China's Xi says opening brings progress, closure backwardness

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Portugal emerges as one of the cheapest countries compared to its historical averages Credit ANNE CORDON

United States President Donald Trump yesterday said he sees an end to the escalating trade dispute with China, after tit-for-tat retaliatory tariffs and threats that rattled markets.

Trump's latest proposal intensified what was already shaping up to be the biggest trade battle in more than a half century.

Zhang Yuyan, a researcher at the Chinese Academy of Social Sciences, a government think tank, said China was unlikely to sell off its holdings of U.S. Treasuries as a tactic in the trade dispute.

The biggest beneficiaries of a cut in China's 25 percent tariff on most auto imports will be the handful of automakers such as electric vehicle brand Tesla that have no factory in China. Since December 2016, Beijing also has charged an additional 10 percent on "super-luxury" vehicles priced above 1.3 million yuan ($200,000).

In a tweet yesterday President Trump challenged China's position, predicting that Beijing would engage with Washington.

"President Xi and I will always be friends, no matter what happens with our dispute on trade", Trump tweeted Sunday.

For years, most American farmers have praised NAFTA as a big win for USA agriculture because it opened up lowered trade barriers in Mexico, which has become one of the top buyers of U.S. pork, grain and soy.

"Taxes will become reciprocal & deal will be made on Intellectual Property. Xi's apparent desire to balance out his country's global payments is clearly great news for countries and companies selling goods to China".

Trump hasn't explained why, amid a week of economic saber-rattling between the two countries that shook global markets, he feels confident a deal can be made. He added that he doesn't blame China, but American leaders for creating a "lopsided" set of trade rules.

In the wake of Mr Trump's decision last month to impose steep tariffs on steel and aluminium imports, primarily to target China, the U.S. last Tuesday published a list of US$50 billion in Chinese goods to be hit by tariffs over what Washington says is widespread theft of intellectual property and technology. Treasury Secretary Steven Mnuchin has been speaking to Chinese Vice Premier Liu He about trade issues, with the US pressing for more access on autos and financial services.

Trump was referring to China's threats to impose tariffs on USA soybeans, frozen beef and other agricultural goods, which have already pushed down prices for those commodities.

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The move prompted Trump last week to threaten tariffs on an additional $100 billion in Chinese goods, which have yet to be identified.

Under Mr. Xi, some Chinese officials and analysts said, the days when Beijing would make concessions to foster change are now gone. "President Xi was trying to strike a balance today", said Myron Brilliant, executive vice president of the U.S. Chamber of Commerce.

"This is a problem caused by China, not a problem caused by President Trump", Kudlow said on "Fox News Sunday".

China will also speed up opening of its insurance sector to foreign investors, Xi said. Kudlow, who started his job a week ago after his predecessor, Gary Cohn, quit over the tariff plan, brushed aside the possibility of economic repercussions.

"It's a long process", Kudlow told Fox News Sunday.

Treasury Secretary Steve Mnuchin said on CBS' "Face the Nation" that he didn't expect the tariffs to have a "meaningful impact on the economy" even as he left the door open for disruption.

As a proxy for trade war concerns, there are few better financial indicators out there than movements in the Australian dollar-Japanese yen cross.

Another top White House economic adviser, Peter Navarro, took a tougher tack, declaring that China's behavior was "a wakeup call to Americans".

Another adviser, Peter Navarro, told NBC's "Meet the Press" that while "there are discussions" with the Chinese, the U.S. is moving forward on tariffs and investment restrictions against Beijing. "Every day of the week China comes into our homes, our business and our government agencies". The U.S. bought more than $500 billion in goods from China past year and now is planning or considering penalties on some $150 billion of those imports.

China, in turn, implemented additional tariffs on 128 US products, including fruit and pork, in response to the Trump administration's decision to impose duties on steel and aluminum.

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