Tag Archives: China

Trump says U.S.-China trade deal may be reached in four weeks

U.S. President Donald Trump talks with with China's Vice Premier Liu He in the Oval Office of the White House in Washington, U.S., April 4, 2019. REUTERS/Jonathan Ernst

By Jeff Mason and David Lawder

WASHINGTON (Reuters) – U.S. President Donald Trump said on Thursday the United States and China were close to a trade deal that could be announced within four weeks, while warning Beijing that it would be difficult to allow trade to continue without a pact.

The two countries are engaged in intense negotiations to end a months-long trade war that has rattled global markets, but hopes of a resolution soared after both sides expressed optimism following talks in Beijing last week.

Speaking to reporters at the White House at the start of a meeting with Chinese Vice Premier Liu He, Trump said some of the tougher points of a deal had been agreed but there were still differences to be bridged.

“We’re getting very close to making a deal. That doesn’t mean a deal is made, because it’s not, but we’re certainly getting a lot closer,” Trump said in the Oval Office.

“And I would think with, oh, within the next four weeks or maybe less, maybe more, whatever it takes, something very monumental could be announced.”

Trump said he would hold a summit with Chinese President Xi Jinping if there were a deal.

Xi assured Trump that text of the China-U.S. trade could be finalized soon, in a message conveyed by Liu He.

According to state-run news agency Xinhua, Liu He told Trump that Xi believed under his and Trump’s leadership, China-U.S. relations will make new and greater progress.

Xi said that in the past month or more, the two sides’ trade teams had maintained close contact and “achieved new and substantive progress on issues in the text of two countries’ trade agreement”.

“I hope the two sides’ trade teams can continue working in the spirit of mutual respect, equality, and mutual benefit to resolve each other’s concerns, and finish negotiations on the text of the China-U.S. trade agreement soon,” Xi said to Trump through Liu.

KEEPING LEVERAGE

Trump declined to say what would happen to U.S. tariffs on $250 billion worth of goods as part of a deal. China wants the tariffs lifted, while U.S. officials are wary of giving up that leverage, at least for now.

Asked about the benefits of an agreement for China, Trump said: “It’s going to be great for China, in that China will continue to trade with the United States. I mean, otherwise, it would be very tough for us to allow that to happen.”

Goods trade between the United States and China, the world’s two largest economies, totaled $660 billion last year, according to U.S. Census Bureau data, consisting of imports of $540 billion from China and $120 billion in exports to China.

On China’s behalf, Liu cited “great progress” in the talks because of Trump’s direct involvement and expressed hope that the talks would lead to “a good result.”

U.S. SEEKS SWEEPING CHANGES

Trump has previously threatened to impose punitive tariffs on all imports from China, more than a half-trillion dollars worth of products.

U.S. Trade Representative Robert Lighthizer, who is leading the talks for the Trump administration, said there were still some “major, major issues” to resolve and praised Liu’s commitment to reform in China.

Asked about the remaining sticking points, Trump mentioned tariffs and intellectual property theft. He said he would discuss tariffs with Liu in their meeting.

“Some of the toughest things have been agreed to,” Trump said. He later said that an enforcement plan for a deal remained a sticking point as well.

“We have to make sure there’s enforcement. I think we’ll get that done. We’ve discussed it at length,” he said.

Lighthizer and Treasury Secretary Steven Mnuchin are holding talks in Washington with a Chinese delegation this week after meeting together in Beijing last week. The current round of talks is scheduled to go through Friday and possibly longer.

Hopes that the talks were moving in a positive direction have cheered financial markets in recent weeks. But U.S. stocks were mixed on Thursday as investors waited for more developments in the trade negotiations, with the Dow Jones industrial Average slightly higher, and the S&P 500 and Nasdaq Composite slightly lower. [.N]

The United States is seeking reforms to Chinese practices that it says result in the theft of U.S. intellectual property and the forced transfer of technology from U.S. companies to Chinese firms.

Administration officials initially envisioned a summit between Trump and Xi potentially taking place in March, but some U.S. lawmakers and lobbying groups have said recently they were told that the administration was now aiming for a deal in late April.

OUTSTANDING ISSUES

White House economic adviser Larry Kudlow said last week that the talks were “not time-dependent” and could be extended for weeks or even months longer.

While some reform pledges by Beijing are largely set, including an agreement to avoid currency manipulation, an enforcement mechanism to ensure that China keeps its pledges and the status of U.S. tariffs on $250 billion worth of Chinese goods must be resolved.

“China has been very clear, publicly and privately, that they would like to see all the tariffs removed,” U.S. Chamber of Commerce international affairs chief Myron Brilliant told reporters on Tuesday.

“The (Trump) administration has been equally clear that they want to keep some of the tariffs in place as a way to have leverage over China fulfilling its obligations under whatever final package is reached.”

(Reporting by Jeff Mason and David Lawder; Additional reporting by Chris Prentice and Michael Martina in BEIJING; Editing by Peter Cooney, Simon Cameron-Moore and Michael Perry)

U.S.-China trade talks continue, Trump not expected to announce summit: official

FILE PHOTO: U.S. President Donald Trump and China's President Xi Jinping arrive for a state dinner at the Great Hall of the People in Beijing, China, November 9, 2017. REUTERS/Jonathan Ernst/File Photo

WASHINGTON (Reuters) – The White House is not expected to announce a date on Thursday for a trade summit between U.S. President Donald Trump and Chinese President Xi Jinping, a senior administration official said, as negotiators for the two sides launch another day of talks.

China and the United States are in the middle of intense negotiations to end a months-long trade war that has rattled global markets.

After meetings in Beijing last week, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are holding talks with a Chinese delegation in Washington this week.

Trump is slated to meet with China’s top trade negotiator, Liu He, at 4:30 p.m. (2030 GMT) at the White House. The Wall Street Journal and the New York Times reported that he was expected to announce a date for a summit at that time, but a senior administration official told Reuters that was incorrect.

“The White House is not expected to announce a date for a meeting,” the official said.

Trump administration officials have cited progress in the talks on tricky aspects, including reforming practices that Washington objects to by Beijing such as the intellectual property theft and forced transfer of technology from U.S. companies doing business in China.

Hopes that the talks were moving in a positive direction have cheered investors.

Administration officials initially envisioned a summit between Trump and Xi potentially taking place in March, but that period passed while talks continued.

How to enforce a deal as well as when and whether to lift tariffs on billions of dollars of goods have been sticking points in what appear to be the final stages of the talks.

(Reporting by Jeff Mason; Editing by Susan Thomas)

Bayer contains cyber attack it says bore Chinese hallmarks

FILE PHOTO: Logo of Bayer AG is pictured at the annual results news conference of the German drugmaker in Leverkusen, Germany February 27, 2019. REUTERS/Wolfgang Rattay/File Photo

By Patricia Weiss and Ludwig Burger

FRANKFURT (Reuters) – German drugmaker Bayer has contained a cyber attack it believes was hatched in China, the company said, highlighting the risk of data theft and disruption faced by big business.

Bayer found the infectious software on its computer networks early last year, covertly monitored and analyzed it until the end of last month and then cleared the threat from its systems, the company said on Thursday.

“There is no evidence of data theft,” Bayer said in a statement, though a spokesman added that the overall damage was still being assessed and that German state prosecutors had launched an investigation.

“This type of attack points toward the ‘Wicked Panda’ group in China, according to security experts,” the spokesman added, citing DCSO, a cyber security group set up by Bayer in 2015 with German partners Allianz, BASF and Volkswagen.

Third-party personal data was also not compromised, the spokesman said.

The hackers used malware called WINNTI, which makes it possible to access a system remotely and then pursue further exploits from there, said Andreas Rohr of the DCSO.

“Once it has been installed, more or less any action can be carried out,” Rohr said.

Discovery of WINNTI provides clear evidence of complex and sophisticated malware that is used in a targeted, sustained espionage campaign, he added

Bayer, Germany’s biggest drugmaker and the world’s largest agricultural supplies company after its takeover of Monsanto, said it could not determine exactly when its systems were first compromised.

‘ACTIVE GROUP’

There was a WINNTI attack on computer systems at German technology group ThyssenKrupp in 2016, according to media reports at the time.

Rohr declined to comment in detail on the Bayer case, citing a non-disclosure agreement but said he knew of at least five WINNTI attacks in Germany.

“This is a very active group of hackers with the ability to carry multiple international attacks in parallel,” he said.

Manufacturing groups across the globe are expanding their data networks as sensors, processing chips and analytical tools become more advanced and cheaper.

Germany has experienced a big increase in the number of security incidents hitting critical infrastructure such as power grids, the country’s cybersecurity agency said in February.

While it’s not possible to say with certainty who was responsible for the attack, because the malware used is widely available, Rohr said the methods bore the hallmarks of Chinese hackers.

“The malware most probably comes from a Chinese group of ‘mercenaries’ who carry out targeted attacks and campaigns on the internet for money,” he said.

“Their targets have in the past been the online gambling industry, the theft of intellectual property of the affected companies or the use of access for the purposes of espionage.”

German broadcasters BR and NDR initially reported the incident.

(Additional reporting by Douglas Busvine; Editing by Keith Weir and David Goodman)

Pompeo urges NATO allies to adapt to new threats from Russia, China

U.S. Secretary of State Mike Pompeo (3rd L) speaks at the meeting of the North Atlantic Treaty Organization (NATO) Foreign Ministers at the State Department in Washington, U.S., April 4, 2019. REUTERS/Joshua Roberts

By Lesley Wroughton and David Brunnstrom

WASHINGTON (Reuters) – U.S. Secretary of State Mike Pompeo on Thursday called on NATO allies to adapt to confront a wide variety of emerging threats, including Russia’s increased aggression, Chinese strategic competition and uncontrolled migration.

Pompeo made the call at the start of a meeting of North Atlantic Treaty Organization foreign ministers in Washington marking the 70th anniversary of the transatlantic military alliance.

“We must adapt our alliance to confront emerging threats … whether that’s Russian aggression, uncontrolled migration, cyber attacks, threats to energy security, Chinese strategic competition, including technology and 5G, and many other issues,” Pompeo said.

In a 2018 strategy document, the U.S. military put countering China and Russia at the heart of a new national defense strategy.

The meeting’s first session focused on ways to deter Russia, including in the Black Sea where it seized three Ukrainian naval vessels last year.

NATO chief Jens Stoltenberg called on Moscow to release the ships and their crews.

He said Russia’s breach of the 1987 Intermediate-range Nuclear Forces (INF) Treaty was part of a “pattern of destabilizing behavior.”

Washington has said it will withdraw from the treaty this summer unless Moscow ends its alleged violations of the pact, which rid Europe of land-based nuclear missiles.

“We will not mirror what Russia is doing,” said Stoltenberg. “We will be measured and coordinated, and we have no intention of deploying ground-launched nuclear missiles in Europe.”

In his remarks, Pompeo said NATO should also confront increased cyber warfare, including from China.

Washington has warned it will not partner with countries that adopt China’s Huawei Technologies systems but has been at odds on the issue with the European Union, which has shunned U.S. calls to ban the company across the bloc. The bulk of NATO members are EU countries.

Huawei is under scrutiny from Western intelligence agencies for its perceived ties to China’s government and the possibility its equipment could be used for espionage. Huawei has repeatedly denied engaging in intelligence work for any government.

The United States has also been at odds with European countries over the failure of many of them to meet NATO defense spending guidelines of 2% of GDP.

Stoltenberg told reporters that NATO allies should commit to increased defense spending to improve burden-sharing in NATO.

“All NATO allies made a pledge to invest more in defense to improve burden sharing in our alliance, and I expect all allies, including Germany, of course, to make good on the pledge we made together,” the NATO secretary general said.

U.S. President Donald Trump has called on NATO countries to pay even more than 2% of their gross domestic product for defense. He told NATO leaders last year to increase defense spending to 4% of GDP. He said the United States pays 4.3% of its GDP to NATO.

Trump has singled out Germany for not doing enough.

Stoltenberg said Germany was now making progress, but all allies needed to do more.

“We didn’t make this pledge to please the United States. We made it because we live in a more unpredictable and uncertain world,” Stoltenberg said.

The NATO chief said disagreement between NATO members Turkey and the United States over Turkey’s plan to buy S-400 missile defense systems from Russia was not part of the formal agenda of the Washington meeting but would be discussed on the margins.

The United States has halted delivery of equipment related to its advanced F-35 fighter jets to Turkey over its S-400 plans.

The United States says Turkey’s purchase of the Russian air defense system would compromise the security of F-35 aircraft, which is built by Lockheed Martin Corp and uses stealth technology.

(Reporting by Lesley Wroughton and David Brunnstrom; editing by Jonathan Oatis and James Dalgleish)

Chinese woman arrested by Secret Service at Trump’s Mar-a-Lago

FILE PHOTO: U.S. President Donald Trump's Mar-a-Lago estate in Palm Beach, Florida, U.S., March 22, 2019. REUTERS/Kevin Lamarque/File Photo

By Mark Hosenball

(Reuters) – A Chinese woman who passed security checkpoints at President Donald Trump’s Mar-a-Lago resort in Florida carrying a thumb drive coded with “malicious” software was arrested on Saturday for entering a restricted property and making false statements to officials, according to a court filing.

Documents filed by the Secret Service on Monday in U.S. District Court for the Southern District of Florida say that shortly after noon on Saturday, Yujing Zhang approached a Secret Service agent screening visitors to Mar-a-Lago seeking entrance to the club.

Zhang produced two Chinese passports displaying her photo and said she wanted to go to the pool. Secret Service officers could not initially find her name on an access list for the property, according to the Secret Service affidavit filed with the court.

A club manager said that a man named Zhang was a club member, and even though Yujing Zhang did not give a clear answer as to whether the man was her father, the Secret Service affidavit says resort officials allowed her on the property on the assumption she was related to a member.

Resort personnel became suspicious after Zhang appeared to have trouble explaining why she was visiting Mar-a-Lago, according to the affidavit.

Zhang initially said she was there for an event staged by a group called the United Nations Chinese American Association. But resort staff found no such event was scheduled, according to the court filing.

A receptionist then contacted Secret Service personnel who questioned Zhang and concluded she did not have “any legitimate documentation” authorizing her entry to Mar-a-Lago, according to the filing.

After detaining her, investigators found in Zhang’s possession four cellphones, a laptop computer, an external hard drive device and a thumb drive, the Secret Service court filing says. Initial examination of the thumb drive determined it contained “malicious malware,” the Secret Service said.

“While the Secret Service does not determine who is permitted to enter the club, our agents and officers conduct physical screenings to ensure no prohibited items are allowed onto the property,” the Secret Service said in a statement.

Responding to a question on the case, Chinese Foreign Ministry spokesman Geng Shuang told a regular news briefing in Beijing on Wednesday: “I have no understanding of the situation you mention.”

In a court filing on Tuesday, a public defender representing Zhang said she was invoking her right to remain silent.

A Justice Department spokeswoman had no comment on the arrest.

(Reporting by Mark Hosenball; additional reporting by Roberta Rampton in Washington and Cate Cadell in Beijing; Editing by Leslie Adler)

Dutch security agency warns against Chinese, Russian technology

FILE PHOTO: EU leaders including Belgian Prime Minister Charles Michel (C), Netherlands Prime Minister Mark Rutte (R), Luxembourg Prime Minister Xavier Bettel (L) and Italian Prime Minister Paolo Gentiloni (rear left) gather around a computer screen at the European Union leaders summit in Malta, February 3, 2017. REUTERS/Darrin Zammit-Lupi/File Photo

AMSTERDAM (Reuters) – The Dutch security service advised the government on Tuesday not to use technology from countries with active cyber-hacking campaigns against the Netherlands, such as China and Russia.

The recommendation came as the Dutch government is weighing options for a new 5G telecommunications network in the coming years and seeks to replace its domestic emergency services network, known as C2000.

The AIVD security agency flagged Chinese and Russian attempts at digital espionage as a major security risk.

“It is undesirable for the Netherlands to exchange sensitive information or for vital processes to depend on the hardware or software of companies from countries running active cyber programs against Dutch interests,” the AIVD said in its annual report.

Prime Minister Mark Rutte has refused to rule out doing business with Chinese technology companies, even as key allies the United States and Australia restricted Huawei Technologies from accessing its next-generation mobile networks on national-security grounds.

Washington has said that Huawei is at the beck and call of the Chinese state, warning that its network equipment may contain “back doors” that could open them up to cyber espionage. Huawei says such concerns are unfounded.

(Reporting by Anthony Deutsch; Editing by Robin Pomeroy)

Treaty’s end would give U.S., Russia impetus to make more nukes: study

FILE PHOTO - National flags of Russia and the U.S. fly at Vnukovo International Airport in Moscow, Russia April 11, 2017. REUTERS/Maxim Shemetov

By Arshad Mohammed and Jonathan Landay

WASHINGTON (Reuters) – The demise of the only U.S.-Russia arms control pact limiting deployed nuclear weapons would make it harder for each to gauge the other’s intentions, giving both incentives to expand their arsenals, according to a study released on Monday.

The expiration of the New START accord also may undermine faith in the Nuclear Non-Proliferation Treaty, which calls on nuclear states such as the United States and Russia to work toward nuclear disarmament, as well as influence China’s nuclear posture, historically one of restraint.

The study, produced by the CNA Corp non-profit research group, is the most comprehensive public examination to date of the consequences of New START’s demise. It argues for extending the 2011 treaty, which expires in February 2021 but can be extended for five years if both sides agree.

The Trump administration is deliberating whether to extend the pact, which President Donald Trump has reviled as a bad deal and his national security adviser, John Bolton, has long opposed. Russia has said it is prepared to extend New START but wants to discuss what it regards as U.S. violations first.

The State Department did not immediately respond to a request for comment on the administration’s deliberations.

Trump has said Washington will withdraw from another arms pact, the 1987 Intermediate-range Nuclear Forces Treaty, this summer unless Moscow ends its alleged violations, compounding tense ties. Russia denies violating the INF treaty.

The New START treaty required the United States and Russia to cut their deployed strategic nuclear warheads to no more than 1,550, the lowest level in decades, and limit delivery systems – land- and submarine-based missiles and nuclear-capable bombers.

It also includes extensive transparency measures requiring each side to allow the other to carry out 10 inspections of strategic nuclear bases each year; give 48 hours notice before new missiles covered by the treaty leave their factories; and provide notifications before ballistic missile launches.

Both sides must also exchange data declaring their deployed strategic nuclear warheads, delivery vehicles and launchers, as well as breakdowns of how many of each are located at individual bases.

All of that would end if the treaty expires.

“Neither country would have the same degree of confidence in its ability to assess the other’s precise warhead levels,” CNA’s Vince Manzo wrote in the study. “Worst-case planning is also more likely as a result.

“Increased opacity between U.S. and Russian strategic nuclear forces would unfold within the broader context of growing mistrust and diverging perceptions about strategy, intentions, and perceptions,” he added.

Without the data, the United States would have to reassign its overworked satellites, possibly devoting more surveillance to Russia and less to China, Iran and North Korea.

Another casualty of the treaty’s expiration could be global nonproliferation, making non-nuclear states doubt the United States and Russia will keep working toward nuclear disarmament under the NPT, the study said.

While it was impossible to predict how China – estimated to have about 280 nuclear warheads – would react to New START’s expiry, the study cites factors that could make Beijing expand its capability.

Without a treaty limiting U.S. and Russian nuclear forces, China could overestimate their arsenals. Unconstrained U.S. and Russian forces could also strengthen voices in China that view a large arsenal as symbolically important, as well as those already advocating for more nuclear weapons.

The study recommends steps for the United States and Russia to mitigate the risks from the treaty’s expiration, including voluntarily sticking to its limits and continuing to exchange data. It also recommends Washington propose annual exchanges of nuclear weapons information and dialogue with Beijing.

(Reporting by Arshad Mohammed and Jonathan Landay; Editing by Mary Milliken and Dan Grebler)

U.S., China hold ‘constructive’ trade talks in Beijing

China's Vice Premier Liu He shakes hands with U.S. Treasury Secretary Steven Mnuchin as Yi Gang, governor of the People's Bank of China (PBC) and U.S. Trade Representative Robert Lighthizer stand next to them as they pose for a group photo at Diaoyutai State Guesthouse in Beijing, China March 29, 2019. Nicolas Asfouri/Pool via REUTERS

By Michael Martina and Philip Wen

BEIJING (Reuters) – U.S. officials held “constructive” talks in Beijing, Treasury Secretary Steven Mnuchin said on Friday, concluding the latest round of dialogue with China aimed at resolving the bitter trade dispute between the world’s two largest economies.

Mnuchin and U.S. Trade Representative Robert Lighthizer were in the Chinese capital for the first face-to-face meetings between the two sides since President Donald Trump delayed a scheduled March 2 hike in tariffs on $200 billion worth of Chinese goods, citing progress in negotiations.

“@USTradeRep and I concluded constructive trade talks in Beijing,” Mnuchin said on social media network Twitter.

“I look forward to welcoming China’s Vice Premier Liu He to continue these important discussions in Washington next week,” he added, but gave no details.

Earlier, he told reporters U.S. officials had a “very productive working dinner” on Thursday. He did not elaborate and it was not immediately clear with whom he had dined.

Trump imposed tariffs on $250 billion of Chinese imports last year in a move to force China to change the way it does business with the rest of the world and to pry open more of its economy to U.S. companies.

Though his blunt-force use of tariffs has angered many, his push to change what are widely viewed as China’s market-distorting trade and subsidy practices has drawn broad support.

Lobbyists, company executives, and U.S. lawmakers from both parties, have urged Trump to not settle simply for Beijing’s offers to make big-ticket purchases from the United States to help reduce a record trade gap.

LOST IN TRANSLATION?

Neither side immediately offered details on the latest talks, and the U.S. delegation was expected to leave Beijing on Friday evening without releasing a formal statement.

Mnuchin and Lighthizer greeted a waiting Liu at the Diaoyutai State Guest House just before 9 a.m. (0100 GMT), and in two brief appearances before journalists, the three mingled and joked with members of the opposite teams.

Trade watchers had anticipated the scope of this round of talks, which wrapped up about 24 hours after the U.S. delegation arrived, to be quite narrow, but that both countries hoped to signal they were working hard toward a resolution.

Reuters reported previously that the two sides were negotiating written pacts in six areas: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade.

It was unclear how much progress was made on the phrasing of those agreements, but earlier in the week a U.S. administration official told Reuters that Lighthizer and Mnuchin were “literally sitting there going through the texts”, a task typically delegated to much lower levels.

One person with knowledge of the talks said “translation is definitely an issue”, referring to discrepancies between the Chinese and English-language versions.

On Thursday, Premier Li Keqiang said Beijing would sharply expand market access for foreign banks and securities and insurance companies, fuelling speculation that China may soon announce new rules allowing foreign financial firms to increase their presence.

White House economic adviser Larry Kudlow said the United States may drop some tariffs if a trade deal is reached, while keeping others in place to ensure Beijing’s compliance.

“We’re not going to give up our leverage,” he told reporters in Washington on Thursday.

‘THERE ARE GOING TO BE PROBLEMS’

Many have expressed skepticism whether whatever deal they reach will end the trade war once and for good.

“Whatever implementation mechanism China agrees to, whether it is monthly or quarterly meetings or other check-ins, there are going to be problems,” James Green, a senior advisor at McLarty Associates who until August was the top USTR official at the embassy in Beijing, told Reuters.

“Either the purchases are going to be off, or the market access is not going to be there. And then the question is, when do you consider putting tariffs back on?” he added. “The trade issue is not going to be put to bed.”

Trump’s demands include an end to Beijing’s practices that Washington says result in the systematic theft of U.S. intellectual property and the forced transfer of American technology to Chinese companies.

U.S. companies say they are often pressured into handing over technological know-how to Chinese joint venture partners, local officials or regulators as a condition for doing business in China.

The U.S. government says technology is often subsequently transferred to, and used by, Chinese competitors.

The issue has proved tough for negotiators as U.S. officials say China has previously refused to acknowledge the problem exists to the extent alleged by the United States, making it hard to discuss resolution.

China says its laws enshrine no requirements on technology transfers, which are a result of legitimate transactions.

(Reporting by Michael Martina and Philip Wen; Additional reporting by Jeff Mason in Washington; Writing by Ben Blanchard and Tony Munroe; Editing by Shri Navaratnam and Clarence Fernandez)

Trump push for China trade reform draws wide support at home, abroad

FILE PHOTO: Shipping containers of China Shipping and China Ocean Shipping Company (COSCO) are seen on a container ship at Kwai Tsing Container Terminals in Hong Kong, China July 25, 2018. REUTERS/Bobby Yip/File Photo

By David Lawder, Philip Blenkinsop and Michael Martina

WASHINGTON/BRUSSELS/BEIJING (Reuters) – U.S. President Donald Trump’s blunt-force use of tariffs in pursuing his “America First” trade agenda has angered many, from company executives to allied governments and members of both parties of Congress.

But there’s one effort which has drawn broad support from those who oppose him on almost everything else – his push to force Beijing to change what are widely viewed as China’s market-distorting trade and subsidy practices.

As U.S.-China talks to end a trade war reach their endgame, politicians, executives and foreign diplomats are urging Trump and his team to hold out for meaningful structural reforms in China to address entrenched problems in the relationship that hurt U.S. and other foreign companies and workers.

Trump’s trade war “has let the genie out of the bottle” by lifting expectations that the trade war will force China to reform policies that businesses and foreign governments regard as unfair, said Steven Gardon, vice president of indirect taxes and customs at Lear Corp. Gardon’s firm is an automotive seating and electrical supplier with plants in 39 countries, including the United States and China.

“Now that all these issues have been raised, there’s a lot more domestic political support to address these issues, and I don’t think you can pull back from that,” Gardon said at a Georgetown Law School forum this month. “There’s now pressure politically that they have to be addressed for the long term.”

Gardon’s comments reflect a broad shift in U.S. and international business sentiment towards China’s economic and trade policies, one that is aligned with Trump’s goals, if not his tactics.

Trump’s trade team say they are in the final stages of negotiating what would be the biggest economic policy agreement with China in decades. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin head to Beijing this week to try to accelerate talks with Chinese Vice Premier Liu He. Liu is set to travel to Washington for another round of negotiations in early April.

Eight months into the trade war that has disrupted the flow of billions of dollars of goods between the world’s two largest economies, it is unclear if a deal acceptable to both sides can be done.

China’s President Xi Jinping is seen as reluctant to make economic reforms under pressure from the United States, and Trump has said he may keep tariffs on Chinese goods in place for “a substantial period” even if a deal is struck.

Xi may find it easier to live with the tariffs Trump has imposed on trade than to change China’s model for economic development.

As part of a deal, Beijing has offered to make big-ticket purchases from the United States to help reduce a record trade gap. Trump’s team has said those purchases would be worth more than a trillion dollars over about six years.

While big Chinese purchases might be tempting for Trump’s administration, they would do nothing to address what U.S. firms competing in China or against Chinese firms say are structural problems with a system stacked against them.

The United States complains China engages in systematic intellectual property theft, forces foreign firms to give up trade secrets for market access and spends huge sums subsidizing its own industry. Redressing those complaints would require policy reform at the highest level from Xi and China’s ruling Communist Party.

A survey released by the American Chamber of Commerce in China in late February showed that a majority of member U.S. companies supported increasing or maintaining tariffs on Chinese goods, and nearly twice as many as last year want the U.S. government to push Beijing harder to create a level playing field.

The U.S. tariff demands have even encouraged some reform-minded Chinese officials and private-sector business executives to call for a faster pace of reform in China as it celebrates the 40th anniversary of its first steps toward capitalism.

Lighthizer told lawmakers in late February that Chinese-American business people in particular have urged him to “hang tough” in the talks and not to “sell out for soybeans.”

STAY THE COURSE

When Trump delayed a threatened tariff increase well before a March 1 deadline for a deal, he stoked fears that he may be swayed by the big purchase order and leave longstanding structural problems unresolved.

Since then, a steady drumbeat of lobbyists, company executives, foreign diplomats and U.S. lawmakers from both parties have urged Trump to stay the course on his structural demands.

Representative Kevin Brady of Texas, one of the most pro-trade Republicans and a critic of Trump’s tariffs, recently joined that call.

“While we want China to buy more U.S. goods … it’s even more important for us to hold China accountable to meeting high international standards on intellectual property rights, subsidization, overcapacity, and the other structural ways in which China distorts the global economy,” he said at a House Ways and Means Committee hearing just days after the tariff delay was announced.

Last week, Senate Democratic leader Chuck Schumer, a longtime China trade hawk, took to the Senate floor to urge Trump not to “back down” and take a deal based largely on Chinese purchases of American soybeans and other goods.

On Thursday, Schumer tweeted: “Now’s not the time to drop $200B in tariffs just because China’s close to a deal, @realDonald Trump.”

FILE PHOTO: U.S. President Donald Trump listens to a question as he meets with former hostage Danny Burch, an oil engineer who was taken hostage in Yemen in September 2017, in the Oval Office at the White House in Washington, U.S. March 6, 2019. REUTERS/Jonathan Ernst/File Photo

FILE PHOTO: U.S. President Donald Trump listens to a question as he meets with former hostage Danny Burch, an oil engineer who was taken hostage in Yemen in September 2017, in the Oval Office at the White House in Washington, U.S. March 6, 2019. REUTERS/Jonathan Ernst/File Photo

QUIETLY ROOTING FOR TRUMP

European Union members, traditional allies of the United States, are still smarting about the steel and aluminum tariffs Trump imposed on imports into the United States last year. The EU is also worried that Trump will impose duties on autos. But the bloc shares many of the same frustrations over China’s technology transfer policies and market access constraints.

“We get complaints every day from our companies,” one European official told Reuters in Beijing, noting that despite repeated pledges from the Chinese government to make life easier for foreign companies, little had changed.

EU trade commissioner Cecilia Malmstrom’s assessment of China’s behavior sounds almost like it was written by the U.S. Trade Representative’s office, charging that China has abused global trading rules.

China has “blurred the lines between state and private sector. The state has undue influence,” she said in a Washington speech this month. “Intellectual properties of companies are stolen. State subsidies, direct or indirect, are common. And these impacts are felt at home and abroad.”

Malmstrom says that while the U.S. and EU “agree on the diagnosis,” they differ on tactics, and she argues for a more multilateral approach, citing the EU’s work with the United States and Japan to address the issues through reform of World Trade Organization rules.

Some worry that Europe could lose out if Washington and Beijing strike a deal to purchase billions of dollars more in products to try to shrink the U.S. goods trade deficit with China.

“If China is buying more from America then inevitably it will buy less from Europe,” a second European official based in Beijing said, adding that could, in particular, affect large European multinationals.

But European diplomats and officials acknowledge a begrudging support for Trump’s goals, even if they are repulsed by his blunt tactics. Many are secretly rooting for his success.

“We are against unilateral measures, but nobody is exactly sorry for China. On content we think he does have a point,” said one EU diplomat who spoke on condition of anonymity in Brussels. “Beijing has to understand that without reform, the system could just stop working.”

Trump administration officials insist that he has gotten the message and is holding out for “structural changes” to the U.S.-China relationship, along with an enforcement mechanism that holds China to its pledges.

Clete Willems, a White House trade adviser, told the Georgetown Law School forum that Trump is determined to fix problems with China’s trade relationship that he has railed against for years, long before he ever sought office.

“The notion that he’s just going to suddenly accept a bad deal is totally inaccurate. The president is going to walk away from bad deals,” said Willems, who announced on Friday that he is leaving the White House for family reasons.

(Reporting by David Lawder; Editing by Simon Webb and James Dalgleish)

Pakistan tells China of ‘deteriorating situation’ in Indian Kashmir

Chinese Foreign Minister Wang Yi and Pakistani Foreign Minister Shah Mehmood Qureshi attend a meeting at Diaoyutai State Guesthouse in Beijing, China, March 19, 2019. Andrea Verdelli/Pool via REUTERS

By Ben Blanchard

BEIJING (Reuters) – Pakistan Foreign Minister Shah Mahmood Qureshi told his Chinese counterpart on Tuesday of the “rapidly deteriorating situation” and rights violations in Indian Kashmir, and called for India to look again at its policies there.

India launched an air strike on a militant camp inside Pakistan last month following an attack on an Indian paramilitary convoy in disputed Kashmir.

The Feb. 14 attack that killed at least 40 paramilitary police was the deadliest in Kashmir’s 30-year-long insurgency, escalating tension between the neighbors, and the subsequent air strike had heightened fears that nuclear-armed India and Pakistan could slide into a fourth war.

Speaking in Beijing standing alongside the Chinese government’s top diplomat, State Councillor Wang Yi, Qureshi said his country appreciated the role China played once again “in standing by Pakistan in these difficult times”.

“I also briefed the foreign minister on the rapidly deteriorating situation on the Indian side of Kashmir, intensification of human rights violations, especially after Pulwama,” he said, referring to where the attack took place.”This is a concern because that leads to a reaction and that reaction at times creates tensions in the region which must be avoided,” Qureshi added.

“I think there’s a need for a new assessment on how the situation on the Indian side of Kashmir should be handled by the Indians. There are now voices within India that are questioning the efficacy of the policy that they’ve followed for the last so many years,” he said, without elaborating.

Wang, who is also China’s foreign minister, said China has always believed that peace and stability in South Asia is in the joint interests of countries in the region and is what the international community wishes.

“China appreciates Pakistan’s constructive efforts to ease the situation and calls on Pakistan and India to continue to exercise restraint and resolve the differences that exist via dialogue and peaceful means.”

The sparring after the Pulwama attack had threatened to spiral out of control and only interventions by U.S. officials, including National Security Adviser John Bolton, headed off a bigger conflict, five sources familiar with the events have told Reuters.

At one stage, India threatened to fire at least six missiles at Pakistan, and Islamabad said it would respond with its own missile strikes “three times over”, said Western diplomats and government sources in New Delhi, Islamabad and Washington.

A Pakistani minister said China and the United Arab Emirates also intervened to lessen tension between the South Asian neighbors.

In a faxed statement to Reuters late on Monday, responding to a question on China’s role in reining in the crisis, its foreign ministry said peaceful coexistence between Pakistan and India was in everyone’s interest.

“As a friendly neighbor of both India and Pakistan, China pro-actively promoted peace talks and played a constructive role in easing the tense situation,” it said.

“Some other countries also made positive efforts in this regard,” the ministry added.

China is willing to work with the international community to continue to encourage the neighbors to meet each other half way and use dialogue and peaceful means to resolve differences, it said, without elaborating.

China and Pakistan call each other “all-weather” friends, but China has also been trying to improve ties with New Delhi.

Indian Prime Minister Narendra Modi and Chinese President Xi Jinping held an informal summit in China last year agreeing to reset relations, and Xi is expected to visit India sometime this year, diplomatic sources say.

(Reporting by Ben Blanchard; Editing by Clarence Fernandez, Simon Cameron-Moore)