Tag Archives: Donald Trump

China, Economic, United States

America’s economic battle with China risks global slump

GLOBAL ECONOMY

PRESIDENT Trump continues to show no mercy in his dealings with China. Emboldened by the robust American economy and the continuing rally on Wall Street, Donald Trump is convinced that tariff barriers will do more damage to Beijing than Washington, and that eventually his approach will force concessions.

The U.S. President’s decision to impose a 10 per cent tariff on £150bn of goods from China means almost half the products shipped from the People’s Republic to America – with the notable exception of some Apple items – are subject to tariffs, raising prices for US businesses and consumers.

These new measures are in addition to the £38bn of tariffs imposed in July and August.

China, led by President Xi Jinping, lost no time in retaliating by finding another £45bn of US goods to penalise. And the country’s best-known entrepreneur, Jack Ma, founder of digital champion Alibaba, said his promise to create up to 1m jobs in the US was no longer viable because of tensions.

 

DESPITE the threat of higher prices for Americans on goods ranging from textiles to electronics, Trump’s tough line will play well in “rust-belt” states as the Republicans seek to seize back the political initiative ahead of November’s mid-term elections.

The White House’s choice of trade as a weapon to curb Chinese influence and expansionism has been met with horror by the International Monetary Fund in Washington and the World Trade Organisation (WTO) in Geneva.

The Organisation for Economic Co-operation and Development (OECD) have also joined the chorus of critics, warning that world economic output was “hitting a plateau” because of US-China trade wars and fragility in emerging markets.

As the apostles of free trade, it argues that much global prosperity, notably in Asia and emerging markets, has been built on an open trading system.

The Great Depression of the 1930s was the result of nations imposing ever-higher barriers on vital trade such as commodities and farm produce. Despite the criticism there is a conviction in the White House that America’s hardline policy will produce dividends.

Larry Kudlow, the White House’s chief economic adviser, declared: “We are open to talks, if there are serious talks.” In May, China agreed to reduce the tariffs on imported American cars from 25 per cent to 15 per cent, to ease strained relations.

Mr Trump has also been encouraged to act tough after his success in bullying Mexico into accepting new rules for trading. Mexico now has to show that products it assembles contain at least 70 per cent of US content before they can move across borders.

The U.S. President has been able to take on China with some impunity because the American economy is going great guns. Growth has exceeded wildest expectations in the second quarter, at an annual rate of 4.1 per cent, creating jobs.

Farming communities have been hardest hit by Chinese retaliation, which has targeted soya bean production, pig products and beef. Trump has bought farmers’ silence with an increase of £9.1bn in subsidies.

So, what does this chest-beating machoism mean for other Western nations?

The big concern is that if the tit-for-tat war carries on for any length of time, Beijing might flood other countries with cheap goods. Complaints of Chinese dumping of cheap steel and aluminum on international markets have led to swingeing penalties being imposed by the countries where the steel is sold – while the cases are examined at the WTO.

The difficulty for Beijing is that it doesn’t import anything like £150bn of goods from the US though it can slow supply chains – such as components for the iPhone and personal computers.

The importance of better trading relations with neighbours has never been more critical. China recently sealed a far-reaching trade deal with India. In Europe, it reinforces the need for Britain to connect to the EU’s market of 500m people and not allow Brexit to damage relationships.

The biggest concern is that the US-China trade war comes at a moment of potential peril for the global economy. Rising US interest rates allied to domestic political upheaval are driving several market economies, including Turkey, Argentina and South Africa, to the brink.

When the financial inducements of Donald Trump’s tax cuts wear off and American retail prices rise – because of the higher costs of Chinese goods – economic conditions could deteriorate rapidly. The trade fracas might just prove to be the start of the next global slump.

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Intelligence, North Korea, United States

Intelligence suggests North Korea is still building missiles

KOREAN PENINSULA

NORTH KOREA is secretly building new missiles despite promising to disarm, according to US intelligence reports.

Satellite imagery suggests construction has been stepped up at a factory making missiles capable of reaching the American mainland.

It makes a mockery of Donald Trump’s boast in June after his historic summit with Kim Jong Un that North Korea is “no longer a nuclear threat”.

When they met in Singapore, the two leaders shook hands on a deal to “denuclearise” the Korean peninsula.

But satellite photos taken in recent weeks indicated work on intercontinental ballistic missiles (ICBMs) was under way at the Sanumdong facility just north of the capital, Pyongyang.

Images have also showed ongoing operations at the regime’s uranium enrichment plant in Yongbyon, 60 miles further north. One image taken on July 7 shows a bright-red trailer in a loading area, identical to those used by North Korea in the past to transport ICBMs.

Analysts have matched satellite images with a 2017 propaganda video released by Kim Jong Un.

The video showing off Kim’s Hwasong-14 missile was in a hanger with 12 beams on one side and 22 skylights.

Using satellite photos, analysts identified the hanger building by comparing beams and skylights on the exterior.

A spokesperson for the James Martin Centre for Nonproliferation Studies, said: “The missile facility is not dead, by any stretch of the imagination. It’s active. We see shipping containers and vehicles coming and going. This is a facility where they build ICBMs and space launch vehicles.”

At the June summit with Kim, the US President said the process of “total denuclearisation . . . has already started”. However, more than a dozen of Mr Trump’s own spies has broken rank to warn that the President was being “deceived” by Kim as the regime quietly increased production in recent months while conducting diplomatic talks.

In Kim’s own carefully-worded pledge, he vaguely promised to “work toward” denuclearisation.

US intelligence agents say senior North Korean officials have discussed intentions to deceive Washington about the number of nuclear warheads and missiles they have, as well as the types and numbers of facilities.

Their strategy includes “asserting that they have fully denuclearised by declaring and disposing of 20 warheads while retaining dozens more”.

North Korean experts at the US Centre for Naval Analysis have said that the North Koreans never agreed to give up their nuclear programme. They insist that the survival of the regime and perpetuation of the Kim family rule are Kim’s guiding principles.

Satellite images at the Yongbyon uranium enrichment site showed work was expanding rapidly, with evidence of activity at the cooling units and of vehicles transporting materials. Reports suggest, “there’s no evidence they are decreasing stockpiles, or that they have stopped production.”

It follows accusations from Kim’s regime that US Secretary of State Mike Pompeo made “gangster-like” demands for denuclearisation.

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China, Economic, European Union, Government, Politics, Society, United States

Trump’s trade war is a risk to the global economy

GLOBAL TRADE WAR

AN escalating trade war between China, the US and Europe could plunge the global economy into turmoil, international experts have warned.

The World Trade Organisation (WTO) said the battle of wills between President Donald Trump and rivals in China and the European Union has put “economic recovery in jeopardy”.

In a major report on the 20 largest economies – known as the G20 – WTO economists warn that angry rhetoric and rising tariffs on all sides are a severe threat.

The WTO said that G20 countries slapped £52.6billion of sanctions on trade between October and May. A total of 39 new restrictive measures were introduced to block goods from competitors – double the number in the previous report.

The WTO said: “The G20 economies must use all means at their disposal to de-escalate the situation and promote further trade recovery.”

President Trump vowed on the campaign trail to protect US jobs and industries from globalisation. He has imposed aluminium and steel tariffs on China and the EU, and hit the Chinese with extra duties on everything from bulldozers to touchscreens.

Beijing responded in kind, hitting key US exports such as its important soya bean trade. Meanwhile, Brussels has slapped tariffs on American goods, including motorcycles and bourbon whiskey.

The President is now threatening to act against Europe’s prized car manufacturers. Last week, he said: “The EU is possibly as bad as China, only smaller. They send a Mercedes in, we can’t send our cars in.”

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