Congress ZTE bills pressure Trump not to lift sanctions

Trump: ZTE exemption is a 'favor' to Chinese leader
US reportedly working with China on a deal to 'save' ZTE from going out of business
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26 May, 2018

From the National Association of Farm Broadcasting News Service.

US Treasury Secretary Steven Mnuchin said yesterday that the two economies were never engaged in a trade war but that it was simple a "trade dispute".

"Commerce Secretary Wilbur Ross declared on Wednesday that 'there is evidence suggesting that, for decades, imports from overseas have eroded our domestic auto industry.' There is?" Trump's decision to hold off on tariffs was also coloured by concern that it could harm talks over North Korea's nuclear program, in which China plays a pivotal role as the isolated nation's closest ally.

At a regular foreign ministry briefing in Beijing, a government spokesman said that the joint China-US statement on economic and trade consultations issued at the weekend had covered the matter. The two countries also agreed on "meaningful increases" of USA agriculture and energy exports and greater efforts to increase trade in manufactured goods and services.

The bill would also prohibit the Defense Department from renewing contracts with vendors that work with the Chinese company.

As part of this agreement, China would eliminate tariffs that are now placed on goods imported from the United States, including agricultural products, and begin purchasing additional farm goods from the U.S. Kudlow, appearing Sunday on ABC, said that the $200 billion reduction target "interests the president a lot" and that both US and Chinese negotiators have used that figure in the discussions "as a rough ballpark estimate". BMW sold almost 107,000 US -made vehicles to China past year, while Mercedes-Benz sold more than 72,000, according to LMC Automotive.

Some industry observers saw this latest move as a US tactic to pressure Mexico and Canada to move quickly to agree to an overhaul of the North American Free Trade Agreement.

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"The Trump administration seems eager to engineer at minimum a temporary peace with China to ensure a smooth run-up to the Kim-Trump summit in June, " Prasad said, referring to the June 12 meeting between President Donald Trump and North Korean leader Kim Jong Un.

"In this latest consultation, both China and the USA demonstrated the responsibility of major stakeholders", Xiaoming stated. China's trade surplus with the U.S. was a record $375 billion in 2017. Mr. Trump is frustrated that Mexico and Canada haven't rolled over for U.S. Trade Representative Robert Lighthizer's absurd demand that 40% of light vehicle content and 45% of pickup trucks be produced in "high-wage zones" with an average minimum wage of at least $16 per hour. The cut in Chinese auto import tariffs could help Tesla, which has been looking to break into the Chinese market. And the Trump administration ordered a seven-year halt in American shipments of computer microchips and software that are at the heart of most of ZTE's telecommunications gear.

In April, China countered with an announcement that it would be imposing duties on a catalogue of 106 American goods, targeting agricultural products and manufactured goods including beef, soybeans, corn, wheat, cars, chemicals, and whiskey.

"Imposing broad, comprehensive restrictions on such a large industry could cause confusion in world markets, and could lead to the breakdown of the multilateral trade system based on WTO rules", Japanese Trade Minister Hiroshige Seko said Thursday in Tokyo.

Trump has said he would "envision" a revised penalty for the company over sanctions violations, including a requirement that it appoint a new board of directors and a "very large fine" of perhaps $1.3 billion. That ban, enacted last month, reportedly shuttered ZTE's manufacturing operations and threatened to put the company out of business.


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