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Washington’s Decision To End Iran Oil Waivers, Will Not Impact U.S. China Trade Talks

"The smart thing would be to remove the tariffs on all of the parts and components, and perhaps on some consumer goods. It seems likely to get that compromise,"

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U.S. Secretary of State Mike Pompeo says Washington’s decision to end Iran oil waivers to China will not have a negative impact on the latest trade talks between two countries. VOA

U.S. Secretary of State Mike Pompeo says Washington’s decision to end Iran oil waivers to China will not have a negative impact on the latest trade talks between the world’s two leading economies.

“We have had lots of talks with China about this issue. I’m confident that the trade talks will continue and run their natural course,” Pompeo told an audience in Washington on Monday.

China is Iran’s largest oil buyer.

Pompeo added the U.S. would ensure the global oil markets are adequately supplied.

Last Monday, the United States announced it was ending waivers on sanctions to countries that import Iranian oil, including China, India, Japan, South Korea and Turkey. Since the sanctions were reintroduced, Italy, Greece and Taiwan have halted their Iranian oil imports.

U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer are meeting with Chinese Vice Premier Liu He in Beijing on Tuesday, for the latest round of negotiations. The two sides will discuss intellectual property, forced technology transfer, non-tariff barriers, agriculture, and other issues.

Vice Premier Liu will then lead a Chinese delegation to Washington for additional talks on May 8.

China
There has to be something for China. On the other hand, I guess I will be surprised if the U.S. removed all of the tariffs because clearly, the USTR team would like to keep at least some of them in place. VOA

Washington and Beijing have held several rounds this year to resolve a trade war that began in 2018 when President Donald Trump imposed punitive tariffs on $250 billion worth of Chinese imports. He has been trying to compel Beijing to change its trade practices. China retaliated with tariff increases on $110 billion of U.S. exports.

Positive tone

The U.S. and China have struck a positive tone ahead of this week’s talks in Beijing, aimed at ending the trade war, as both countries work toward an agreement.

“We’re doing well on trade, we’re doing well with China,” President Trump told reporters last week.

In Beijing, Chinese officials said that “tangible progress” has been achieved.

“Both sides are also maintaining communication. We believe that both sides’ trade delegations can work together, meet each other halfway and work hard to reach a mutually beneficial agreement,” Chinese Foreign Ministry spokesperson Geng Shuang said last week.

As the United States and China appear close to reaching a negotiated settlement over trade disputes, a group of American business and retailers has called for a “full and immediate removal of all added tariffs” on Chinese goods in a deal, saying anything less would be a “loss for the American people.”

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“Americans have paid over $21 billion in taxes due to the imposition of new tariffs,” said a letter to President Trump April 22.
Pixabay

Business groups from “Americans for Free Trade” have asked the Trump administration to “fully eliminate tariffs” on Chinese goods, saying tariffs are taxes that American businesses and consumers pay.

“Americans have paid over $21 billion in taxes due to the imposition of new tariffs,” said a letter to President Trump April 22.

Some experts say the administration lacks confidence in China’s enforcement of a trade deal, and predict some punitive tariffs are likely to remain.

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“I cannot imagine China accepting a deal where all the tariffs stay in place. I don’t see how [Chinese President] Xi Jinping can take that to his people. There has to be something for China. On the other hand, I guess I will be surprised if the U.S. removed all of the tariffs because clearly, the USTR team would like to keep at least some of them in place,” David Dollar, Brookings Institution’s senior fellow, told VOA Mandarin.

“The smart thing would be to remove the tariffs on all of the parts and components, and perhaps on some consumer goods. It seems likely to get that compromise,” he added. (VOA)

Next Story

Here’s Why Coronavirus May Have Severe Impact on Asia’s Economy

This time around Chinese tourism matters even more to Southeast Asia

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Coronavirus
The Coronavirus outbreak, which has so far caused 41 deaths in China, and caused the country to quarantine 16 cities, is causing comparisons to the 2003 spread of severe acute respiratory syndrome, or SARS, which decreased the value of the global economy by $40 billion. VOA

Southeast Asia’s proximity to China and dependence on that nation for a major share of its economy is raising concerns that the coronavirus outbreak  that started there will not only have health impacts but harm the region’s economies.

The outbreak, which has so far caused 41 deaths in China, and caused the country to quarantine 16 cities, is causing comparisons to the 2003 spread of severe acute respiratory syndrome, or SARS, which decreased the value of the global economy by $40 billion.

“Now that the Wuhan coronavirus has been found to be able to be transmitted from human to human, the economic consequences could be extremely concerning for the Asia-Pacific region,” Rajiv Biswas, IHS Markit Asia Pacific chief economist, said.

Sectors of the economy that are particularly vulnerable to a SARS-like virus epidemic that can be spread by human-to-human transmission are retail stores, restaurants, conferences, sporting events, tourism and commercial aviation,” he said.

Observers agree that tourism could be one of the hardest-hit industries, in part because of the millions of Chinese who usually travel now, during the Lunar New Year, and in part because China has grown so much in the last two decades that many neighboring nations depend on it for tourism.

That is only one of the economic differences between China today and the China of the SARS virus in 2003.

Coronavirus
The recent coronavirus outbreak originating from China to other countries including Singapore may impart some uncertainty to near-term business and consumer sentiments. VOA

China has since then become a member of the World Trade Organization and the second-biggest economy in the world. Its supply chain has become more integrated with the rest of the world than it has ever been, and it has become the biggest trading partner for many countries in the region.

The 2003 virus decreased China’s economic growth rate, but its effect was the same for Malaysia, Singapore, and Vietnam, Biswas said.

This time around Chinese tourism matters even more to Southeast Asia.

After Hong Kong, nations for which Chinese visitors’ spending accounts for the biggest share of gross domestic product are, from most to least, Cambodia, Thailand, Singapore, Vietnam, and Malaysia, according to statistics released by Capital Economics, a London-based research company, Friday. In many of these nations, businesses catering to tourists display signs in Chinese, accept China’s yuan currency, and use that country’s WeChat for mobile payments.

Major tourism events in the region add to the threat that the virus and its economic impact will spread, such as the Tokyo Summer Olympics, Biswas said. Vietnam will also host the Vietnam Grand Prix Formula One race this year, while Malaysia will host the Asia-Pacific Economic Cooperation forum.

Singapore is an island nation that depends heavily on foreign trade, including to facilitate trade and investment in China. Selena Ling, head of treasury research and strategy at Singapore’s OCBC Bank, said Friday she was expecting Singapore’s economy to stage a modest recovery from 2019, but that may change.

Coronavirus
Southeast Asia’s proximity to China and dependence on that nation for a major share of its economy is raising concerns that the coronavirus outbreak  that started there will not only have health impacts but harm the region’s economies. VOA

She said “the recent coronavirus outbreak originating from China to other countries including Singapore may impart some uncertainty to near-term business and consumer sentiments.”

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That could mean slower growth in the first quarter of 2020, she said. (VOA)