world economy


Opec strives for deal to raise oil output as Iran resists

VIENNA, June 22 — Opec scrambled yesterday to agree on raising oil output, with Saudi Arabia warning of shortages but Iran holding out against a deal amid the prospect of lower exports due to US sanctions on Tehran. The Saudi and Russian energy…

Trump prepares China tariff target list as confrontation escalates

WASHINGTON: President Donald Trump on Friday was due to unveil a final list of Chinese imports that would face punishing tariffs but it remained uncertain whether he would hold fire as part of a negotiating strategy.

Imposing the tariffs would escalate the trade confrontation with Beijing, and potentially set off a round of tit-for-tat retaliation, which economists warn would damage the global economy.

The deadline to release the list comes as Washington faces a dizzying array of parallel diplomatic horse trading, as Trump is increasingly dependent on Beijing to help advance efforts at North Korean denuclearization, while also using aggressive trade tactics on all major US economic partners.

The president's trade team, including senior officials from the Commerce and Treasury departments, were due to gather Thursday at the White House to finalize the list of Chinese goods on the hit list.

A report in the Wall Street Journal quoting sources close to the matter said Thursday evening the list had been approved and would affect about US$50 billion, (RM199 billlion) worth of goods, the same figure that was first announced in March.

Chinese Foreign Minister Wang Yi urged Washington to avoid a “lose-lose approach” on trade.

Trump has frequently reversed course, threatening and then backing away, or vice versa, but he has appeared determined to take a hard line with Beijing.

“What we're seeing here is a bargaining process in which the Trump team has found that by continuing to put pressure on China, the offers have become better and better,” said Dennis Wilder, head of a Georgetown University program on US-China relations.

“My guess is that the Trump administration will announce but not implement. They want to give the Chinese a little more time,” the former senior CIA official for East-Asia told AFP.

The confrontation with China began when Trump announced in March 25% tariffs on about US$50 billion in Chinese goods to punish the country against the theft and forced transfer of American technologies and know-how.

China immediately threatened to retaliate on US$50 billion in US goods, so Trump upped the ante, vowing to hit another US$100 billion of goods.

A preliminary list of about 1,300 Chinese export goods was released in April by US Trade Representative Robert Lighthizer, with about 70% of the goods coming from categories covering nuclear reactors, electrical machinery and optical equipment.

A mystified Beijing

However, the list was due to be trimmed after a public comment period to reduce the negative impact on US companies and consumers, so the final total is not confirmed. CNBC reported Thursday Trump officials planned to winnow that list to between 800 and 900 goods.

It was also unclear when the tariffs would take effect. The White House said last month the final list would be unveiled on June 15, with the duties to be imposed “shortly thereafter”.

Trade talks with Beijing have been subject to repeated about-faces and turmoil among US officials, which analysts say has left Chinese officials unsure of Trump's goals or which of the several senior emissaries from Trump's Cabinet actually has the power to seal a deal.

“I think the Chinese have been mystified by what the administration wants,” said Nicholas Lardy, an expert on the Chinese economy at the Peterson Institute for International Economics.

Trump has moved to save the Chinese telecommunications giant ZTE from US sanctions imposed in April that brought it the verge of collapse, sparking outrage from congressional Republicans, and last month the White House effectively declared a truce in the trade hostilities with China before deciding weeks later to press ahead with tariffs.

Analysts say the tens of billions of dollars in tariffs that Washington is preparing to levy on China amount to a pittance when compared to the size of the world's two largest economies — limiting their power to bend Beijing to Trump's will.

But others worry about the sign it sends, and the potential to damage the world economy.

Trump faces competing objectives in pursuing a North Korean deal while seeking comprehensive economic concessions from China, which might loosen the economic pressure on Pyongyang if Washington presses too far.

“We're asking them to completely change who they are and we're shaking this little stick in front of them,” said Derek Scissors, an expert on the Chinese economy at the American Enterprise Institute.

“I'm a China-basher on trade,” he told AFP, but added: “I don't see why we're imposing US$50 billion worth of tariffs on China. It's not going to do any good”. — AFP

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