Tag Archives: China

NATO needs to address China’s rise, says Stoltenberg

FILE PHOTO: NATO Secretary-General Jens Stoltenberg gives a news conference on the day the United States is set to pull out of the Intermediate-range Nuclear Force Treaty (INF), in Brussels, Belgium, August 2, 2019. REUTERS/Francois Walschaerts

By John Mair and Colin Packham

SYDNEY (Reuters) – NATO needs to understand the implications of China’s rise as Beijing expands its power around the world, including areas that may challenge members of the North Atlantic security body, Secretary General Jens Stoltenberg said on Wednesday.

China’s increasing assertiveness, including in the South China Sea, has raised concerns about its intentions, and the United States has called on NATO to recognize and adapt to new emerging threats, including China.

“This is not about moving NATO into the Pacific, but this is about responding to the fact that China is coming closer to us,” Stoltenberg told Reuters in an interview in Sydney.

“Investing heavily in critical infrastructure in Europe, increased presence in the Arctic and also increased presence in Africa, and in cyberspace,” he added.

“So all of this makes it important for NATO to address the rise of China, and we do that not least by working closely with our partners in this region – Australia, New Zealand, but also Japan and South Korea,” Stoltenberg said.

Beijing has said the country’s economic and military advancements are no threat to other nations.

However, tensions have risen as a trade war between Washington and Beijing escalates, and U.S. Defense Secretary Mark Esper said he would like to place intermediate-range missiles in the Asia-Pacific region.

On Sunday, while on a visit to Sydney, Esper said China was destabilizing the Indo-Pacific region, accusing Beijing of predatory economics, intellectual property theft and “weaponizing the global commons”.

“I spoke with Secretary Esper yesterday and he said clearly that it would take time to develop new intermediate-range weapons, and any potential deployment in this part of the world will take time and no decision has been taken,” Stoltenberg said.

He spoke after meeting Australia’s Prime Minister Scott Morrison and its foreign and defense ministers to discuss China, the war in Afghanistan, terrorism and cybersecurity.

“For me, it is extremely useful to listen to Australia, with the knowledge, the experience and just the presence in this region, that provides you with an understanding which is important for NATO,” he said.

China is Australia’s largest trading partner but the diplomatic and trade relationship has cooled significantly as Canberra raised concerns about China’s influence in the country and banned Chinese telecom firm Huawei from Australia’s 5G network.

Australia and other Western allies worried that 5G would be a foundation technology for critical infrastructure that could be compromised by Beijing, which rejects those concerns.

“NATO also believes 5G technology will be a building block of society and the organization is now working on formulating a way to secure its own technology,” Stoltenberg said.

“5G technology is extremely important as it will affect all wakes of life, Industry, communications, energy, in a much more fundamental way than 4G does today,” he added.

Stoltenberg was guarded on the latest round of Afghanistan peace talks, reiterating his earlier comments in New Zealand that the prospect for a deal was closer than ever before.

“I hope it’s possible to reach an agreement soon. We are closer to a deal than we have ever been before, but it is not possible to give an exact date because these are negotiations,” he said.

(Reporting by John Mair and Colin Packham; editing by Darren Schuettler)

Oil falls 3% as trade war concerns hit demand outlook

FILE PHOTO: An oil pump is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann/File Photo

By Collin Eaton

HOUSTON (Reuters) – Oil prices tumbled more than 4% on Wednesday to a seven-month low, extending recent heavy losses following a surprise build in U.S. crude stockpiles and fears that demand will shrink due to Washington’s escalating trade war with Beijing.

Brent crude futures <LCOc1> were down $2.52, or 4.3%, at $56.42 a barrel by 11:57 a.m. CDT (1657 GMT), setting a seven-month low. Prices have lost more than 20% since their 2019 peak in April.

U.S. West Texas Intermediate (WTI) crude futures <CLc1> were down $2.36, or 4.4%, at $51.25.

Oil fell early on worries about the trade war, then extended losses after U.S. government data showed a build of 2.4 million barrels in U.S. stockpiles instead of the 2.8 million draw analysts had expected. U.S. crude oil inventories are about 2% above the five-year average for this time of year.

Gasoline inventories rose 4.4 million barrels, with U.S. Gulf Coast gasoline stocks hitting the highest on record for this time of year, the U.S. Energy Information Administration (EIA) data showed.

After seven weeks of consecutive crude drawdowns, “there was a thought that today’s report would turn oil’s fortunes around,” said John Kilduff, partner at Again Capital LLC in New York. “That support got taken out of the market.”

Brent has plunged more than 12% since last week as global equity markets went into a tailspin after U.S. President Donald Trump said he would slap a 10% tariff on a further $300 billion in Chinese imports from Sept. 1.

“The market continues to trade lower on concerns about demand growth and the idea that economic growth can be impacted by the trade war,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford Connecticut.

“The market isn’t concerned about anything other than how demand is going to play out through the rest of the year,” he said.

This week, the EIA reduced its forecast U.S. demand for crude and liquid fuels. The agency also cut its forecast for global crude and liquids consumption by 0.1% for both 2019 and 2020.

Meanwhile, U.S. crude production was set to rise 1.28 million bpd to 12.27 million bpd this year.

“People saw those numbers and it put a negative vibe in the market,” said Robert Yawger, director of energy futures at Mizuho in New York.

U.S. crude could fall to around the low-$40 a barrel range unless bearish sentiment changes, but U.S. oil production is still surging and the stock market is signaling rising fears of an economic downturn, said Josh Graves, senior market strategist at RJO Futures in Chicago.

“We could keep following the trend lower,” Graves said. “Crude oil inventories were disappointing and the stock market is in worrisome territory.”

Trump on Tuesday dismissed fears that the trade row with China could be drawn out further. Still, U.S. stock indexes tumbled more.

Demand for safe-haven assets such as government debt underscored lingering anxiety over recession risks.

Tensions in the Middle East remained high after Iran seized a number of tankers in recent weeks in the Strait of Hormuz, a major chokepoint for oil shipments.

Saudi Energy Minister Khalid al-Falih and U.S. Energy Secretary Rick Perry on Tuesday expressed mutual concern over threats targeting freedom of maritime traffic in the Gulf.

(Additional reporting by Ron Busson, Jane Chung; Editing by Marguerita Choy and David Gregorio)

Chinese government hackers suspected of moonlighting for profit

FILE PHOTO: An attendee looks on during the 2016 Black Hat cyber-security conference in Las Vegas, Nevada, U.S. August 3, 2016. REUTERS/David Becker/File Photo

By Joseph Menn, Jack Stubbs and Christopher Bing

LAS VEGAS (Reuters) – One of the most effective teams of Chinese government-backed hackers is also conducting financially-motivated side operations, cybersecurity researchers said on Wednesday.

U.S. firm FireEye said members of the group it called Advanced Persistent Threat 41 (APT41) penetrated and spied on global tech, communications and healthcare providers for the Chinese government while using ransomware against game companies and attacking cryptocurrency providers for personal profit.

The findings, announced at the Black Hat security conference in Las Vegas, show how some of the world’s most advanced hackers increasingly pose a threat to consumers and companies not traditionally targeted by state-backed espionage campaigns.

“APT41 is unique among the China-Nexus actors we track in that it uses tools typically reserved for espionage campaigns in what appears to be activity for personal gain,” said FireEye Senior Vice President Sandra Joyce.

Officials in China did not immediately respond to Reuters request for comment. Beijing has repeatedly denied Western accusations of conducting widespread cyber espionage.

FireEye said the APT 41 group used some of the same tools as another group it has previously reported on, which FireEye calls APT17 and Russian security firm Kaspersky calls Winnti.

Current and former Western intelligence officials told Reuters Chinese hacking groups were known to pursue commercial crimes alongside their state-backed operations.

FireEye, which sells cybersecurity software and services, said one member of APT41 advertised as a hacker for hire in 2009 and listed hours of availability outside of the normal workday, circumstantial evidence of moonlighting.

The group has used spear-phishing, or trick emails designed to elicit login information. But it has also deployed root kits, which are relatively rare and give hard-to-detect control over computers. In all, the group has used nearly 150 unique pieces of malware, FireEye said.

The most technically impressive feats included tainting millions of copies of a utility called CCleaner, now owned by security company Avast. Only a small number of specially selected, high-value computers were fully compromised, making detection of the hack more difficult.

Avast said that it had worked with security researchers and law enforcement to stop the attack and that no damage was detected. The company did not have any immediate further comment on Wednesday.

In March, Kaspersky found the group hijacked Asus’ software update process to reach more than 1 million computers, again targeting a much smaller number of end-users. Asus said the next day it had issued a fix for the attack, which affected “a small number of devices.”

“We have evidence that at least one telecom company may have been the intended target during the Asus compromise, which is consistent with APT41’s espionage targeting over the past two years,” said FireEye spokesman Dan Wire.

But FireEye and Slovakia-based cybersecurity company ESET said the gaming compromises aligned with financial motives more than national espionage. Among other things, the group won access to a game’s production environment and generated tens of millions of dollars’ worth of virtual currency, FireEye said.

(Reporting by Joseph Menn, Jack Stubbs and Chris Bing; Editing by Greg Mitchell and Nick Zieminski)

Trump vows to help farmers as China halts U.S. agricultural purchases

FILE PHOTO: U.S. Dollar and China Yuan notes are seen in this picture illustration June 2, 2017. REUTERS/Thomas White/Illustration/File Photo/File Photo

By Susan Heavey

WASHINGTON (Reuters) – U.S. President Donald Trump on Tuesday vowed to protect American farmers against China by signaling to provide further aid if needed, a day after Chinese firms stopped agricultural purchases and Beijing threatened more tariffs on U.S. farm products.

“Our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do – And I’ll do it again next year if necessary!” Trump tweeted on Tuesday.

U.S. farmers, a key political constituency for Trump, have been among the hardest hit in the trade war between the world’s two largest economies. Shipments of soybeans, the most valuable U.S. farm export, to top buyer China sank to a 16-year low in 2018.

To compensate for the losses, the Trump administration has rolled out up to $28 billion in federal aid since the trade war began last year, and the Agriculture Department to date has made $8.6 billion of direct aid payments to farmers.

The latest federal aid package of up to $16 billion was rolled out in July and the first tranche for the payments are expected to begin in mid-to-late August.

Promises of large agricultural purchases by China have been a key element of a potential trade deal, but Trump last week said Beijing had not fulfilled a promise to buy large volumes of U.S. farm products and vowed to impose a 10% tariff on a further $300 billion in Chinese imports starting Sept. 1.

On Monday, China’s Commerce Ministry said Chinese companies have stooped buying U.S. farm products and added that Beijing may also impose additional tariffs on American agricultural goods, a move that could further hurt U.S. farm states that are key for Trump’s 2020 re-election bid.

Overall, China has purchased about 14.3 million tonnes of last season’s soybean crop, the least in 11 years, and some 3.7 million tonnes still need to be shipped, according to U.S. data. China bought 32.9 million tonnes of U.S. soybeans in 2017.

(Reporting by Susan Heavey; Additional reporting and writing by Humeyra Pamuk; Editing by Bernadette Baum and Paul Simao)

China warns Hong Kong protesters not to ‘play with fire’

A demonstrator throws a traffic cone at a group of people opposing the anti-government protesters, during a demonstration in support of the city-wide strike and to call for democratic reforms in Hong Kong, China, August 5, 2019. REUTERS/Kim Kyung-Hoon

By Cate Cadell

BEIJING (Reuters) – Protesters in Hong Kong must not “play with fire” and mistake Beijing’s restraint for weakness, China said on Tuesday in its sharpest rebuke yet of the “criminals” behind demonstrations in the city whom it vowed to bring to justice.

Hong Kong has suffered weeks of sometimes violent protests that began with opposition to a now-suspended extradition law, which would have allowed suspects to be tried in mainland courts.

But the protests have swelled into a broader backlash against the government of the Asian financial hub, fueled by many residents’ fear of eroding freedoms under the increasingly tight control of the Communist Party in Beijing.

“I would like to warn all of the criminals: don’t ever misjudge the situation and mistake our restraint for weakness,” the Chinese government’s Hong Kong and Macau Affairs Office said in a document issued during a briefing in Beijing.

A small group of violent radicals were at the forefront of the protests, with “some kind-hearted citizens who have been misguided and coerced to join,” according to the document attributed to two officials, Yang Guang and Xu Luying.

It said anti-China forces were the “behind-the-scenes masterminds” who had “openly and brazenly emboldened” the protesters.

“We would like to make clear to the very small group of unscrupulous and violent criminals and the dirty forces behind them: those who play with fire will perish by it,” the office said.

“At the end of the day, they will eventually be punished.”

China has been quick to label U.S. officials as “black hands” instigating unrest in Hong Kong in an attempt to contain China’s development, but it has not provided any concrete evidence.

A bipartisan group of U.S. lawmakers on Friday urged the Trump administration to suspend future sales of munitions and crowd-control equipment to Hong Kong police, which have been accused of using excessive force.

Police on Monday fired tear gas at protesters in the former British colony after a general strike hit transport and the city’s Beijing-backed leader, chief executive Carrie Lam, warned its prosperity was at risk.

The protests surpassed earlier shows of dissent in scale and intensity, seemingly stoked by Lam’s refusal once again to meet any of the protesters’ demands, including for her resignation and independent inquiries into police use of force.

The protests are the greatest political threat to Hong Kong’s government since the territory returned to Chinese rule in 1997, and one of the biggest popular challenges to Chinese leader Xi Jinping since he came to power in 2012.

‘CIVILIZED POWER’

China’s People’s Liberation Army (PLA) in Hong Kong has remained in barracks since the protests started in April, leaving Hong Kong’s police force to deal with the massive demonstrations.

Last week, the PLA garrison there issued a video showing “anti-riot” exercises, and its top brass warned violence is “absolutely impermissible”.

Diplomats and foreign security analysts are watching the situation closely, but believe there’s little appetite in Beijing for the PLA to be deployed on the streets of Hong Kong.

So far, the central government and the PLA have said only that there are clear provisions in law covering the prospect of the force’s intervention in the city.

During the briefing, Yang called the PLA “a strong force that defends every inch of its sacred territory”, and said the central government would not allow any “turbulence” beyond the control of the Hong Kong government to threaten national unity or security.

“The PLA is a force of power but also a civilized power,” Yang said.

“As long as it has the strong support of the central government and the Chinese people, the Hong Kong government and police “are fully capable of punishing those criminal activities and restoring public order and stability”, he said.

(Reporting by Cate Cadell; writing by Michael Martina; Editing by Clarence Fernandez and Darren Schuettler)

Police battle protesters as strike paralyses Hong Kong

Passenger exit a stalled train during a disruption of Mass Transit Railway (MTR) services by protesters at Fortress Hill station in Hong Kong, China August 5, 2019. REUTERS/Kim Kyung-Hoon

By Donny Kwok and Clare Jim

HONG KONG (Reuters) – Police fired tear gas at protesters in multiple parts of Hong Kong on Monday after a general strike hit transport and the city’s Beijing-backed leader warned its prosperity was at risk.

The protests surpassed earlier shows of dissent in scale and intensity, seemingly stoked by Hong Kong chief executive Carrie Lam’s refusal once again to meet any of the protesters’ demands, while warning of an “extremely dangerous situation”.

What started several months ago as demonstrations over an extradition bill that would have let people be sent to mainland China for trial have grown into a much broader backlash against the city government and its political masters in Beijing.

The protests are the greatest political threat to the former British colony’s government since it returned to Chinese rule and one of the biggest popular challenges to Chinese leader Xi Jinping since he came to power in 2012.

Amid extensive disruptions to trains and traffic, tens of thousands of demonstrators fanned out across Hong Kong, spreading pockets of activism to most of its main three regions: Hong Kong island, Kowloon and the New Territories.

Police stations were besieged and roads occupied.

In the evening, a group of men armed with sticks tried to attack the black-clad protesters in the North Point district.

Riot police used tear gas in districts including Wong Tai Sin, Tin Shui Wai, Tai Po, and Admiralty close to the city’s government headquarters.

Speaking to the media for the first time in two weeks, Lam remained defiant, rejecting calls to resign, condemning violence and saying the government would be resolute.

“FAR EXCEEDED ORIGINAL DEMANDS”

She warned that the protests were putting Hong Kong on a path of no return and had hurt its economy.

“They claim they want a revolution and to restore Hong Kong. These actions have far exceeded their original political demands,” said a stern-faced Lam, flanked by some, but not all senior members of her administration.

“These illegal acts that challenge our country’s sovereignty, and jeopardize ‘one country two systems’, will destroy the stability and prosperity of Hong Kong,” Lam said, referring to the territory’s administrative system since 1997, when it was handed back to China.

Demonstrators fear China is gradually encroaching on the island’s cherished autonomy.

China’s Hong Kong and Macao Affairs Office of the State Council said it would hold another news conference on Tuesday at 2.30 pm (0630 GMT), after one last Monday that announced no new major policy shifts by Beijing despite the upheavals.

“I don’t think the government is doing anything to heal society… They provide no solution,” said Jay Leung, 20, a university student who joined a protest, dismissing Lam’s words as a waste of time.

“I didn’t hear anything positive, she just made it worse,” added tourism worker Russell, 38.

Demonstrators blocked key roads, including three tunnels, cutting major arteries linking Hong Kong island and the Kowloon Peninsula. In Yuen Long district, a car rammed through a barricade, knocking down protesters.

Commuters struggled to get to work, with many rail and bus services suspended by activists who blocked trains from leaving stations, some by sitting in doorways.

ECONOMIC DAMAGE

Long lines of traffic snaked across Hong Kong island into the heart of the business center and hundreds of people were stranded at the airport, where more than 200 flights were canceled at one point.

Many businesses shut, and workers stayed home.

“Losing a bit of money now is not such a problem, (compared) with losing everything that the freedom of Hong Kong used to stand for,” said Mark Schmidt, 49, a restaurant manager who closed on Monday.

In an upmarket shopping mall in Sha Tin, scores of shops were shuttered, including clothing retailer H&M as well as luxury brands Chanel and Dior. Protesters in the shopping center chanted: “Strike! Support to the end.”

Many stores in the bustling shopping district of Causeway Bay were closed for part of the day as well as businesses close to the protests.

Members of the Hong Kong Disneyland Cast Members Union went on strike, as did many lifeguards, forcing authorities to close some beaches and swimming pools.

Police, who some have accused of using excessive force, said the situation was spiraling out of control.

Authorities said 420 people have been arrested over the protests since June 9, while police have fired 1,000 rounds of tear gas and about 160 rubber bullets.

The protesters’ demands include a complete withdrawal of the extradition bill and an independent inquiry into government handling of the crisis.

With tourist numbers falling and hotel occupancy rates slumping, the protests are piling pressure on a struggling economy.

IHS Markit’s July Purchasing Managers’ Index for Hong Kong showed private sector business activity dropped to its lowest level in a decade, also weighed down by the Sino-U.S. trade war.

“I would not be surprised if we see a technical recession – two consecutive quarters of contraction,” said Raymond Yeung, chief China economist at ANZ.

The benchmark Hang Seng Index closed down 2.9 percent, falling to its lowest level since January.

(Reporting by Clare Jim, Donny Kwok, James Pomfret, Noah Sin, Twinnie Siu, Vimvam Tong, Kevin Liu, Lukas Job, Felix Tam; Writing by Anne Marie Roantree; Editing by Paul Tait, Clarence Fernandez, Simon Cameron-Moore and Andrew Cawthorne)

Thousands of Hong Kong civil servants defy government to join protests

Civil servants attend a rally to support the anti-extradition bill protest in Hong Kong, China August 2, 2019. REUTERS/Kim Kyung-Hoon

By Felix Tam and Greg Torode

HONG KONG (Reuters) – Thousands of civil servants joined in the anti-government protests in Hong Kong on Friday for the first time since they started two months ago, defying a warning from the authorities to remain politically neutral.

Protests against a proposed bill that would allow people to be extradited to stand trial in mainland China have grown increasingly violent, with police accused of excessive use of force and failing to protect protesters from suspected gang attacks.

Chanting encouragement, crowds turned out to support the civil servants at their rally on Friday evening which halted traffic on major roads in the heart of the city’s business district.

“I think the government should respond to the demands, instead of pushing the police to the frontline as a shield,” said Kathy Yip, a 26-year-old government worker.

The rally on Friday came after an open letter penned anonymously and published on Facebook set out a series of demands to the Hong Kong government by a group which said it represented civil servants.

“At present the people of Hong Kong are already on the verge of collapse,” the group wrote in the letter, saying it was “a pity that we have seen extreme oppression.”

The group also listed five demands: complete withdrawal of the extradition bill; a halt to descriptions of the protests as ‘rioting’; a waiver of charges against those arrested; an independent inquiry and resumption of political reform.

The protests against a now suspended extradition bill have widened to demand greater democracy and the resignation of Hong Kong’s leader Carrie Lam, and have become one of the gravest populist challenges to Communist Party rulers in Beijing.

On Thursday the government said Hong Kong’s 180,000 civil servants must remain politically neutral as the city braced for another wave of protests over the weekend and a mass strike on Monday across sectors such as transport, schools and corporates.

“At this difficult moment, government colleagues have to stay united and work together to uphold the core values of the civil service,” the government said in a statement.

Protest organizers said over 40,000 people participated in Friday’s rally, while the police put the number at 13,000.

Police said they had arrested eight people, including a leading pro-independence leader, after seizing weapons and suspected bomb-making material in a raid.

Under Chinese rule, Hong Kong has been allowed to retain extensive freedoms, such as an independent judiciary, but many residents see the extradition bill as the latest step in a relentless march toward mainland control. Anson Chan, former chief secretary, said the rally was spontaneous and civil servants enjoyed the right to assembly and it could not be said to impair political neutrality.

Many civil servants, however, were apprehensive about identifying themselves, with many speaking anonymously or asking for only their first name to be used.

MORE PROTESTS PLANNED

Hundreds of medical workers also demonstrated on Friday to protest against the government’s handling of the situation. Large-scale protests are planned for the weekend in Mong Kok, Tseung Kwan O and Western districts.

In a warning to protesters, China’s People’s Liberation Army in Hong Kong on Wednesday released a video of “anti-riot” exercises and its top brass warned violence was “absolutely impermissible”.

The PLA has remained in barracks since protests started in April, leaving Hong Kong’s police force to deal with protests.

U.S. President Donald Trump has described protests in Hong Kong as “riots” that China will have to deal with itself..

Police said seven men and a woman, aged between 24 and 31, were arrested on Friday after a raid on a building in the New Territories district of Sha Tin, where police seized weapons and suspected petrol bombs. Making or possessing explosives illegally can carry a sentence of up to 14 years in jail.

The police may arrest more people as the investigations unfold, police officer Li Kwai Wah said, adding, “Recently we are very worried about the escalating violence.”

Andy Chan, a founder of the pro-independence Hong Kong National Party that was banned last September, was among those arrested. His arrest prompted about 100 protesters to surround a police station to demand his release, television footage showed.

On Friday night, crowds of protesters surrounded a police station where Chan was being held, drawing out riot police to the street outside.

On Wednesday, 44 people were charged in a Hong Kong court with rioting over a recent protest near Beijing’s main representative office in the heart of the city.

The escalating protests, which have shut government offices, blocked roads and disrupted business, is taking a toll of the city’s economy and scaring off tourists.

Cheng aged 39, who was speaking behind a large black mask, said the recent triad attack on protesters and slow police response had angered him and his civil service peers.

Of the five protester demands, he said the need for an independent inquiry into the actions of the police was vital.

“I hope to stay in the civil service for a long time. But we have to act now.”

(Reporting by James Pomfret, Twinnie Siu, Anne Marie Roantree, Felix Tam, Vimvam Tong and Donny Kwok; Writing by Farah Master; Editing by Raissa Kasolowsky)

Trump threatens new tariffs as U.S.-China trade tensions spike again

FILE PHOTO: Farmer Dave Walton holds soybeans in Wilton, Iowa, U.S. May 22, 2019. Picture taken May 22, 2019. REUTERS/Kia Johnson

By David Lawder and Andrea Shalal

WASHINGTON (Reuters) – U.S. President Donald Trump on Thursday moved to impose a 10% tariff on a remaining $300 billion list of Chinese imports starting Sept. 1, after U.S. and Chinese negotiators failed to kickstart trade talks between the world’s two largest economies.

The levies – which would hit a wide swath of consumer goods from cell phones and laptop computers to toys and footwear – ratchet up tensions in a war of tit-for-tat tariffs that have disrupted global supply chains and roiled financial markets for more than a year.

U.S. stocks fell after the news and oil prices plummeted, and further fallout was expected. The IMF has warned that tariffs already in place will shave 0.2% off global economic output in 2020.

The benchmark S&P 500, which had been in solidly positive territory on Thursday afternoon, lost significant ground after Trump tweeted about the tariffs, and was last down 0.6% on the day. Benchmark U.S. Treasury yields also fell.

“Trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%,” Trump tweeted.

Trump also faulted China for not making good on promises to buy more American agricultural products and criticized China’s President Xi Jinping for failing to do more to stem sales of the synthetic opioid fentanyl.

The president’s tweets followed a briefing by Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on their talks in Shanghai, their first face-to-face meeting with Chinese officials since Trump and Xi agreed to a trade ceasefire at a G20 summit in June.

The talks ended on Wednesday with little sign of progress, although both countries described the negotiations as constructive. Another round of meetings between the negotiators has been scheduled for September.

Trump had been pressing Xi to crack down on a flood of fentanyl and fentanyl-related substances from China, which U.S. officials say is the main source of a drug blamed for most of more than 28,000 synthetic opioid-related overdose deaths in the United States in 2017.

Xi promised Trump at a summit in Argentina in December that Beijing would take action. China had pledged that from May 1 it would expand the list of narcotics subject to state control to include the more than 1,400 known fentanyl analogs, which have a slightly different chemical makeup but are addictive and potentially deadly, as well as any new ones developed in the future.

Talks between the United States and China collapsed in May after U.S. officials accused China of pulling back from earlier commitments. Washington sharply hiked tariffs on $200 billion worth of Chinese goods and Beijing retaliated, escalating the trade dispute.

Trump subsequently threatened to impose 25% sanctions on the remaining $300 billion in Chinese imports, prompting warnings from Walmart and other major U.S. retailers of a sharp spike in consumer prices. Thursday’s tweets indicated those goods would face a lower tariff rate than initially threatened.

While the United States bemoans the lack of larger Chinese agricultural purchases, Beijing has been pressing Washington to relax restrictions on sales to Chinese telecommunications giant Huawei as it had promised.

The U.S. Department of Agriculture on Thursday confirmed private sales to China of 68,000 tonnes of soybeans in the week ended July 25.

The sale was the first to a private buyer since Beijing offered to exempt five crushers from the 25% import tariffs imposed more than a year ago. Soybean futures opened lower on Thursday as traders shrugged off the small amount, and losses accelerated after Trump’s tweets.

(Additional reporting by Stella Qiu and Beijing Monitoring Desk; additional reporting by David Lawder, Jonathan Landay and Andrea Shalal in Washington and Mark Weinraub and Karl Plume in Chicago; Editing by Sonya Hepinstall)

China buys U.S. soybeans for first time since June

FILE PHOTO: Soybeans fall into a bin as a trailer is filled at a farm in Buda, Illinois, U.S., July 6, 2018. REUTERS/Daniel Acker/File Photo

By Mark Weinraub and Karl Plume

CHICAGO (Reuters) – The U.S. Department of Agriculture on Thursday confirmed private sales to China of 68,000 tonnes of soybeans for the 2019/20 marketing year, the first such purchase by a private buyer since the trade war between the world’s two largest economies broke out more than a year ago.

It was the first new soybean purchase by China since a 544,000-tonne sale was announced in late June, and the first since Beijing offered to exempt five private crushers in the country from 25-percent import tariffs on U.S. beans arriving by the end of the year.

In its weekly export sales report, the USDA also said China bought 66,800 tonnes of soybeans for 2018/19 delivery, including 62,000 tonnes that had previously been listed as headed for unknown destinations. But China also canceled previous purchases totaling 72,900 tonnes for the current marketing year, USDA said.

Widespread market rumors last week suggested that a large Chinese crusher purchased a small number of soybean cargoes for shipment in October from terminals in the U.S. Pacific Northwest, traders said.

Prices for soybeans shipped to Asia from the PNW this autumn are lower than prices for beans shipped from rival exporter Brazil if China’s import tariffs are removed, U.S. export traders said.

Large purchases, however, are not expected as China’s hog herd, the largest consumer of the soybean meal produced from raw beans, has been decimated by the deadly African swine fever. Soy crushing margins are also unprofitable, limiting demand.

Although just a fraction of the 87 million tonnes of soybeans the world’s top buyer is expected to import over the 2019/20 (Sept/Aug) season, the purchase was significant. The 25-percent tariff on U.S. soybeans made imports from rival suppliers like Brazil and Argentina far more attractive to private crushers.

Chinese state-owned firms have purchased some 14 million tonnes of U.S. soy since an initial trade war truce was struck by U.S. President Donald Trump and China’s Xi Jinping in December, but less than 10 million tonnes have been shipped so far.

Latest U.S.-China trade talks called ‘constructive’ by both sides

Chinese Vice Premier Liu He, at right, looks over as United States Trade Representative Robert Lighthizer, third from left gestures near Treasury Secretary Steve Mnuchin, second from left before the start of talks at the Xijiao Conference Center in Shanghai, China July 31, 2019. Ng Han Guan/Pool via REUTERS

By Brenda Goh and David Stanway

SHANGHAI (Reuters) – U.S. and Chinese negotiators wrapped up a brief round of trade talks on Wednesday that both sides described as “constructive,” including discussions over further Chinese purchases of American farm goods and an agreement to reconvene in September.

The first face-to-face talks since a ceasefire was agreed to last month in the trade war between the world’s two largest economies amounted to a working dinner on Tuesday at Shanghai’s historic Fairmont Peace Hotel and a half-day meeting on Wednesday, before U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin flew out.

“The meetings were constructive, and we expect negotiations on an enforceable trade deal to continue in Washington … in early September,” White House spokeswoman Stephanie Grisham said in a statement.

“Both sides, according to the consensus reached by the two leaders in Osaka, had a candid, highly effective, constructive and deep exchange on major trade and economic issues of mutual interest,” China’s Commerce Ministry said in a statement shortly after the U.S. team left Shanghai.

It was not immediately clear what, if any, further agricultural products China agreed to buy from the United States and when – an issue that had become a bone of contention after U.S. President Donald Trump said China had not made good on promised purchases.

“The Chinese side confirmed their commitment to increase purchases of United States agricultural exports,” the White House’s Grisham said, offering no other details.

Representatives for the U.S. Trade Representative’s office did not immediately respond to a request for comment.

The Chinese statement said negotiators discussed more Chinese purchases of agricultural products from the United States, but did not say there was any agreement to buy more.

The talks began amid low expectations. Trump on Tuesday warned China against waiting out his first term to finalize any trade deal, saying if he wins re-election in the November 2020 U.S. presidential contest, the outcome will be worse for China.

Fresh fears over the trade war and concerns about a protracted fight with little near-term progress weighed on global markets on Wednesday.

Chinese Foreign Ministry spokeswoman Hua Chunying said on Wednesday that she was not aware of the latest developments during the talks, but that it was clear it was the United States that continued to “flip flop”.

“I believe it doesn’t make any sense for the U.S. to exercise its campaign of maximum pressure at this time,” Hua told a news briefing in response to a question about the tweets.

“It’s pointless to tell others to take medication when you’re the one who is sick,” she said.

EARLY FINISH

The U.S.-China trade war has disrupted global supply chains and shaken financial markets as each side has slapped tariffs on billions of dollars of each other’s goods.

An official Chinese government survey released on Wednesday showed factory activity shrank for the third month in a row in July, underlining the growing strains the dispute has placed on the No. 2 economy.

The Shanghai talks were expected to center on “goodwill” gestures, such as Chinese commitments to purchase U.S. agricultural commodities and steps by the United States to ease some sanctions on Chinese telecoms equipment giant Huawei Technologies Co Ltd, a person familiar with the discussions told Reuters earlier.

Those issues are somewhat removed from the primary U.S. complaints in the trade dispute such as Chinese state subsidies, forced technology transfers and intellectual property violations – all topics the White House in its statement said were discussed. China’s account of the discussions did not mention any of the non-agricultural issues.

Trump and Chinese President Xi Jinping agreed in June at the G20 summit in Osaka, Japan, to restart trade talks that stalled in May, after Washington accused Beijing of reneging on major portions of a draft agreement. The collapse in talks prompted a steep U.S. tariff hike on $200 billion of Chinese goods.

The U.S. Commerce Department put Huawei on a national security blacklist in May, effectively banning U.S. firms from selling to Huawei, a move that enraged Chinese officials.

Trump said after the Osaka meeting that he would not impose new tariffs on a final $300 billion of Chinese imports and would ease some U.S. restrictions on Huawei if China agreed to make purchases of U.S. agricultural products.

But so far, U.S. semiconductor and software makers are still mostly in the dark about the administration’s plans.

In Sao Paulo on Tuesday, U.S. Commerce Secretary Wilbur Ross said decisions on license applications by U.S. firms to resume some sales to Huawei could come as early as next week.

Hu Xijin, editor-in-chief of China’s nationalistic Global Times tabloid, run by the ruling Communist Party’s People’s Daily newspaper, wrote on Twitter that the negotiators had “efficient and constructive” exchanges.

“The two sides discussed increasing purchase of U.S. farm products and the U.S. side agreed to create favorable conditions for it. They will hold future talks,” Hu said, without elaborating.

(Reporting by Brenda Goh, David Stanway, Yilei Sun, Engen Tham, and Josh Horwitz in Shanghai, and Huizhong Wu in Beijing; and Roberta Rampton, David LAwder and Andrea Shalala in Washington; Writing by Michael Martina in Beijing and Susan Heavey in Washington; Editing by Simon Cameron-Moore, Kim Coghill and Will Dunham)