with systematic edits to a nearly 150-page draft trade agreement that would blow up months of negotiations between the world’s two largest economies, according to three U.S. government sources and three private sector sources briefed on the talks.

The document was riddled with reversals by China that undermined core U.S. demands, the sources told Reuters.

In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: theft of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

U.S. President Donald Trump responded in a tweet on Sunday vowing to raise tariffs on $200 billion worth of Chinese goods from 10 to 25 percent on Friday – timed to land in the middle of a scheduled visit by China’s Vice Premier Liu He to Washington to continue trade talks.

One administration insider said the changes “undermines the core architecture of the deal”, particularly since Robert Lighthizer has prioritized an enforcement regime that’s closer to something typically used for punitive economic sanctions than a trade deal.

Lighthizer and Treasury Secretary Steven Mnuchin said earlier this week that Trump’s tariff threats were prompted by Beijing reneging on its promises. But they refused to disclose any details. It now appears that Beijing has gone back on practically all of the concessions it had made during the negotiations, including deals on currency stabilization, enforcement and market access for cloud-computing firms, to name a few.

But despite the steady stream of optimistic trade rhetoric, the only real surprise here – as one administration insider put it – is that it took this long for the White House to blow up the deal.

Lighthizer and U.S. Treasury Secretary Steven Mnuchin were taken aback at the extent of the changes in the draft. The two cabinet officials on Monday told reporters that Chinese backtracking had prompted Trump’s tariff order but did not provide details on the depth and breadth of the revisions.

Liu last week told Lighthizer and Mnuchin that they needed to trust China to fulfil its pledges through administrative and regulatory changes, two of the sources said. Both Mnuchin and Lighthizer considered that unacceptable, given China’s history of failing to fulfil reform pledges.

One private-sector source briefed on the talks said the last round of negotiations had gone very poorly because “China got greedy.”

“China reneged on a dozen things, if not more…The talks were so bad that the real surprise is that it took Trump until Sunday to blow up,” the source said.

“After 20 years of having their way with the U.S., China still appears to be miscalculating with this administration.”

Though Vice Premier Liu He will visit Washington later this week, the notion that a deal can be salvaged, at least in the short term, looks almost impossibly remote. And it’s not hard to see why.

Even as the standoff in the Pacific between the US and China has grown increasingly tense – thanks in part to Washington’s belligerently pro-Taiwan (and its refusal to allow Beijing to have its cake and eat it, too when it comes to contested islands in the South China Sea) – Beijing has put on a happy face and parroted Washington’s line that American military meddling in the region is a separate issue.

But as Washington prepares to sell billions of dollars in arms to Taiwan (only months after President Xi vowed to bring the errant province back under Beijing’s control), it appears the Chinese might finally be losing their patience.

On Tuesday, Foreign Ministry spokesman Geng Shuang told reporters that Beijing had lodged “stern representations” with the US over a House bill expressing support for Taiwan. Beijing complained that this “severely violates” the longstanding “One China” policy and represents “gross interference” in China’s affairs.

While the Communist Party might have been willing to countenance repeated American intrusions into the South China Sea, Xi earlier this year threatened to smite anybody who dares interfere with Beijing’s plans for Taiwan.

Walking away from the trade-deal table might only be the beginning.

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Olivia Krotheuclides de oliveira pinto netopogohereFlorianGeyerJoe Recent comment authors
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Hmmm
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Hmmm

China playing Trump’s game – reneg on or modify anything and everything previously agreed to.

The threat of runaway inflation will cool Trump’s jets.

ISC
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ISC

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ISC
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ISC

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ISC
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ISC

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Joe
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Joe

Trump is an idiot! And who pays these tariffs? Not China, but the US consumer who pays an extra 25% on his Huawei phone or other consumer good imported from China.

FlorianGeyer
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FlorianGeyer

@ Joe.

That’s the US intention I suspect. The only way now for the US to reduce her debt mountain is via inflation. And tariffs ensure that inflation will occur.

pogohere
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pogohere

China’s perspective:

comment image

From: The Geopolitics of 2017 in 4 Maps (map 2)
https://geopoliticalfutures.com/the-geopolitics-of-2017-in-4-maps/

Olivia Kroth
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China is the world’s largest exporter – with global exports approaching $2.5 trillion. There is hardly a country on the planet which does not buy goods made In China. US exports constitute slightly less than 2% of China’s GDP. In less than 40 years, China rose from one of the world’s poorest countries, to become the globe’s number 2 economy. The Communist Party in China set about lifting nearly 700 million of its citizens out of poverty – creating an enormous middle class with substantial disposable incomes. In 2016, China produced 2 million new millionaires. Last year, there were 2.5… Read more »

Olivia Kroth
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Russia becomes chief guest of Fourth Silk Road International EXPO in China’s Xian Business & Economy May 11, 16:20 UTC+3 The Kurgan, Chelyabinsk, Khanty-Mansiysk, Sverdlovsk, Tyumen and Yamalo-Nenets regions of Russia’s Urals Federal District have set out their stalls at the EXPO XIAN /China/, May 11. /TASS/. Russia has become one of the chief guests of the Fourth Silk Road International EXPO that kicked off in the Chinese city of Xian on Saturday. This year, Russia’s regions of the Urals Federal District are showcasing their trade, economic, investment, educational and scientific capacities at the event. Russian presidential envoy to the… Read more »

euclides de oliveira pinto neto
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euclides de oliveira pinto neto

A colonia USA Inc. ainda está com sorte… quero ver quando os chineses não aceitarem o dólar “toilet paper USAdo” como moeda de pagamento das importações… que deverá ser o próximo passo da China…

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