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শুক্রবার, ৭ সেপ্টেম্বর, ২০১৮

Trump team nears massive escalation in China trade fight

The Finance 202: Trump team nears massive escalation in China trade fight:-

The Trump administration is edging closer to the biggest escalation yet in its trade war with China. 
The U.S. Trade Representative closed the books at midnight for comments about 25 percent tariffs on an additional $200 billion of Chinese imports. That’s probably the last hurdle the Trump team needs to clear before declaring its intent to move ahead with the duties.  
Trump could announce as soon as today that he is imposing the tariffs. The move would constitute a fourfold increase over the 25 percent duties his administration has slapped on $50 billion worth of imports from China. That country on Thursday renewed its pledge to retaliate by targeting $60 billion of U.S. goods. 
Lobbyists close to the matter say they don’t expect Trump’s decision to come until next week at the earliest. There is little suspense, however, about whether he will follow through: All signs point to the president making good on repeated threats to dial up the conflict in a major way. “There came time when I couldn’t delay it anymore because it’s too much money that they drain out of our country. Just too much money,” Trump told Bloomberg News in an interview last week. “That’s where we are now.” And James Freeman, a Wall Street Journal opinion editor, writes that in a Thursday phone call, the president sounded “very stable but unfortunately also still very focused on eliminating trade deficits with America’s trading partners.”
Business interests are preparing to fight back. The Consumer Technology Association, for one, will weighing whether to sue to block the tariffs if they go into effect. The group — which counts Amazon, Uber and Walmart among its members — believes the administration lacks the legal authority to impose the duties. 

Their argument: The Trump team justified its first tariffs on Chinese imports by invoking its power under Section 301 of the Trade Act of 1974. The statute allows the administration to police violations of American intellectual property. But Trump is aiming to escalate in retaliation for China’s response to the initial U.S. salvo, grounds the group says are not justified under the law. “We are reviewing all options,” a CTA representative tells me.
Others are hoping to head off the tariffs through last-minute lobbying appeals. “On Thursday, Cisco Systems Inc., Hewlett-Packard Enterprise Co., and other technology companies sent a letter to U.S. Trade Representative Robert Lighthizer urging the administration to avoid imposing more tariffs,” Bloomberg News’s Andrew Mayeda, Mark Niquette and Shawn Donnan write. “By increasing duties on telecommunications networking gear, the administration would raise the cost of accessing the Internet and slow the roll-out of next-generation wireless technologies, the companies said.”
And still others are making the case that the administration shouldn’t move precipitously to put the tariffs in force. “Companies had been preparing for the tariffs based on the cadence of the last two” rounds, Jake Colvin of the National Foreign Trade Council tells me. “If they come sooner, it will complicate fourth-quarter planning. A surprise announcement would be even worse than it already is.”
Negotiations between the U.S. and China last month left little hope for a last-minute detente. From the Wall Street Journal's Bob Davis and Lingling Wei
“The August trade talks revealed chasms between Washington and Beijing. Chinese negotiators focused on their efforts to live up to World Trade Organization obligations, say people briefed on the talks, and offered 'conceptual' ideas for a deal. But Trump administration negotiators were looking for much more concrete offers. Even in an administration divided on trade issues, the U.S. side this time was fairly unified, U.S. officials say. The U.S. position has shifted more toward the view of Mr. Lighthizer, who has been pressing for deep changes in the Chinese economy, including reduction of subsidies and other industrial policies favoring domestic firms.”
Looming over the wait for the announcement is the turmoil roiling the White House this week, as the president and his top staff appear consumed by the forthcoming Bob Woodward book and a New York Times opinion piece from an anonymous administration official. “Certainly the Chinese are looking for signs of weakness and pullback, and certainly others the U.S. is negotiating with will be looking for indications the president is on his heels,” one source close to the process says. “To the extent the president wants to change the subject and show he’s in charge, it probably makes it more likely that he takes a significant action.”

— CEA responds. Yesterday's Ticker examined a new report by the White House Council of Economic Advisers arguing to replace the federal government's method for measuring wage growth with one that would yield a rosier number. CEA chief of staff DJ Nordquist got in touch to say the report is no critique of Labor Department data.
“We aren’t criticizing government data.  We rely on it, every day at CEA, and in fact, this paper is based on [Bureau of Labor Statistics] data. We rely on BLS for many, many things – we are data nerds!” Nordquist writes in an email. “Our paper was just saying there are lots of measures out there but for some reason, the focus seems to be on a particular BLS wage number, even though BLS has many products that measure wages and inflation – which are more accurate than the headline number. Even the Atlanta and San Francisco Fed do not focus on average hourly earnings divided by CPI.”

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