Food Delivery Apps Are Drowning China In Plastic

Food Delivery Apps Are Drowning China In Plastic


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Food Delivery Apps Are Drowning China In Plastic (nytimes.com)






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from the transformation-of-daily-life dept.

“The astronomical growth of food delivery apps in China is flooding the country with takeout containers, utensils and bags,” writes Raymond Zhong and Carolyn Zhang for The New York Times. “And the country’s patchy recycling system isn’t keeping up. The vast majority of this plastic ends up discarded, buried or burned with the rest of the trash, researchers and recyclers say.” From the report: Scientists estimate that the online takeout business in China was responsible for 1.6 million tons of packaging waste in 2017, a ninefold jump from two years before. That includes 1.2 million tons of plastic containers, 175,000 tons of disposable chopsticks, 164,000 tons of plastic bags and 44,000 tons of plastic spoons. Put together, it is more than the amount of residential and commercial trash of all kinds disposed of each year by the city of Philadelphia. The total for 2018 grew to an estimated two million tons.

Recyclers manage to return some of China’s plastic trash into usable form to feed the nation’s factories. The country recycles around a quarter of its plastic, government statistics show, compared with less than 10 percent in the United States. But in China, takeout boxes do not end up recycled, by and large. They must be washed first. They weigh so little that scavengers must gather a huge number to amass enough to sell to recyclers. “Half a day’s work for just a few pennies. It isn’t worth it,” said Ren Yong, 40, a garbage collector at a downtown Shanghai office building. He said he threw takeout containers out.

Many people in urban China are using the delivery apps because “delivery is so cheap, and the apps offer such generous discounts, that it is now possible to believe that ordering a single cup of coffee for delivery is a sane, reasonable thing to do,” the report adds.

“The pathology is to want control, not that you ever get it, because of
course you never do.”
— Gregory Bateson

Working…

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U.S. Considers Export Ban on Surveillance Company That Helps Send Muslims to China’s Concentration Camps: Report

U.S. Considers Export Ban on Surveillance Company That Helps Send Muslims to China’s Concentration Camps: Report

An unnamed man at a trade show has his face marked for identification by Hikvision on a monitor at Security China 2018 in Beijing, China on October 23, 2018

An unnamed man at a trade show has his face marked for identification by Hikvision on a monitor at Security China 2018 in Beijing, China on October 23, 2018
Photo: AP

The U.S. government is considering a tech export ban that would target Hikvision, a Chinese video surveillance company that’s been instrumental in sending anywhere from 1 million to 3 million Muslims into China’s network of secretive concentration camps, according to a new report from the New York Times.

Under the proposed ban, Hikvision would be unable to buy American technology, not unlike last week’s restrictions placed on Huawei that now prohibit American companies like Intel and Google from doing business with the Chinese tech giant. Hikvision did not immediately return Gizmodo’s request for comment on Wednesday.

The U.S. government ban would in some ways be symbolic, as Hikvision doesn’t import much hardware from the U.S., but it’s not clear whether the company’s American sales would ultimately be affected. Hikvision sells a large assortment of consumer-grade surveillance cameras in the U.S. through online retailers like Amazon, but the video equipment being used in China is much more sophisticated. Hikvision makes traffic cameras, sidewalk surveillance cameras with facial recognition, and thermal cameras that are used to monitor people throughout China. The company also makes warehouse conveyor robots, robot forklifts, and drones, as well as drone signal jammers.

The Chinese government has systematically surveilled and oppressed the roughly 11 million Uighurs, an ethnic minority in the western part of the country who are predominantly Muslim. Current estimates indicate that anywhere from 1 million to 3 million Uighurs are currently being held in China’s concentration camps, according to the U.S. State Department. The Chinese government prefers to call the camps “re-education centers” and denies that Uighurs are being oppressed despite overwhelming evidence to the contrary. China insists that its actions against the Xinjiang region’s Uighurs are an anti-terrorism effort.

In reality, the Xinjiang region has become a total police state, with armored cars and tanks on the streets in recent years. Western reporters who go to the region are regularly tailed and harassed for reporting on the Uighurs and average citizens are constantly stopped for their ID, so much so that many dread leaving their homes at all.

“Hikvision takes these concerns very seriously and has engaged with the U.S. government regarding all of this since last October,” a Hikvision spokesman told the New York Times via email. “In light of them, the company has already retained human rights expert and former U.S. ambassador Pierre-Richard Prosper to advise the company regarding human rights compliance. Separately, Hikvision takes cybersecurity very seriously as a company and follows all laws and regulations in the markets we operate.”

Pierre-Richard Prosper was President George W. Bush’s Ambassador-at-Large for War Crimes Issues at the U.S. State Department from 2001 to 2005.

United Nations human rights chief Michelle Bachelet has recently called for an investigation into the treatment of the Uighurs in China, but the Chinese government has insisted that any investigation should avoid, “interfering in domestic matters.”

As the New York Times reports, Hikvision already exports its high-end video surveillance technology to countries like Pakistan, Zimbabwe, Uzbekistan, and the United Arab Emirates. And countries like Saudi Arabia have been oddly supportive of the crackdown on China’s Muslim citizens.

But the Trump regime’s interest in banning Hikvision may not be primarily about protecting the Uighurs, as these kinds of actions are seen through the lens of the U.S.-China trade war, as well as the New Cold War more broadly.

“Taking this step would be a tangible signal to both U.S. and foreign companies that the U.S. government is looking carefully at what is happening in Xinjiang and is willing to take action in response,” Jessica Batke, a former State Department official, told the New York Times. “At the same time, however, the ongoing trade war perhaps undercuts the perception that this is coming from a place of purely human rights concerns.”

Some of the video surveillance currently taking place against the Uighurs in China
GIF: WSJ

Roughly 42 percent of Hikvision is controlled by state-owned companies in China, though American financial institutions like Fidelity and J.P. Morgan are also major investors, according to Foreign Policy magazine. One of J.P. Morgan’s 2017 reports on investments in China noted “strong demand across a wide range of industries” for Hikvision’s products.

As the Financial Times notes this morning, shares in Hikvision plummeted 10 percent today before slightly recovering. But any further slip in Hikvision’s stock is likely to create the kind of pressure that even the UN can’t bring to bear—wealthy people who are helping finance oppression, knowingly or not, really don’t like losing money.

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Apple faces significant risks in China. Warnings are pouring in, and Citi sees its iPhone sales there getting cut in half. (AAPL)

Apple faces significant risks in China. Warnings are pouring in, and Citi sees its iPhone sales there getting cut in half. (AAPL)

Tim Cook ChinaAP

  • Citi cut its Apple price target and lowered its iPhone sales estimates due to US-China trade risk.
  • The firm’s adjustments follow a litany of other Wall Street analysts’ similarly cautious trade-war-related reports and broader concerns of China’s slowing economy.
  • Apple shares have slumped 11% this month, and are trading at a two-month low.
  • Watch Apple trade live.

Wall Street’s warnings about Apple‘s business in China are growing louder. 

The technology giant’s iPhone sales could get cut in half during the second part of this year as a direct result of the escalated trade tensions between the US and China, according to a Sunday report from Citi.

That view prompted the bank to lower its estimates for iPhone sales in China for the remainder of 2019 and to trim its price target for the second time this year. 

The bearish note follows a host of other Wall Street firms’ similarly stark warnings about Apple’s sales in the critical Chinese market. The fears underscore a broader concern about China’s economic slowdown.

While analysts have for months sounded off about Apple facing headwinds in China, the warnings have come quickly in recent weeks as the US-China trade war has escalated.

Read more: THE TECH COLD WAR: Everything that’s happened in the new China-US tech conflict involving Google, Huawei, Apple, and Trump

“We are proactively slashing our iPhone unit sales as we believe the US/China trade situation will result in a slowdown of Apple iPhone demand in China as China residents shift their purchasing preference to China national brands,” Citi analyst Jim Suva, who held his longtime “buy” rating, wrote in a client note.

“Our independent due diligence shows a less favorable brand image desire for iPhone which has very recently deteriorated.”

Suva cut his sales and earnings-per-share estimates, pointing to the fact that China represents 18% of Apple’s iPhone sales. While he had previously forecasted sales of nearly 14.5 million iPhones in the second half of this year, he now sees just over 7.2 million units sold. Suva also cut his 2020 estimates by roughly half.

Earlier this month, the US exacerbated the trade war between the two economic powerhouses when it banned technology from the Chinese telecommunications company Huawei. The Commerce Department later said it would temporarily relax some of the restrictions.

Read more: Huawei is planning to drop Google’s operating system as soon as next month after being banned from working with US companies

Analysts fear China could retaliate against the US, hurting technology companies like Apple. 

“Data through April shows Apple continued to gain market share of the smartphone installed base in China, however worsening trade tensions puts share gains in the rest of the June quarter into question,” Morgan Stanley said Sunday in a sweeping report on the state of Apple’s business in China.

The year-over-year change in the iPhone's installed base in China.Morgan Stanley

“In the event Apple products are not given an exemption from the final round of tariffs on Chinese exports to the US, we see a 20-25% EPS hit in FY20 in the worst case scenario,” the Morgan Stanley analysts wrote.

Elsewhere on Wall Street, HSBC and UBS both cut their Apple price targets last week. It was the fourth time HSBC lowered its price target in the last six months.

UBS, for its part, said Apple could indirectly suffer from the US blacklisting Huawei.

“Negotiations between US/China are ongoing and an extension has been granted for some critical items, but we do think a nationalistic movement — similar to the one we saw at the time of the arrest of Huawei’s CFO in November — seems quite probable and would impact iPhone sales,” UBS analyst Tim Arcuri wrote.

Apple shares have fallen 11% this month, and trade near a two-month low near $178 a share.

Now read more markets coverage from Markets Insider and Business Insider:

The US-China trade war could slash economic output across the world

Fiat Chrysler proposes huge $37 billion merger with Renault that would create the world’s 3rd-largest automaker

The investment chief at a $70 billion private-equity behemoth explains how the rise of Amazon and Uber forced him to make a ‘scary’ change to his strategy

Apple shares.Markets Insider

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U.S. – China Trade Talks End For Now, As Higher Tariffs Take Effect

U.S. – China Trade Talks End For Now, As Higher Tariffs Take Effect

Cargo is unloaded from a container ship at the main port terminal in Long Beach, Calif., on Friday. Two days of trade talks between the U.S. and China ended without a deal to avert more tariffs.

Mark Ralston/AFP/Getty Images


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Mark Ralston/AFP/Getty Images

Cargo is unloaded from a container ship at the main port terminal in Long Beach, Calif., on Friday. Two days of trade talks between the U.S. and China ended without a deal to avert more tariffs.

Mark Ralston/AFP/Getty Images

Trade negotiators from the U.S. and China wrapped up two days of what President Trump called “candid and constructive” talks on Friday but failed to reach agreement. The Trump administration raised the stakes for future negotiations by boosting tariffs on $200 billion worth of Chinese imports.

Those tariffs “may or may not be removed depending on what happens with respect to future negotiations,” Trump tweeted. “The relationship between President Xi and myself remains a very strong one, and conversations into the future will continue.”

While the prospect of higher tariffs rattled financial markets, investors seemed reassured that talks had not broken down completely. Major stock indexes closed up on Friday, after a sharp drop earlier in the day.

Still, U.S. business groups greeted the administration’s latest move with caution.

“CEOs are deeply concerned that a return to tariff escalation with China will hurt the U.S. economy and American workers, businesses, and farmers,” the Business Roundtable said in a statement.

The roundtable, which represents leaders of big public companies, supports the president’s push to change what it calls unfair trade practices in China. But CEOs stressed that any “final agreement should take tariffs down.”

Trump is a firm believer in tariffs, even though most economists say the import duties are primarily paid not by China but by U.S. businesses and consumers.

“Tariffs will make our Country MUCH STRONGER, not weaker,” the president tweeted. The administration increased tariffs to 25% from 10% on a wide range of Chinese products. Trump has also threatened to extend tariffs to an additional $325 billion in Chinese goods — taxing virtually everything the U.S. imports from China.

While the higher tariffs took effect in the middle of trade talks, they do not apply to goods in transit across the Pacific. That gives negotiators a narrow window to reach agreement before the effects of the higher duties are felt.

There was no immediate word on when or where trade negotiations would resume.

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Exclusive: SEC probes Siemens, GE, Philips in alleged China medical equipment scheme

Exclusive: SEC probes Siemens, GE, Philips in alleged China medical equipment scheme

SAO PAULO (Reuters) – The U.S. Securities and Exchange Commission is investigating Siemens AG, Philips NV and General Electric Co for allegedly using local middlemen to negotiate bribes with Chinese government and hospital officials to sell medical equipment, two U.S. sources with knowledge of the matter told Reuters.

FILE PHOTO: The logo of U.S. conglomerate General Electric is pictured at the company’s site of its energy branch in Belfort, France, February 5, 2019. REUTERS/Vincent Kessler/File Photo

The investigations into the companies’ business in China, along with an existing SEC probe into their sales in Brazil, are part of a new effort by U.S. regulators to crack down on alleged corruption in sales of costly medical equipment worldwide, said the sources, who spoke on condition of anonymity because they were not authorized to discuss the investigation publicly.

The SEC declined to comment.

Siemens, GE and Philips all denied wrongdoing and said they were unaware of any SEC investigation concerning their operations in China.

Reuters reported in May that the SEC, along with the U.S. Justice Department and FBI, were investigating Siemens, GE and Philips – as well as Johnson & Johnson – for allegedly paying bribes to win contracts in Brazil. The four companies all denied any wrongdoing in Brazil.

Under a U.S. federal law called the Foreign Corrupt Practices Act of 1977 (FCPA), it is illegal for Americans, U.S. companies or foreign companies whose securities are listed in the United States to pay foreign officials to win business. If found guilty of violating the act, firms could face fines from the SEC.

China’s medical device market stood at $58.63 billion in 2017 – compared to $10.8 billion for Brazil – according to the most recent data available from the U.S. Commerce Department.

In both markets, the companies benefited not only from the sale of the equipment but also from the bigger profit margins to be made on servicing it during its 10-to-15 year lifespan as well as selling software updates, spare parts and the materials used in operating the machines, the sources said.

China’s National Health and Family Planning Commission and the China Food and Drug Administration, which regulate the healthcare system, did not immediately respond to requests for comment.

Brazilian federal prosecutors declined to comment.

INVESTOR LAWSUIT

Some details of the alleged scheme in China were included in a shareholder lawsuit against current and former members of GE’s board in New York state court, which the company disclosed in its 2018 annual report.

The GE shareholder lawsuit, filed in New York state Supreme Court last December, alleges that since at least 2011 GE employees in China or workers at its subsidiaries “have bribed hospital administrators, engaged in collusive bidding, and given kickbacks to government officials.”

The lawsuit includes translations of Chinese criminal court rulings finding middlemen who sold GE equipment guilty of bribing Chinese government and hospital officials. Some hospital administrators confessed in open court and received prison sentences, according to rulings cited in the lawsuit. GE was not charged in the Chinese court rulings included as evidence.

The lawsuit accuses GE of colluding with Philips, Siemens and Toshiba Corp’s medical unit – which was bought by Canon Inc in 2016 – to fix prices and rig tenders for expensive medical equipment, such as MRI machines and CT scanners, through Chinese middlemen. The lawsuit included public data on how much Chinese hospitals paid for the equipment, which it said was routinely at least 40 percent above the price the middlemen paid to the companies. The difference was then distributed as bribes to health officials, the lawsuit alleges, with some money being pocketed by the middlemen and flowing back to the other companies, who allegedly put in “cover” bids to make the public tender appear competitive.

Lawyers for GE in February filed a motion to dismiss the lawsuit, saying the complaint failed to link alleged wrongdoing in China to any of the defendants. The judge in the case has not yet ruled on the motion.

Lawyers for the plaintiffs did not respond to emailed requests for comment.

Boston-based GE said in an emailed statement that it believes the lawsuit lacks merit, adding that “we are committed to integrity, compliance and the rule of law in every country in which we do business.”

Amsterdam-based Philips said in an emailed statement it is “fully complying with local and international anti-bribery and anti-corruption laws.” Philips said it was “not involved” in any of the transactions in the criminal cases in China and that it makes extensive efforts to ensure its third-party agents act lawfully.

FILE PHOTO: The logo of German industrial group Siemens is seen in Zurich, Switzerland, January 30, 2019. REUTERS/Arnd Wiegmann/File Photo

Siemens said in an emailed statement that it had just become aware of the New York lawsuit and it would “investigate any new allegation of misconduct that directly or indirectly involves Siemens” that may arise from the litigation. Siemens, based in Munich, said that its policy is “to cooperate with law enforcement investigations when they occur.”

Canon said in an emailed statement that “Canon Medical Systems Group are committed to conducting business activities with the highest priority on compliance with laws” and that the company has a zero tolerance toward bribery.

Toshiba said in an emailed statement that it was not aware of the New York state lawsuit. It said company policies “prohibit illegal or improper payments against lawful business practices.”

Reporting by Brad Brooks; Additional reporting by Brenda Goh in Shanghai and Makiko Yamazaki in Tokyo; Editing by Daniel Flynn and Will Dunham

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Google Cloud is down – Business News – Castanet.net

Google Cloud is down – Business News – Castanet.net

Google Cloud is down


| Story:
257727

Photo: File

If you are wondering why your Gmail was burping and belching while trying to load today, it’s not just your computer.

Google Cloud servers are experiencing “high levels of network congestion in the eastern USA, affecting multiple services in Google Cloud, G Suite and YouTube,” Google announced on their server uptime site.

“Users may see slow performance or intermittent errors. Our engineering teams have completed the first phase of their mitigation work and are currently implementing the second phase, after which we expect to return to normal service,” Google said.

They are expected to provide another update at 4 p.m.

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Trump’s Love for Tariffs Began in Japan’s ’80s Boom

Trump’s Love for Tariffs Began in Japan’s ’80s Boom

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Donald J. Trump in 1987. Allies and historians say that his admiration of tariffs is one of his longest and most deeply held policy positions.CreditCreditJoe McNally/Getty Images

WASHINGTON — Donald J. Trump lost an auction in 1988 for a 58-key piano used in the classic film “Casablanca” to a Japanese trading company representing a collector. While he brushed off being outbid, it was a firsthand reminder of Japan’s growing wealth, and the following year, Mr. Trump went on television to call for a 15 percent to 20 percent tax on imports from Japan.

“I believe very strongly in tariffs,” Mr. Trump, at the time a Manhattan real estate developer with fledgling political instincts, told the journalist Diane Sawyer, before criticizing Japan, West Germany, Saudi Arabia and South Korea for their trade practices. “America is being ripped off,” he said. “We’re a debtor nation, and we have to tax, we have to tariff, we have to protect this country.”

Thirty years later, few issues have defined Mr. Trump’s presidency more than his love for tariffs — and on few issues has he been more unswerving. Allies and historians say that love is rooted in Mr. Trump’s experience as a businessman in the 1980s with the people and money of Japan, then perceived as a mortal threat to America’s economic pre-eminence.

“This is something that has been stuck in his craw since the ’80s,” said Dan DiMicco, a former steel executive who helped draft Mr. Trump’s trade policy on the 2016 campaign trail and in his presidential transition. “It came from his very own core belief.”

The affection has grown in recent years, as tariffs have emerged as perhaps the most potent unilateral tool that Mr. Trump can wield to advance his economic agenda — and perhaps the purest policy expression of the campaign themes that lifted him to the White House.

“Tariffs tie so much of Trump together, ” said Jennifer M. Miller, an assistant history professor at Dartmouth College who last year published a study of how Japan’s rise has affected the president’s worldview. “His obsession with winning, which he thinks tariffs will allow him to do. His obsession with appearing tough. His obsession with making certain parts of national border fixed. And his obsession with executive power.”

Mr. Trump has imposed tariffs on washing machines, solar panels, steel, aluminum and $250 billion worth of imported goods from China. He is considering additional tariffs on $300 billion worth of Chinese imports and on cars, trucks and auto parts from Europe and Japan.

He has defied pressure to remove those tariffs from business groups, Republican and Democratic lawmakers and some of his own domestic policy advisers. And he has grown more insistent in his claims that it is the nation’s trading partners, not American consumers, that bear the brunt of the costs from what amounts to a tax increase on imports. No evidence supports that.

In conversations with lawmakers and advisers, Mr. Trump is fond of using “tariff” as a verb and waving off concerns that they raise consumer prices and depress economic activity.

“Where are my tariffs? Bring me my tariffs,” the president declared at meetings early in his presidency, when his advisers were not providing him options quickly enough.

Mr. Trump was a vocal critic of Japan as its economy and international influence boomed in the ’80s, a period of high anxiety over Japanese economic ascension, though he himself had a complicated relationship with the country. He competed with Japanese developers for properties in New York City, then bragged of selling condominiums and office space for a premium to Japanese buyers. He borrowed money from Japanese financial institutions, but complained about the difficulty of doing deals with large groups of Japanese businessmen.

His critiques of Japan — and to a lesser extent, other trading partners — won him publicity as he briefly explored a presidential campaign before the 1988 election.

He took out a newspaper advertisement in 1987 to warn that “for decades, Japan and others have been taking advantage of the United States” by not paying America for its assistance in their national defense. He complained about Japanese trading practices in an interview that year with Larry King, and in 1988 with Oprah Winfrey.

“If you ever go to Japan right now, and try and sell something, forget about it, Oprah. Just forget about it,” Mr. Trump said, adding, “They come over here, they sell their cars, their VCRs, they knock the hell out of our companies.”

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Dongbei Special Steel in Dalian, China. Mr. Trump has imposed tariffs on washing machines, solar panels, steel, aluminum and $250 billion worth of imported goods from China.CreditChina Daily/Reuters

One of his first public statements on the subject came in October 1987, a few days after the stock market crashed, when Mr. Trump spoke to 500 people at a Rotary Club in Portsmouth, N.H. Mr. Trump was 41, the newly minted author of “The Art of the Deal” and hearing the first words of encouragement that he should run for president.

Mr. Trump railed against Japan, as well as Saudi Arabia and Kuwait, saying these allies were cheating the United States. Rather than raise taxes on Americans to close the federal deficit, he said, “We should have these countries that are ripping us off pay off the $200 billion deficit.”

Mike Dunbar, a local Republican official who organized the speech, said, “Obviously, there’s more meat on the bone today. But he’s completely the Trump I met and knew in the ’80s.”

Mr. Trump’s interest in leveling the playing field in trade dates back even further than that — to Lee Iacocca, the swashbuckling chairman of Chrysler, who brought the carmaker back from ruin under an onslaught of Japanese imports.

“He imagined himself Iacocca’s equal as an icon of American business,” said Michael D’Antonio, one of Mr. Trump’s biographers. “Beyond that, there is the personalization he does about everything. He always thinks that if something bad is happening to him, there must be, by definition, something evil afoot.”

Ms. Miller said support for tariffs allowed Mr. Trump to decouple his personal experience with foreign financiers and buyers and his longstanding belief that foreign competition has decimated American factories — because they would restrict the flow of goods, but not investment capital, between countries.

“Trump needs a way to reconcile, on some level, the ways he’s benefited from globalization while globalization has left America in carnage,” Ms. Miller said.

As president, Mr. Trump has clashed with some aides over their efficacy, particularly early in the administration. Regular Tuesday morning meetings on trade would often devolve into rancorous debates between the economic nationalists and more mainstream advisers, like Gary D. Cohn, the president’s former chief economic adviser. After one heated exchange, Mr. Trump derided Mr. Cohn as a “globalist.”

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Listen to ‘The Daily’: The President Takes On China, Alone

As President Trump escalates his trade war with Beijing, we look at what each side stands to gain or lose.

transcript

transcript

Hosted by Natalie Kitroeff, produced by Michael Simon Johnson and Luke Vander Ploeg, and edited by Lisa Tobin

As President Trump escalates his trade war with Beijing, we look at what each side stands to gain or lose.

michael barbaro

From the New York Times, I’m Michael Barbaro. This is “The Daily.” Today, years of multi-national efforts have failed to get China to play by the international rules of trade. Now, Donald Trump has launched an all-out trade war in which the U.S. is taking on China alone. It’s Wednesday, May 15th.

natalie kitroeff

Hi, Peter.

peter s. goodman

How are you?

natalie kitroeff

I’m good. How are you?

natalie kitroeff

So, we’re talking trade.

peter s. goodman

Wait, this is Natalie calling?

natalie kitroeff

It sure is.

peter s. goodman

The thing about “The Daily” is you never know who’s calling. All right, Natalie, it’s great to hear from you.

natalie kitroeff

I’m glad that you’re glad to hear from me. [MUSIC]

michael barbaro

My colleague, business reporter Natalie Kitroeff, spoke to economics correspondent Peter Goodman about the story behind the trade war.

natalie kitroeff

So, Peter.

peter s. goodman

So, Natalie.

natalie kitroeff

When does this idea take hold that trade with China is a problem for the United States?

peter s. goodman

Well, the story really starts at a time when trade with China is seen as part of a solution. I mean, the U.S. is still fighting the Cold War with its allies, China is run by the Chinese Communist Party. The Communist Party has emerged from decades of isolation. Out of this comes Deng Xiaoping, who opens China to the world — at first very tentatively — and China becomes capable of producing more and more goods, but it doesn’t have access to world markets. It needs access to world markets. It’s running up against tariffs in much of the world. And the theory, at least the theory that’s advanced by the people who are pushing this, is, listen, if we let China into our club and China gets more and more integrated into the global economy, bit by bit through this engagement, China will become more like us. It will eventually become a free market-governed, liberal democracy. That was the sort of ultimate selling point. Of course, you know, the clear reality was that, at minimum, American companies wanted a crack at the Chinese market, which is, you know, in theory, the largest consumer market on earth. There’s a billion-plus people there. A billion-plus people is a couple billion feet needing to wear socks. I mean, that’s how the market is viewed. And China is, at that point, willing to trade — or at least this was the theory — some access to its market in exchange for the right to gain access to world markets.

natalie kitroeff

Right. So, this kind of grand idea that global trade will transform China into a liberal democracy doesn’t totally pan out. What about just the fact of China as a trading partner? How does that go for the United States?

peter s. goodman

Well, a lot of good things did happen for American economic life. We got access to an awful lot of low cost goods. A lot of American manufacturers got access to components they could use in their own factory productions. And, along the way, American companies get out from under having to deal with labor unions in their home country, minimum wage laws, environmental and workplace safety regulations. They can just go set about making stuff as cheaply and easily as possible in China. And, bit by bit, China becomes the factory to the world. We also saw hundreds of millions of people lifted out of poverty in China, which is no small thing. Those people entered the global marketplace, and they went out and bought a lot of goods, including some made or least designed in the United States. But we also missed a lot of stuff.

natalie kitroeff

And what do you think that was?

peter s. goodman

We missed something that had been understood since the beginning of modern economics, which is when you liberalize trade, there are winners and there are losers. I mean, you have whole towns in China that are organized to dominate making paint, making neckties, making shoelaces for shoes. Entire towns are organized in this fashion. And, so, if you are living in the industrial Midwest and you’re working at the same factory where you’ve been showing up for work for 20 years thinking that the fact that you’re good at your job and you work hard is going to be enough to get you to your pension, well, China has set up a system designed to undercut that. And American policymakers failed to prepare for that. So, they didn’t take the many benefits — and there were many benefits — of China integrating into the world economy — benefits for American companies — and distribute them so that the people who were hurt got something for their pain, or at least got help with their transition to the next thing. So, a lot of people were just left stranded and left to suffer what we now call deindustrialization. And downward mobility became the reality for tens of millions of people in the center of the United States.

natalie kitroeff

Right. So, we understood how American consumers and American companies would win. It was pretty much the American worker who we didn’t really think about.

peter s. goodman

That’s right. I mean, American workers in key industries were the ones who paid the price. And the failure was not, as I think many economists still view it, allowing China into the global trading system. It was the failure to cushion the blow for the communities that paid that price.

natalie kitroeff

In terms of all of this conversation that we’re hearing now about China being an unfair trading partner, does that depend on who you are?

peter s. goodman

There’s now a fairly universal view regardless of who you are that China has taken some very serious liberties with the global trading system and has not lived up to the spirit of what it agreed to when it entered the W.T.O. A lot of Western companies — American companies — have not gotten the access to the Chinese market that they were promised. China has cracked down on the internet, has not allowed major internet companies to set up in China. China has continued to force many Western companies to engage in these joint ventures where they are required to transfer in technology, which leads to their intellectual property getting stolen from them. China has, by and large, used the W.T.O. for its own benefit and has not delivered on the market-opening elements of what it promised.

natalie kitroeff

And are those issues you raised, are those violations of the terms of being a W.T.O. member?

peter s. goodman

Sometimes yes and sometimes no. I mean, let’s remember what the W.T.O. is — a bunch of countries that were more like each other than not — you know, they had the same level of education and innovation in their workforces — they all agreed that they were going to lower tariffs to one another, and trade expanded dramatically, and so did living standards. And it just wasn’t built for an enormous economy like China, which is not at all like the wealthy, developed countries that started the global trading system. It’s a poor country that has hundreds of millions of people who are desperate who will take jobs at very low wages, who are so eager to elevate their living standards that they’re not initially all that concerned about labor standards, workplace safety standards. There’s no democracy. There’s no free press to bring to light abuses. And, so, the W.T.O. finds itself dealing with a whole range of cases. But the W.T.O. process is very slow. It can take years to get a result. And, in the meantime, your company or your industry can be wiped out.

natalie kitroeff

Right. So, give me an example of how China has been able to take advantage of this setup.

peter s. goodman

Well, take steel, for example. China needs to employ large numbers of people — not only in industrial areas, it needs to create a lot of jobs for farmers who are falling behind the people living in Chinese cities who are increasingly wealthy. And one key way of creating those jobs is to invest in steel plants. And, by the middle of the 2000s, China is making a whole lot of steel — a lot more steel than it can possibly use at home. And, so, what does it do? It doesn’t want to fire a bunch of people working at steel mills. It says, well, we’re going to have to go find a place to sell all this steel. And that place is the rest of the world. So, China starts selling steel at low prices — much lower prices than steel is being manufactured in places like the United States and Canada and Italy and Germany and Japan. And steel, Chinese-made steel, becomes very attractive to much of the industrial world, because it’s increasingly high quality, and it’s cheap. So, that’s great if you’re buying steel. It’s not so great if you work at a plant that makes steel. And, for workers, it looks like their paychecks are under fire from somebody who’s not playing fair. And they’re angry about it.

natalie kitroeff

How exactly did China not play fair?

peter s. goodman

From China’s perspective, it’s simply taking advantage of what’s available. But, when you get people to speak candidly in China about this — it’s important to remember that for China, history doesn’t start in 2001 when it enters the W.T.O. History doesn’t start when Deng Xiaoping opens up to the world. History starts centuries ago. And, for a lot of those centuries, China is the victim of colonialism. In the dominant narrative amongst party officials, is this not wrong notion that for centuries Westerners have been coming and pillaging. They’ve been taking advantage of a weak China. So now, China’s in the W.T.O. in 2001, and it’s going to take advantage of what’s available to catch up.

natalie kitroeff

It’s like payback.

peter s. goodman

I don’t know that it’s seen as payback. It’s seen as we’re not suckers. We’re not defenseless. We’ve now got a plan. We’ve lived through decades of chaos, but we figured it out now. And we’ve carefully studied how the rest of the world works. We understand how Britain and the United States and France and Japan have turned themselves into these very wealthy societies. And now that’s what we’re going to do. And the way we do it is we exploit our advantages. And our advantages are that we’re a huge country with an awful lot of hardworking people and a central bureaucracy that has got a formula for how to rapidly industrialize. So, I mean, China’s view is we made this deal under the W.T.O. The rules were what they were. The process of adjudication was what it was. I mean, that’s the Chinese view. Now, clearly, there are ways in which China is not complying, and that poses a serious problem, and over the last decade, what’s happened is those unhappy about China have expanded from the workers in select industries finding themselves in direct competition with Chinese companies and often vulnerable to losing their jobs — that’s expanded to the corporate ranks. I mean, banks are angry that they don’t have access to the Chinese market — even auto companies. Technology companies are angry that they’ve had to hand over technology that Chinese companies have then used to undercut them making their own products. So, the sense has taken hold, broadly, in American life that the U.S. has been victimized by China, and that the consumer benefits are simply not enough. [MUSIC]

natalie kitroeff

You said China didn’t see itself as a bunch of suckers. The U.S. obviously doesn’t like to see itself as a bunch of suckers either. Is that how we find ourselves in this raging trade war?

peter s. goodman

Well, in part. While there is now pretty close to unanimity that China’s a problem, there is a very significant divide over what to do about that. So, in the Trump view, the idea is you work out everything in a bilateral arrangement between two countries. Because, in any bilateral arrangement, the U.S. should have the upper hand, because the U.S. is the richest, most powerful country, and every other country has a greater interest in getting access to the American market than the U.S. has getting access to the other market. That’s not how most of the American power structure has historically viewed things. So, multilateral solutions and international institutions have been at the center of economic policy. And the counter view is, O.K., if the W.T.O. is not working properly, we don’t scrap the W.T.O. because if we scrap the W.T.O., then we’re just living in the law of the jungle. And, at the moment, the U.S. might be the biggest, toughest animal in the jungle, but that’s not forever by any means. I mean, China may very well become a larger economy than the United States sooner than we think, and then we’ll be at a disadvantage. So, better to have institutions that focus on creating rules and norms with enforcement mechanisms that actually deal with the sorts of problems that we deal with in modern society. So, if the W.T.O. is not set up to deal with intellectual property and technology, well, then let’s sit down and write some rules that actually govern the problems that we’ve got now.

natalie kitroeff

Peter, I take your point. On the other hand, don’t you think we got to a point in American society where there was just this backlash against these free trade deals?

peter s. goodman

Definitely.

natalie kitroeff

And there was a kind of feeling among those workers that you talked about that the multilateral approach hasn’t worked.

peter s. goodman

Yeah. Well, first of all, as a matter of political reality, there’s no question that that argument didn’t win the favor of people in a lot of key parts of the industrial Midwest. And there’s no question that there’s no simple solution when it comes to dealing with China. So, China represents an economic problem that we’ve just never seen before. And if there were an obvious solution to this problem, we’d have found it already. [MUSIC]

natalie kitroeff

So, Peter, the bilateral approach that we’ve seen President Trump take, which has resulted in a year-plus of trade war, is it working?

peter s. goodman

Well, it’s certainly not working by the president’s own scorecard, because the trade deficit has gone up, not down. There is some evidence that some jobs that might have gone outside of the United States are now staying in the United States, but there’s very little evidence that that has turned into more American jobs. So, if you’re an American company and you now fear building a new factory in China, it’s not that now you’re going to build in the United States, it’s now maybe you’ll build in Vietnam. Maybe you’ll explore a venture in India or some other low-wage country in the world.

natalie kitroeff

So, it’s not as if these jobs are going to be flooding back to the U.S. — that American workers are going to benefit from this approach.

peter s. goodman

Well, some of these jobs are even jeopardized by this approach. I mean, I was in western Michigan last December, and I was visiting a factory that makes the electronics that go into auto lights. And this is a company that’s been in Michigan for decades. They resisted going to Mexico after the U.S. entered Nafta in the mid-90s. These are Republicans who think tribally about their American identity and they really don’t want to look abroad. And, suddenly, they’re finding that the components that they’re importing — electronics from China, some steel products — are going up in price because of Trump’s tariffs. And they were telling me very sheepishly, we’re having to explore the possibility that we’re going to have to shut down this factory or at least move some of the production to Mexico, because the economics just don’t make sense with these tariffs in place.

natalie kitroeff

So, if this is not in accordance with mainstream economic thought, if this approach could actually hurt American workers, hurt those people in Michigan you talked to rather than give them their jobs back, who would be most likely to support the president’s approach?

peter s. goodman

Precisely those people I talked to in Michigan, and people in general who have found themselves in recent decades competing against Chinese industry. I had dinner in western Michigan with a guy whose family business had really been ravaged by cheap Chinese imports more than 15 years ago. This guy’s got his own company, and he’s discovering that he is having a hard time getting his hands on low-priced steel because Trump has put tariffs on steel. He talked about cutting people’s bonuses at Christmas and holding off on hiring and really being concerned about the future of the company. And, yet, he was effusively praising Trump for taking on this fight. I mean, in his telling, no one has had the guts to challenge China. And when I pressed for a coherent explanation about how this trade war was ultimately going to better him, I didn’t get very satisfying answers. But what I got was a deep, emotional sense — a sentiment that Americans have been systematically cheated in the global economy. I mean, the United States is certainly the greatest beneficiary of globalization of any country in history. How it distributes the winnings of globalization is another question, and a lot of people have not gotten their slice of the pie. But there is this deep sense that the U.S. has been fleeced. And this guy I had dinner with was just so happy that his country was now represented by somebody who was willing to take the gloves off. And if he got caught in the midst of this conflict and it cost him some money, that was O.K. by him. He looked at it as, eventually, some good will come out of this, because, if nothing else, Trump is restoring our pride.

natalie kitroeff

I’ve had so many conversations exactly like the one you described with workers and business owners all across the country. It’s almost as if that guy and the people that I’ve talked to see the fight between the U.S. and China as bigger and more important than the personal cost that it might have to them in the short term. And they value the fact that President Trump is willing to fight that fight, it’s — patriotic.

peter s. goodman

Oh, no, that’s right, and I think this is part of why we should get our minds around the distinct possibility that this trade war could go on a long time and a deal might either be very hard to strike, or it could be that this administration doesn’t really want to strike a deal because this is but one element in what has become a kind of holy war. And, so, on the American side, we’re having this battle over whether we’re simply trying to readjust the terms of engagement with a China that we’re going to have to deal with one way or another versus those who view us as now being in almost a new kind of Cold War where our own security and our own prosperity is dependent upon isolating and containing China.

natalie kitroeff

And what about on the Chinese side? If this is a big, bilateral war — bigger, in our minds, than just a trade war — how is this war playing in China?

peter s. goodman

Well, let’s imagine how the world looks to a Chinese business owner who’s now dealing with declining sales and higher costs because of the tariffs that China’s imposed on American goods as part of this trade war. That Chinese business owner isn’t any happier than the guy I had dinner with in Michigan. But Trump has now elevated this trade war to an issue of sovereignty, and allowed the Chinese propaganda machine to present this as an attack on China’s dignity, on China’s destiny, on China’s national integrity by an American president who’s trying to keep China down. So, the Chinese business owner, much like the Michigan business owner, has a reason to think, well, I may have to hurt for a little while in exchange for the longer-term goal of boosting China’s place in the world and China’s security. [MUSIC]

natalie kitroeff

And it seems to me like that dynamic might make this more intractable.

peter s. goodman

There’s no question that on both sides what began as a trade issue has escalated into something that’s tapping deeply into nationalist sentiments, into long grievances and narratives of getting cheated. This is on both sides. And, for significant numbers of people, national pride and dignity is on the line. That does not lend itself to one side backing down.

natalie kitroeff

Thank you Peter.

peter s. goodman

Thank you, Natalie.

michael barbaro

On Tuesday, the president continued to promote his trade war with China.

archived recording (donald trump)

I think it’s going to be — I think it’s going to turn out extremely well. We’re in a very strong position.

michael barbaro

Saying that the 25 percent tariffs he has imposed on $250 billion worth of Chinese goods would benefit the United States, and that he was considering imposing additional tariffs on nearly every Chinese import.

archived recording (donald trump)

Our economy is fantastic. Theirs is not so good. We’ve gone up trillions and trillions of dollars since the election. They’ve gone way down since my election.

michael barbaro

The president suggested he was in no rush to end the fight, but held out the possibility that an agreement could be reached.

archived recording (donald trump)

If they want to make a deal, it could absolutely happen. But in the meantime a lot of money is being made by the United States and a lot of strength is being shown.

michael barbaro

We’ll be right back. [MUSIC] Here’s what else you need to know today.

archived recording (donald trump)

My son spent, I guess, over 20 hours testifying about something that Mueller said was 100 percent O.K., and now they want him to testify again. I don’t know why. I have no idea why, but it seems very unfair to me.

michael barbaro

On Tuesday, the president’s oldest son, Donald Trump Jr., agreed to testify before the Senate Intelligence Committee as it investigates whether he was honest in his previous testimony about a 2016 meeting with a Russian lawyer who allegedly promised incriminating information about Hillary Clinton. Donald Trump Jr. had resisted testifying for weeks, prompting a subpoena from the committee’s Republican chairman, Richard Burr, followed by calls from several other Republicans, including Senator Lindsey Graham, that Donald Trump Jr. ignore the subpoena.

archived recording (lindsey graham)

If I were Donald Trump Jr.‘s lawyer, I would tell him, you don’t need to go back into this environment anymore. You’ve been there for hours and hours and hours, and nothing being alleged here changes the outcome of the Mueller investigation. I would call it a day.

michael barbaro

In a carefully negotiated deal, Donald Trump Jr. will testify privately for just a few hours on a limited range of subjects. That’s it for “The Daily.” I’m Michael Barbaro, see you tomorrow.

Those tensions have not entirely subsided. On Sunday, Mr. Cohn’s successor, Larry Kudlow, irked Mr. Trump when he told a television interviewer that American consumers would pay some of the costs of tariffs.

Mr. DiMicco, the campaign trade adviser, said Mr. Trump was living up to his promises and becoming the first American president to say “enough’s enough” to China. Mr. Trump’s message to Beijing, he said, was that “there’s only one way for us to obviously get your attention because you haven’t lived up to any agreement you’ve made with the global trading community, and that’s to hit you between the eyes with tariffs.”

Mr. Trump relies on his trade adviser, Peter Navarro, to provide the economic rationale for his devotion to tariffs. When a delegation of Republican senators warned Mr. Trump in a recent White House meeting about their cost to consumers, the president turned to Mr. Navarro, who showed the senators a slide presentation that documented how the tariffs had helped lift first-quarter economic growth to 3.2 percent.

A former professor at the University of California, Irvine, Mr. Navarro has long argued, in books and speeches, that tariffs — far from being a burden on consumers and a drag on growth — can fuel growth and productivity. Those views place him outside the mainstream of his profession. But he argues that the standard economic scholarship about tariffs does not take into account market distortions between trading partners.

In the case of China, Mr. Navarro has said, those distortions include huge Chinese subsidies of exports, the forced transfer of technology from American firms that want to do business in China and the theft of American intellectual property. He argues that tariffs, which might otherwise raise the prices of Chinese goods, serve merely to level the playing field. They also encourage production in the United States.

Arthur Laffer, the conservative economist who has advised Mr. Trump, said he has told the president what he tells everyone about trade policy: “When you look at tariffs, they are very, very bad for the economy.” But he believes Mr. Trump is using tariffs to pressure other countries to open their markets more freely.

“I have no reason to second-guess the president on negotiation strategy,” Mr. Laffer said.

Increasingly, though, Mr. Trump appears to view tariffs as not just a negotiating ploy, but an end in themselves. He declared last week on Twitter that Chinese leaders seemed to think they could get a better trade deal if they waited for a new president to be elected.

“Would be wise for them to act now,” Mr. Trump wrote, “but love collecting BIG TARIFFS!”

Ana Swanson contributed reporting.

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Fastly pops in public offering showing that there’s still money for tech IPOs

Fastly pops in public offering showing that there’s still money for tech IPOs

Shares of Fastly, the service that’s used by websites to ensure that they can load faster, have popped in its first hours of trading on the New York Stock Exchange.

The company, which priced its public offering at around $16 — the top of the estimated range for its public offering — have risen more than 50% since their debut on public markets to trade at $25.01.

It’s a sharp contrast to the public offering last week from Uber, which is only just now scratching back to its initial offering price after a week of trading underwater, and an indicator that there’s still some open space in the IPO window for companies to raise money on public markets, despite ongoing uncertainties stemming from the trade war with China.

Compared with other recent public offerings, Fastly’s balance sheet looks pretty okay. Its losses are narrowing (both on an absolute and per-share basis according to its public filing), but the company is paying more for its revenue.

San Francisco-based Fastly competes with companies that include Akamai, Amazon, Cisco and Verizon, providing data centers and a content-distribution service to deliver videos from companies like The New York Times, Ticketmaster, New Relic and Spotify.

Last year, the company reported revenues of $144.6 million and a net loss of $30.9 million, up from $104.9 million in revenue and $32.5 million in losses in the year ago period. Revenue was up more than 38% and losses narrowed by 5% over the course of the year.

The outcome is a nice win for Fastly investors, including August Capital, Iconiq Strategic Partners, O’Reilly AlphaTech Ventures and Amplify Partners, which backed the company with $219 million in funding over the eight years since Artur Bergman founded the business in 2011.

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Senior China official says trade war with U.S. could cut growth by 1% point: SCMP

Senior China official says trade war with U.S. could cut growth by 1% point: SCMP

BEIJING (Reuters) – A senior official of China’s ruling Communist Party said the trade dispute with the U.S. could reduce China’s growth pace this year by as much as 1 percentage point, the South China Morning Post reported on Friday, citing an unnamed source.

The paper said Wang Yang, a member of the Communist Party’s seven-person Standing Committee, told a delegation of Taiwanese business people whose firms are based in China that the worst-case scenario from the trade war was a 1 percentage point drop in GDP growth this year.

Beijing has set a growth target of between 6% and 6.5% for 2019.

Reporting by Beijing Monitoring Desk

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No end in sight for corrosive trade war as China retaliates to U.S. tariffs – The Globe and Mail

No end in sight for corrosive trade war as China retaliates to U.S. tariffs – The Globe and Mail

Beijing will raise tariffs on US$60-billion in goods imported from the United States, China’s Finance Ministry said Monday.

Justin Sullivan/Getty Images

China hit back at the United States in a new round of escalating tariffs, triggering a sharp fall in stock markets as hope fades for a quick resolution to the trade war between the world’s two largest economies.

Beijing will raise tariffs on US$60-billion in goods imported from the United States, China’s Finance Ministry said Monday, in retaliation for U.S. President Donald Trump jacking up American tariffs on US$200-billion of Chinese goods last week.

The expanding confrontation now threatens to extend into summer, visiting higher prices on consumers and businesses, volatility on the markets and economic damage to both countries.

The Chinese government said it did not want to impose new levies but would not be pushed around by Mr. Trump.

“China will never yield to external pressure,” Foreign Ministry spokesman Geng Shuang said. “We have said many times that increasing tariffs will not solve any problem.”

Under China’s stiffer customs penalties, 2,493 U.S. products will face a 25-per-cent tariff rate; 1,078 goods a 20-per-cent rate; and 974 goods a 10-per-cent rate. The new tariffs will take effect June 1.

Beijing’s tariffs hit a long list of agricultural and edible products – sugar, coffee, vegetables, meat, gin and tequila – as well as ores and concentrates, chemicals, fertilizers, household appliances, mechanical components, lumber and sporting goods.

In the Oval Office Monday, Mr. Trump responded by falsely crediting his tariffs for the United States’ recent economic growth and cheering the “tremendous amount of money” that is flowing into the treasury as a result. He reiterated his threat to extend tariffs even further, to cover all US$558-billion Chinese imports to his country.

“I love the position we’re in,” Mr. Trump said. “I think it’s working out really well.”

In fact, the United States’ tariffs will actually push economic growth down. One Goldman Sachs estimate found Mr. Trump’s tariffs could reduce U.S. GDP growth by as much as 0.4 per cent.

The cost of tariffs is paid by importers in the country imposing the tariffs and typically passed on to customers. This means that imposing the levies hurts both foreign exporters, who will see a drop in business, and domestic consumers, who must pay more for imported products.

The U.S. President said he would see his Chinese counterpart, Xi Jinping, at next month’s Group of 20 summit in Japan and that it would “probably [be] a very fruitful meeting.” Otherwise, the United States and China have announced no further plans to negotiate, leaving an end to the trade war uncertain.

Mr. Trump said he would pay out compensation of about US$15-billion to American farmers, a usually solidly Republican voting block that has been hit particularly hard by the trade war. The President is likely to face increasing pressure from farm groups and other businesses to end the trade war, but his approval rating among GOP voters has remained solid, giving him little political incentive to change course.

Any resolution feels uncertain and distant.

“We’re back to the exact situation we were in 10 months ago,” said Andrew Polk, founding partner of Trivium, a Beijing-based business advisory firm. “This is the kind of response we should expect from China going forward. They have never wanted to turn up the heat. But they have to react.”

Also Monday, the U.S. Commerce Department slapped stricter licensing requirements on six companies in China and Hong Kong; four for allegedly breaking U.S. sanctions on Iran and two for selling technology to the Chinese army. The move, while theoretically a separate process from the trade talks, could further ratchet up tensions.

Fighting China on trade was a key part of Mr. Trump’s election campaign. He blames Beijing for hollowing out the U.S. manufacturing sector by producing goods at a fraction of the price of their American counterparts.

Trade experts largely agree that China has engaged in unfair trading practices – such as dumping heavily subsidized products on international markets and forcing U.S. companies to turn over their trade secrets – but they generally contend a tariff war is the wrong way to go about holding the country accountable.

Mr. Trump launched his trade offensive against China last year, hitting US$50-billion of goods with 25-per-cent tariffs and US$200-billion with 10-per-cent rates. China fired back with levies on American products, most notably soy beans, a major crop in Trump-supporting states across the U.S. heartland.

The two sides appeared to be making progress in negotiations until earlier this month, when Washington accused Beijing of reneging on promises to change its laws to stop handing out subsidies to Chinese firms and obliging U.S. companies to hand over intellectual property. The breakdown in talks prompted Mr. Trump to hike the 10-per-cent levies to 25 per cent.

Mei Xinyu, a researcher with the Chinese Academy of International Trade and Economic Co-operation, a research body under the Ministry of Commerce, said China carefully calibrated the goods it chose to minimize pain to Chinese consumers.

“Trade retaliation is never our goal. It’s just a way to show them that we are capable of taking countermeasures to respond to their behaviour, and in turn to help them sober up and regain their rationality. We hope to go back to the normal trajectory,” he said.

Ryan Young, a senior fellow at the free-market think tank, Competitive Enterprise Institute, said Mr. Trump’s negotiating strategy has “backfired badly” and he will have to change course to reach a resolution. Mr. Young said Congress should try to take away Mr. Trump’s authority to impose levies.

Mr. Young said better options for dealing with China’s behaviour would be suing Beijing through the World Trade Organization and joining the Trans-Pacific Partnership, a Pacific Rim trade pact meant to contain China’s influence.

“The President has the order wrong – he says ‘ready, fire, aim,’” Mr. Young said. “Trump can’t be trusted with tariff authority.”

Editor’s note: An earlier version of this story misstated the amount of compensation Donald Trump said he would pay out to American farmers.

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