U.S. Plans to Raise Tariffs On Friday, Says China Broke Promises

People walk by a globe structure showing the United States of America on display outside a bank in Beijing, Monday, May 6, 2019. U.S.  Donald Trump raised pressure on China on Sunday, threatening to hike tariffs on $200 billion worth of Chinese goods in a tweet that sent financial markets swooning. Trump’s comments, delivered on Twitter, came as a Chinese delegation was scheduled to resume talks in Washington on Wednesday aimed at resolving a trade war that has shaken investors and cast gloom over the world economy. (AP Photo/Andy Wong)

Accusing Beijing of “reneging” on commitments it made in earlier talks, the nation’s top trade negotiator said Monday that the Trump administration will increase tariffs on $200 billion in Chinese goods Friday, a sharp escalation in a yearlong trade dispute.

At the same time, a Chinese trade delegation is expected to arrive in Washington to resume negotiations on Thursday, a day later than originally planned.

At a briefing with reporters, neither U.S. Trade Representative Robert Lighthizer nor Treasury Secretary Steven Mnuchin offered details of China’s alleged backsliding, and there was no immediate response from Beijing.

Mnuchin said Trump officials learned over the weekend that Chinese officials “were trying to go back on some of the language” that had been negotiated in 10 earlier rounds of talks.

The U.S. officials said that at 12:01 a.m. Eastern time Friday, the administration will raise the tariffs from 10% to 25%. President Donald Trump had announced those plans via Twitter on Sunday, expressing frustration with the pace of negotiations. The hit list includes such varied products as baseball gloves, vacuum cleaners and burglar alarms.

The reiteration Monday of the president’s threat from high-level Trump officials reinforced the administration’s determination to put Beijing on the defensive.

By threatening to raise taxes on Chinese imports, Trump is throwing down a challenge to Beijing: Agree to sweeping changes in China’s government-dominated economic model — or suffer the consequences.

The unexpected ultimatum shook up financial markets, which had expected the world’s two biggest economies to resolve a yearlong standoff over trade, perhaps by the end of the week.

“It’s a significant change in the president’s tone,” said Timothy Keeler, a partner at the law firm Mayer Brown and former chief of staff for the U.S. Trade Representative office. “It certainly increases the possibility that you’ll have no deal.”

For weeks, Trump administration officials had been suggesting that the U.S. and Chinese negotiators were making steady progress.

Suddenly on Sunday, Trump said he had lost patience: “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” he tweeted.

Trump also said he planned “shortly” to slap 25% tariffs on another $325 billion in Chinese products, covering everything China ships to the United States.

The two countries are engaged in high-stakes commercial combat over China’s aggressive push to establish Chinese companies as world leaders in cutting-edge fields such as robotics and electric vehicles.

The United States accuses Beijing of predatory practices, including hacking into U.S. companies’ computers to steal trade secrets, forcing foreign firms to hand over technology in exchange for access to the Chinese market and unfairly subsidizing Chinese firms at the expense of foreign competitors.

The Trump administration has imposed 10% tariffs on $200 billion in Chinese imports and 25% tariffs on another $50 billion. The Chinese have retaliated by targeting $110 billion in U.S. imports.

Global stock markets sank Monday on Trump’s tweetstorm. But shares in the United States regained some of the lost ground on news that Chinese officials were planning to go ahead with this week’s meetings in Washington. Still, the Chinese government did not provide details on exactly when talks would resume and who would be on China’s negotiating team.

U.S. officials said they expected that China’s delegation would be led again by Vice Premier Liu He, a confidante of Chinese President Xi Jinping.

Beijing is wrestling with an internal conflict: It is eager to end a trade fight that has battered Chinese exporters, but it doesn’t want to look like it’s bowing to the Trump administration’s demands for far-reaching concessions.

Trump’s threat makes going ahead with talks “very difficult politically” for Xi’s government, said Jake Parker, vice president of the U.S.-China Business Council. He said the Chinese public might “view this as a capitulation” if Beijing reached an agreement before Trump’s Friday deadline.

The conflict is testing how far Beijing is willing to go in changing a state-led economic model it sees as the path to prosperity and global influence — and how much power Washington will have to enforce any agreement.

Beijing is willing to change industrial plans that provoke foreign opposition but wants to preserve the ruling Communist Party’s dominant role in directing economic development, said Willy Lam, a politics specialist at the Chinese University of Hong Kong.

Chinese officials have said they are willing to let foreign companies participate in plans that call for government-led creation of global competitors in robotics and other technologies. But they have yet to release details, and it is unclear whether the concessions will satisfy Trump.

Xi is “adamant about party-state control over major sectors of the economy,” Lam said. “If they give this up, then China in effect ceases to be a socialist country.”

Beijing agreed early on to narrow its trade surplus with the United States — a staggering $379 billion last year — by purchasing more American soybeans, natural gas and other exports.

At the same time, Xi’s government has announced a steady drumbeat of promises to open markets — in businesses that include auto manufacturing and banking. But none of the moves directly addresses American complaints.

The negotiators are also looking for a way to hold Beijing to any commitments it makes. The Trump administration wants to keep tariffs on Chinese imports to maintain leverage over Beijing.

“Trump wants a certain amount of tariffs to remain in place just in case the Chinese don’t honor their promises,” Lam said. “The Chinese refuse to give the Americans the right to penalize them.”

The Chinese are also skittish about allowing Washington to dictate changes to industrial policy and subsidies, said Raoul Leering, a trade specialist for Dutch bank ING. They see that as “having another country decide your economic policy.”

Trump also seems to be calculating that Xi needs a deal more than he does. The Chinese economy is decelerating. “Trump believes he can bully the Chinese,” Lam said. “Trump realizes the Chinese economy is facing a rough patch, and Xi Jinping is under pressure from his own people.”

But Trump also has an incentive to reach a deal. The trade war is creating uncertainty for businesses trying to decide where to buy supplies, locate factories and make investments. And it’s been weighing on a strong U.S. stock market, which the president likes to tout as evidence that his economic policies are working.


Source: U.S. Plans to Raise Tariffs On Friday, Says China Broke Promises



“The Attack Against The Rich Has Begun,” Wealth Author Warns

"Screw the wealthy and the migrants" is written on the facade of a Dior shop in Paris during the Yellow Vest (Gilets Jaunes) demonstrations in December 2018. (GEOFFROY VAN DER HASSELT/AFP/Getty Images)

Academic and author Rainer Zitelmann has reason to worry. In writing his latest book, The Power of Capitalism: A Journey Through Recent History Across Five Continents, he has witnessed a growth of socialism and anti-capitalism throughout the world.

More worryingly, he says, these movements have taken an anti-rich stance. “I think we have now worldwide an attack on the rich and an attack on capitalism,” Zitelmann says in conversation over his new book.

Examples of this “attack” are commonplace in the countries Zitelmann has studied: Proposals for a wealth tax in the U.S. from Senator Elizabeth Warren and in the U.K. from the Labour Party.

Nor is this war on wealth about political views from the left or the right, he warns: “In France, you have a socialist and anti-capitalist movement. Even the right-wing people there are socialist”.

In December, France’s Yellow Vest (Gilets Jaunes) movement labeled president Emmanuel Macron “president of the rich”, as they torched luxury cars and shops on the Champs-Élysées.

Then, when France’s billionaires donated their millions to re-build Notre Dame, the same movement criticized them for not donating to other causes.

A protester holds a placard reading in French "Notre-Dame (of Paris) = one million euros, Burn out at hospitals = zero euro" during a demonstration called by the Yellow Vest (Gilets Jaunes) (NICOLAS TUCAT/AFP/GettyImages)

A protester holds a placard reading in French “Notre-Dame (of Paris) = one million euros, Burn out at hospitals = zero euro” during a demonstration called by the Yellow Vest (Gilets Jaunes) (NICOLAS TUCAT/AFP/GettyImages)


“We have a stronger socialist movement than we had before,” Zitelmann says.

“Would Tony Blair be elected in the Labour Party today? I don’t think so. And Gerhard Schroder, who made these economic reforms [in Germany], would he be elected? No. Do you think Bill Clinton would be elected in the Democratic Party today?

An elderly woman walks past Prada in Hong Kong (PHILIPPE LOPEZ/AFP/GettyImages)

An elderly woman walks past Prada in Hong Kong (PHILIPPE LOPEZ/AFP/GettyImages)


The Front Lines Are Drawn

Whatever your political viewpoint, it is not impossible to see why somebody might be anti-rich.

Global inequality has grown since the financial recession in 2008. According to a report by Credit Suisse last year, the top 1 percent of global wealth holders held 42.6 percent of all household wealth in 2008. This rose up to 47.2 percent in mid-2018.

While Zitelmann agrees with parallels drawn with 2008, he says the rich are not the ones to blame for the worldwide recession: “I criticize the policy of the central banks especially the European Central Bank”.

In the witchhunt for somebody to blame, however, the finger was pointed at the wealthy. “This is what happens always in history where there are bad things happening and they are hard to understand: They look for scapegoats”, Zitelmann asserts.

“This is what they criticize – the gap between the poor and the rich. But I think that’s the wrong question. I’m concerned about the poverty in the world and not relative to the divide between the rich and the poor.”

How The Rich Should React

What happens if you run a successful business: You have played by the rules, struck lucky perhaps, and made a lot of money in the process. How do you react to this public backlash against your bank balance?

Many are keeping a low profile. A growing number of wealthy are curbing their ostentation. The rich today try not to look rich, let alone talk about it.

An example emerged in Zitelmann’s home country of Germany last year. Thenon-executive chairman of BlackRock in Germany, Friedrich Merz, ran to succeed Angela Merkel as leader of the ruling Christian Democratic Party (CDU).

Merz’s wealth quickly became the headline, however. “I’m upper middle class”, said Merz in an effort to deflect criticism of his privilege, which included ownership of two private jets.

Friedrich Merz, former candidate for the CDU party leadership (Maja Hitij/Getty Images)

Friedrich Merz, former candidate for the CDU party leadership (Maja Hitij/Getty Images)


The debate over his wealth grew as Merz first denied and then accepted that he was a millionaire.

“This is crazy,” comments Zitelmann. The rich should not be apologetic, he believes. “They should stop being defensive and start to explain why rich people are good for society and not bad for society.

“For me its the wake-up call for rich people.”

I write about the vast fortunes of Europe’s wealthy amidst the continent’s political ups and downs. I cover where their money ends up:

Source: “The Attack Against The Rich Has Begun,” Wealth Author Warns

What Billionaires Want The Secret Influence of America’s 100 Richest – The Guardian


If we judge US billionaires by their most prominent fellows, they may seem to be a rather attractive bunch: ideologically diverse (perhaps even tending center-left), frank in speaking out about their political views, and generous in philanthropic giving for the common good – not to mention useful for the goods and jobs they have helped produce. The very top titans – Warren Buffett, Jeff Bezos, Bill Gates – have all taken left-of-center stands on various issues, and Buffett and Gates are paragons of philanthropy. The former New York mayor Michael Bloomberg is known for his advocacy of gun control, gay rights, and environmental protection. George Soros (protector of human rights around the world) and Tom Steyer (focused on young people and environmental issues) have been major donors to the Democrats……..

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