US and Chinese officials are working to <a href="https://www.wionews.com/world/china-us-agree-to-restart-trade-talks-at-xi-trump-meeting-report-231374">schedule a top-level trade talk</a> by telephone next week but a face-to-face encounter has not been scheduled yet, US officials said Friday.

Efforts to pencil in a new round of negotiations come a week after President Donald Trump and Chinese counterpart Xi Jinping met in Japan and agreed to restart their stalled negotiations.

But Beijing this week showed no sign of softening its position, with the Commerce Ministry announcing Thursday that any resolution would require Washington to lift the steep tariffs it imposed on Chinese imports last year.

"I know they're working on coming up with a date for so-called face-to-face meetings. That will happen," top White House economic advisor Larry Kudlow told Fox Business Network on Friday.

"I don't know if that's this coming week. I think the phone calls are this week. The face-to-face may not be for another week, but I don't want to get ahead of that curve," he said.

An official with the US Trade Representative's office confirmed to AFP that efforts are underway to schedule a call between top negotiators for next week.

Meanwhile, The South China Morning Post also reported Friday that talks were due to resume in Beijing next week.

US stocks appeared to react positively to word talks will resume, erasing some of the losses from earlier in the day when a strong jobs report called into doubt a hoped-for cut in interest rates by the Federal Reserve.

Trade talks with Beijing have been stalled since May, when Trump accused Chinese negotiators of reneging on core commitments made over prior months of negotiating.

But at their meeting last week on the sidelines of the Group of 20 summit in Japan, Trump agreed to soften the hardline stance on Chinese telecommunications giant Huawei, a company US officials claim poses a national security threat.

The decision triggered a backlash among lawmakers on Capitol Hill but White House officials said the changes should not create any additional risk to US national security.

The White House also said this week it had no intention of easing a ban on Huawei's participation in the development of 5G wireless networks in the United States.

Beijing and Washington have hit each other with tariffs on $360 billion in two-way trade since last year, rattling markets and weighing on the manufacturing sector while fueling concerns about a weakening global economy.

US and Chinese officials are working to schedule a top-level trade talk by telephone next week but a face-to-face encounter has not been scheduled yet, US officials said Friday.

US and Chinese officials are working to schedule a top-level trade talk by telephone next week but a face-to-face encounter has not been scheduled yet, US officials said Friday. Efforts to pencil in a new round of negotiations come a week after President Donald Trump and Chinese counterpart Xi Jinping met in Japan and agreed to restart their stalled negotiations. But Beijing this week showed no sign of softening its position, with the Commerce Ministry announcing Thursday that any resolution would require Washington to lift the steep tariffs it imposed on Chinese imports last year. "I know they're working on coming up with a date for so-called face-to-face meetings. That will happen," top White House economic advisor Larry Kudlow told Fox Business Network on Friday. "I don't know if that's this coming week. I think the phone calls are this week. The face-to-face may not be for another week, but I don't want to get ahead of that curve," he said. An official with the US Trade Representative's office confirmed to AFP that efforts are underway to schedule a call between top negotiators for next week. Meanwhile, The South China Morning Post also reported Friday that talks were due to resume in Beijing next week. US stocks appeared to react positively to word talks will resume, erasing some of the losses from earlier in the day when a strong jobs report called into doubt a hoped-for cut in interest rates by the Federal Reserve. Trade talks with Beijing have been stalled since May, when Trump accused Chinese negotiators of reneging on core commitments made over prior months of negotiating. But at their meeting last week on the sidelines of the Group of 20 summit in Japan, Trump agreed to soften the hardline stance on Chinese telecommunications giant Huawei, a company US officials claim poses a national security threat. The decision triggered a backlash among lawmakers on Capitol Hill but White House officials said the changes should not create any additional risk to US national security. The White House also said this week it had no intention of easing a ban on Huawei's participation in the development of 5G wireless networks in the United States. Beijing and Washington have hit each other with tariffs on $360 billion in two-way trade since last year, rattling markets and weighing on the manufacturing sector while fueling concerns about a weakening global economy.

US-China trade officials aim to talk next week by telephone

By Allen Morrison and Stewart Black 
 
When US President Donald Trump meets Chinese leader Xi Jinping at the G-20 economic summit in Japan, hopes aren’t all that high that they will conclude with a comprehensive trade deal.

Nonetheless, most US business leaders and investors are optimistic that the two countries will eventually reach a trade agreement – and when they do, it will pry open Chinese markets and create a wealth of opportunities for US companies.

Specifically, American negotiators are pushing for a deal that could end forced technology transfers, improve intellectual property protection and widen access to China’s markets – all with the ultimate goal of creating a “level playing field” for US businesses.

Yet as beneficial as resolving intellectual property and technology transfer issues with China maybe – not to mention ending the trade war – this is not the biggest reason American companies have failed to do business in China. Rather, as our forthcoming research shows, their biggest failure stems from their inability to penetrate the country’s complex business ecosystems.

Changes to intellectual property regulations and tariff provisions will not magically fix this.

Doing business in China

Since the 1970s, foreign companies, including US businesses, have poured trillions of dollars into China to build global supply chains and access their markets.

In 2018, total foreign direct investment stocks in China reached a record $2.76 trillion, up from just over $915 billion a decade earlier.

For some Western companies as diverse as Coca-Cola, General Motors, Apple, Lego and L'Oréal, China has been a boon and remains a focus of their international expansion plans. After decades of commitment, they have made significant progress in China by emphasizing adaptability, delegation of decision-making, cultural learning, and talent acquisition and development.

But research we’re planning to publish later this summer shows that China remains an enigma for most U.S. businesses. Only 41 companies in the Standard &amp; Poor’s 500 stock index generate 10 per cent or more of their global revenues from China. Of the 30 largest companies in the index, only four have revenues that exceed 10 per cent of their global revenues.

And a 2017 Goldman Sachs analysis found that in all, S&amp;P 500 companies earned just 1 per cent of their revenues in China, compared with 30 per cent in total non-US sales.

Rise of the Chinese ‘megafirm’ 
 
No doubt Chinese government regulations, tariffs and the theft of intellectual property are among the significant barriers that have made it harder for US&nbsp;and other Western companies to do business in China. But we found that the biggest challenge is their failure to penetrate state-dominated business ecosystems built around what are essentially Chinese “megafirms.”

China’s largest conglomerates, which have grown an average of 20 per cent&nbsp;per year over the past decade have much in common with their Asian cousins. Like the chaebol of South Korea and keiretsu in Japan, affiliates and subsidiaries of Chinese megafirms are typically part of a network of cross-owned businesses. Ownership structures are difficult for outsiders to penetrate and act as nearly insurmountable barriers to entry for foreign companies.

But Chinese megafirms have a unique aspect to their structure and ownership: the role of the state, which includes national, provincial or municipal entities. Rather than serve as background context for decision-making within Chinese megafirms acting strictly as a regulator, the state is itself an owner and plays a much greater role than most Americans know.

The 10 biggest Chinese companies by revenue are all either state-owned or owned by a mixture of publicly listed investors and Chinese government entities. Of the 111 Chinese businesses on the Fortune Global 500 list in 2018, state-owned entities represented nearly 71%.

The rest were privately owned – many with publicly listed shares – but don’t let that fool you. With only a few exceptions, publicly listed companies in China are invariably partly owned by other companies in which operate in their ecosystem and these, in turn, are owned or partly owned by either the state or government-controlled entities.

Given the dearth of publicly accessible information and exacerbated by the maze of cross-ownerships, following the equity trail and fully understanding ownership is difficult in China and most often futile.

Success for foreign companies in China is invariably dependent on fitting into a major business ecosystem. These include networks of suppliers, assemblers, financial institutions, distributors, retailers and trading companies. At the center of this circle are typically one or several megafirms.

Unfortunately, the US businesses that can’t make it to the inside of that circle – the vast majority – are unable to prosper in China. And the Chinese government helps to pick who gets in, and who doesn’t.

Megafirms meet megabanks 
 
The Chinese government does not need to own a controlling share in order to exert powerful influence.

It can cause its companies to enter into new partnerships, diversify into new product lines, set up new production facilities, or expand distribution merely by signaling the desired outcomes through public or private statements, “introductions” to targeted partners and promises of new customers and revenue streams.

The government also uses Chinese “megabanks” to drive economic growth according to national priorities. In 2018, nearly 65 per cent of all bank loans in China were to corporate entities, twice as high as in the U.S. Megafirms are provided funding at preferential rates, leaving those on the outside at a disadvantage.

The banking sector in China is huge, with total assets of about $35 trillion in 2018, more than three times the country’s entire GDP. This circular financing feeds corporate growth and creates a circular system of codependency.

Because foreign companies are outside the system, they are at inherent disadvantage when it comes to attaining local loans from Chinese banks.

That creates another problem for Western companies. Most of them invest overseas with the goal of repatriating profits back home. China makes this very difficult. Which means they typically have to bring money in from their home countries – but because of Chinese tax rules and strict foreign exchange controls, they also have difficulty getting their investments back out.

Impenetrable China

A positive resolution to the trade war – either during the G-20 or sometime later – would be welcomed by many. But we believe that whatever agreements are reached on tariffs or intellectual property, these structural issues will persist.

The US&nbsp;and other outside companies that want to do business in China face a dilemma: Do they reinvent themselves in an effort to become insiders in China? Doing so would not only require a change in mentality, but also a commitment to being “in China, for China.”

Otherwise, China’s business ecosystem, with its megafirms and layers of affiliates with the government at the center of it all, will remain largely impenetrable for Western companies. Irrespective of what happens at the G-20, China is very unlikely to change a system that has created massive wealth and prosperity for the Chinese people. 
&nbsp;

(Allen Morrison is Professor of Global Management, Arizona State University; Stewart Black is Professor of Management Practice in Global Leadership and Strategy, INSEAD)

(This article was originally published on The Conversation. Read the original article)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)&nbsp; 
&nbsp;

By Allen Morrison and Stewart Black When US President Donald Trump meets Chinese leader Xi Jinping at the G-20 economic summit in Japan, hopes aren’t all that high that they will conclude with a comprehensive trade deal.

By Allen Morrison and Stewart Black When US President Donald Trump meets Chinese leader Xi Jinping at the G-20 economic summit in Japan, hopes aren’t all that high that they will conclude with a comprehensive trade deal. Nonetheless, most US business leaders and investors are optimistic that the two countries will eventually reach a trade agreement – and when they do, it will pry open Chinese markets and create a wealth of opportunities for US companies. Specifically, American negotiators are pushing for a deal that could end forced technology transfers, improve intellectual property protection and widen access to China’s markets – all with the ultimate goal of creating a “level playing field” for US businesses. Yet as beneficial as resolving intellectual property and technology transfer issues with China maybe – not to mention ending the trade war – this is not the biggest reason American companies have failed to do business in China. Rather, as our forthcoming research shows, their biggest failure stems from their inability to penetrate the country’s complex business ecosystems. Changes to intellectual property regulations and tariff provisions will not magically fix this. Doing business in China Since the 1970s, foreign companies, including US businesses, have poured trillions of dollars into China to build global supply chains and access their markets. In 2018, total foreign direct investment stocks in China reached a record $2.76 trillion, up from just over $915 billion a decade earlier. For some Western companies as diverse as Coca-Cola, General Motors, Apple, Lego and L'Oréal, China has been a boon and remains a focus of their international expansion plans. After decades of commitment, they have made significant progress in China by emphasizing adaptability, delegation of decision-making, cultural learning, and talent acquisition and development. But research we’re planning to publish later this summer shows that China remains an enigma for most U.S. businesses. Only 41 companies in the Standard & Poor’s 500 stock index generate 10 per cent or more of their global revenues from China. Of the 30 largest companies in the index, only four have revenues that exceed 10 per cent of their global revenues. And a 2017 Goldman Sachs analysis found that in all, S&P 500 companies earned just 1 per cent of their revenues in China, compared with 30 per cent in total non-US sales. Rise of the Chinese ‘megafirm’ No doubt Chinese government regulations, tariffs and the theft of intellectual property are among the significant barriers that have made it harder for US and other Western companies to do business in China. But we found that the biggest challenge is their failure to penetrate state-dominated business ecosystems built around what are essentially Chinese “megafirms.” China’s largest conglomerates, which have grown an average of 20 per cent per year over the past decade have much in common with their Asian cousins. Like the chaebol of South Korea and keiretsu in Japan, affiliates and subsidiaries of Chinese megafirms are typically part of a network of cross-owned businesses. Ownership structures are difficult for outsiders to penetrate and act as nearly insurmountable barriers to entry for foreign companies. But Chinese megafirms have a unique aspect to their structure and ownership: the role of the state, which includes national, provincial or municipal entities. Rather than serve as background context for decision-making within Chinese megafirms acting strictly as a regulator, the state is itself an owner and plays a much greater role than most Americans know. The 10 biggest Chinese companies by revenue are all either state-owned or owned by a mixture of publicly listed investors and Chinese government entities. Of the 111 Chinese businesses on the Fortune Global 500 list in 2018, state-owned entities represented nearly 71%. The rest were privately owned – many with publicly listed shares – but don’t let that fool you. With only a few exceptions, publicly listed companies in China are invariably partly owned by other companies in which operate in their ecosystem and these, in turn, are owned or partly owned by either the state or government-controlled entities. Given the dearth of publicly accessible information and exacerbated by the maze of cross-ownerships, following the equity trail and fully understanding ownership is difficult in China and most often futile. Success for foreign companies in China is invariably dependent on fitting into a major business ecosystem. These include networks of suppliers, assemblers, financial institutions, distributors, retailers and trading companies. At the center of this circle are typically one or several megafirms. Unfortunately, the US businesses that can’t make it to the inside of that circle – the vast majority – are unable to prosper in China. And the Chinese government helps to pick who gets in, and who doesn’t. Megafirms meet megabanks The Chinese government does not need to own a controlling share in order to exert powerful influence. It can cause its companies to enter into new partnerships, diversify into new product lines, set up new production facilities, or expand distribution merely by signaling the desired outcomes through public or private statements, “introductions” to targeted partners and promises of new customers and revenue streams. The government also uses Chinese “megabanks” to drive economic growth according to national priorities. In 2018, nearly 65 per cent of all bank loans in China were to corporate entities, twice as high as in the U.S. Megafirms are provided funding at preferential rates, leaving those on the outside at a disadvantage. The banking sector in China is huge, with total assets of about $35 trillion in 2018, more than three times the country’s entire GDP. This circular financing feeds corporate growth and creates a circular system of codependency. Because foreign companies are outside the system, they are at inherent disadvantage when it comes to attaining local loans from Chinese banks. That creates another problem for Western companies. Most of them invest overseas with the goal of repatriating profits back home. China makes this very difficult. Which means they typically have to bring money in from their home countries – but because of Chinese tax rules and strict foreign exchange controls, they also have difficulty getting their investments back out. Impenetrable China A positive resolution to the trade war – either during the G-20 or sometime later – would be welcomed by many. But we believe that whatever agreements are reached on tariffs or intellectual property, these structural issues will persist. The US and other outside companies that want to do business in China face a dilemma: Do they reinvent themselves in an effort to become insiders in China? Doing so would not only require a change in mentality, but also a commitment to being “in China, for China.” Otherwise, China’s business ecosystem, with its megafirms and layers of affiliates with the government at the center of it all, will remain largely impenetrable for Western companies. Irrespective of what happens at the G-20, China is very unlikely to change a system that has created massive wealth and prosperity for the Chinese people. (Allen Morrison is Professor of Global Management, Arizona State University; Stewart Black is Professor of Management Practice in Global Leadership and Strategy, INSEAD) (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

A Trump-Xi trade deal would do little to fix the real problems US companies face in China

Asian share markets turned higher on Thursday following a media report the United States and China have tentatively agreed to a truce in their trade war, ahead of a closely-watched meeting between the two nations this weekend.

The South China Morning Post (SCMP), citing sources, said in Washington and Beijing were laying out an agreement that would help avert the next round of tariffs on an additional $300 billion of Chinese imports.

On Wednesday, US President Donald Trump said a trade deal with his Chinese counterpart Xi Jinping was possible this weekend though he was prepared to impose tariffs on virtually all remaining Chinese imports if talks fail.

"But the truce cake seems to have been baked," the SCMP cited one of its sources as saying.

Hopes the world's two biggest economies would finally reach an agreement were enough to cheer investors, sending MSCI's broadest index of Asia-Pacific shares outside Japan up 0.6%.

China led the gains with its blue-chip index up 1.4%. South Korea's KOSPI index was up 0.6% while Hong Kong's Hang Seng and Japan's Nikkei jumped 0.8%.

Relations between Washington and Beijing have spiralled downward since talks collapsed in May, when the United States accused China of reneging on pledges to reform its economy.

The ongoing trade war has already rattled investors who have ditched shares for the safety of bonds and gold this year. It has also prompted the U.S. Federal Reserve to pause its rate tightenings and, in fact, signal a cut as soon as next month.

Many traders said they expected the market to remain in a narrow range until after the weekend meeting of G20 leaders in Osaka, Japan where Trump is also holding bilateral talks with other nations.

"The bottom line is the market has been hit by a barrage of noise that gives us less clarity than before," said Chris Weston, market strategist at Pepperstone.

"While the most likely situation is we simply hear a lot of bravadoes that the two sides plan to work closely together and agree to find a solution that is amicable, we still need to consider if the event poses a gaping risk for markets," he added.

"It certainly feels as though the probability is we will see traders manage exposures, refraining from adding too much additional risk just in case."

Wall Street had been circumspect, with the Dow ending Wednesday down 0.04%, while the S&amp;P 500 lost 0.12% and the Nasdaq rose 0.32%.

Less that 50

Trump weighed into US monetary policy on Wednesday, accusing Federal Reserve Chairman Jerome Powell of doing a "bad job" and "out to prove how tough he is" by not cutting interest rates.

Markets are convinced the Fed will indeed ease at its next meeting in July, but had to scale back bets on a half-point cut following cautious comments from various policymakers.

Futures are 100% priced for a cut of 25 basis points, and imply a 22% chance of 50 basis points.

The probability of a less aggressive Fed and expectations of a Sino-China trade truce helped ease the selling pressure on the US dollar, which inched up to 96.276 on a basket of currencies from a three-month trough of 95.843.

The dollar bounced modestly against the yen to 107.97 and away from a low of 106.77. The euro likewise eased back to $1.13615 from a top of $1.1412.

The dollar's gains took a little of the shine off gold, which broke a six-session winning stretch and eased to $1,407.22 per ounce.

Oil prices ran into profit-taking in early Asia, having gained overnight on a larger-than-expected drawdown in crude stocks as exports hit a record high and surprise falls in refined product stockpiles.

Brent crude futures eased 20 cents to $66.29, while US crude lost 22 cents to $59.16 a barrel. 
&nbsp;

Asian share markets turned higher on Thursday following a media report the United States and China have tentatively agreed to a truce in their trade war, ahead of a closely-watched meeting between the two nations this weekend.

Asian share markets turned higher on Thursday following a media report the United States and China have tentatively agreed to a truce in their trade war, ahead of a closely-watched meeting between the two nations this weekend. The South China Morning Post (SCMP), citing sources, said in Washington and Beijing were laying out an agreement that would help avert the next round of tariffs on an additional $300 billion of Chinese imports. On Wednesday, US President Donald Trump said a trade deal with his Chinese counterpart Xi Jinping was possible this weekend though he was prepared to impose tariffs on virtually all remaining Chinese imports if talks fail. "But the truce cake seems to have been baked," the SCMP cited one of its sources as saying. Hopes the world's two biggest economies would finally reach an agreement were enough to cheer investors, sending MSCI's broadest index of Asia-Pacific shares outside Japan up 0.6%. China led the gains with its blue-chip index up 1.4%. South Korea's KOSPI index was up 0.6% while Hong Kong's Hang Seng and Japan's Nikkei jumped 0.8%. Relations between Washington and Beijing have spiralled downward since talks collapsed in May, when the United States accused China of reneging on pledges to reform its economy. The ongoing trade war has already rattled investors who have ditched shares for the safety of bonds and gold this year. It has also prompted the U.S. Federal Reserve to pause its rate tightenings and, in fact, signal a cut as soon as next month. Many traders said they expected the market to remain in a narrow range until after the weekend meeting of G20 leaders in Osaka, Japan where Trump is also holding bilateral talks with other nations. "The bottom line is the market has been hit by a barrage of noise that gives us less clarity than before," said Chris Weston, market strategist at Pepperstone. "While the most likely situation is we simply hear a lot of bravadoes that the two sides plan to work closely together and agree to find a solution that is amicable, we still need to consider if the event poses a gaping risk for markets," he added. "It certainly feels as though the probability is we will see traders manage exposures, refraining from adding too much additional risk just in case." Wall Street had been circumspect, with the Dow ending Wednesday down 0.04%, while the S&P 500 lost 0.12% and the Nasdaq rose 0.32%. Less that 50 Trump weighed into US monetary policy on Wednesday, accusing Federal Reserve Chairman Jerome Powell of doing a "bad job" and "out to prove how tough he is" by not cutting interest rates. Markets are convinced the Fed will indeed ease at its next meeting in July, but had to scale back bets on a half-point cut following cautious comments from various policymakers. Futures are 100% priced for a cut of 25 basis points, and imply a 22% chance of 50 basis points. The probability of a less aggressive Fed and expectations of a Sino-China trade truce helped ease the selling pressure on the US dollar, which inched up to 96.276 on a basket of currencies from a three-month trough of 95.843. The dollar bounced modestly against the yen to 107.97 and away from a low of 106.77. The euro likewise eased back to $1.13615 from a top of $1.1412. The dollar's gains took a little of the shine off gold, which broke a six-session winning stretch and eased to $1,407.22 per ounce. Oil prices ran into profit-taking in early Asia, having gained overnight on a larger-than-expected drawdown in crude stocks as exports hit a record high and surprise falls in refined product stockpiles. Brent crude futures eased 20 cents to $66.29, while US crude lost 22 cents to $59.16 a barrel.

Asian shares creep higher on hopes of US-China trade truce

Commerce and Industry Minister Piyush Goyal on Friday said India is well placed to handle the "crossfire" resulting from global trade war on the strength of the country's economy.

At a time when the world is witnessing trade wars across nations, India too will be impacted.

"Obviously, in a situation when the world is seeing trade wars across nations, across continents, India will come in the crossfire. But then it's a crossfire which we can handle," the minister said during Question Hour in Rajya Sabha.

The global trade war has been triggered by the US after it raised duties on imports, including aluminium and steel. Other countries, including India too retaliated by raising import duty on goods from the US.

The minister said irrespective of the world trade situation, India is looking at ways to "encash' opportunities to further exports. 
 
The minister further said India is competent to handle the international trade situation.

Goyal also dismissed contentions that India's exports have been hit badly after the US has terminated its Preferential Trade Treatment or GSP (Generalised System of Preferences) to India from June 5 this year.

"I would like to submit that the total impact of GSP is under $250-269 million in a year and for a country of size and strength of India, I can assure members (of the House) that it will not have any significant impact. India can handle the situation," he said when asked if India was discussing the issue with the US.

GSP, the minister said was unilateral, non-obligatory concession given by the US to India as a developing country.

"Some of the demands that were raised on India were such that India could not yield. I think national sovereignty and national interest is paramount," he said when asked if the government would initiate further negotiations in this regard with the US.

He further said India will continue to negotiate with all countries, including the US, but it will not be at the cost of sovereignty. 
 
On the country's exports, Goyal said it increased significantly during the last fiscal and in the current year also, the outward shipments are showing increasing trends.

He further said India has fortified its foreign exchange reserves and the government is taking pro-active measures to promote exports.

On a question related to the forthcoming visit of US Secretary of State Mike Pompeo to India, Goyal said there will be discussions on several issues.

Pompeo will be visiting India from June 25-27.&nbsp;

Commerce and Industry Minister Piyush Goyal on Friday said India is well placed to handle the "crossfire" resulting from global trade war on the strength of the country's economy.

Commerce and Industry Minister Piyush Goyal on Friday said India is well placed to handle the "crossfire" resulting from global trade war on the strength of the country's economy. At a time when the world is witnessing trade wars across nations, India too will be impacted. "Obviously, in a situation when the world is seeing trade wars across nations, across continents, India will come in the crossfire. But then it's a crossfire which we can handle," the minister said during Question Hour in Rajya Sabha. The global trade war has been triggered by the US after it raised duties on imports, including aluminium and steel. Other countries, including India too retaliated by raising import duty on goods from the US. The minister said irrespective of the world trade situation, India is looking at ways to "encash' opportunities to further exports. The minister further said India is competent to handle the international trade situation. Goyal also dismissed contentions that India's exports have been hit badly after the US has terminated its Preferential Trade Treatment or GSP (Generalised System of Preferences) to India from June 5 this year. "I would like to submit that the total impact of GSP is under $250-269 million in a year and for a country of size and strength of India, I can assure members (of the House) that it will not have any significant impact. India can handle the situation," he said when asked if India was discussing the issue with the US. GSP, the minister said was unilateral, non-obligatory concession given by the US to India as a developing country. "Some of the demands that were raised on India were such that India could not yield. I think national sovereignty and national interest is paramount," he said when asked if the government would initiate further negotiations in this regard with the US. He further said India will continue to negotiate with all countries, including the US, but it will not be at the cost of sovereignty. On the country's exports, Goyal said it increased significantly during the last fiscal and in the current year also, the outward shipments are showing increasing trends. He further said India has fortified its foreign exchange reserves and the government is taking pro-active measures to promote exports. On a question related to the forthcoming visit of US Secretary of State Mike Pompeo to India, Goyal said there will be discussions on several issues. Pompeo will be visiting India from June 25-27.

India well placed to deal with global trade crossfire, says Piyush Goyal

United States President Donald Trump is obsessed with trade tariffs. He misses no opportunity to upbraid China, India, Mexico and even the European Union (EU) on the high tariffs they impose on US products. &nbsp;

He is especially incensed by India’s 50 per cent import duty on Harley Davidson motorcycles, which have an infinitesimal market share in India. Yet for Trump, it is a symbol of how other countries “rip off America”, as he said in a recent television interview. Trump has used tariff threats to bully Mexico into sending 6,000 Mexican troops to stop refugees fleeing Central American countries like El Salvador and Honduras before they reach the US-Mexico border. &nbsp;

Trump has, meanwhile, held out a threat to slap 25 per cent tariffs on Chinese exports to the US valued at $300 billion in addition to the tariffs already in place on $250 billion worth of Chinese exports. Trump is expected to meet Chinese President Xi Jinping at the G20 Summit in Osaka, Japan, on June 28-29 to thrash out the issues in the escalating US-China trade war. &nbsp;

Where does India fit in? India-US trade is a fraction of China-US trade. China’s trade surplus with the US that sends Trump into near-delirium was $419.2 billion in 2018. India’s trade surplus with the US in 2018 was a relatively puny $24.2 billion. &nbsp;

“Tariffs are a beautiful thing,” Trump told CNBC’s Squawk Box show on June 10, 2019. But so far, the tariffs Trump has imposed on China aren’t working. Latest data shows China’s trade surplus with the US trade climbed by $2.1 billion to $29.2 billion for the month of April 2019.

At the G20 summit, Prime Minister Narendra Modi is scheduled to have a short bilateral meeting with Trump. Trade, technology and defence will dominate the conversation. Trump wants India to cut import duties on a swathe of goods, including medical stents whose suppliers have a strong lobby in the US. &nbsp;

Trump will apply additional pressure on Modi to stop India buying Russia’s S-400 anti-missile system. The US has already told NATO ally Turkey, which is also buying the S-400, that Washington will no longer support the advanced F-35 fighter jet programme in Turkey. &nbsp;

Modi though has several aces up his sleeve and must tackle Trump’s tactics with a few of his own. Strategically, the US needs India to counter China’s emergence as the world’s pre-eminent superpower over the next two decades. India is the only country with a large economy and military that can help Washington contain China in the Indo-Pacific. &nbsp;

As important as strategy is psychology. Trump is a megalomaniac. He relishes praise. But he also respects strong leaders. One of the reasons Trump constantly praises Xi Jinping whilst decrying China is the strongman image the Chinese leader projects. The last thing Modi should, therefore, do at the G20 summit in Osaka next week is fawn over Trump in the hope that his administration will soften its stand over trade tariffs and the S-400. Far better to adopt Xi’s playbook with Trump: be friendly, but firm. Xi hasn’t conceded an inch to Trump on trade or technology but has kept the dialogue going. By slapping tariffs last week on US exports covering 28 items, India has made a good beginning. &nbsp;

India’s consumer market is the world’s second largest. India also has the second highest percentage of Internet users (12 per cent) in the world, behind China (21 per cent) but ahead of the US (8 per cent). Washington does have legitimate complaints on India’s restrictive laws on e-commerce firms. These and other trade issues will need to be sorted out by the new team in the commerce and finance ministries.&nbsp;

As commerce and industry minister, Piyush Goyal is well suited to negotiate knotty trade disputes with the US. The MoS in the commerce ministry, Hardip Singh Puri, is another experienced negotiator, having spent several years as India’s permanent representative at the United Nations in New York. &nbsp;

Finance Minister Nirmala Sitharaman’s stint as defence minister will prove useful while negotiating the difficult terrain over India’s commitment to buy the S-400. Advance payment has already been made to Russia and cancelling the contract is neither feasible nor desirable. India needs to maintain its links with Russian defence contractors to avoid over-dependence on American military hardware. &nbsp;

India’s trump card is the fact that both the US and China need it in their corner. Washington knows that a China-Russia axis can pose a threat to the Western alliance. With the European Union sclerotic and Britain enervated by Brexit, the US has few allies apart from India with both large economies and militaries. &nbsp;

China, for its part, needs to keep India onside as an antidote to the US bullying. The Wuhan spirit and Xi’s likely return trip to Modi’s constituency Varanasi in October this year is aimed at keeping India in good humour and as far out of Washington’s orbit of influence as possible. &nbsp;

Modi will this have to play his cards deftly in Osaka. It is likely to be another decade before India’s economic and military heft reaches a level that makes it part of an emerging Isosceles triangle with the US and China. Till then, stay flexible, but on core issues, resolute as Trump lumbers through the G20 summit in Japan next week.

(This article was originally published on The DNA. Read the <a href="https://www.dnaindia.com/analysis/column-dealing-with-donald-trump-2762858">original article)</a>

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)&nbsp;

United States President Donald Trump is obsessed with trade tariffs. He misses no opportunity to upbraid China, India, Mexico and even the European Union (EU) on the high tariffs they impose on US products.

United States President Donald Trump is obsessed with trade tariffs. He misses no opportunity to upbraid China, India, Mexico and even the European Union (EU) on the high tariffs they impose on US products. He is especially incensed by India’s 50 per cent import duty on Harley Davidson motorcycles, which have an infinitesimal market share in India. Yet for Trump, it is a symbol of how other countries “rip off America”, as he said in a recent television interview. Trump has used tariff threats to bully Mexico into sending 6,000 Mexican troops to stop refugees fleeing Central American countries like El Salvador and Honduras before they reach the US-Mexico border. Trump has, meanwhile, held out a threat to slap 25 per cent tariffs on Chinese exports to the US valued at $300 billion in addition to the tariffs already in place on $250 billion worth of Chinese exports. Trump is expected to meet Chinese President Xi Jinping at the G20 Summit in Osaka, Japan, on June 28-29 to thrash out the issues in the escalating US-China trade war. Where does India fit in? India-US trade is a fraction of China-US trade. China’s trade surplus with the US that sends Trump into near-delirium was $419.2 billion in 2018. India’s trade surplus with the US in 2018 was a relatively puny $24.2 billion. “Tariffs are a beautiful thing,” Trump told CNBC’s Squawk Box show on June 10, 2019. But so far, the tariffs Trump has imposed on China aren’t working. Latest data shows China’s trade surplus with the US trade climbed by $2.1 billion to $29.2 billion for the month of April 2019. At the G20 summit, Prime Minister Narendra Modi is scheduled to have a short bilateral meeting with Trump. Trade, technology and defence will dominate the conversation. Trump wants India to cut import duties on a swathe of goods, including medical stents whose suppliers have a strong lobby in the US. Trump will apply additional pressure on Modi to stop India buying Russia’s S-400 anti-missile system. The US has already told NATO ally Turkey, which is also buying the S-400, that Washington will no longer support the advanced F-35 fighter jet programme in Turkey. Modi though has several aces up his sleeve and must tackle Trump’s tactics with a few of his own. Strategically, the US needs India to counter China’s emergence as the world’s pre-eminent superpower over the next two decades. India is the only country with a large economy and military that can help Washington contain China in the Indo-Pacific. As important as strategy is psychology. Trump is a megalomaniac. He relishes praise. But he also respects strong leaders. One of the reasons Trump constantly praises Xi Jinping whilst decrying China is the strongman image the Chinese leader projects. The last thing Modi should, therefore, do at the G20 summit in Osaka next week is fawn over Trump in the hope that his administration will soften its stand over trade tariffs and the S-400. Far better to adopt Xi’s playbook with Trump: be friendly, but firm. Xi hasn’t conceded an inch to Trump on trade or technology but has kept the dialogue going. By slapping tariffs last week on US exports covering 28 items, India has made a good beginning. India’s consumer market is the world’s second largest. India also has the second highest percentage of Internet users (12 per cent) in the world, behind China (21 per cent) but ahead of the US (8 per cent). Washington does have legitimate complaints on India’s restrictive laws on e-commerce firms. These and other trade issues will need to be sorted out by the new team in the commerce and finance ministries. As commerce and industry minister, Piyush Goyal is well suited to negotiate knotty trade disputes with the US. The MoS in the commerce ministry, Hardip Singh Puri, is another experienced negotiator, having spent several years as India’s permanent representative at the United Nations in New York. Finance Minister Nirmala Sitharaman’s stint as defence minister will prove useful while negotiating the difficult terrain over India’s commitment to buy the S-400. Advance payment has already been made to Russia and cancelling the contract is neither feasible nor desirable. India needs to maintain its links with Russian defence contractors to avoid over-dependence on American military hardware. India’s trump card is the fact that both the US and China need it in their corner. Washington knows that a China-Russia axis can pose a threat to the Western alliance. With the European Union sclerotic and Britain enervated by Brexit, the US has few allies apart from India with both large economies and militaries. China, for its part, needs to keep India onside as an antidote to the US bullying. The Wuhan spirit and Xi’s likely return trip to Modi’s constituency Varanasi in October this year is aimed at keeping India in good humour and as far out of Washington’s orbit of influence as possible. Modi will this have to play his cards deftly in Osaka. It is likely to be another decade before India’s economic and military heft reaches a level that makes it part of an emerging Isosceles triangle with the US and China. Till then, stay flexible, but on core issues, resolute as Trump lumbers through the G20 summit in Japan next week. (This article was originally published on The DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

PM Narendra Modi must play his cards deftly when he meets Donald Trump at G20 Summit

A rise in US visa denials for Chinese academics and intensified scrutiny of alleged links to Beijing over fears of potential espionage are having a chilling effect on long-standing research collaboration, researchers say.

American and Chinese scientists have co-authored thousands of papers each year, far outpacing the output from scientific collaborations between any other two nations, according to a 2018 survey by academic database Nature Index.

But it is getting tougher for researchers to work together on projects and share data for peer review, as American institutions tighten rules for accepting foreign funding and intensify vetting of foreign partners, several researchers told AFP.

The pressure is the result of a clampdown by Washington on what it describes as espionage and technology theft through academic contacts, with the White House warning last year that Chinese nationals studying or working in the United States could be manipulated or forced to "serve Beijing's military and strategic ambitions".

In one of the latest countermeasures, the US Department of Energy -- which conducts advanced research on everything from supercomputers to nuclear weapons -- blocked its scientists from participating in a foreign government's talent recruitment programmes, citing national security and competition concerns.

Its order, seen by AFP, did not mention a specific country, but officials pointed to Beijing's lucrative 'Thousand Talents' programme.

The initiative offers non-Chinese, and Chinese working abroad, high pay to deliver top-level technology to China.&nbsp;

The increased mistrust is bound to have an impact on research collaboration, academics and experts say.

An increasing number of young Chinese scholars are told they cannot participate in a project for security reasons, said an official at Pennsylvania State University, who requested anonymity given the sensitivity of the topic.

"Research collaboration between China and the US will be severely disrupted by the trade war-turned-technology war, which essentially is a talent war," said Cao Cong, professor of innovation studies at Nottingham University's China campus in the city of Ningbo.

Beijing has committed billions of dollars in recent years to narrow China's science and technology gap with the United States, Cao said.

But China is still "heavily dependent" on the US for technology transfers and training, he added, and the "cut off" will have an impact in coming years.

Visa Troubles

The rising number of visa denials have prompted a warning from China's education ministry that students and academics could have their study or research plans foiled by refusals or delays.

One in eight Chinese applicants seeking US visas for academic or research purposes between January and March this year had difficulties securing them, a marked increase from last year, education ministry official Xu Yongji said.

Star quantum physicist Pan Jianwei was unable to attend a meeting of the American Association for the Advancement of Science in February, where he was to collect the prestigious Newcomb Cleveland Prize, due to visa delays.

"I waited for four months before I got a visa in March," Pan told AFP. When it finally arrived, the award ceremony had long passed.

Yi Rao, a prominent Chinese neurobiologist who had worked at Harvard and Northwestern universities in the past, said his application for a US visa to attend a workshop by the National Science Foundation was denied last July without an explanation.

A State Department official said she could not discuss specific visa cases due to US privacy laws.

The State Department has said the increased scrutiny was prompted by rising number of students who were co-opted by foreign intelligence while in the United States.

China is by far the biggest source of international students and scholars on US campuses, with 360,000 attendings last year.

Atmosphere of Suspicion

The cooling of ties is also complicating Beijing's efforts to recruit top Chinese and foreign talent, after US intelligence officials in December said the 'Thousand Talents' programme facilitated the theft of American technology and intellectual property.

Tim Byrnes -- an Australian physicist who won nearly one million yuan ($144,000) from the programme in 2016 for a quantum computing lab at New York University's Shanghai campus -- said he now finds himself in a "precarious position".

"Possibly, some people awarded the Thousand Talents might not be able to apply for grants in the US in future due to fears of leaking intellectual property," Byrnes said.

Since it was launched in 2008, the programme has attracted more than 7,000 Chinese and foreign researchers to China -- mostly from the US -- according to its website.

But Byrnes said he was not asked to share any of his findings with the Chinese government.

"Everything we do is published in academic journals. Everything is disclosed not just to China but to the whole world," he said.

"But the current atmosphere of suspicion is threatening the openness of science."

A rise in US visa denials for Chinese academics and intensified scrutiny of alleged links to Beijing over fears of potential espionage are having a chilling effect on long-standing research collaboration, researchers say.

A rise in US visa denials for Chinese academics and intensified scrutiny of alleged links to Beijing over fears of potential espionage are having a chilling effect on long-standing research collaboration, researchers say. American and Chinese scientists have co-authored thousands of papers each year, far outpacing the output from scientific collaborations between any other two nations, according to a 2018 survey by academic database Nature Index. But it is getting tougher for researchers to work together on projects and share data for peer review, as American institutions tighten rules for accepting foreign funding and intensify vetting of foreign partners, several researchers told AFP. The pressure is the result of a clampdown by Washington on what it describes as espionage and technology theft through academic contacts, with the White House warning last year that Chinese nationals studying or working in the United States could be manipulated or forced to "serve Beijing's military and strategic ambitions". In one of the latest countermeasures, the US Department of Energy -- which conducts advanced research on everything from supercomputers to nuclear weapons -- blocked its scientists from participating in a foreign government's talent recruitment programmes, citing national security and competition concerns. Its order, seen by AFP, did not mention a specific country, but officials pointed to Beijing's lucrative 'Thousand Talents' programme. The initiative offers non-Chinese, and Chinese working abroad, high pay to deliver top-level technology to China. The increased mistrust is bound to have an impact on research collaboration, academics and experts say. An increasing number of young Chinese scholars are told they cannot participate in a project for security reasons, said an official at Pennsylvania State University, who requested anonymity given the sensitivity of the topic. "Research collaboration between China and the US will be severely disrupted by the trade war-turned-technology war, which essentially is a talent war," said Cao Cong, professor of innovation studies at Nottingham University's China campus in the city of Ningbo. Beijing has committed billions of dollars in recent years to narrow China's science and technology gap with the United States, Cao said. But China is still "heavily dependent" on the US for technology transfers and training, he added, and the "cut off" will have an impact in coming years. Visa Troubles The rising number of visa denials have prompted a warning from China's education ministry that students and academics could have their study or research plans foiled by refusals or delays. One in eight Chinese applicants seeking US visas for academic or research purposes between January and March this year had difficulties securing them, a marked increase from last year, education ministry official Xu Yongji said. Star quantum physicist Pan Jianwei was unable to attend a meeting of the American Association for the Advancement of Science in February, where he was to collect the prestigious Newcomb Cleveland Prize, due to visa delays. "I waited for four months before I got a visa in March," Pan told AFP. When it finally arrived, the award ceremony had long passed. Yi Rao, a prominent Chinese neurobiologist who had worked at Harvard and Northwestern universities in the past, said his application for a US visa to attend a workshop by the National Science Foundation was denied last July without an explanation. A State Department official said she could not discuss specific visa cases due to US privacy laws. The State Department has said the increased scrutiny was prompted by rising number of students who were co-opted by foreign intelligence while in the United States. China is by far the biggest source of international students and scholars on US campuses, with 360,000 attendings last year. Atmosphere of Suspicion The cooling of ties is also complicating Beijing's efforts to recruit top Chinese and foreign talent, after US intelligence officials in December said the 'Thousand Talents' programme facilitated the theft of American technology and intellectual property. Tim Byrnes -- an Australian physicist who won nearly one million yuan ($144,000) from the programme in 2016 for a quantum computing lab at New York University's Shanghai campus -- said he now finds himself in a "precarious position". "Possibly, some people awarded the Thousand Talents might not be able to apply for grants in the US in future due to fears of leaking intellectual property," Byrnes said. Since it was launched in 2008, the programme has attracted more than 7,000 Chinese and foreign researchers to China -- mostly from the US -- according to its website. But Byrnes said he was not asked to share any of his findings with the Chinese government. "Everything we do is published in academic journals. Everything is disclosed not just to China but to the whole world," he said. "But the current atmosphere of suspicion is threatening the openness of science."

Amid heightened US-China tensions, science suffers collateral damage

China on Tuesday urged the United States to properly solve<a href="https://www.wionews.com/world/amid-heightened-us-china-tensions-science-suffers-collateral-damage-228220"> trade disputes through consultations </a>based on the principles of equality and mutual respect.

Foreign ministry spokesman Lu Kang made the statement at a regular press conference in Beijing, as a series of public hearings regarding proposed US tariffs on approximately $300 billion worth of Chinese products kicked off in Washington D.C. on Monday.

The hearings, to be held by the Office of the US Trade Representative (USTR) daily for two weeks, will be attended by hundreds of witnesses, most of whom are expected to voice their opposition to the proposed tariffs and explain how trade protectionism would hurt their businesses, industries and consumers.

"I have noticed that, as the hearing for proposed US tariffs&nbsp;on Chinese imports gets underway, the waves of voices within the United States against additional tariffs are going higher and higher. Even (Larry) Kudlow, director of the White House National Economic Council, openly admitted that US businesses and consumers will pay for the new tariffs. In addition, according to a recent report by Goldman Sachs, the costs of the tariffs imposed by the US government completely shifted to American companies and families, and their impact on American commodity prices is greater than previously estimated," said Lu.

Twenty-five per cent tariffs on some 250 billion dollars' worth in goods from China are currently in effect, and have already backfired.

Last week, over 600 US companies and associations sent a letter to the White House, urging it to stop escalating trade tensions with China through tariff hikes.

According to the anti-tariff campaign "Tariffs Hurt the Heartland," the proposed new tariffs, if imposed, would result in the loss of more than 2 million US jobs, add more than 2,000 dollars in costs for an average American family of four, and reduce the value of US gross domestic product by 1 per cent, combined with the impact of previously implemented tariffs and retaliatory measures imposed by the Chinese side.

The spokesman stressed that for a long period of time, trade and investment brought huge benefits to industries and consumers in both the US and China.

"History has proved that the trade disputes between the United States and China can be properly resolved through consultation, as long as the negotiation and dialogue are based on mutual respect, equality and mutual benefit. Any practice against such principles is doomed to fail," he said.

China on Tuesday urged the United States to properly solve trade disputes through consultations based on the principles of equality and mutual respect. Foreign ministry spokesman Lu Kang made the statement at a regular press conference in Beijing, as a series of public hearings regarding proposed US tariffs on approximately $300 billion worth of Chinese products kicked off in Washington D.

China on Tuesday urged the United States to properly solve trade disputes through consultations based on the principles of equality and mutual respect. Foreign ministry spokesman Lu Kang made the statement at a regular press conference in Beijing, as a series of public hearings regarding proposed US tariffs on approximately $300 billion worth of Chinese products kicked off in Washington D.C. on Monday. The hearings, to be held by the Office of the US Trade Representative (USTR) daily for two weeks, will be attended by hundreds of witnesses, most of whom are expected to voice their opposition to the proposed tariffs and explain how trade protectionism would hurt their businesses, industries and consumers. "I have noticed that, as the hearing for proposed US tariffs on Chinese imports gets underway, the waves of voices within the United States against additional tariffs are going higher and higher. Even (Larry) Kudlow, director of the White House National Economic Council, openly admitted that US businesses and consumers will pay for the new tariffs. In addition, according to a recent report by Goldman Sachs, the costs of the tariffs imposed by the US government completely shifted to American companies and families, and their impact on American commodity prices is greater than previously estimated," said Lu. Twenty-five per cent tariffs on some 250 billion dollars' worth in goods from China are currently in effect, and have already backfired. Last week, over 600 US companies and associations sent a letter to the White House, urging it to stop escalating trade tensions with China through tariff hikes. According to the anti-tariff campaign "Tariffs Hurt the Heartland," the proposed new tariffs, if imposed, would result in the loss of more than 2 million US jobs, add more than 2,000 dollars in costs for an average American family of four, and reduce the value of US gross domestic product by 1 per cent, combined with the impact of previously implemented tariffs and retaliatory measures imposed by the Chinese side. The spokesman stressed that for a long period of time, trade and investment brought huge benefits to industries and consumers in both the US and China. "History has proved that the trade disputes between the United States and China can be properly resolved through consultation, as long as the negotiation and dialogue are based on mutual respect, equality and mutual benefit. Any practice against such principles is doomed to fail," he said.

Waves of voices within US against additional tariffs going higher: China

China's Huawei has applied to trademark its "Hongmeng" operating system (OS) in at least <a href="https://www.wionews.com/world/huawei-obtains-46-commercial-5g-contracts-in-30-countries-225175">nine countries and Europe</a>, data from a UN body shows, in a sign it may be deploying a back-up plan in key markets as US sanctions threaten its business model.&nbsp;

The move comes after the Trump administration put <a href="https://www.wionews.com/world/with-us-driving-west-to-shun-it-huawei-seeks-to-strengthen-grip-on-africa-225593">Huawei on a blacklist</a> last month that barred it from doing business with US tech companies such as Alphabet Inc, whose Android OS is used in Huawei's phones.

Since then, Huawei - the world's biggest maker of telecoms network gear - has filed for a Hongmeng trademark in countries such as Cambodia, Canada, South Korea and New Zealand, data from the UN World Intellectual Property Organization (WIPO) shows.&nbsp;

It also filed an application in Peru on May 27, according to the country's anti-trust agency Indecopi.

Huawei has a back-up OS in case it is cut off from US-made software, Richard Yu, CEO of the firm`s consumer division, told German newspaper Die Welt in an interview earlier this year.&nbsp;

The firm, also the world's second-largest maker of smartphones, has not yet revealed details about its OS.

Its applications to trademark the OS show Huawei wants to use "Hongmeng" for gadgets ranging from smartphones, portable computers to robots and car televisions.

At home, Huawei applied for a Hongmeng trademark in August last year and received a nod last month, according to a filing on China`s intellectual property administration`s website.&nbsp;

According to WIPO data, the earliest Huawei applications to trademark the Hongmeng OS outside China were made on May 14 to the European Union Intellectual Property Office and South Korea, or right after the United States flagged it would stick Huawei on an export blacklist.

Huawei has come under mounting scrutiny for over a year, led by US allegations that "back doors" in its routers, switches and other gear could allow China to spy on US communications.&nbsp;

The company has denied its products pose a security threat.

However, consumers have been spooked by how matters have escalated, with many looking to offload their devices on worries they would be cut off from Android updates in the wake of the US blacklist.

Huawei's hopes to become the world's top selling smartphone maker in the fourth quarter this year have now been delayed, a senior Huawei executive said this week.

Peru's Indecopi has said it needs more information from Huawei before it can register a trademark for Hongmeng in the country, where there are some 5.5 million Huawei phone users.&nbsp;

The agency did not give details on the documents it had sought, but said Huawei had up to nine months to respond.

Huawei representatives in Peru declined to provide immediate comment, while the Chinese embassy in Lima did not respond to requests for comment.

China's Huawei has applied to trademark its "Hongmeng" operating system (OS) in at least nine countries and Europe, data from a UN body shows, in a sign it may be deploying a back-up plan in key markets as US sanctions threaten its business model.

China's Huawei has applied to trademark its "Hongmeng" operating system (OS) in at least nine countries and Europe, data from a UN body shows, in a sign it may be deploying a back-up plan in key markets as US sanctions threaten its business model. The move comes after the Trump administration put Huawei on a blacklist last month that barred it from doing business with US tech companies such as Alphabet Inc, whose Android OS is used in Huawei's phones. Since then, Huawei - the world's biggest maker of telecoms network gear - has filed for a Hongmeng trademark in countries such as Cambodia, Canada, South Korea and New Zealand, data from the UN World Intellectual Property Organization (WIPO) shows. It also filed an application in Peru on May 27, according to the country's anti-trust agency Indecopi. Huawei has a back-up OS in case it is cut off from US-made software, Richard Yu, CEO of the firm`s consumer division, told German newspaper Die Welt in an interview earlier this year. The firm, also the world's second-largest maker of smartphones, has not yet revealed details about its OS. Its applications to trademark the OS show Huawei wants to use "Hongmeng" for gadgets ranging from smartphones, portable computers to robots and car televisions. At home, Huawei applied for a Hongmeng trademark in August last year and received a nod last month, according to a filing on China`s intellectual property administration`s website. According to WIPO data, the earliest Huawei applications to trademark the Hongmeng OS outside China were made on May 14 to the European Union Intellectual Property Office and South Korea, or right after the United States flagged it would stick Huawei on an export blacklist. Huawei has come under mounting scrutiny for over a year, led by US allegations that "back doors" in its routers, switches and other gear could allow China to spy on US communications. The company has denied its products pose a security threat. However, consumers have been spooked by how matters have escalated, with many looking to offload their devices on worries they would be cut off from Android updates in the wake of the US blacklist. Huawei's hopes to become the world's top selling smartphone maker in the fourth quarter this year have now been delayed, a senior Huawei executive said this week. Peru's Indecopi has said it needs more information from Huawei before it can register a trademark for Hongmeng in the country, where there are some 5.5 million Huawei phone users. The agency did not give details on the documents it had sought, but said Huawei had up to nine months to respond. Huawei representatives in Peru declined to provide immediate comment, while the Chinese embassy in Lima did not respond to requests for comment.

Huawei files to trademark mobile OS around the world amid US ban

US President Donald Trump said China will be left with no other option but to enter into a <a href="https://www.wionews.com/world/will-slap-huge-new-tariffs-on-china-if-president-xi-doesnt-show-up-trump-ahead-of-g20-meeting-226081">trade deal with the United States</a> because his increased tariffs on Chinese products is having an impact on its economy.

"The China deal is going to work out. You know why, because of tariffs, because right now <a href="https://www.wionews.com/business-economy/china-exports-grow-despite-us-tariffs-but-import-slump-most-in-nearly-three-years-225842">China is getting absolutely</a> decimated by companies that are leaving China going to other countries, including our own, because they don't want to pay the tariffs," Trump told CBS news in an interview.

In recent months, Trump has imposed additional tariffs on Chinese products worth $200 billion and he has ordered for another round of tariffs on rest of the Chinese imports amounting to $300 billion.

"And China will, in my opinion, based on a lot of facts and a lot of knowledge, China is going to make a deal because they're going to have to make a deal," he said.

"China will subsidise their product because they want to keep people working. So China is going to pay a lot. We have put 25 percent on $250 billion of Chinese goods coming into our country, including $50 billion of high-technology equipment and things," he said.

"You haven't seen any or virtually any price increase because what China does basically their companies - they subsidise their companies because they want to keep people working. They want to stay competitive. We have another $300 billion to go with China," he said.

"I haven't done that because it's a very big thing for them, not for us. For us it's not going to matter because we'll be able to buy the product in other countries that don't have the tariffs. So it's not going to have an effect,"&nbsp;said the US president.

Later in the day, Trump told reporters that he will meet Chinese President Xi Jinping in Japan later this month on the sidelines of the G-20 Summit. Some reports say that Xi might skip the G-20 summit.

"I think President Xi of China -- great relationship with him -- I think he'll be there. We are scheduled to talk and to meet. I think interesting things will happen. Let's see what happens," he said in response to a question.

"Right now, we're getting 25 per cent on $250 billion worth of goods. That's a lot of money that's pouring into our Treasury. We've never gotten 10 cents from China. Now we're getting a lot of money from China. I think that's one of the reasons that GDP was so high in the first quarter, because of the tariffs that we've taken in from China," he said.

"We always have the option to raise it another $300 billion at 25 per cent. And the 25 per cent could be much higher than 25 per cent," he asserted.

US President Donald Trump said China will be left with no other option but to enter into a trade deal with the United States because his increased tariffs on Chinese products is having an impact on its economy.

US President Donald Trump said China will be left with no other option but to enter into a trade deal with the United States because his increased tariffs on Chinese products is having an impact on its economy. "The China deal is going to work out. You know why, because of tariffs, because right now China is getting absolutely decimated by companies that are leaving China going to other countries, including our own, because they don't want to pay the tariffs," Trump told CBS news in an interview. In recent months, Trump has imposed additional tariffs on Chinese products worth $200 billion and he has ordered for another round of tariffs on rest of the Chinese imports amounting to $300 billion. "And China will, in my opinion, based on a lot of facts and a lot of knowledge, China is going to make a deal because they're going to have to make a deal," he said. "China will subsidise their product because they want to keep people working. So China is going to pay a lot. We have put 25 percent on $250 billion of Chinese goods coming into our country, including $50 billion of high-technology equipment and things," he said. "You haven't seen any or virtually any price increase because what China does basically their companies - they subsidise their companies because they want to keep people working. They want to stay competitive. We have another $300 billion to go with China," he said. "I haven't done that because it's a very big thing for them, not for us. For us it's not going to matter because we'll be able to buy the product in other countries that don't have the tariffs. So it's not going to have an effect," said the US president. Later in the day, Trump told reporters that he will meet Chinese President Xi Jinping in Japan later this month on the sidelines of the G-20 Summit. Some reports say that Xi might skip the G-20 summit. "I think President Xi of China -- great relationship with him -- I think he'll be there. We are scheduled to talk and to meet. I think interesting things will happen. Let's see what happens," he said in response to a question. "Right now, we're getting 25 per cent on $250 billion worth of goods. That's a lot of money that's pouring into our Treasury. We've never gotten 10 cents from China. Now we're getting a lot of money from China. I think that's one of the reasons that GDP was so high in the first quarter, because of the tariffs that we've taken in from China," he said. "We always have the option to raise it another $300 billion at 25 per cent. And the 25 per cent could be much higher than 25 per cent," he asserted.

China getting decimated because companies leaving them: Trump

Against the backdrop of worsening trade conflicts, US job creation slowed sharply in May, adding to evidence the economy is weakening and raising expectations the Federal Reserve could cut interest rates soon.

Hiring dried up in major industries and wage growth stagnated, and because job growth was worse than previously reported in March and April, hiring was essentially flat last month, the Labor Department reported Friday.

With the China trade conflict increasing and a new battle with Mexico set to begin Monday, with dire implications for a host of industries, the unexpectedly steep job slowdown in May heightened fears the world's largest economy is beginning to sputter.

US employers added only 75,000 net new positions last month, less than half the 180,000 economists had been expecting, with sudden drops in hiring in healthcare, education and construction.&nbsp;

The federal government payroll also shrank unexpectedly by 15,000 workers.&nbsp;

The unemployment rate held steady at 3.6 per cent, matching April's level, the lowest since 1969.

As he ploughs ahead with his aggressive and unorthodox trade agenda, President Donald Trump has been comforted that vigorous job gains and historically low unemployment provide a buffer against retaliation in tariff battles with major trading partners that have hit the US manufacturing sector in particular.

The US economy in July will break the record for its longest-ever expansion but economists expect it to slow a notch in 2019 and the odds of a recession have also increased.

The average job gains for the past three months was 151,000 compared to the 12-month average of 196,000, signalling a slowdown in hiring, also attributed to the difficulty of finding workers.

Kevin Hassett, the White House's departing chief economist, conceded Friday that the numbers were weaker than expected, but he pointed to special factors.

"There really were pretty serious weather effects. There's all this flooding in the Midwest... a lot of the ports had to stop taking traffic," he told CNBC.

Hassett estimated weather could have cut the monthly hiring figure by 40,000 positions but the result was still underwhelming.

"It's a little bit disappointing but it does not really cause to change our outlook for the year," he said.

The sudden weakness has raised expectations the Federal Reserve will cut the benchmark interest rates this year -- possibly twice and as soon as this month -- to support growth after four increases in 2018.

Sand in the gears

Fed policymakers have sent signals in recent days they are open to easing, and are on the lookout for signs of weakness.&nbsp;

"These data make it easier for the Fed to ease either this month or next, if the trade tensions intensify and the stock market drops sharply," economist Ian Shepherdson of Pantheon Macroeconomics said in a research note.

Economist Joel Naroff was more succinct: "The lean, mean job machine has sand in its gears."

A weakening economy also could unnerve Republicans ahead of hotly contested elections in 2020.

Job creation tumbled in the goods-producing and service sectors, while industries such as construction, transportation and temporary help, which had previously been reliable sources of new jobs, hit a rough patch.

Meanwhile, average hourly wages rose 0.2 per cent compared to April to $27.83, disappointing economists who had hoped for slightly stronger gains.

Over the last 12 months, wage gains were 3.1 per cent and have been at or above three per cent for 10 straight months, outpacing increases in consumer inflation but confirming the lack of any upward trend.

With employers continuing to complain of a dearth of available and qualified workers, the size of the labour force was unchanged.

The disappointing number encouraged Wall Street, however, where the three major stock indexes jumped more than one per cent as investors bet on an increased chance of a Fed interest rate cut.

"If the Fed wants evidence the trade dispute has rattled business confidence enough to cause economic problems, a net unchanged employment report with fading wage pressures should do the trick," Chris Low of FTN Financial said in an analysis.

Against the backdrop of worsening trade conflicts, US job creation slowed sharply in May, adding to evidence the economy is weakening and raising expectations the Federal Reserve could cut interest rates soon.

Against the backdrop of worsening trade conflicts, US job creation slowed sharply in May, adding to evidence the economy is weakening and raising expectations the Federal Reserve could cut interest rates soon. Hiring dried up in major industries and wage growth stagnated, and because job growth was worse than previously reported in March and April, hiring was essentially flat last month, the Labor Department reported Friday. With the China trade conflict increasing and a new battle with Mexico set to begin Monday, with dire implications for a host of industries, the unexpectedly steep job slowdown in May heightened fears the world's largest economy is beginning to sputter. US employers added only 75,000 net new positions last month, less than half the 180,000 economists had been expecting, with sudden drops in hiring in healthcare, education and construction. The federal government payroll also shrank unexpectedly by 15,000 workers. The unemployment rate held steady at 3.6 per cent, matching April's level, the lowest since 1969. As he ploughs ahead with his aggressive and unorthodox trade agenda, President Donald Trump has been comforted that vigorous job gains and historically low unemployment provide a buffer against retaliation in tariff battles with major trading partners that have hit the US manufacturing sector in particular. The US economy in July will break the record for its longest-ever expansion but economists expect it to slow a notch in 2019 and the odds of a recession have also increased. The average job gains for the past three months was 151,000 compared to the 12-month average of 196,000, signalling a slowdown in hiring, also attributed to the difficulty of finding workers. Kevin Hassett, the White House's departing chief economist, conceded Friday that the numbers were weaker than expected, but he pointed to special factors. "There really were pretty serious weather effects. There's all this flooding in the Midwest... a lot of the ports had to stop taking traffic," he told CNBC. Hassett estimated weather could have cut the monthly hiring figure by 40,000 positions but the result was still underwhelming. "It's a little bit disappointing but it does not really cause to change our outlook for the year," he said. The sudden weakness has raised expectations the Federal Reserve will cut the benchmark interest rates this year -- possibly twice and as soon as this month -- to support growth after four increases in 2018. Sand in the gears Fed policymakers have sent signals in recent days they are open to easing, and are on the lookout for signs of weakness. "These data make it easier for the Fed to ease either this month or next, if the trade tensions intensify and the stock market drops sharply," economist Ian Shepherdson of Pantheon Macroeconomics said in a research note. Economist Joel Naroff was more succinct: "The lean, mean job machine has sand in its gears." A weakening economy also could unnerve Republicans ahead of hotly contested elections in 2020. Job creation tumbled in the goods-producing and service sectors, while industries such as construction, transportation and temporary help, which had previously been reliable sources of new jobs, hit a rough patch. Meanwhile, average hourly wages rose 0.2 per cent compared to April to $27.83, disappointing economists who had hoped for slightly stronger gains. Over the last 12 months, wage gains were 3.1 per cent and have been at or above three per cent for 10 straight months, outpacing increases in consumer inflation but confirming the lack of any upward trend. With employers continuing to complain of a dearth of available and qualified workers, the size of the labour force was unchanged. The disappointing number encouraged Wall Street, however, where the three major stock indexes jumped more than one per cent as investors bet on an increased chance of a Fed interest rate cut. "If the Fed wants evidence the trade dispute has rattled business confidence enough to cause economic problems, a net unchanged employment report with fading wage pressures should do the trick," Chris Low of FTN Financial said in an analysis.

US hiring slows sharply in May as trade tensions worsen

China's central bank chief said Friday the country has <a href="https://www.wionews.com/world/explainer-us-china-trade-war-the-levers-they-can-pull-224809">plenty of policy tools left to handle the trade war</a> with the United States.

There is "tremendous" room to counter the deepening trade war, People's Bank of China governor Yi Gang said in an interview with Bloomberg TV.

"We have plenty of room in interest rates, we have plenty of room in required reserve ratio rate, and also for the fiscal, monetary policy toolkit, I think the room for adjustment is tremendous," Yi said on Bloomberg TV.

<a href="https://www.wionews.com/world/china-warns-its-companies-on-us-travel-rebuffs-trade-criticism-224200">Ties between China and the US</a> have deteriorated sharply after trade negotiations stalled last month without a deal to lift bruising tariffs on goods worth $360 billion in two-way trade.

China said Thursday that it would soon release detailed information about a planned blacklist of "unreliable" foreign companies and individuals, that analysts expect will target firms cutting off supplies to <a href="https://www.wionews.com/world/amid-us-china-row-huawei-signs-deal-with-russian-telecom-company-mts-to-develop-5g-network-224867">Chinese tech giant Huawei</a>.

Last month the US Commerce Department placed Huawei and dozens of its affiliates on an "entity list" on grounds of national security, curbing its access to crucial US-made components and software -- through a 90-day reprieve was later issued.

Yi has participated in several rounds of the trade negotiations with Washington and is scheduled to meet with US Treasury Secretary Steven Mnuchin this weekend during the G20 gathering of financial policymakers in Japan.

He said the meeting with Mnuchin would be "productive talk, as always," but trade war discussions would be "uncertain and difficult", according to Bloomberg News.

Watch: IMF's Lagarde warns of 'growing concerns' over trade tensions

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China's yuan, or renminbi, the currency has also rapidly depreciated against the dollar as trade tensions have ramped up in recent weeks, nearing the critical seven to the dollar exchange rate.

The central bank has long prevented the yuan from falling below seven, but Yi hinted the bank may no longer defend the currency at that level.

"I don't think along this mathematical scale any number is more important (than) the other number," he said.

"The trade war would have a temporary depreciation pressure on the renminbi, but you see, after the noise, (the) renminbi will continue to be very stable and relatively strong compared to emerging market currencies, even compared to convertible currencies," he told Bloomberg TV.

"I'm very confident (the) renminbi will continue to be stable at a more or less equilibrium level," Yi said.

China's central bank chief said Friday the country has plenty of policy tools left to handle the trade war with the United States. There is "tremendous" room to counter the deepening trade war, People's Bank of China governor Yi Gang said in an interview with Bloomberg TV.

China's central bank chief said Friday the country has plenty of policy tools left to handle the trade war with the United States. There is "tremendous" room to counter the deepening trade war, People's Bank of China governor Yi Gang said in an interview with Bloomberg TV. "We have plenty of room in interest rates, we have plenty of room in required reserve ratio rate, and also for the fiscal, monetary policy toolkit, I think the room for adjustment is tremendous," Yi said on Bloomberg TV. Ties between China and the US have deteriorated sharply after trade negotiations stalled last month without a deal to lift bruising tariffs on goods worth $360 billion in two-way trade. China said Thursday that it would soon release detailed information about a planned blacklist of "unreliable" foreign companies and individuals, that analysts expect will target firms cutting off supplies to Chinese tech giant Huawei. Last month the US Commerce Department placed Huawei and dozens of its affiliates on an "entity list" on grounds of national security, curbing its access to crucial US-made components and software -- through a 90-day reprieve was later issued. Yi has participated in several rounds of the trade negotiations with Washington and is scheduled to meet with US Treasury Secretary Steven Mnuchin this weekend during the G20 gathering of financial policymakers in Japan. He said the meeting with Mnuchin would be "productive talk, as always," but trade war discussions would be "uncertain and difficult", according to Bloomberg News. Watch: IMF's Lagarde warns of 'growing concerns' over trade tensions × China's yuan, or renminbi, the currency has also rapidly depreciated against the dollar as trade tensions have ramped up in recent weeks, nearing the critical seven to the dollar exchange rate. The central bank has long prevented the yuan from falling below seven, but Yi hinted the bank may no longer defend the currency at that level. "I don't think along this mathematical scale any number is more important (than) the other number," he said. "The trade war would have a temporary depreciation pressure on the renminbi, but you see, after the noise, (the) renminbi will continue to be very stable and relatively strong compared to emerging market currencies, even compared to convertible currencies," he told Bloomberg TV. "I'm very confident (the) renminbi will continue to be stable at a more or less equilibrium level," Yi said.

China has tools to handle trade war with US: Central bank chief Yi Gang

US President Donald Trump threatened to hit China with tariffs on "at least" another $300 billion worth of Chinese goods but said he thought both China and Mexico wanted to make deals in their<a href="https://www.wionews.com/world/explainer-us-china-trade-war-the-levers-they-can-pull-224809"> trade disputes with the United States</a>.

Tensions between the world's two largest economies have risen sharply since talks aimed at ending a<a href="https://www.wionews.com/world/amid-us-china-row-huawei-signs-deal-with-russian-telecom-company-mts-to-develop-5g-network-224867"> festering trade war broke down</a> in early May.

While Trump said on Thursday that talks with China are ongoing, no face-to-face meetings have been held since May 10, the day he sharply increased tariffs on a $200 billion list of Chinese goods to 25%, prompting Beijing to retaliate.

"Our talks with China, a lot of interesting things are happening. We'll see what happens... I could go up another at least $300 billion and I'll do that at the right time," Trump told reporters on Thursday, without specifying which goods could be impacted.

"But I think China wants to make a deal and I think Mexico wants to make a deal badly," said Trump before boarding Air Force One at the Irish airport of Shannon on his way to France for a D-Day commemoration.

China's Commerce Ministry also said on Thursday that Beijing would have to adopt necessary countermeasures if Washington unilaterally escalates trade tensions, and that US pressure have caused serious setbacks to the trade talks.

The International Monetary Fund warned on Wednesday that escalating tariff threats were sapping business and market confidence, and could slow global growth that is currently expected to improve next year.

US Treasury Secretary Steven Mnuchin is scheduled to meet with People's Bank of China Governor Yi Gang this weekend at a gathering of G20 finance leaders in Japan, the first face-to-face discussion between key negotiators in nearly a month.

Mexican and US officials are also set to resume their talks in Washington on Thursday aimed at averting an imposition of tariffs on Mexican goods.

After saying that "not enough" progress on ways to curb migration was made when the two sides met on Wednesday, Trump told reporters on Thursday that Mexico had made progress in the talks but needed to do more.

He reiterated that 5 per cent tariffs on all Mexico's exports to the United States due to start on Monday will go ahead if progress is not made. The tariffs can rise to as much as 25 per cent later in the year.

US President Donald Trump threatened to hit China with tariffs on "at least" another $300 billion worth of Chinese goods but said he thought both China and Mexico wanted to make deals in their trade disputes with the United States.

US President Donald Trump threatened to hit China with tariffs on "at least" another $300 billion worth of Chinese goods but said he thought both China and Mexico wanted to make deals in their trade disputes with the United States. Tensions between the world's two largest economies have risen sharply since talks aimed at ending a festering trade war broke down in early May. While Trump said on Thursday that talks with China are ongoing, no face-to-face meetings have been held since May 10, the day he sharply increased tariffs on a $200 billion list of Chinese goods to 25%, prompting Beijing to retaliate. "Our talks with China, a lot of interesting things are happening. We'll see what happens... I could go up another at least $300 billion and I'll do that at the right time," Trump told reporters on Thursday, without specifying which goods could be impacted. "But I think China wants to make a deal and I think Mexico wants to make a deal badly," said Trump before boarding Air Force One at the Irish airport of Shannon on his way to France for a D-Day commemoration. China's Commerce Ministry also said on Thursday that Beijing would have to adopt necessary countermeasures if Washington unilaterally escalates trade tensions, and that US pressure have caused serious setbacks to the trade talks. The International Monetary Fund warned on Wednesday that escalating tariff threats were sapping business and market confidence, and could slow global growth that is currently expected to improve next year. US Treasury Secretary Steven Mnuchin is scheduled to meet with People's Bank of China Governor Yi Gang this weekend at a gathering of G20 finance leaders in Japan, the first face-to-face discussion between key negotiators in nearly a month. Mexican and US officials are also set to resume their talks in Washington on Thursday aimed at averting an imposition of tariffs on Mexican goods. After saying that "not enough" progress on ways to curb migration was made when the two sides met on Wednesday, Trump told reporters on Thursday that Mexico had made progress in the talks but needed to do more. He reiterated that 5 per cent tariffs on all Mexico's exports to the United States due to start on Monday will go ahead if progress is not made. The tariffs can rise to as much as 25 per cent later in the year.

Tariffs on Chinese goods could go up at least another $300 billion: Trump

The World Bank slashed its global growth forecasts for this year in a report released Tuesday that portrayed a world gripped by deepening <a href="https://www.wionews.com/business-economy/india-highest-recipient-of-remittances-at-79-billion-in-2018-world-bank-208916">trade conflict, tumbling confidence</a> and increasingly skittish investment.

Although the global development lender currently expects a modest <a href="https://www.wionews.com/business-economy/china-expected-to-continue-win-win-solutions-for-world-development-world-bank-184302">recovery 2020 and 2021</a>, the bank said in its semi-annual report that a lot will have to go right for this to happen.

Instead the growing risks suggest the outlook could instead grow darker still.

The greatest danger on the horizon is the prospect of worsening trade clashes between major world economies -- a specter that rose again last week when US President Donald Trump announced fresh punitive duties on Mexican goods in a dispute over immigration policy.

The world economy is now expected to expand by 2.6 per cent this year, three tenths of a percentage point lower than the January forecast, and well below the three per cent growth seen in 2018, according to the Global Economic Prospects report.

The World Bank also sounded the alarm about rising debt levels and warned emerging economies they could soon regret the decision to borrow in search of a growth boost.

Newly-installed World Bank President David Malpass, who in his previous position with the US Treasury participated in Trump's stalled trade negotiations with China, said global growth is "fragile" and the slowdown jeopardizes progress in battling world poverty.

"The global economic outlook, in both the near and long term, is confronting substantial challenges," he told reporters.

The new forecast was decidedly gloomier than the latest outlook by the International Monetary Fund, released in April, but which likewise predicted a slowdown and warned of the risks posed by trade conflicts.

"The bottom line is that the global economy is coming to a crossroads," said World Bank economist Ayhan Kose, who oversaw the report, said.

"We need to find ways to stabilize growth and I think further escalation of these trade tensions is now the number one risk that could actually weigh on the outlook," he told AFP.

World trade volume also is expected to drop off sharply, growing by 2.6 per cent this year, the slowest pace since the global financial crisis and a full percentage point lower than January's forecast.

In East Asia and the Pacific, total economic output is likely to drop below six per cent for the first time since the Asian financial crisis more than 20 years ago.

China's forecast is little changed, with growth projected to slow to 6.2 to per cent this year.

The forecast for the United States is unchanged, with GDP growth slowing to 2.5 per cent this year before weakening to 1.7 per cent in 2020, though still considerably stronger than other advanced economies.

But American exports to Europe and Asia have seen an "especially acute" slowdown, and conditions in the eurozone economic have "deteriorated rapidly" as exports to China, central Asia and elsewhere have shrunk, according to the report.

Latin America's top two economies, Brazil and Mexico, have taken sharp turns for the worse.&nbsp;

The report did not take Trump's latest tariff threat against Mexico into account -- it was announced Friday and is due to take effect June 10 -- but the World Bank cut the forecast by 0.3 points, calling for expansion of just 1.7 per cent in 2019.

If Trump follows through on his threat, tariffs on all Mexican goods would hit 25 per cent in October.

"The big question is, are we pushing the panic button?" Kose said.&nbsp;

"The answer at the moment is no but I think if tensions escalate further, we have to push the panic button and get ready for a much deeper slowdown."

The forecast also sliced 0.7 per cent off its outlook for Brazil, cutting it to 1.5 per cent.

Kose highlighted concerns over rising debt, saying that since 2007 sovereign debt among emerging and developing economies had risen on average by 15 per cent.

These countries should be "extremely careful" not to allow current low interest rates to entice them into overindulging in more debt, and should instead opt for more reforms that can stimulate investment.

"When you accumulate debt, it makes you more vulnerable to crisis, it limits your policy space and then ultimately, you never know when the interest rate's going to increase," he said.

The World Bank slashed its global growth forecasts for this year in a report released Tuesday that portrayed a world gripped by deepening trade conflict, tumbling confidence and increasingly skittish investment.

The World Bank slashed its global growth forecasts for this year in a report released Tuesday that portrayed a world gripped by deepening trade conflict, tumbling confidence and increasingly skittish investment. Although the global development lender currently expects a modest recovery 2020 and 2021, the bank said in its semi-annual report that a lot will have to go right for this to happen. Instead the growing risks suggest the outlook could instead grow darker still. The greatest danger on the horizon is the prospect of worsening trade clashes between major world economies -- a specter that rose again last week when US President Donald Trump announced fresh punitive duties on Mexican goods in a dispute over immigration policy. The world economy is now expected to expand by 2.6 per cent this year, three tenths of a percentage point lower than the January forecast, and well below the three per cent growth seen in 2018, according to the Global Economic Prospects report. The World Bank also sounded the alarm about rising debt levels and warned emerging economies they could soon regret the decision to borrow in search of a growth boost. Newly-installed World Bank President David Malpass, who in his previous position with the US Treasury participated in Trump's stalled trade negotiations with China, said global growth is "fragile" and the slowdown jeopardizes progress in battling world poverty. "The global economic outlook, in both the near and long term, is confronting substantial challenges," he told reporters. The new forecast was decidedly gloomier than the latest outlook by the International Monetary Fund, released in April, but which likewise predicted a slowdown and warned of the risks posed by trade conflicts. "The bottom line is that the global economy is coming to a crossroads," said World Bank economist Ayhan Kose, who oversaw the report, said. "We need to find ways to stabilize growth and I think further escalation of these trade tensions is now the number one risk that could actually weigh on the outlook," he told AFP. World trade volume also is expected to drop off sharply, growing by 2.6 per cent this year, the slowest pace since the global financial crisis and a full percentage point lower than January's forecast. In East Asia and the Pacific, total economic output is likely to drop below six per cent for the first time since the Asian financial crisis more than 20 years ago. China's forecast is little changed, with growth projected to slow to 6.2 to per cent this year. The forecast for the United States is unchanged, with GDP growth slowing to 2.5 per cent this year before weakening to 1.7 per cent in 2020, though still considerably stronger than other advanced economies. But American exports to Europe and Asia have seen an "especially acute" slowdown, and conditions in the eurozone economic have "deteriorated rapidly" as exports to China, central Asia and elsewhere have shrunk, according to the report. Latin America's top two economies, Brazil and Mexico, have taken sharp turns for the worse. The report did not take Trump's latest tariff threat against Mexico into account -- it was announced Friday and is due to take effect June 10 -- but the World Bank cut the forecast by 0.3 points, calling for expansion of just 1.7 per cent in 2019. If Trump follows through on his threat, tariffs on all Mexican goods would hit 25 per cent in October. "The big question is, are we pushing the panic button?" Kose said. "The answer at the moment is no but I think if tensions escalate further, we have to push the panic button and get ready for a much deeper slowdown." The forecast also sliced 0.7 per cent off its outlook for Brazil, cutting it to 1.5 per cent. Kose highlighted concerns over rising debt, saying that since 2007 sovereign debt among emerging and developing economies had risen on average by 15 per cent. These countries should be "extremely careful" not to allow current low interest rates to entice them into overindulging in more debt, and should instead opt for more reforms that can stimulate investment. "When you accumulate debt, it makes you more vulnerable to crisis, it limits your policy space and then ultimately, you never know when the interest rate's going to increase," he said.

World Bank slashes global growth forecast amid deepening US-China trade conflict

The United States will take "unprecedented actions" to ensure the supply of<a href="https://www.wionews.com/business-economy/us-firms-fret-as-chinas-fedex-probe-planned-hit-list-heightens-trade-frictions-224227"> strategic minerals and rare earth</a> critical to the tech sector and the military, Commerce Secretary Wilbur Ross said Tuesday.

China is a major supplier of the critical materials and as the trade <a href="https://www.wionews.com/world/china-says-us-cant-use-pressure-to-force-trade-deal-223677">conflict with Washington</a> has escalated, Beijing has dangled a threat of cutting exports of rare earth as a counter-strike to US tariffs.

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/gravitas-chinas-weapon-of-choice-in-trade-war-rare-earth-metals-224003/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

Ross said in a statement that a new report designates 35 minerals as "critical to the economic and national security" of America, including uranium, titanium, and rare earth elements needed for smartphones, computers, aircraft and GPS systems, among other uses.

"These critical minerals are often overlooked but modern life without them would be impossible," Ross said.

"Through the recommendations detailed in this report, the Federal government will take unprecedented action to ensure that the United States will not be cut off from these vital materials."

President Donald Trump has ramped up his aggressive stance towards China in a bid to pressure the country to change its objectionable trade practices but the most recent flare-up caused talks to breakdown, especially due to US actions against Chinese tech giant Huawei.

In December 2017, Trump called on Commerce and other government agencies to develop new sources of critical minerals to reduce vulnerabilities to supply disruptions, especially from foreign sources.

The report calls for actions including improving supplies "through investment and trade with America's allies," while streamlining permitting for mining in the United States, including on federal lands.

It also lists a plan to improve mapping and data collection to promote domestic mineral exploration.

The United States will take "unprecedented actions" to ensure the supply of strategic minerals and rare earth critical to the tech sector and the military, Commerce Secretary Wilbur Ross said Tuesday.

The United States will take "unprecedented actions" to ensure the supply of strategic minerals and rare earth critical to the tech sector and the military, Commerce Secretary Wilbur Ross said Tuesday. China is a major supplier of the critical materials and as the trade conflict with Washington has escalated, Beijing has dangled a threat of cutting exports of rare earth as a counter-strike to US tariffs. Ross said in a statement that a new report designates 35 minerals as "critical to the economic and national security" of America, including uranium, titanium, and rare earth elements needed for smartphones, computers, aircraft and GPS systems, among other uses. "These critical minerals are often overlooked but modern life without them would be impossible," Ross said. "Through the recommendations detailed in this report, the Federal government will take unprecedented action to ensure that the United States will not be cut off from these vital materials." President Donald Trump has ramped up his aggressive stance towards China in a bid to pressure the country to change its objectionable trade practices but the most recent flare-up caused talks to breakdown, especially due to US actions against Chinese tech giant Huawei. In December 2017, Trump called on Commerce and other government agencies to develop new sources of critical minerals to reduce vulnerabilities to supply disruptions, especially from foreign sources. The report calls for actions including improving supplies "through investment and trade with America's allies," while streamlining permitting for mining in the United States, including on federal lands. It also lists a plan to improve mapping and data collection to promote domestic mineral exploration.

Will take unprecedented action to ensure supply of rare earths critical to tech, military: US

The European Union said Friday it is prepared to negotiate a l<a href="https://www.wionews.com/world/china-cancels-us-pork-import-order-as-us-china-trade-war-drags-on-219266">imited trade deal, including on cars,</a> with the US, after President Donald Trump held off imposing auto tariffs.

"We note that US postpones decision on car tariffs for 180 days," European trade commissioner Cecilia Malmstrom tweeted. "The EU is prepared to negotiate a limited trade agreement including cars."

Earlier, Germany welcomed President Donald Trump's decision to hold off on imposing punitive tariffs on European car imports, saying this helped prevent a trade conflict from escalating.

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/chinas-hike-of-us-tariffs-sparks-asia-stock-losses-218707/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

"It is an important signal for the German and European economy that a new escalation of the trade conflict could be prevented for the time being," said Economy Minister Peter Altmaier.&nbsp;

President Donald Trump on Friday had announced he will delay by six months a decision on imposing steep tariffs on imported autos while the United States pursues talks with key trading partners.

"Within 180 days... the Trade Representative shall update me on the outcome of the negotiations," Trump said in a proclamation issued by the White House.

In his proclamation on Friday, Trump described the US auto sector as facing decline due to unfair foreign competition.

A report by Commerce Secretary Wilbur Ross concluded that America's shrinking share of the auto market jeopardized its research, development and manufacturing -- all "vital to national security."&nbsp; 
&nbsp;

The European Union said Friday it is prepared to negotiate a limited trade deal, including on cars, with the US, after President Donald Trump held off imposing auto tariffs.

The European Union said Friday it is prepared to negotiate a limited trade deal, including on cars, with the US, after President Donald Trump held off imposing auto tariffs. "We note that US postpones decision on car tariffs for 180 days," European trade commissioner Cecilia Malmstrom tweeted. "The EU is prepared to negotiate a limited trade agreement including cars." Earlier, Germany welcomed President Donald Trump's decision to hold off on imposing punitive tariffs on European car imports, saying this helped prevent a trade conflict from escalating. "It is an important signal for the German and European economy that a new escalation of the trade conflict could be prevented for the time being," said Economy Minister Peter Altmaier. President Donald Trump on Friday had announced he will delay by six months a decision on imposing steep tariffs on imported autos while the United States pursues talks with key trading partners. "Within 180 days... the Trade Representative shall update me on the outcome of the negotiations," Trump said in a proclamation issued by the White House. In his proclamation on Friday, Trump described the US auto sector as facing decline due to unfair foreign competition. A report by Commerce Secretary Wilbur Ross concluded that America's shrinking share of the auto market jeopardized its research, development and manufacturing -- all "vital to national security."

Ready to negotiate limited trade agreement with US including cars: European Union

A day after China retaliated with<a href="https://www.wionews.com/world/trump-says-he-feels-us-china-trade-talks-going-to-be-very-successful-218515"> imposing $60 billion tariffs</a> on US goods, the foreign ministry said it will remain calm and level-headed in the face of flip-flops and maximum pressure from the US side.

"China does not want to fight the trade war but it is not afraid to fight it. If someone attacks us on our doorstep, we will take them on and fight to the finish," China's foreign ministry spokesman Geng Shuang said.

China had announced on Monday that is latest tariffs against <a href="https://www.wionews.com/world/us-china-trade-setback-stokes-recession-fears-stocks-slide-218396">US goods will come into effect</a> from June 1 even as President Trump in a tweet had cautioned President Xi's government not to retaliate.

Trump in a tweet on Tuesday had said, "We have placed a 25 per cent tariff on “dumped” steel from China and other countries, adding that in one year tariffs have rebuilt our steel industry - it is booming!"

<blockquote class="twitter-tweet">
China buys MUCH less from us than we buy from them, by almost 500 Billion Dollars, so we are in a fantastic position. Make your product at home in the USA and there is no Tariff. You can also buy from a non-Tariffed country instead of China. Many companies are leaving China.....
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1128246369674829832?ref_src=twsrc%5Etfw">May 14, 2019</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

Earlier on Monday, Trump had said China should not retaliate because "things could only get worse", however, just hours later China unveiled its new round of tariffs in a tit-for-tat move against the US which had imposed $200 billion worth of Chinese goods in the midst of the trade war last week.

On Friday, Trump had issued orders for the tariff increase, asserting that China "broke the deal" by reneging on earlier commitments made during negotiations.

"We admonish the US side to take heed of the international community's reaction and calls from people from all walks of life, calculate the gains and losses of their own interests, have a clear understanding of the situation and return to the right track at an early date," China's foreign ministry spokesman said. 
&nbsp; &nbsp; 
"We are determined and able to maintain our legitimate rights and interests," Shuang added.&nbsp; 
&nbsp;

A day after China retaliated with imposing $60 billion tariffs on US goods, the foreign ministry said it will remain calm and level-headed in the face of flip-flops and maximum pressure from the US side.

A day after China retaliated with imposing $60 billion tariffs on US goods, the foreign ministry said it will remain calm and level-headed in the face of flip-flops and maximum pressure from the US side. "China does not want to fight the trade war but it is not afraid to fight it. If someone attacks us on our doorstep, we will take them on and fight to the finish," China's foreign ministry spokesman Geng Shuang said. China had announced on Monday that is latest tariffs against US goods will come into effect from June 1 even as President Trump in a tweet had cautioned President Xi's government not to retaliate. Trump in a tweet on Tuesday had said, "We have placed a 25 per cent tariff on “dumped” steel from China and other countries, adding that in one year tariffs have rebuilt our steel industry - it is booming!" China buys MUCH less from us than we buy from them, by almost 500 Billion Dollars, so we are in a fantastic position. Make your product at home in the USA and there is no Tariff. You can also buy from a non-Tariffed country instead of China. Many companies are leaving China..... — Donald J. Trump (@realDonaldTrump) May 14, 2019 Earlier on Monday, Trump had said China should not retaliate because "things could only get worse", however, just hours later China unveiled its new round of tariffs in a tit-for-tat move against the US which had imposed $200 billion worth of Chinese goods in the midst of the trade war last week. On Friday, Trump had issued orders for the tariff increase, asserting that China "broke the deal" by reneging on earlier commitments made during negotiations. "We admonish the US side to take heed of the international community's reaction and calls from people from all walks of life, calculate the gains and losses of their own interests, have a clear understanding of the situation and return to the right track at an early date," China's foreign ministry spokesman said. "We are determined and able to maintain our legitimate rights and interests," Shuang added.

If someone attacks us on our doorstep, we will fight to the finish: China on trade war with US

Shortly after Donald Trump said<a href="https://www.wionews.com/world/china-should-not-retaliate-on-tariffs-it-will-only-get-worse-says-trump-218364"> China should not impose tariffs</a> against the US, China on Monday said it will impose tariffs on $60 billion worth of US goods from June 1.

China will be imposing tariffs ranging from 5 per cent to 25 per cent on a number of American goods, according to a statement by the Tariff Policy Commission of the State Council which is part of China's cabinet.

Earlier in the day, President Trump had said that "if it doesn't make a deal because companies will be forced to leave China for other countries."&nbsp;

Trump had directly appealed to President Xi in his tweet even as China said it won't &nbsp;"surrender" to foreign pressure after Washington renewed its threat to impose tariffs.

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<blockquote class="twitter-tweet">
I say openly to President Xi &amp; all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China. You had a great deal, almost completed, &amp; you backed out!
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1127888569543077888?ref_src=twsrc%5Etfw">May 13, 2019</a></blockquote>
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"China will never surrender to external pressure," foreign ministry spokesman Geng Shuang said, adding,"we are determined to have the ability to safeguard our legitimate rights and interests."

"We have said many times that imposing tariffs will not solve any problems," Geng added.

Trade talks between China and the US concluded without any concrete results last week even as the Trump administration imposed new tariffs on China as the deadlock continued.

<div class="videoWrapper trancodeVideo"><iframe src="https://www.wionews.com/videos/trump-warns-china-to-strike-a-trade-deal-or-face-worse-terms-218018/embed" width="560" height="350" style="width:100%;max-width:560px;" class="includeVideo" frameborder="0" autoplay=1 allowfullscreen></iframe></div>

China has so far slapped tariffs on $110 billion worth of US goods in retaliation to the US duties.

Meanwhile, President Trump ordered US Trade Representative Robert Lighthizer to begin imposing tariffs on all remaining imports from China as the trade war between the two nations began to hit markets worldwide.

Reports now suggest a possible meeting between Trump and President Xi on the sidelines of the G20 summit could help the ease the crisis, however, no date has been set for the two leaders to meet.

Shortly after Donald Trump said China should not impose tariffs against the US, China on Monday said it will impose tariffs on $60 billion worth of US goods from June 1.

Shortly after Donald Trump said China should not impose tariffs against the US, China on Monday said it will impose tariffs on $60 billion worth of US goods from June 1. China will be imposing tariffs ranging from 5 per cent to 25 per cent on a number of American goods, according to a statement by the Tariff Policy Commission of the State Council which is part of China's cabinet. Earlier in the day, President Trump had said that "if it doesn't make a deal because companies will be forced to leave China for other countries." Trump had directly appealed to President Xi in his tweet even as China said it won't "surrender" to foreign pressure after Washington renewed its threat to impose tariffs. I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China. You had a great deal, almost completed, & you backed out! — Donald J. Trump (@realDonaldTrump) May 13, 2019 × "China will never surrender to external pressure," foreign ministry spokesman Geng Shuang said, adding,"we are determined to have the ability to safeguard our legitimate rights and interests." "We have said many times that imposing tariffs will not solve any problems," Geng added. Trade talks between China and the US concluded without any concrete results last week even as the Trump administration imposed new tariffs on China as the deadlock continued. China has so far slapped tariffs on $110 billion worth of US goods in retaliation to the US duties. Meanwhile, President Trump ordered US Trade Representative Robert Lighthizer to begin imposing tariffs on all remaining imports from China as the trade war between the two nations began to hit markets worldwide. Reports now suggest a possible meeting between Trump and President Xi on the sidelines of the G20 summit could help the ease the crisis, however, no date has been set for the two leaders to meet.

Now, China imposes tariffs on $60 billion worth of US goods

Global equities fell on Monday after their worst week of 2019 as hopes of an imminent US-China trade deal were crushed, raising fears of a fresh round of tit-for-tat tariffs.

The impasse left investors bracing for retaliation by China for Washington's increase on Friday of tariffs on $200 billion worth of Chinese goods. The move followed accusations by US President Donald Trump that Beijing had reneged on earlier commitments.

Trump on Monday warned China not to retaliate against an increase in tariffs he imposed last week.

Escalation could tip the US economy into recession, a risk flagged by the inversion in US Treasury bond yield curve between three-month and 10-year rates for the second time in under a week.

The US curve has inverted before each recession in the past 50 years. It gave a false signal just once.

"Overall, in the short term the chances of recession have increased so equity markets will be priced on the back of that," said Justin Oneukwusi, portfolio manager at Legal &amp; General Investment Management.

The pan-European Stoxx 600 slipped 0.5%. S&amp;P 500 futures shed 1.3%.

Chinese shares tumbled. The benchmark Shanghai Composite and the blue-chip CSI 300 indices shed 1.2% and 1.8%, respectively.

The offshore Chinese yuan fell to its lowest in more than four months, 6.88 to the dollar.

Trade talks as Washington demanded promises of concrete changes to Chinese law and Beijing said it would not swallow any "bitter fruit" that harmed its interests.

"How far this escalates is what the market is really worried about ... The important thing is what's the impact on growth, and that's what the market is really fearing," Oneukwusi said.

White House economic adviser Larry Kudlow told Fox News that China needed to agree to "very strong" enforcement provisions to secure a deal. He said the sticking point was Beijing's reluctance to put into law changes that had been agreed.

Kudlow said US tariffs would remain in place while negotiations continued and Trump was likely to meet Chinese President Xi Jinping at a G20 summit in Japan in late June.

"The risk of a full-blown trade war has materially increased, even though both sides seem to still want a trade deal and talks are expected to continue," UBS economist Tao Wang said.

Washington said it was preparing to raise tariffs on all remaining imports from China, worth about $300 billion.

"Our base case is for limited progress and Chinese retaliation," said Michael Hanson, head of global macro strategy at TD Securities.

Major currencies were relatively calm. The euro was steady at $1.1234 and the dollar little changed against a basket of currencies at 97.270.

"We've seen pretty restrained moves among currencies, despite some severe rhetoric between the US and China so far. However, cause for concern remains a weaker yuan, which should be a warning sign for risk assets," said Marc-André Fongern of MAF Global Forex.

Emerging-market stocks were down 0.9 per cent, hovering near January lows. JPMorgan said it had reduced its emerging-markets risk for the second time in as many months on Monday following the setback in US-China trade talks.

In commodities, oil futures jumped on growing concern about supply disruptions in the Middle East. Brent crude futures rose 1.8% to $71.90 a barrel and US West Texas Intermediate futures were up 1.5% at $62.56 per barrel.

In digital currencies, Bitcoin hovered above $7,000 on Monday, close to nine-month highs, as the biggest cryptocurrency's 2019 rally gathered steam.

Global equities fell on Monday after their worst week of 2019 as hopes of an imminent US-China trade deal were crushed, raising fears of a fresh round of tit-for-tat tariffs.

Global equities fell on Monday after their worst week of 2019 as hopes of an imminent US-China trade deal were crushed, raising fears of a fresh round of tit-for-tat tariffs. The impasse left investors bracing for retaliation by China for Washington's increase on Friday of tariffs on $200 billion worth of Chinese goods. The move followed accusations by US President Donald Trump that Beijing had reneged on earlier commitments. Trump on Monday warned China not to retaliate against an increase in tariffs he imposed last week. Escalation could tip the US economy into recession, a risk flagged by the inversion in US Treasury bond yield curve between three-month and 10-year rates for the second time in under a week. The US curve has inverted before each recession in the past 50 years. It gave a false signal just once. "Overall, in the short term the chances of recession have increased so equity markets will be priced on the back of that," said Justin Oneukwusi, portfolio manager at Legal & General Investment Management. The pan-European Stoxx 600 slipped 0.5%. S&P 500 futures shed 1.3%. Chinese shares tumbled. The benchmark Shanghai Composite and the blue-chip CSI 300 indices shed 1.2% and 1.8%, respectively. The offshore Chinese yuan fell to its lowest in more than four months, 6.88 to the dollar. Trade talks as Washington demanded promises of concrete changes to Chinese law and Beijing said it would not swallow any "bitter fruit" that harmed its interests. "How far this escalates is what the market is really worried about ... The important thing is what's the impact on growth, and that's what the market is really fearing," Oneukwusi said. White House economic adviser Larry Kudlow told Fox News that China needed to agree to "very strong" enforcement provisions to secure a deal. He said the sticking point was Beijing's reluctance to put into law changes that had been agreed. Kudlow said US tariffs would remain in place while negotiations continued and Trump was likely to meet Chinese President Xi Jinping at a G20 summit in Japan in late June. "The risk of a full-blown trade war has materially increased, even though both sides seem to still want a trade deal and talks are expected to continue," UBS economist Tao Wang said. Washington said it was preparing to raise tariffs on all remaining imports from China, worth about $300 billion. "Our base case is for limited progress and Chinese retaliation," said Michael Hanson, head of global macro strategy at TD Securities. Major currencies were relatively calm. The euro was steady at $1.1234 and the dollar little changed against a basket of currencies at 97.270. "We've seen pretty restrained moves among currencies, despite some severe rhetoric between the US and China so far. However, cause for concern remains a weaker yuan, which should be a warning sign for risk assets," said Marc-André Fongern of MAF Global Forex. Emerging-market stocks were down 0.9 per cent, hovering near January lows. JPMorgan said it had reduced its emerging-markets risk for the second time in as many months on Monday following the setback in US-China trade talks. In commodities, oil futures jumped on growing concern about supply disruptions in the Middle East. Brent crude futures rose 1.8% to $71.90 a barrel and US West Texas Intermediate futures were up 1.5% at $62.56 per barrel. In digital currencies, Bitcoin hovered above $7,000 on Monday, close to nine-month highs, as the biggest cryptocurrency's 2019 rally gathered steam.

US-China trade setback stokes recession fears; stocks slide

&nbsp;By Tony Walker 
 
The Chinese have a saying attributed to the philosopher and writer Lao Tzu: every journey begins with a single step.

If that is the case, US-China relations have taken a step backwards in negotiators’ failure to advance trade negotiations in the latest round of talks in Washington, which ended unsatisfactorily.

China has said it is willing to resume discussions. The US has sent mixed messages, including a series of bombastic tweets from President Donald Trump warning of a worse deal if an agreement is not reached before the next presidential election.

Washington responded to the inability of the two sides to bridge their differences by raising tariffs on $200 billion worth of Chinese imports to 25 per cent from 10 per cent already imposed.

The administration has threatened to extend tariff increases to virtually all Chinese imports. This would likely prompt a trade war.

Sharp differences remain over the wording of the trade agreement itself. Beijing regards the language as too harsh on intellectual property and trade secrets theft, forced technology transfers, competition policy, access to financial services, and currency manipulation.

China appears to have hardened its position on some of these issues in the course of the negotiations, after having earlier indicated more flexibility.

This does not augur well for an early resolution.

The US has also clearly resolved to increase pressure on China on other fronts, in what risks becoming deepening differences on a range of issues.

As trade negotiators convened in Washington two US warships sailed near disputed islands and island features claimed by China in the South China Sea. This is the third time this year the US has conducted freedom of navigation operations next to Chinese-claimed territory.

Coinciding with last week’s stalled trade talks, the US also barred the large Chinese telecommunications operator, China Mobile Ltd, from operating in the US. Washington cited security concerns.

This comes in the wake of the US decision to ban the Chinese telecommunication communications equipment supplier, Huawei, from participating in the buildout of its 5G network.

US pressure led to three other members of the so-called “five eyes” security partnership, including Australia, to bar Huawei as well. Britain, alone among the “five eyes”, has agreed to allow the Chinese company to participate in non-core aspects of the 5G buildout.

This will be viewed in Beijing as an indication the US is using its economic weight to confront China more broadly and encourage its allies to follow suit.

US attempts to extradite the daughter of the founder of Huawei from Canada to face charges for breaching sanctions against Iran risk further souring relations.

While it would be premature to describe a messy pause in US-China trade negotiations as an inflexion moment in an increasingly complex relationship, it is unarguable that US-China relations have entered a new and more fractious phase.

What is unclear is whether a more overtly competitive relationship is bringing closer the day when the gloves really do come off in a way that threatens global harmony.

In any case, it seems clear a period of relative amity, during which the US and China sought to achieve a reasonable balance between an old and a new global order, is over.

Benn Steil, director of the international economics program at the Council on Foreign Relations, told Bloomberg that rivalry between the US and China for control of everything from global trade routes to cyberspace will drive the relationship for years to come.

“The heady era of global integration is gone,” Steil said.

This view may prove alarmist, but, on latest indications, overcoming trade and other differences between Washington and Beijing will be easier said than done.

Trump’s arrival in the White House, with a team of trade advisers who have made careers railing against China’s uncompetitive trade practices, has brought trading differences more sharply into focus.

Disputes over intellectual property, market access, alleged currency manipulation and a host of other trade issues have been present ever since China began its inexorable rise.

US politicians of left and right agitate against what’s perceived to be China’s mercantilist trade policies. This is blamed for American jobs draining away from the country’s manufacturing heartland.

Prominent Democrats, including Senate minority leader Chuck Schumer, support Trump’s tough stand on China. Democratic presidential hopefuls like Bernie Sanders have accused Trump of not delivering on his promises to upend US trading relationships.

Trump’s unhelpful response to the failure in Washington to achieve breakthrough points to an uncertain conclusion to complex negotiations that would lay the foundation for a more stable relationship.

This contribution to the debate provides an indication of the extent to which US-China relations have become enmeshed in American domestic politics.

Trade frictions with China risk becoming more – not less – intense as a presidential election year approaches in 2020.

Presidential campaigns tend to expose sharper differences on trade as the two sides compete for votes in the American rust belt, where factory closures have killed off tens of thousands of jobs.

One of Trump’s boasts is that he has reversed this trend by encouraging American business to reinvest onshore and bring jobs home. But disruptions to trade have their costs.

Trump’s tariff war against China has hit American farmers hard as the Chinese have retaliated by seeking alternative markets for agricultural commodities such as soybeans.

In other words, China is not without an ability to strike back at US attempts to strong-arm it over trade.

In the end, a resolution of a damaging US-China trade dispute that risks broader damage to a global trading system will require the intervention of respective leaders, Trump and his Chinese counterpart, Xi Jinping. The two will meet in June at the Osaka G20 leaders’ summit.

What is complicating that scenario is that crude US attempts to ramp up pressure on Beijing may well prove counterproductive. In Chinese culture, the issue of “face” is important.

Xi will not want to lose “face” in negotiations with Trump by yielding ground unduly. As US academic Patrick Chovanec writes:

"If we want China to embrace structural reform that requires real commitment – it’s not something we can just twist their arm to do, they have to buy into it. When you basically strong-arm them into doing something they really don’t want to do, and they’re convinced it’s harmful to their interests, at some point they are going to cheat, push back, or scuttle it, it’s just a question of when, because they haven’t bought into it."

US-China trade negotiations risk-taking more than a few steps back. 
 
(Tony Walker is Adjunct Professor, School of Communications, La Trobe University)

(This article was originally published on The DNA. Read the <a href="https://theconversation.com/stakes-are-high-as-us-ups-the-ante-on-trade-dispute-with-china-116985">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)&nbsp;

 
 
 
 
 
&nbsp;

By Tony Walker The Chinese have a saying attributed to the philosopher and writer Lao Tzu: every journey begins with a single step. If that is the case, US-China relations have taken a step backwards in negotiators’ failure to advance trade negotiations in the latest round of talks in Washington, which ended unsatisfactorily.

By Tony Walker The Chinese have a saying attributed to the philosopher and writer Lao Tzu: every journey begins with a single step. If that is the case, US-China relations have taken a step backwards in negotiators’ failure to advance trade negotiations in the latest round of talks in Washington, which ended unsatisfactorily. China has said it is willing to resume discussions. The US has sent mixed messages, including a series of bombastic tweets from President Donald Trump warning of a worse deal if an agreement is not reached before the next presidential election. Washington responded to the inability of the two sides to bridge their differences by raising tariffs on $200 billion worth of Chinese imports to 25 per cent from 10 per cent already imposed. The administration has threatened to extend tariff increases to virtually all Chinese imports. This would likely prompt a trade war. Sharp differences remain over the wording of the trade agreement itself. Beijing regards the language as too harsh on intellectual property and trade secrets theft, forced technology transfers, competition policy, access to financial services, and currency manipulation. China appears to have hardened its position on some of these issues in the course of the negotiations, after having earlier indicated more flexibility. This does not augur well for an early resolution. The US has also clearly resolved to increase pressure on China on other fronts, in what risks becoming deepening differences on a range of issues. As trade negotiators convened in Washington two US warships sailed near disputed islands and island features claimed by China in the South China Sea. This is the third time this year the US has conducted freedom of navigation operations next to Chinese-claimed territory. Coinciding with last week’s stalled trade talks, the US also barred the large Chinese telecommunications operator, China Mobile Ltd, from operating in the US. Washington cited security concerns. This comes in the wake of the US decision to ban the Chinese telecommunication communications equipment supplier, Huawei, from participating in the buildout of its 5G network. US pressure led to three other members of the so-called “five eyes” security partnership, including Australia, to bar Huawei as well. Britain, alone among the “five eyes”, has agreed to allow the Chinese company to participate in non-core aspects of the 5G buildout. This will be viewed in Beijing as an indication the US is using its economic weight to confront China more broadly and encourage its allies to follow suit. US attempts to extradite the daughter of the founder of Huawei from Canada to face charges for breaching sanctions against Iran risk further souring relations. While it would be premature to describe a messy pause in US-China trade negotiations as an inflexion moment in an increasingly complex relationship, it is unarguable that US-China relations have entered a new and more fractious phase. What is unclear is whether a more overtly competitive relationship is bringing closer the day when the gloves really do come off in a way that threatens global harmony. In any case, it seems clear a period of relative amity, during which the US and China sought to achieve a reasonable balance between an old and a new global order, is over. Benn Steil, director of the international economics program at the Council on Foreign Relations, told Bloomberg that rivalry between the US and China for control of everything from global trade routes to cyberspace will drive the relationship for years to come. “The heady era of global integration is gone,” Steil said. This view may prove alarmist, but, on latest indications, overcoming trade and other differences between Washington and Beijing will be easier said than done. Trump’s arrival in the White House, with a team of trade advisers who have made careers railing against China’s uncompetitive trade practices, has brought trading differences more sharply into focus. Disputes over intellectual property, market access, alleged currency manipulation and a host of other trade issues have been present ever since China began its inexorable rise. US politicians of left and right agitate against what’s perceived to be China’s mercantilist trade policies. This is blamed for American jobs draining away from the country’s manufacturing heartland. Prominent Democrats, including Senate minority leader Chuck Schumer, support Trump’s tough stand on China. Democratic presidential hopefuls like Bernie Sanders have accused Trump of not delivering on his promises to upend US trading relationships. Trump’s unhelpful response to the failure in Washington to achieve breakthrough points to an uncertain conclusion to complex negotiations that would lay the foundation for a more stable relationship. This contribution to the debate provides an indication of the extent to which US-China relations have become enmeshed in American domestic politics. Trade frictions with China risk becoming more – not less – intense as a presidential election year approaches in 2020. Presidential campaigns tend to expose sharper differences on trade as the two sides compete for votes in the American rust belt, where factory closures have killed off tens of thousands of jobs. One of Trump’s boasts is that he has reversed this trend by encouraging American business to reinvest onshore and bring jobs home. But disruptions to trade have their costs. Trump’s tariff war against China has hit American farmers hard as the Chinese have retaliated by seeking alternative markets for agricultural commodities such as soybeans. In other words, China is not without an ability to strike back at US attempts to strong-arm it over trade. In the end, a resolution of a damaging US-China trade dispute that risks broader damage to a global trading system will require the intervention of respective leaders, Trump and his Chinese counterpart, Xi Jinping. The two will meet in June at the Osaka G20 leaders’ summit. What is complicating that scenario is that crude US attempts to ramp up pressure on Beijing may well prove counterproductive. In Chinese culture, the issue of “face” is important. Xi will not want to lose “face” in negotiations with Trump by yielding ground unduly. As US academic Patrick Chovanec writes: "If we want China to embrace structural reform that requires real commitment – it’s not something we can just twist their arm to do, they have to buy into it. When you basically strong-arm them into doing something they really don’t want to do, and they’re convinced it’s harmful to their interests, at some point they are going to cheat, push back, or scuttle it, it’s just a question of when, because they haven’t bought into it." US-China trade negotiations risk-taking more than a few steps back. (Tony Walker is Adjunct Professor, School of Communications, La Trobe University) (This article was originally published on The DNA. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

Stakes are high as US ups the ante on trade dispute with China

China's top trade negotiator Liu He said on Friday in Washington that<a href="https://www.wionews.com/world/us-officials-says-china-trade-talks-constructive-217600"> trade talks with the US</a> would continue in Beijing but warned that there would be no concessions on "important principles".

"Negotiations have not broken down, but rather on the contrary, this is only a normal twist in the negotiations between the two countries, it is inevitable," Liu told Chinese media.

<a href="https://www.wionews.com/photos/top-facts-how-us-china-talks-differ-from-any-other-trade-deal-217563">In pics: How US-China talks differ from any other trade deal</a>

"Both sides agree they will meet again in Beijing in the future and keep pushing forward the negotiations," he said without giving a date.

Although Liu deemed the two days of talks in the US "productive" he said differences continued to exist.

"We have a consensus in lots of areas but to speak frankly there are areas we have differences on, and we believe these concern big principles," he said.

"Every country has important principles, and we will not make concessions on matters of principle."

US Treasury Secretary Steven Mnuchin said earlier, talks to end a worrisome&nbsp;<a href="https://www.wionews.com/photos/top-facts-how-us-china-talks-differ-from-any-other-trade-deal-217563">US-China trade battle</a>&nbsp;were "constructive," giving a sign of hope that Washington and Beijing could seal a deal to avert damage to the global economy.

"They were constructive discussions between both parties, that's all we're going to say," Mnuchin was quoted as saying by CNBC following a two-hour negotiating session.

President Donald&nbsp;<a href="https://www.wionews.com/world/tariffs-will-bring-in-far-more-wealth-to-our-country-than-even-phenomenal-deal-of-traditional-kind-donald-trump-217507">Trump said Friday he was in no hurry to reach a deal with Beijing</a>, arguing the United States was negotiating from a position of strength.

Just hours earlier, Washington had pulled the trigger on an increase in punitive duties on $200 billion in Chinese imports to 25 per cent from 10 per cent, and Beijing responded vowing to take the "necessary countermeasures."

China's top trade negotiator Liu He said on Friday in Washington that trade talks with the US would continue in Beijing but warned that there would be no concessions on "important principles".

China's top trade negotiator Liu He said on Friday in Washington that trade talks with the US would continue in Beijing but warned that there would be no concessions on "important principles". "Negotiations have not broken down, but rather on the contrary, this is only a normal twist in the negotiations between the two countries, it is inevitable," Liu told Chinese media. In pics: How US-China talks differ from any other trade deal "Both sides agree they will meet again in Beijing in the future and keep pushing forward the negotiations," he said without giving a date. Although Liu deemed the two days of talks in the US "productive" he said differences continued to exist. "We have a consensus in lots of areas but to speak frankly there are areas we have differences on, and we believe these concern big principles," he said. "Every country has important principles, and we will not make concessions on matters of principle." US Treasury Secretary Steven Mnuchin said earlier, talks to end a worrisome US-China trade battle were "constructive," giving a sign of hope that Washington and Beijing could seal a deal to avert damage to the global economy. "They were constructive discussions between both parties, that's all we're going to say," Mnuchin was quoted as saying by CNBC following a two-hour negotiating session. President Donald Trump said Friday he was in no hurry to reach a deal with Beijing, arguing the United States was negotiating from a position of strength. Just hours earlier, Washington had pulled the trigger on an increase in punitive duties on $200 billion in Chinese imports to 25 per cent from 10 per cent, and Beijing responded vowing to take the "necessary countermeasures."

China says it will hold more trade talks with US in Beijing

As new US tariffs on $200 billion worth of Chinese goods kicked in on Friday, <a href="https://www.wionews.com/business-economy/oil-rallies-on-hopes-for-us-china-trade-deal-217381">China's commerce ministry</a> said it "deeply regrets" the move by the Trump administration even as it vowed to take "necessary countermeasures".

"The eleventh round of China-US high-level economic and trade consultations is underway and we hope the US and the Chinese side can meet each other halfway," the statement said.

The commerce ministry, however, did not elaborate on the "countermeasures". US and Chinese officials completed their talks on the first day when the two sides met in Washington on Thursday.

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/no-end-to-us-china-trade-war-217290/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

The US and &nbsp;Chinese officials are due to meet again on Friday for the second day of talks to resolve the trade dispute.

China's top trade negotiator Liu He said that an increase in US tariffs on Chinese goods "won't solve anything".

"Both the Chinese and US economies, in some ways, are part of a complete industrial chain. Everyone will get hurt. As both sides have now run into issues during the negotiations, we shouldn't harm the innocent," Liu said.

"The interests of the broader masses have been damaged, and we feel regretful. So we hope we can find the best way to a solution," he added.

However, as the talks got underway, President Trump said China had sought to "renegotiate the deal", adding, "we can't have that."

Trump warned that if the two sides fail to make a deal, the US would go back to manufacturing products that China now makes. "It'll be the old-fashioned way, the way we used to do it: We made our own product."

Trump did add that&nbsp;he had received a "beautiful" letter from Chinese President Xi Jinping to keep hopes alive in the contentious talks.

Markets around the world were hit even as several market experts still hope a last minute deal would&nbsp;be reached by the warring sides. US stock indexes closed lower on Thursday ahead of the trade talks.

As new US tariffs on $200 billion worth of Chinese goods kicked in on Friday, China's commerce ministry said it "deeply regrets" the move by the Trump administration even as it vowed to take "necessary countermeasures".

As new US tariffs on $200 billion worth of Chinese goods kicked in on Friday, China's commerce ministry said it "deeply regrets" the move by the Trump administration even as it vowed to take "necessary countermeasures". "The eleventh round of China-US high-level economic and trade consultations is underway and we hope the US and the Chinese side can meet each other halfway," the statement said. The commerce ministry, however, did not elaborate on the "countermeasures". US and Chinese officials completed their talks on the first day when the two sides met in Washington on Thursday. The US and Chinese officials are due to meet again on Friday for the second day of talks to resolve the trade dispute. China's top trade negotiator Liu He said that an increase in US tariffs on Chinese goods "won't solve anything". "Both the Chinese and US economies, in some ways, are part of a complete industrial chain. Everyone will get hurt. As both sides have now run into issues during the negotiations, we shouldn't harm the innocent," Liu said. "The interests of the broader masses have been damaged, and we feel regretful. So we hope we can find the best way to a solution," he added. However, as the talks got underway, President Trump said China had sought to "renegotiate the deal", adding, "we can't have that." Trump warned that if the two sides fail to make a deal, the US would go back to manufacturing products that China now makes. "It'll be the old-fashioned way, the way we used to do it: We made our own product." Trump did add that he had received a "beautiful" letter from Chinese President Xi Jinping to keep hopes alive in the contentious talks. Markets around the world were hit even as several market experts still hope a last minute deal would be reached by the warring sides. US stock indexes closed lower on Thursday ahead of the trade talks.

Deeply regret US tariffs, will take 'necessary countermeasures': China

By Charles Hankla 
 
Last week President Donald Trump seemed to be on the cusp of a trade deal with China. A couple of threatening tweets later, the odds of ending the 16-month-old US-China trade war have dropped dramatically.

Whether or not American and Chinese trade negotiators ultimately salvage a deal – the US says China backpedaled on a commitment and intends to raise tariffs within days – the episode highlights drawbacks in Trump’s trade strategy, which tends to be protectionist, confrontational and negotiated one on one.

Unfortunately, Trump’s policies are only an acceleration of a trend in international trade that’s been going on for several decades. It’s a move away from multilateralism – in which many countries agree on certain trading principles – and toward bilateralism – which pits nation against nation, raising the stakes.

I am a specialist in the politics of trade. My observations lead me to believe that the increasing abandonment of multilateralism will have pernicious long-term consequences. Not only will trade become more costly for businesses and consumers, it may even make the planet a more dangerous place.

World trade – Trump style

Before we can understand what has changed, we need to revisit how trade deals have historically been done.

In the decades following World War II, the General Agreement on Tariffs and Trade was the center of gravity for trade negotiations. While that system wasn’t perfect, most of the world’s countries could at least participate, to one degree or another, in hammering out the rules of trade.

This multilateral trading order reached its heyday in 1995, with the creation of the World Trade Organisation. But more recently, the system has weakened. Today, most of the world’s new agreements are struck between only two countries or within a single region.

Trump has shown little appetite for continuing the multilateral negotiations his predecessors were working on. He’s also hammered on regional accords, famously renegotiating the North American Free Trade Agreement and withdrawing from the Trans-Pacific Partnership.

Trump’s clear preference is for bilateral deals where the US can use its market power to force concessions from its negotiating partners. But Trump has added a level of confrontation and antagonism to world trade not known in the postwar era.

For evidence, look no further than his threats to raise tariffs on hundreds of billions of dollars of Chinese goods if a deal falls through.

In essence, the United States under Trump has begun to see itself as the victim, rather than the guarantor, of the liberal trading order. This new perspective has made American negotiators more willing to extract temporary concessions from trading partners, even when these come at the cost of destabilizing the system as a whole.

Rules upon rules

One pernicious consequence of abandoning multilateralism is the mounting complexity and discriminatory nature of global trading arrangements.

In international trade, the fewer rules there are the better. One real benefit of the WTO system is that the same rules, more or less, apply to everyone.

But the world’s increasing rejection of multilateralism is creating a complex web of trade regulations that are tremendously hard to navigate. The number of preferential trade agreements jumped from just over 50 in 1990 to nearly 300 in 2010.

More deals like these mean that one set of rules is overlaid by more rules that only apply when trading with specific countries in certain goods and services. For this reason, the economist Jagdish Bhagwati has called bilateral deals “termites in the trading system.”

These “termites” and the informational burdens they create have real costs for companies and consumers, whether in Europe, Asia or the United States. And this growing complexity weakens competition by giving certain companies an edge over others based on their national origin, distorting the efficiency of global markets.

In the end, these burdens can discourage smaller companies from engaging in global commerce, make it more expensive for even the largest businesses and drive up the cost of products for consumers.

Trade conflicts

A second drawback to Trump’s approach is that it increases the risk of war, at least over the long term.

As the political economist David Lake has pointed out, one purpose of the trading system that the US helped set up after World War II was to forestall mutually antagonistic trading blocs like the ones built by Adolf Hitler or, earlier, by the European and Japanese colonial powers.

The origins of the two world wars may have been principally political, but there is little doubt that economic conflicts between blocs contributed to the military tensions.

During the postwar era, the multilateral system took a major step toward insulating trade from such international disputes and strategic competition. Outside of relations with the communist bloc, which only later participated in multilateral trade deals, there is ample reason to believe that economic interdependence helped produce the “long peace” of that period.

For this reason, we should all be worried about the wobbly state of the global trading system. Bilateral and regional deals are making it easier for large countries to use trade policy more explicitly as an arm of foreign and military policy.

Modern bilateral deals are not recreating the colonial systems of the past, but they do tend to center on major powers in what some scholars have called a “hub” and “spoke” pattern. The “hub” often enjoys significant influence over the “spoke,” and not just in commercial affairs. China’s overtures to African countries over a free trade deal, for example, are likely linked to its strategic interest in securing access to national resources.

While I’m not suggesting that these deals are likely to trigger a shooting war anytime soon, an increasingly fractured world will gradually reduce interdependence among countries – which can act as a strong incentive to avoid a fight.

If the rising number of bilateral deals become an instrument of security policy, and trade increasingly flows only to strategically friendly countries, we should all prepare for more violent conflict in the future. 
 
(Charles Hankla is Associate Professor of Political Science, Georgia State University) 
 
(This article was originally published on The Conversation. Read the <a href="https://theconversation.com/trumps-one-on-one-approach-to-china-has-dangerous-implications-for-global-trade-and-world-peace-116505">original article)</a>

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) 
 
&nbsp;

By Charles Hankla Last week President Donald Trump seemed to be on the cusp of a trade deal with China. A couple of threatening tweets later, the odds of ending the 16-month-old US-China trade war have dropped dramatically.

By Charles Hankla Last week President Donald Trump seemed to be on the cusp of a trade deal with China. A couple of threatening tweets later, the odds of ending the 16-month-old US-China trade war have dropped dramatically. Whether or not American and Chinese trade negotiators ultimately salvage a deal – the US says China backpedaled on a commitment and intends to raise tariffs within days – the episode highlights drawbacks in Trump’s trade strategy, which tends to be protectionist, confrontational and negotiated one on one. Unfortunately, Trump’s policies are only an acceleration of a trend in international trade that’s been going on for several decades. It’s a move away from multilateralism – in which many countries agree on certain trading principles – and toward bilateralism – which pits nation against nation, raising the stakes. I am a specialist in the politics of trade. My observations lead me to believe that the increasing abandonment of multilateralism will have pernicious long-term consequences. Not only will trade become more costly for businesses and consumers, it may even make the planet a more dangerous place. World trade – Trump style Before we can understand what has changed, we need to revisit how trade deals have historically been done. In the decades following World War II, the General Agreement on Tariffs and Trade was the center of gravity for trade negotiations. While that system wasn’t perfect, most of the world’s countries could at least participate, to one degree or another, in hammering out the rules of trade. This multilateral trading order reached its heyday in 1995, with the creation of the World Trade Organisation. But more recently, the system has weakened. Today, most of the world’s new agreements are struck between only two countries or within a single region. Trump has shown little appetite for continuing the multilateral negotiations his predecessors were working on. He’s also hammered on regional accords, famously renegotiating the North American Free Trade Agreement and withdrawing from the Trans-Pacific Partnership. Trump’s clear preference is for bilateral deals where the US can use its market power to force concessions from its negotiating partners. But Trump has added a level of confrontation and antagonism to world trade not known in the postwar era. For evidence, look no further than his threats to raise tariffs on hundreds of billions of dollars of Chinese goods if a deal falls through. In essence, the United States under Trump has begun to see itself as the victim, rather than the guarantor, of the liberal trading order. This new perspective has made American negotiators more willing to extract temporary concessions from trading partners, even when these come at the cost of destabilizing the system as a whole. Rules upon rules One pernicious consequence of abandoning multilateralism is the mounting complexity and discriminatory nature of global trading arrangements. In international trade, the fewer rules there are the better. One real benefit of the WTO system is that the same rules, more or less, apply to everyone. But the world’s increasing rejection of multilateralism is creating a complex web of trade regulations that are tremendously hard to navigate. The number of preferential trade agreements jumped from just over 50 in 1990 to nearly 300 in 2010. More deals like these mean that one set of rules is overlaid by more rules that only apply when trading with specific countries in certain goods and services. For this reason, the economist Jagdish Bhagwati has called bilateral deals “termites in the trading system.” These “termites” and the informational burdens they create have real costs for companies and consumers, whether in Europe, Asia or the United States. And this growing complexity weakens competition by giving certain companies an edge over others based on their national origin, distorting the efficiency of global markets. In the end, these burdens can discourage smaller companies from engaging in global commerce, make it more expensive for even the largest businesses and drive up the cost of products for consumers. Trade conflicts A second drawback to Trump’s approach is that it increases the risk of war, at least over the long term. As the political economist David Lake has pointed out, one purpose of the trading system that the US helped set up after World War II was to forestall mutually antagonistic trading blocs like the ones built by Adolf Hitler or, earlier, by the European and Japanese colonial powers. The origins of the two world wars may have been principally political, but there is little doubt that economic conflicts between blocs contributed to the military tensions. During the postwar era, the multilateral system took a major step toward insulating trade from such international disputes and strategic competition. Outside of relations with the communist bloc, which only later participated in multilateral trade deals, there is ample reason to believe that economic interdependence helped produce the “long peace” of that period. For this reason, we should all be worried about the wobbly state of the global trading system. Bilateral and regional deals are making it easier for large countries to use trade policy more explicitly as an arm of foreign and military policy. Modern bilateral deals are not recreating the colonial systems of the past, but they do tend to center on major powers in what some scholars have called a “hub” and “spoke” pattern. The “hub” often enjoys significant influence over the “spoke,” and not just in commercial affairs. China’s overtures to African countries over a free trade deal, for example, are likely linked to its strategic interest in securing access to national resources. While I’m not suggesting that these deals are likely to trigger a shooting war anytime soon, an increasingly fractured world will gradually reduce interdependence among countries – which can act as a strong incentive to avoid a fight. If the rising number of bilateral deals become an instrument of security policy, and trade increasingly flows only to strategically friendly countries, we should all prepare for more violent conflict in the future. (Charles Hankla is Associate Professor of Political Science, Georgia State University) (This article was originally published on The Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Donald Trump’s one-on-one approach to China has dangerous implications for global trade

Oil prices were under pressure on Tuesday from concerns the escalating <a href="https://www.wionews.com/world/us-china-reneged-on-trade-commitments-sparking-trump-tariff-hike-216534">China-US&nbsp;trade dispute</a> could slow the global economy, while US&nbsp;sanctions on crude exporters Iran and Venezuela helped keep the market on edge.

Brent crude oil futures were at $71.09 per barrel at 0341 GMT, 15 cents, or 0.2 per cent, below their last close.

US&nbsp;West Texas Intermediate (WTI) crude futures were at $62.20 per barrel, 5 cents below their last settlement.

Analysts said there were a number of factors driving oil prices.

One is a concern that <a href="https://www.wionews.com/india-news/working-with-saudi-arabia-uae-to-ensure-oil-supplies-to-india-us-216447">global economic growth</a> is threatened by the intensifying trade dispute between the United States and China.

Talks between the world's two biggest economies hit a wall over the weekend, when US&nbsp;President Donald Trump announced a raft of new import tariffs on Chinese goods.

"US-China trade tensions are set to be at the forefront of the market's collective mind this week, as any nuance out of discussions in Washington could trigger knee-jerk moves by traders," said Han Tan, analyst at futures brokerage FXTM.

Tanker brokerage Eastport said in a note that "worsening trade friction between Washington and Beijing poses a downside risk to our forecasts" for petroleum products.

On the supply-side, oil markets remain tense as the United States tightens sanctions on Iranian oil exports, saying on Monday it was boosting its military presence in the Middle East.

Iran has threatened "reciprocal actions" against US&nbsp;sanctions, which could mean restarting some of its nuclear programme.

The US&nbsp;sanctions have already halved Iranian crude oil exports over the past year to below 1 million barrels per day (bpd), and shipments to customers are expected to drop as low as 500,000 bpd in May as sanctions tighten.

Beyond Iran, the crisis in Venezuela has also disrupted oil supplies from this OPEC member, with Washington placing oil sanctions on the Venezuelan government under President Nicolas Maduro.

"As the White House raises the stakes on Iran and Venezuela, what is the oil endgame?" asked Bank of America Merrill Lynch in a note.

"The Venezuelan political situation seems untenable but oil exports could continue to contract until the industry receives a capital injection, a dim prospect for now," the bank said.

"In addition ... Iran oil exports could collapse further over the coming months. While America's maximum pressure policy on these two regimes may pay off, additional oil supply losses cannot be ruled out," it added.

Bank of America said it expected Saudi Arabia "to bring back oil production slowly as Iranian barrels exit the market", adding that overall it saw Brent crude oil prices having a floor at $70 per barrel in current market conditions.

Oil prices were under pressure on Tuesday from concerns the escalating China-US trade dispute could slow the global economy, while US sanctions on crude exporters Iran and Venezuela helped keep the market on edge.

Oil prices were under pressure on Tuesday from concerns the escalating China-US trade dispute could slow the global economy, while US sanctions on crude exporters Iran and Venezuela helped keep the market on edge. Brent crude oil futures were at $71.09 per barrel at 0341 GMT, 15 cents, or 0.2 per cent, below their last close. US West Texas Intermediate (WTI) crude futures were at $62.20 per barrel, 5 cents below their last settlement. Analysts said there were a number of factors driving oil prices. One is a concern that global economic growth is threatened by the intensifying trade dispute between the United States and China. Talks between the world's two biggest economies hit a wall over the weekend, when US President Donald Trump announced a raft of new import tariffs on Chinese goods. "US-China trade tensions are set to be at the forefront of the market's collective mind this week, as any nuance out of discussions in Washington could trigger knee-jerk moves by traders," said Han Tan, analyst at futures brokerage FXTM. Tanker brokerage Eastport said in a note that "worsening trade friction between Washington and Beijing poses a downside risk to our forecasts" for petroleum products. On the supply-side, oil markets remain tense as the United States tightens sanctions on Iranian oil exports, saying on Monday it was boosting its military presence in the Middle East. Iran has threatened "reciprocal actions" against US sanctions, which could mean restarting some of its nuclear programme. The US sanctions have already halved Iranian crude oil exports over the past year to below 1 million barrels per day (bpd), and shipments to customers are expected to drop as low as 500,000 bpd in May as sanctions tighten. Beyond Iran, the crisis in Venezuela has also disrupted oil supplies from this OPEC member, with Washington placing oil sanctions on the Venezuelan government under President Nicolas Maduro. "As the White House raises the stakes on Iran and Venezuela, what is the oil endgame?" asked Bank of America Merrill Lynch in a note. "The Venezuelan political situation seems untenable but oil exports could continue to contract until the industry receives a capital injection, a dim prospect for now," the bank said. "In addition ... Iran oil exports could collapse further over the coming months. While America's maximum pressure policy on these two regimes may pay off, additional oil supply losses cannot be ruled out," it added. Bank of America said it expected Saudi Arabia "to bring back oil production slowly as Iranian barrels exit the market", adding that overall it saw Brent crude oil prices having a floor at $70 per barrel in current market conditions.

International oil prices dip over China-US trade dispute, Iran sanctions

Benchmark indices fell for the fifth session in a row on Tuesday, with the Sensex plunging 324 points and the Nifty diving over 100 points as investors continued to weigh US-China trade tiff and lukewarm corporate results.

Indian bourses after starting the session on a high came under heavy selling pressure as domestic investors' sentiment took a beating after IMF chief Christine Lagarde said US-China tensions were a 'threat' to world economy.

The Sensex was mainly dragged by Tata Motors, ICICI Bank, Bharti Airtel and Reliance Industries -- shedding as much as 4.60 per cent.

The quarterly results of ICICI Bank and Bharti Airtel failed to attract investors and both the companies saw constant sell-offs during the session.&nbsp;

The 30-share index ended 323.71 points, or 0.84 per cent, lower at 38,276.63. The BSE index hit an intra-day low of 38,236.18 and a high of 8,835.54.

Similarly, the NSE Nifty dropped 100.35 points to settle below the 11,500 level at 11,497.90. During the day, the bourse hit a low of 11,484.45 and a high of 11,657.05.

In the Sensex pack, HUL, L&amp;T, PowerGrid, Infosys, ONGC and Bajaj Auto ended up to 1.37 per cent higher.

"Indian market has been on shaky ground for the past couple of days driven by ambiguity associated with the US-China trade negotiations and less-than-inspiring ongoing corporate earnings season," said Jagannadham Thunuguntla, Senior VP and Head of Research (Wealth), Centrum Broking.

Global markets have been rattled by the concerns over the health of the world economy ever since US President Donald Trump on Sunday threatened to hike tariffs on USD 200 billion worth of Chinese goods.

Meanwhile, the head of the International Monetary Fund (IMF) said fresh trade tensions between the US and China were the main threat to the world economy, adding that recent "rumours and tweets" made an agreement between the countries less likely.

Chinese bourses, however, recovered with Shanghai Composite Index ending in the green. Equities in Japan and Korea closed in the red. 
European stocks were also trading lower in early trade.

The Indian rupee was trading flat at 69.39 against the US dollar intra-day.

Global benchmark Brent crude was trading 0.74 per cent lower at USD 70.71 per barrel.&nbsp;

Benchmark indices fell for the fifth session in a row on Tuesday, with the Sensex plunging 324 points and the Nifty diving over 100 points as investors continued to weigh US-China trade tiff and lukewarm corporate results.

Benchmark indices fell for the fifth session in a row on Tuesday, with the Sensex plunging 324 points and the Nifty diving over 100 points as investors continued to weigh US-China trade tiff and lukewarm corporate results. Indian bourses after starting the session on a high came under heavy selling pressure as domestic investors' sentiment took a beating after IMF chief Christine Lagarde said US-China tensions were a 'threat' to world economy. The Sensex was mainly dragged by Tata Motors, ICICI Bank, Bharti Airtel and Reliance Industries -- shedding as much as 4.60 per cent. The quarterly results of ICICI Bank and Bharti Airtel failed to attract investors and both the companies saw constant sell-offs during the session. The 30-share index ended 323.71 points, or 0.84 per cent, lower at 38,276.63. The BSE index hit an intra-day low of 38,236.18 and a high of 8,835.54. Similarly, the NSE Nifty dropped 100.35 points to settle below the 11,500 level at 11,497.90. During the day, the bourse hit a low of 11,484.45 and a high of 11,657.05. In the Sensex pack, HUL, L&T, PowerGrid, Infosys, ONGC and Bajaj Auto ended up to 1.37 per cent higher. "Indian market has been on shaky ground for the past couple of days driven by ambiguity associated with the US-China trade negotiations and less-than-inspiring ongoing corporate earnings season," said Jagannadham Thunuguntla, Senior VP and Head of Research (Wealth), Centrum Broking. Global markets have been rattled by the concerns over the health of the world economy ever since US President Donald Trump on Sunday threatened to hike tariffs on USD 200 billion worth of Chinese goods. Meanwhile, the head of the International Monetary Fund (IMF) said fresh trade tensions between the US and China were the main threat to the world economy, adding that recent "rumours and tweets" made an agreement between the countries less likely. Chinese bourses, however, recovered with Shanghai Composite Index ending in the green. Equities in Japan and Korea closed in the red. European stocks were also trading lower in early trade. The Indian rupee was trading flat at 69.39 against the US dollar intra-day. Global benchmark Brent crude was trading 0.74 per cent lower at USD 70.71 per barrel.

Sensex logs fifth straight loss, plummets 324 points

Additional tariffs will not resolve any problems in the ongoing bilateral <a href="https://www.wionews.com/world/us-china-reneged-on-trade-commitments-sparking-trump-tariff-hike-216534">trade dispute between China</a> and the United States, China's foreign ministry spokesman Geng Shuang said on Tuesday.

Earlier, China's commerce ministry said that vice premier <a href="https://www.wionews.com/world/explaining-the-us-china-trade-war-which-grabbed-spotlight-in-2018-185043">Liu He will go ahead</a> with a visit to the United States this week, after efforts to reach a deal to end a trade war were thrown into doubt by US President Donald Trump's vow to impose new tariffs.

"Adding tariffs can't resolve any problem. What I need to make clear is that talks are by their nature a process of discussion. It's normal for both sides to have differences. China won't shun problems and is sincere about continuing talks," China's foreign ministry spokesman said.

US officials have said China has backtracked on substantial commitments it made during months of negotiations. Those concerns prompted Trump to say on Sunday that he would raise tariffs on $200 billion worth of Chinese goods to 25 per cent from 10 per cent by the end of the week, and would "soon" target remaining Chinese imports with tariffs.

The swift deterioration in negotiations between the world`s two largest economies hit global financial markets as investors faced the prospect of an escalation rather than an end to a 10-month-old trade war.

The president's tweets abruptly ended a five-month ceasefire in a trade dispute that has cost the two countries billions of dollars and disrupted manufacturing supply chains.

Geng, speaking at a daily press briefing, said China hopes that the United States will work with China to resolve each other's concerns.

Additional tariffs will not resolve any problems in the ongoing bilateral trade dispute between China and the United States, China's foreign ministry spokesman Geng Shuang said on Tuesday.

Additional tariffs will not resolve any problems in the ongoing bilateral trade dispute between China and the United States, China's foreign ministry spokesman Geng Shuang said on Tuesday. Earlier, China's commerce ministry said that vice premier Liu He will go ahead with a visit to the United States this week, after efforts to reach a deal to end a trade war were thrown into doubt by US President Donald Trump's vow to impose new tariffs. "Adding tariffs can't resolve any problem. What I need to make clear is that talks are by their nature a process of discussion. It's normal for both sides to have differences. China won't shun problems and is sincere about continuing talks," China's foreign ministry spokesman said. US officials have said China has backtracked on substantial commitments it made during months of negotiations. Those concerns prompted Trump to say on Sunday that he would raise tariffs on $200 billion worth of Chinese goods to 25 per cent from 10 per cent by the end of the week, and would "soon" target remaining Chinese imports with tariffs. The swift deterioration in negotiations between the world`s two largest economies hit global financial markets as investors faced the prospect of an escalation rather than an end to a 10-month-old trade war. The president's tweets abruptly ended a five-month ceasefire in a trade dispute that has cost the two countries billions of dollars and disrupted manufacturing supply chains. Geng, speaking at a daily press briefing, said China hopes that the United States will work with China to resolve each other's concerns.

Adding tariffs can't resolve any problem, says China on trade conflict with US

After US media reports said China may<a href="https://www.wionews.com/world/china-considers-cancelling-trade-talks-with-us-after-trump-vows-new-tariff-hike-report-216292"> cancel trade talks</a> with the US, China's foreign ministry said its trade team was still preparing to leave for Washington for the next round of talks.

"We are currently working on understanding the situation," foreign ministry spokesman Geng Shuang said, adding,"the Chinese team is currently preparing to go to the US for negotiations."

On Sunday, <a href="https://www.wionews.com/world/trump-announces-higher-us-tariffs-on-china-goods-216186">President Trump had tweeted</a> asserting that he would impose renewed tariffs against China on $200 billion worth of Chinese goods this week and target hundreds of billions more soon.

"For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods," Trump tweeted adding, "the 10% will go up to 25% on Friday."

"The trade deal with China continues, but too slowly, as they attempt to renegotiate. No!" he added.

The latest round of talks follows US Treasury Secretary Steven Mnuchin's talks with Chinese officials in Beijing last month.

As a result of President Trump's Sunday tweet on imposition of new tariffs against China, Shanghai stocks suffered their worst day in more than three years on Monday. The benchmark Shanghai Composite Index sank 5.58 per cent, or 171.88 points, to 2,906.46.

Shanghai's decline was the worst in a single day since late February 2016.&nbsp;

In Hong Kong, the Hang Seng Index plunged 3.03 per cent, or 912.43 points, to 29,169.12 in the afternoon. Hong Kong stocks finally ended 2.90 per cent down after President Trump's tariffs threat.

China's yuan currency also suffered, losing 1.3 per cent at one point -- its heaviest drop for three years -- before recovering somewhat in the afternoon to 6.7976 to the dollar, down 0.92 per cent.

In India, the BSE Sensex opened over 400 points before recovering slightly as the blood bath in the markets continued worldwide. 
&nbsp;

After US media reports said China may cancel trade talks with the US, China's foreign ministry said its trade team was still preparing to leave for Washington for the next round of talks.

After US media reports said China may cancel trade talks with the US, China's foreign ministry said its trade team was still preparing to leave for Washington for the next round of talks. "We are currently working on understanding the situation," foreign ministry spokesman Geng Shuang said, adding,"the Chinese team is currently preparing to go to the US for negotiations." On Sunday, President Trump had tweeted asserting that he would impose renewed tariffs against China on $200 billion worth of Chinese goods this week and target hundreds of billions more soon. "For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods," Trump tweeted adding, "the 10% will go up to 25% on Friday." "The trade deal with China continues, but too slowly, as they attempt to renegotiate. No!" he added. The latest round of talks follows US Treasury Secretary Steven Mnuchin's talks with Chinese officials in Beijing last month. As a result of President Trump's Sunday tweet on imposition of new tariffs against China, Shanghai stocks suffered their worst day in more than three years on Monday. The benchmark Shanghai Composite Index sank 5.58 per cent, or 171.88 points, to 2,906.46. Shanghai's decline was the worst in a single day since late February 2016. In Hong Kong, the Hang Seng Index plunged 3.03 per cent, or 912.43 points, to 29,169.12 in the afternoon. Hong Kong stocks finally ended 2.90 per cent down after President Trump's tariffs threat. China's yuan currency also suffered, losing 1.3 per cent at one point -- its heaviest drop for three years -- before recovering somewhat in the afternoon to 6.7976 to the dollar, down 0.92 per cent. In India, the BSE Sensex opened over 400 points before recovering slightly as the blood bath in the markets continued worldwide.

After Trump's tariff threat, China says trade team still preparing for US talks

By James L Anderson

The original March 1 deadline has passed as the United States and China hash out a trade deal amid deadlocked negotiations.

Any US-China trade deal likely falls short compared to what the Trans-Pacific Partnership (TPP) could have been.

Within current talks, Donald Trump’s administration is focused on greater access to subsidised Chinese industries and addressing intellectual property theft linked to alleged forced technology transfers to China. All of this has an impact on America’s economic competitiveness in the short term.

But is the US adequately managing long-term Chinese efforts to don the mantle of global leader?

On the third day of his administration in 2017, Trump honoured a campaign promise by withdrawing from the contentious TPP. The historic 12-nation agreement was on track to cover roughly 40 per cent of the global economy.

Democrats and some Republicans in Congress, advocacy groups and some members of the American public flatly opposed the agreement. Concerns about the oversized influence of multinational corporations and the controversial investor-state dispute process was a feature of the public discourse.

Lost opportunity to rein in China?

But America may have missed a window of opportunity to curb China’s rise when it pulled out of the TPP.

Scholars Graham Allison and Kori Schake have grappled over if and how China can replace America as the world’s ranking power. Allison’s recent work, Destined for War, discusses the “windows of opportunity” the US can exploit to slow the pace of the rising power.

If history is any credible guide, the transition from Pax Britannica to Pax Americana may help US policy-makers and the public alike to understand the imperatives that surround China’s rise.

At the turn of the 20th century, America had unprecedented growth, thanks to Alfred Thayer Mahan’s vision of American sea power. And in the early years between the two World Wars, the United States, Great Britain and Japan headlined a global naval arms race.

In 1921, President Warren Harding held the Washington Naval Conference to disarm tensions among the competing navies in the Pacific. The naval powers agreed to discontinue their shipbuilding programmes and capped their naval fleets in the region. America also protected holdings in East Asia from the threat of a rising Japan.

The agreement was a triumph for America. But for Britain, their naval power was now at “eye level” with the United States.

The UK could not challenge the US

An overstretched Britain had neither the political will nor the financial ability to oppose America’s demands, aware that an arms race with the U.S. would likely bankrupt the British economy.

Pax Britannica, a symbol of Britain’s naval dominance, was forced to deliberately accommodate America’s rise. Britain’s reduced Pacific fleet and degraded Anglo-Japanese relations marked a turning point in America’s ascendancy.

It was not the first time Britain missed an opportunity to slow America’s rise. The American Civil War offered the chance, but Britain decided against joining on behalf of the Confederacy due to the issue of slavery. Schake also notes the Venezuela crisis of 1895 marked an early turning point in the leadership transition. This could have also been a window of opportunity.

How does this apply to current US-China relations? The “battleground” remains the same as in 1921; instead, China plans to supplant America to become the global leader.

Barack Obama’s administration crafted the TPP as a geopolitical instrument to halt China’s plans. It presented east and southeast Asian nations with an alternative to China’s coercive diplomacy in the region, such as in the case of Sri Lanka.

Reducing trade barriers had the potential to provide America with greater investment opportunities in the Asia-Pacific region. It could have weakened China’s diplomatic clout while also creating economic incentives for American investment in the area. It exploited a window of opportunity that targeted the source of China’s rise — its economy.

Pulling out of the TPP was not solely a product of the current administration —a Hillary Clinton administration may have withdrawn too. America’s anti-free trade mood reflects the priority of the public and lawmakers, which is to preserve US jobs and sovereignty.

Shifts in global power are afoot

But shifts in global power may be underway with implications beyond what happens on the home front. A tech Cold War is brewing, China’s plans for expansion under the Belt and Road initiative continue and South China Sea claims are an extension of China’s sovereignty.

The rebooted TPP, the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership, is likely to reduce barriers to trade and increase investment opportunities across Asia and Latin America for its member countries, including Canada.

But the agreement, without US representation, hardly lives up to America’s once-desired aim to create a trade zone in a large swath of East Asia that would isolate China while addressing the global power shifts underway. A renegotiated CPTPP, with American backing, may have even strengthened the Trump administration’s position in its current trade negotiations with the Chinese.

The UK was unable to prevent the last global leadership transition due to missed windows of opportunity and deliberate accommodation. An America that views China’s rise through a short-term bilateral lens runs the risk of accidentally accommodating Chinese efforts to replace America.

Taking advantage of a window of opportunity may be key to curbing the next global leadership transition —and the CPTPP may be the window that America needs before we are forced to accommodate to China’s interests. The US should reconsider joining the pact if it wants any shot at slowing China’s rise.

(James L Anderson is Visiting Fulbright Fellow at Centre for International and Defence Policy, Queen's University, Ontario)

(This article was originally published on the Conversation. Read the <a href="https://theconversation.com/a-u-s-china-trade-deal-does-not-slow-chinas-rise-111971">original article)</a>

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

By James L Anderson The original March 1 deadline has passed as the United States and China hash out a trade deal amid deadlocked negotiations. Any US-China trade deal likely falls short compared to what the Trans-Pacific Partnership (TPP) could have been.

By James L Anderson The original March 1 deadline has passed as the United States and China hash out a trade deal amid deadlocked negotiations. Any US-China trade deal likely falls short compared to what the Trans-Pacific Partnership (TPP) could have been. Within current talks, Donald Trump’s administration is focused on greater access to subsidised Chinese industries and addressing intellectual property theft linked to alleged forced technology transfers to China. All of this has an impact on America’s economic competitiveness in the short term. But is the US adequately managing long-term Chinese efforts to don the mantle of global leader? On the third day of his administration in 2017, Trump honoured a campaign promise by withdrawing from the contentious TPP. The historic 12-nation agreement was on track to cover roughly 40 per cent of the global economy. Democrats and some Republicans in Congress, advocacy groups and some members of the American public flatly opposed the agreement. Concerns about the oversized influence of multinational corporations and the controversial investor-state dispute process was a feature of the public discourse. Lost opportunity to rein in China? But America may have missed a window of opportunity to curb China’s rise when it pulled out of the TPP. Scholars Graham Allison and Kori Schake have grappled over if and how China can replace America as the world’s ranking power. Allison’s recent work, Destined for War, discusses the “windows of opportunity” the US can exploit to slow the pace of the rising power. If history is any credible guide, the transition from Pax Britannica to Pax Americana may help US policy-makers and the public alike to understand the imperatives that surround China’s rise. At the turn of the 20th century, America had unprecedented growth, thanks to Alfred Thayer Mahan’s vision of American sea power. And in the early years between the two World Wars, the United States, Great Britain and Japan headlined a global naval arms race. In 1921, President Warren Harding held the Washington Naval Conference to disarm tensions among the competing navies in the Pacific. The naval powers agreed to discontinue their shipbuilding programmes and capped their naval fleets in the region. America also protected holdings in East Asia from the threat of a rising Japan. The agreement was a triumph for America. But for Britain, their naval power was now at “eye level” with the United States. The UK could not challenge the US An overstretched Britain had neither the political will nor the financial ability to oppose America’s demands, aware that an arms race with the U.S. would likely bankrupt the British economy. Pax Britannica, a symbol of Britain’s naval dominance, was forced to deliberately accommodate America’s rise. Britain’s reduced Pacific fleet and degraded Anglo-Japanese relations marked a turning point in America’s ascendancy. It was not the first time Britain missed an opportunity to slow America’s rise. The American Civil War offered the chance, but Britain decided against joining on behalf of the Confederacy due to the issue of slavery. Schake also notes the Venezuela crisis of 1895 marked an early turning point in the leadership transition. This could have also been a window of opportunity. How does this apply to current US-China relations? The “battleground” remains the same as in 1921; instead, China plans to supplant America to become the global leader. Barack Obama’s administration crafted the TPP as a geopolitical instrument to halt China’s plans. It presented east and southeast Asian nations with an alternative to China’s coercive diplomacy in the region, such as in the case of Sri Lanka. Reducing trade barriers had the potential to provide America with greater investment opportunities in the Asia-Pacific region. It could have weakened China’s diplomatic clout while also creating economic incentives for American investment in the area. It exploited a window of opportunity that targeted the source of China’s rise — its economy. Pulling out of the TPP was not solely a product of the current administration —a Hillary Clinton administration may have withdrawn too. America’s anti-free trade mood reflects the priority of the public and lawmakers, which is to preserve US jobs and sovereignty. Shifts in global power are afoot But shifts in global power may be underway with implications beyond what happens on the home front. A tech Cold War is brewing, China’s plans for expansion under the Belt and Road initiative continue and South China Sea claims are an extension of China’s sovereignty. The rebooted TPP, the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership, is likely to reduce barriers to trade and increase investment opportunities across Asia and Latin America for its member countries, including Canada. But the agreement, without US representation, hardly lives up to America’s once-desired aim to create a trade zone in a large swath of East Asia that would isolate China while addressing the global power shifts underway. A renegotiated CPTPP, with American backing, may have even strengthened the Trump administration’s position in its current trade negotiations with the Chinese. The UK was unable to prevent the last global leadership transition due to missed windows of opportunity and deliberate accommodation. An America that views China’s rise through a short-term bilateral lens runs the risk of accidentally accommodating Chinese efforts to replace America. Taking advantage of a window of opportunity may be key to curbing the next global leadership transition —and the CPTPP may be the window that America needs before we are forced to accommodate to China’s interests. The US should reconsider joining the pact if it wants any shot at slowing China’s rise. (James L Anderson is Visiting Fulbright Fellow at Centre for International and Defence Policy, Queen's University, Ontario) (This article was originally published on the Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

A US-China trade deal does not slow China’s rise

By Amitrajeet A Batabyal

Talks between the US and China to end the trade war appear to be in trouble with the March 2 deadline for a deal fast approaching.

In the ongoing trade talks between the US and China, a lack of trust – key to any successful negotiation – appears to be hobbling the ability to reach a deal. Hence it is not clear negotiators will be able to achieve anything substantive before they hit President Donald Trump’s deadline, triggering automatic tariff hikes if there’s no agreement.

As a trade economist, I believe the answer to the trust conundrum lies in learning from an international body the president disdains: the World Trade Organisation.

Empty words? 
 
From the American perspective, a key issue is that in the past the Chinese have made all sorts of promises to address US&nbsp;concerns that they later reneged on. Or, China has taken so long to act that when it finally did it made little difference.

Several examples of Chinese promises going unkept readily come to mind.

When China joined the World Trade Organization in 2001, it was given “developing country” status. This allowed China to levy high tariffs on imports from the US&nbsp;and Europe even as it benefited from low duties on its exports.

The understanding at that time was that as its economy grew, China would gradually adopt market-based economic principles and commit itself to the basic tenets of liberalised trade and globalisation. But this has not happened.

Sometime after China joined the WTO, the country imposed a 21 per cent to 30 per cent tariff on cars. It was only this past December, and under pressure because of the current trade talks, that the Chinese finally agreed to temporarily reduce the tariff to 15 per cent. In contrast, the corresponding US tariff on Chinese auto imports has long been 2.5 per cent.

More generally, also after becoming a WTO member, China promised to open up its banking, telecommunications and electronic payment processing sectors. But action in these areas has either been non-existent or half-hearted.

Even now, the Chinese telecommunications industry remains very much under government control, and the government has effectively precluded Facebook and Google from offering their services in China.

Concerns about the reliability of the Chinese are not limited to economic and technological matters. To see this, note that on a state visit to the US in 2015, President Xi Jinping promised not to militarize the artificial islands on disputed reefs that the Chinese were building in the South China Sea.

However, we now have clear evidence that he has done exactly what he promised he would not do.

Holding China’s feet to the fire

Given all this, I believe it would be rather naïve on the part of the US to agree to any Chinese promises in the current trade talks without also building a robust enforcement mechanism into any deal.

Indeed, the negotiators themselves seem to understand this, but difficulty finding a way to enforce any agreements – both past and present – is making it harder to come to a deal. And that’s where the WTO and its enforcement mechanisms come in.

For example, China agreed to just such a mechanism with its WTO ascension. This enforcement rule permitted a nation to automatically levy tariffs on certain Chinese goods and services if that country’s domestic market was hurt by those same exports. Unfortunately, like most WTO rules, this rule had a finite life and was allowed to lapse at the end in 2013. Even though this mechanism has been infrequently used, President Barack Obama took advantage of it with some success in 2009 to impose tariffs on Chinese-made tires that were harming US manufacturers.

If such an enforcement mechanism can be built into a trade deal, then the US would not have to plead its case before some international body before it retaliated against the Chinese. Instead, when confronted with one or more broken promises, it would have the legal right to act unilaterally to hold China accountable.

That said, since the current negotiations are between two sovereign nations, the key is to devise an enforcement mechanism that is agreeable to both the US and China. Only then will a resulting trade deal be self-enforcing.

Since the US and China are both members of the WTO, another but less potent enforcement mechanism would lie in utilising its dispute settlement mechanism to address any disagreements that may arise after a deal is reached. The US has had success in the past in using this WTO mechanism as well to hold China accountable.

A deal worth the paper it’s printed on

The venerable Chinese sage Sun Tzu once said that “in the midst of chaos, there is also the opportunity.”

The US now has an opportunity to conclude a meaningful trade deal with China that also has enforcement built into it. Therefore, the American negotiators ought to seize this opportunity and ensure a deal isn’t backed primarily by Chinese promises.

Otherwise, it won’t be the last time a US president fumes about unfair Chinese trading practices.

(By Amitrajeet A Batabyal is Arthur J. Gosnell Professor of Economics, Rochester Institute of Technology)

(This article was originally published on the Conversation. Read the <a href="https://theconversation.com/us-china-trade-talks-will-the-chinese-keep-promises-to-stop-bad-behavior-111900">original article</a>)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

 
&nbsp;

By Amitrajeet A Batabyal Talks between the US and China to end the trade war appear to be in trouble with the March 2 deadline for a deal fast approaching. In the ongoing trade talks between the US and China, a lack of trust – key to any successful negotiation – appears to be hobbling the ability to reach a deal.

By Amitrajeet A Batabyal Talks between the US and China to end the trade war appear to be in trouble with the March 2 deadline for a deal fast approaching. In the ongoing trade talks between the US and China, a lack of trust – key to any successful negotiation – appears to be hobbling the ability to reach a deal. Hence it is not clear negotiators will be able to achieve anything substantive before they hit President Donald Trump’s deadline, triggering automatic tariff hikes if there’s no agreement. As a trade economist, I believe the answer to the trust conundrum lies in learning from an international body the president disdains: the World Trade Organisation. Empty words? From the American perspective, a key issue is that in the past the Chinese have made all sorts of promises to address US concerns that they later reneged on. Or, China has taken so long to act that when it finally did it made little difference. Several examples of Chinese promises going unkept readily come to mind. When China joined the World Trade Organization in 2001, it was given “developing country” status. This allowed China to levy high tariffs on imports from the US and Europe even as it benefited from low duties on its exports. The understanding at that time was that as its economy grew, China would gradually adopt market-based economic principles and commit itself to the basic tenets of liberalised trade and globalisation. But this has not happened. Sometime after China joined the WTO, the country imposed a 21 per cent to 30 per cent tariff on cars. It was only this past December, and under pressure because of the current trade talks, that the Chinese finally agreed to temporarily reduce the tariff to 15 per cent. In contrast, the corresponding US tariff on Chinese auto imports has long been 2.5 per cent. More generally, also after becoming a WTO member, China promised to open up its banking, telecommunications and electronic payment processing sectors. But action in these areas has either been non-existent or half-hearted. Even now, the Chinese telecommunications industry remains very much under government control, and the government has effectively precluded Facebook and Google from offering their services in China. Concerns about the reliability of the Chinese are not limited to economic and technological matters. To see this, note that on a state visit to the US in 2015, President Xi Jinping promised not to militarize the artificial islands on disputed reefs that the Chinese were building in the South China Sea. However, we now have clear evidence that he has done exactly what he promised he would not do. Holding China’s feet to the fire Given all this, I believe it would be rather naïve on the part of the US to agree to any Chinese promises in the current trade talks without also building a robust enforcement mechanism into any deal. Indeed, the negotiators themselves seem to understand this, but difficulty finding a way to enforce any agreements – both past and present – is making it harder to come to a deal. And that’s where the WTO and its enforcement mechanisms come in. For example, China agreed to just such a mechanism with its WTO ascension. This enforcement rule permitted a nation to automatically levy tariffs on certain Chinese goods and services if that country’s domestic market was hurt by those same exports. Unfortunately, like most WTO rules, this rule had a finite life and was allowed to lapse at the end in 2013. Even though this mechanism has been infrequently used, President Barack Obama took advantage of it with some success in 2009 to impose tariffs on Chinese-made tires that were harming US manufacturers. If such an enforcement mechanism can be built into a trade deal, then the US would not have to plead its case before some international body before it retaliated against the Chinese. Instead, when confronted with one or more broken promises, it would have the legal right to act unilaterally to hold China accountable. That said, since the current negotiations are between two sovereign nations, the key is to devise an enforcement mechanism that is agreeable to both the US and China. Only then will a resulting trade deal be self-enforcing. Since the US and China are both members of the WTO, another but less potent enforcement mechanism would lie in utilising its dispute settlement mechanism to address any disagreements that may arise after a deal is reached. The US has had success in the past in using this WTO mechanism as well to hold China accountable. A deal worth the paper it’s printed on The venerable Chinese sage Sun Tzu once said that “in the midst of chaos, there is also the opportunity.” The US now has an opportunity to conclude a meaningful trade deal with China that also has enforcement built into it. Therefore, the American negotiators ought to seize this opportunity and ensure a deal isn’t backed primarily by Chinese promises. Otherwise, it won’t be the last time a US president fumes about unfair Chinese trading practices. (By Amitrajeet A Batabyal is Arthur J. Gosnell Professor of Economics, Rochester Institute of Technology) (This article was originally published on the Conversation. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)

US-China trade conflict: Lack of trust hobbling the ability to reach a deal

The BSE benchmark Sensex recovered over 100 points Tuesday, led by strong buying by domestic institutional investors amid positive global cues.

The 30-share index was trading 124.21 points, or 0.35 per cent, at 35,622.65. Similarly, the 50-share NSE Nifty rose 38.90 points, or 0.37 per cent, to 10,679.85.

Top gainers in the Sensex pack include Bharti Airtel, Bajaj Finance, M&amp;M, PowerGrid, ICICI Bank, ONGC, L&amp;T, Bajaj Auto, Vedanta, Tata Steel, Axis Bank and Yes Bank, rising up to 1.45 per cent.

On the other hand, HUL, Tata Motors, Infosys, HDFC, TCS and IndusInd Bank were the losers, falling up to 0.76 per cent.

Investor sentiment was positive on strong buying by domestic institutional investors (DIIs), said traders.

On a net basis, DIIs were net buyers to the tune of Rs 2,336.74 crore, while foreign institutional investors sold shares worth a net of Rs 1,239.79 crore on Monday, provisional data available with BSE showed.

A firm trend in global equities on hopes of a resolution to the US-China trade conflict, as the next round of talks begin later in the day, too pushed domestic indices in the positive terrain, traders added.

Hong Kong's Hang Seng was up 0.03 per cent, Shanghai Composite Index rose 0.25 per cent higher, Kospi inched 0.01 per cent higher, and Japan's Nikkei gained 0.07 per cent in early trade.

On Wall Street, Dow Jones Industrial Average was closed on Monday for a public holiday.

The benchmark Brent crude futures slipped 0.57 per cent to $66.12 per barrel.

Meanwhile, the domestic currency derivatives markets are closed on account of Chhatrapati Shivaji Jayanti.

The BSE benchmark Sensex recovered over 100 points Tuesday, led by strong buying by domestic institutional investors amid positive global cues. The 30-share index was trading 124.

The BSE benchmark Sensex recovered over 100 points Tuesday, led by strong buying by domestic institutional investors amid positive global cues. The 30-share index was trading 124.21 points, or 0.35 per cent, at 35,622.65. Similarly, the 50-share NSE Nifty rose 38.90 points, or 0.37 per cent, to 10,679.85. Top gainers in the Sensex pack include Bharti Airtel, Bajaj Finance, M&M, PowerGrid, ICICI Bank, ONGC, L&T, Bajaj Auto, Vedanta, Tata Steel, Axis Bank and Yes Bank, rising up to 1.45 per cent. On the other hand, HUL, Tata Motors, Infosys, HDFC, TCS and IndusInd Bank were the losers, falling up to 0.76 per cent. Investor sentiment was positive on strong buying by domestic institutional investors (DIIs), said traders. On a net basis, DIIs were net buyers to the tune of Rs 2,336.74 crore, while foreign institutional investors sold shares worth a net of Rs 1,239.79 crore on Monday, provisional data available with BSE showed. A firm trend in global equities on hopes of a resolution to the US-China trade conflict, as the next round of talks begin later in the day, too pushed domestic indices in the positive terrain, traders added. Hong Kong's Hang Seng was up 0.03 per cent, Shanghai Composite Index rose 0.25 per cent higher, Kospi inched 0.01 per cent higher, and Japan's Nikkei gained 0.07 per cent in early trade. On Wall Street, Dow Jones Industrial Average was closed on Monday for a public holiday. The benchmark Brent crude futures slipped 0.57 per cent to $66.12 per barrel. Meanwhile, the domestic currency derivatives markets are closed on account of Chhatrapati Shivaji Jayanti.

Sensex rebounds over 100 points; Nifty nears 10,700

The United States and China launched critical trade talks on<a href="http://www.wionews.com/world/us-china-trade-talks-trump-to-meet-chinese-vice-premier-this-week-193558"> Wednesday amid deep differences over Washington's </a>demands for structural economic reforms from Beijing that will make it difficult to reach a deal before a March 2 US tariff hike.

The two sides met next door to the White House in the highest-level talks since US President Donald Trump and Chinese President Xi Jinping agreed a 90-day truce in their trade war in December.

People familiar with the <a href="http://www.wionews.com/business-economy/china-us-trade-tension-a-major-risk-to-global-growth-imf-chief-192497">talks and trade experts watching them</a> say that, so far, there has been little indication that Chinese officials are willing to address core US demands to protect American intellectual property rights and end policies that Washington says force U.S. companies to transfer technology to Chinese firms.

The US complaints, along with accusations of Chinese cyber theft of US&nbsp;trade secrets and a systematic campaign to acquire US technology firms, were used by the Trump administration to justify punitive US tariffs on $250 billion worth of Chinese imports.

Cabinet-level officials, led by Chinese Vice Premier Liu He and US&nbsp;Trade Representative Robert Lighthizer, gathered in the Eisenhower Executive Office Building next to the White House.

During a photo opportunity at the start of the scheduled two days of talks, Lighthizer, Treasury Secretary Steven Mnuchin and other top Trump administration officials sat silently across a long table from their Chinese counterparts, ignoring a reporter's questions.

The talks began two days after the United States charged Chinese telecommunications company Huawei Technologies Co Ltd and its chief financial officer, Meng Wanzhou, with conspiring to violate U.S. sanctions on Iran by doing business through a subsidiary it tried to hide.

Meng was arrested in Canada on December&nbsp;1 at the request of the United States, which is seeking to have her extradited.

The talks in Washington are expected to be tense, with little indication so far that Chinese officials are willing to address core US demands to fully protect American intellectual property rights and end policies that Washington has said force US companies to transfer technology to Chinese firms.

The US&nbsp;complaints, along with accusations of Chinese cyber theft of US&nbsp;trade secrets and a systematic campaign to acquire US technology firms, were used by the Trump administration to justify punitive US&nbsp;tariffs on $250 billion worth of Chinese imports.

Trump has threatened to raise tariffs on $200 billion of goods to 25 per cent from 10 per cent on March 2 if an agreement cannot be reached. He has also threatened new tariffs on the remainder of Chinese goods shipped to the United States. China has retaliated with tariffs of its own, but has suspended some and is allowing some purchases of US soybeans during the talks.

Chinese officials deny that their policies coerce technology transfers.

The United States and China launched critical trade talks on Wednesday amid deep differences over Washington's demands for structural economic reforms from Beijing that will make it difficult to reach a deal before a March 2 US tariff hike.

The United States and China launched critical trade talks on Wednesday amid deep differences over Washington's demands for structural economic reforms from Beijing that will make it difficult to reach a deal before a March 2 US tariff hike. The two sides met next door to the White House in the highest-level talks since US President Donald Trump and Chinese President Xi Jinping agreed a 90-day truce in their trade war in December. People familiar with the talks and trade experts watching them say that, so far, there has been little indication that Chinese officials are willing to address core US demands to protect American intellectual property rights and end policies that Washington says force U.S. companies to transfer technology to Chinese firms. The US complaints, along with accusations of Chinese cyber theft of US trade secrets and a systematic campaign to acquire US technology firms, were used by the Trump administration to justify punitive US tariffs on $250 billion worth of Chinese imports. Cabinet-level officials, led by Chinese Vice Premier Liu He and US Trade Representative Robert Lighthizer, gathered in the Eisenhower Executive Office Building next to the White House. During a photo opportunity at the start of the scheduled two days of talks, Lighthizer, Treasury Secretary Steven Mnuchin and other top Trump administration officials sat silently across a long table from their Chinese counterparts, ignoring a reporter's questions. The talks began two days after the United States charged Chinese telecommunications company Huawei Technologies Co Ltd and its chief financial officer, Meng Wanzhou, with conspiring to violate U.S. sanctions on Iran by doing business through a subsidiary it tried to hide. Meng was arrested in Canada on December 1 at the request of the United States, which is seeking to have her extradited. The talks in Washington are expected to be tense, with little indication so far that Chinese officials are willing to address core US demands to fully protect American intellectual property rights and end policies that Washington has said force US companies to transfer technology to Chinese firms. The US complaints, along with accusations of Chinese cyber theft of US trade secrets and a systematic campaign to acquire US technology firms, were used by the Trump administration to justify punitive US tariffs on $250 billion worth of Chinese imports. Trump has threatened to raise tariffs on $200 billion of goods to 25 per cent from 10 per cent on March 2 if an agreement cannot be reached. He has also threatened new tariffs on the remainder of Chinese goods shipped to the United States. China has retaliated with tariffs of its own, but has suspended some and is allowing some purchases of US soybeans during the talks. Chinese officials deny that their policies coerce technology transfers.

US, China trade talks begin amid deep differences

Thucydides, the great historian of the Peloponnesian Wars between Athens and Sparta, held by some to the doyen of the school of the realist school of international relations famously said: “What made war inevitable was the growth of Athenian power and the fear that this caused in Sparta”. This assertion, in the 20th century, formulated into a coinage by Harvard professor, Graham Allison, who called it the “Thucydides Trap” referred to the fear that a rising power caused in an incumbent one which then escalated toward war. &nbsp;&nbsp;

The "Thucydides Trap" appears to have a searing resonance in the relations between the United States and China with the former being the incumbent power and the latter a rising one. Echoes of the trap, while resplendent in most domains and areas of the relationship between the two also came when the United States sent two warships through the Taiwan Strait in the first such operation this year. &nbsp;&nbsp;

Taiwan being a major flashpoint between the United States and China, the voyage risks further heightening tensions with China, which considers Taiwan its own and has not ruled out the use of force to bring the self-ruled island under its control. While this particular incident or event is more in the nature of posturing designed to send a message to China but, in the grand scheme of things, it could be held as a prelude to a putative militarised dynamic and tenor of relations between the two countries.

All this assumes salience against the backdrop of the Trump presidency which has held China in its crosshairs. Be it the trade wars initiated by the American president, or other forms of disputes and tensions thereof, it is increasingly becoming clear that the United States is stymieing China’s efforts to attain Great Power status. 
 
Inevitably or perhaps naturally, China will not only resent this stymieing but also make counter efforts to check, balance or hedge the United States. What will ensue is friction and frisson which might, at some point in time, lend themselves to an outright confrontation between the two.

In the process, there will be an inexorable drift to the “Thucydides Trap” which might become a self-fulfilling prophecy.

An alarming scenario, it must be checked and contained the soonest for if war occurs between the United States and China, the strides of progress that the world has made will be frittered and, in an extreme scenario, mankind’s survival might be at risk. The question is how?

The answer lies in the realm of both politics and economics. As the wit has said, “all war is bad politics”. This is a maxim that powers that be across the China-United States divide must take to heart and devise means and mechanism of a political nature that precludes the option of war. In the realm of the immediate, this could mean instituting and crystallising confidence-building measures that aim at reassurance and not confrontation and conflict.&nbsp;

The complement to this approach must be disavowing mercantilist protectionist approaches of the political economy toward each other and actually deepening trade and financial linkages. While this “complex interdependence”, historically, did not prevent the first World War, but deepening trade and financial linkages, because they lead to economic growth and development for members enmeshed into its framework, create stakes and opportunities which make war not impossible but improbable. 
&nbsp; 
It is the cumulative confluence of the two that might create propitious conditions between China and the United States and preclude the drift toward war. But, alas, the actual and real condition of the world and domestic politics across the world suggest that this salubrious condition or set of conditions might not actually come to pass. The “return” of the nation-state and its concomitant, nationalism, along with protectionist mercantilism besides leading to what has been called “ deglobalisation” is also making the world a more edgy and a fraught place. Among other things, this has heightened the salience of geopolitics and competition thereof whose corollary is heightened conflict and tension.&nbsp;

Without any real checks to militarised competition between the major states of the international system and a flawed and weak global governance institutional architecture, what might actually come to pass is the “Thucydides Trap” which, broken down, amidst the contemporary geopolitical and world political configuration might mean war between China and the United States. 
 
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Thucydides, the great historian of the Peloponnesian Wars between Athens and Sparta, held by some to the doyen of the school of the realist school of international relations famously said: “What made war inevitable was the growth of Athenian power and the fear that this caused in Sparta”.

Thucydides, the great historian of the Peloponnesian Wars between Athens and Sparta, held by some to the doyen of the school of the realist school of international relations famously said: “What made war inevitable was the growth of Athenian power and the fear that this caused in Sparta”. This assertion, in the 20th century, formulated into a coinage by Harvard professor, Graham Allison, who called it the “Thucydides Trap” referred to the fear that a rising power caused in an incumbent one which then escalated toward war. The "Thucydides Trap" appears to have a searing resonance in the relations between the United States and China with the former being the incumbent power and the latter a rising one. Echoes of the trap, while resplendent in most domains and areas of the relationship between the two also came when the United States sent two warships through the Taiwan Strait in the first such operation this year. Taiwan being a major flashpoint between the United States and China, the voyage risks further heightening tensions with China, which considers Taiwan its own and has not ruled out the use of force to bring the self-ruled island under its control. While this particular incident or event is more in the nature of posturing designed to send a message to China but, in the grand scheme of things, it could be held as a prelude to a putative militarised dynamic and tenor of relations between the two countries. All this assumes salience against the backdrop of the Trump presidency which has held China in its crosshairs. Be it the trade wars initiated by the American president, or other forms of disputes and tensions thereof, it is increasingly becoming clear that the United States is stymieing China’s efforts to attain Great Power status. Inevitably or perhaps naturally, China will not only resent this stymieing but also make counter efforts to check, balance or hedge the United States. What will ensue is friction and frisson which might, at some point in time, lend themselves to an outright confrontation between the two. In the process, there will be an inexorable drift to the “Thucydides Trap” which might become a self-fulfilling prophecy. An alarming scenario, it must be checked and contained the soonest for if war occurs between the United States and China, the strides of progress that the world has made will be frittered and, in an extreme scenario, mankind’s survival might be at risk. The question is how? The answer lies in the realm of both politics and economics. As the wit has said, “all war is bad politics”. This is a maxim that powers that be across the China-United States divide must take to heart and devise means and mechanism of a political nature that precludes the option of war. In the realm of the immediate, this could mean instituting and crystallising confidence-building measures that aim at reassurance and not confrontation and conflict. The complement to this approach must be disavowing mercantilist protectionist approaches of the political economy toward each other and actually deepening trade and financial linkages. While this “complex interdependence”, historically, did not prevent the first World War, but deepening trade and financial linkages, because they lead to economic growth and development for members enmeshed into its framework, create stakes and opportunities which make war not impossible but improbable. It is the cumulative confluence of the two that might create propitious conditions between China and the United States and preclude the drift toward war. But, alas, the actual and real condition of the world and domestic politics across the world suggest that this salubrious condition or set of conditions might not actually come to pass. The “return” of the nation-state and its concomitant, nationalism, along with protectionist mercantilism besides leading to what has been called “ deglobalisation” is also making the world a more edgy and a fraught place. Among other things, this has heightened the salience of geopolitics and competition thereof whose corollary is heightened conflict and tension. Without any real checks to militarised competition between the major states of the international system and a flawed and weak global governance institutional architecture, what might actually come to pass is the “Thucydides Trap” which, broken down, amidst the contemporary geopolitical and world political configuration might mean war between China and the United States. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

China-United States relations and the 'Thucydides Trap'

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