Washington, May 9 (AP/UNB) — U.S. and Chinese negotiators are set to resume trade talks just hours before the United States plans to raise tariffs on Chinese imports in a dramatic escalation of tensions between the world's two biggest economies.
China says it will retaliate if President Donald Trump follows through, though the Commerce Ministry in Beijing offered no specifics.
The negotiations starting up again Thursday were thrown into disarray after U.S. officials accused the Chinese of reneging on commitments they'd made in earlier rounds of talks. In response to the backsliding, the United States is raising tariffs on $200 billion in Chinese imports from 10% to 25% at 12:01 a.m. Eastern time Friday.
The two countries are sparring over U.S. allegations that China steals technology and pressures American companies into handing over trade secrets.
Beijing, May 9 (AP/UNB) — China said Thursday it will retaliate if President Donald Trump goes ahead with more tariff hikes in a fight over technology and trade, ratcheting up tensions ahead of negotiations in Washington.
Beijing will be forced to take "necessary countermeasures" if the increases go ahead Friday as planned, the Commerce Ministry said. It gave no details of possible penalties.
Trump threw global financial markets into turmoil with his surprise threat Sunday to raise import duties on $200 billion of Chinese goods from 10% to 25%. Trump complained talks were moving too slowly and Beijing was trying to backtrack on earlier agreements.
"China deeply regrets that if the U.S. tariff measures are carried out, China will have to take necessary countermeasures," said a Commerce Ministry statement.
Trump has raised import duties on $250 billion of Chinese goods starting last July over complaints Beijing steals or pressures companies to hand over technology.
The negotiations also include complaints about China's trade surpluses and plans for government-led creation of global competitors in robotics and other fields. Washington, Europe, Japan and other trading partners say those violate Beijing's market-opening commitments.
Beijing responded with penalties on $110 billion of American imports, but is running out of goods for penalties due to their lopsided trade.
Chinese authorities already have extended retaliation beyond imports by targeting operations of American companies in China. Regulators have slowed down customs clearance for their shipments and delayed issuing licenses in finance and other industries.
Beijing has an array of other weapons including launching tax, anti-monopoly or other investigations that can hamper a company's operations.
Beijing, May 8 (AP/UNB) — China's exports fell unexpectedly in April, adding to pressure on Beijing ahead of negotiations on ending a tariff war with Washington over Chinese technology ambitions.
Wednesday's announcement of trade data came after President Donald Trump sent global financial markets plunging with a surprise threat of more penalties on Chinese imports.
April exports sank 2.7% from a year ago to $193.5 billion, a reverse from March's 14.2% growth, customs data showed. That was well below private sector forecasts of growth in low single digits.
Imports rose 4% to $179.6 billion, rebounding from the previous month's 7.6% decline. That added to signs government efforts to reverse an economic downturn might be gaining traction.
Imports of American goods fell 26% from a year earlier to $10.3 billion. Exports to the United States, China's biggest foreign market, were down 13% at $31.4 billion.
Talks in Washington are due to go ahead Thursday despite earlier fears Beijing might pull out due to Trump's threat. China said Tuesday its economy czar will participate as scheduled.
Weak trade figures might "add more pressure to leaders from both sides to get a deal done," Macquarie Bank said in a report. It said the decision to send Vice Premier Liu He to Washington suggests "China doesn't want the talks to break."
Exports to the U.S. market are down 9.7% for the first four months of the year following Trump's tariff hikes in response to complaints Beijing steals or pressures companies to hand over technology.
In the same four-month period, imports of American goods plunged 30.4% following Chinese retaliatory duties and orders to buyers to find other suppliers.
Washington is pressing Beijing to roll back plans for government-led creation of Chinese global competitors in robotics, electric cars and other technologies. The United States also wants other changes including cuts in subsidies to Chinese industry.
Chinese leaders have expressed confidence their economy can survive the tariff fight. But while American exporters have been hit hardest, Chinese industries including electronics that Beijing sees its economic future also have suffered double-digit declines in U.S. sales.
Both governments have said negotiations are making progress, but Trump expressed frustration Sunday at what he called their slow pace. U.S. officials accused Beijing of trying to renege on commitments made in earlier talks.
Trump has approved 25% percent tariffs on $50 billion of Chinese goods and 10% on $200 billion.
Beijing responded with penalty duties on $110 billion of American imports. It also has retaliated by slowing customs clearance for U.S. companies in China and delaying issuing licenses in insurance and other industries.
On Sunday, Trump said on Twitter he would raise the 10% charge to 25% percent, effective Friday. He said he was considering imposing penalties on the rest of Chinese goods shipped to the United States.
Economists say even if a settlement is reached, China's exports this year will be lackluster due to weak global demand, putting pressure on manufacturers that support millions of jobs.
Beijing, May 7 (AP/UNB) — China confirmed Tuesday its economy czar will go to Washington for trade talks despite fears he might cancel after President Donald Trump threatened to escalate a tariff war over Beijing's technology ambitions.
The announcement indicated President Xi Jinping's government puts its desire to end a conflict that has battered Chinese exporters ahead of the political need to look tough in the face of U.S. pressure.
The decision to have Vice Premier Liu He, Xi's top economic adviser, take part in talks due to start Thursday might keep alive hopes the two biggest global economies could make peace as early as this week.
The Trump administration is pressing Beijing to roll back plans for government-led development of Chinese global competitors in robotics, electric cars and other technologies. Washington, Europe, Japan and other trading partners say those violate China's market-opening commitments and are based in part on stolen technology.
Trump's announcement Sunday that he would increase tariffs on $200 billion of Chinese imports to 25% from 10% caused global stock markets to plunge. Markets recovered after a Chinese spokesman said Monday envoys still were preparing to go to the United States, though there was no word then whether Liu would take part.
The American side is led by Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
A Commerce Ministry statement announcing Liu's plans gave no indication whether other details such as the size of his delegation might change.
The Chinese government didn't immediately respond to accusations Monday by American officials that Beijing was trying to backtrack on commitments made in earlier negotiations.
Washington and Beijing have raised tariffs on billions of dollars of each other's exports, disrupting trade in goods from soybeans to medical equipment. Estimates of lost potential sales so far range as high as $25 billion.
Both governments have said negotiations were making progress, but Trump expressed frustration Sunday at the pace.
Mnuchin said Monday that Chinese officials "were trying to go back on some of the language" that had been negotiated in 10 earlier rounds of talks.
The conflict is testing how far Beijing is willing to go in changing a state-led economic model it sees as the path to prosperity and global influence — and how much power Washington will have to enforce any agreement.
The United States accuses Beijing of pressing companies to hand over technology in exchange for market access, improperly subsidizing Chinese firms and stealing American trade secrets.
No details of the talks have been released. But private sector analysts say Beijing is willing to change details of its plans so long as it preserves the ruling Communist Party's dominant economic role.
The Trump administration has imposed 10% tariffs on $200 billion in Chinese imports and 25% tariffs on another $50 billion. The Chinese have retaliated by targeting $110 billion in U.S. imports.
Trump said Sunday he also planned to impose 25% tariffs on another $325 billion in Chinese products. That would extend penalties to everything China ships to the United States, its biggest foreign customer.
A stumbling block in the talks is U.S. insistence on an enforcement mechanism with penalties if Beijing fails to keep its promises. The Trump administration wants to keep tariffs on Chinese imports to maintain leverage over Beijing.
Washington, May 4 (AP/UNB) — Hiring accelerated and pay rose at a solid pace in April, setting the stage for healthy U.S. economic growth to endure despite fears of a slowdown earlier this year.
Employers added 263,000 jobs, with the unemployment rate dropping to a five-decade low of 3.6% from 3.8%, though that drop partly reflected an increase in the number of Americans who stopped looking for work. Average hourly pay rose 3.2% from 12 months earlier, matching March's year-over-year increase.
Friday's jobs report from the government showed that economic growth remains brisk enough to encourage strong hiring nearly a decade into the economy's recovery from the Great Recession. The economic expansion, which has fueled 103 straight months of hiring, is set to become the longest in history in July.
"All of the recession talk earlier in the spring was much ado about nothing," said Gus Faucher, chief economist at PNC.
Trump administration officials insisted that the job market's gains were a result of the president's tax cuts and deregulatory policies.
"We have entered a very strong and durable prosperity cycle," said Larry Kudlow, director of the White House's National Economic Council.
President Donald Trump has also pressed the Federal Reserve to cut short-term interest rates because inflation remains low. But most economists said the healthy jobs picture, against the backdrop of low inflation, would reinforce the Fed's current wait-and-see approach. The Fed raised rates four times last year but has signaled that it doesn't foresee any rate increases this year.
Investors welcomed the April jobs data by sending stock prices broadly higher. The Dow Jones Industrial Average closed up 197 points, or 0.75%.
Jason Guggisberg, vice president of Adecco USA, a staffing firm that finds temporary and permanent hires for business clients, said companies are doing much more to attract workers. They are offering more perks — like free lunches or weekly happy hours — and allowing more flexible work schedules.
Some are also raising pay, though Guggisberg said many of them have to be persuaded to do so. Adecco often has to show its clients data about how many jobs are available in a given area and how few workers are actually searching for jobs.
"We are constantly having conversations with clients about supply and demand" and reminding them that most applicants have multiple job opportunities, he said. "Two years ago, I don't know that I ever had that conversation."
The brightening economic picture represents a sharp improvement from the start of the year. At the time, the government was enduring a partial shutdown, the stock market had plunged, trade tensions between the United States and China were flaring and the Fed had just raised short-term rates in December. Analysts worried that the economy might barely expand in the first three months of the year and might even tip into recession in the ensuing months.
Yet the outlook soon brightened. Chair Jerome Powell signaled that the Fed would put rate hikes on hold. Trade negotiations between the U.S. and China made some progress. The economic outlook in some other major economies improved. Share prices rebounded.
And in the end, the government reported that the U.S. economy grew at a 3.2% annual rate in the January-March period — the strongest pace for a first quarter since 2015. That said, the growth was led mostly by factors that could prove temporary — a restocking of inventories in warehouses and on store shelves and a narrowing of the U.S. trade deficit. By contrast, consumer spending and business investment, which more closely reflect the economy's underlying strength, were relatively weak.
But American households have become more confident since the winter and are ramping up spending. Consumer spending surged in March by the most in nearly a decade. A likely factor is that steady job growth and solid wage increases have enlarged Americans' paychecks.
Businesses are also spending more freely. Orders to U.S. factories for long-lasting capital goods jumped in March by the most in eight months. That suggested that companies were buying more computers, machinery and other equipment to keep up with growing customer demand.
Years of steady hiring have sharply lowered unemployment for a range of population groups. The unemployment rate for women fell last month to 3.1%, the lowest point since 1953. The rate for Latinos dropped to 4.2%, a record low since 1973, when the government began tracking the data.
For Asians, joblessness has matched a record low of 2.2%. And the unemployment rate for veterans of the Iraq and Afghan wars dropped to 1.7%, also a record low.
Most of last month's job growth occurred in services, which includes both higher-paying jobs in information technology and lower-paying temporary work. Manufacturers added just 4,000 jobs. Construction firms gained 33,000, mostly on public infrastructure projects.
Professional and business services, which include IT networking jobs as well as accountants and engineers, led the gains with 76,000. Education and health care added 62,000 jobs, while a category that mostly includes restaurants and hotels gained 34,000.
Retailers, however, continued to cut jobs, shedding 12,000 in April, the third straight months of cuts. The sector has eliminated 49,000 jobs in the past year even as the economy has picked up.
Retailers are suffering from broader changes in the economy as more Americans are shopping online and stores close after decades of overexpansion. Also to blame is an aging U.S. population that no longer needs to buy as much clothing and other goods.