The United States pulled the trigger Friday on a steep increase in tariffs on Chinese products and Beijing immediately vowed to hit back, turning up the heat before the second day of trade negotiations.
President Donald Trump got a briefing from his trade negotiators after the first day of talks with the Chinese side on Thursday, but made no move to hold off on the tariffs — dashing hopes there might be a last-minute reprieve as the negotiations continued.
Minutes after the US increased punitive duties on $200 billion in imports from 10 to 25 percent, the Chinese commerce ministry said it “deeply regrets” the move and repeated its pledge to take “necessary countermeasures”, without elaborating.
Locked in a trade dispute for more than a year, officials from the world’s two biggest economies returned to the bargaining table late Thursday, led by Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin.
Since last year, the two sides have exchanged tariffs on more than $360 billion in two-way trade, gutting US agricultural exports to China and weighing on both countries’ manufacturing sectors.
Trump began the standoff because of complaints about unfair Chinese trade practices.
The US team met with Trump late Thursday night to brief him and “agreed to continue discussions” on Friday, the White House said in a statement.
Lighthizer and Mnuchin met the Chinese delegation for about 90 minutes Thursday evening and they had a working dinner with Liu.
“We hope the US and the Chinese side can meet each other halfway and work hard together to resolve existing problems through cooperation and consultation,” the Chinese commerce ministry said in a statement.
Despite optimism from officials in recent weeks that the talks were moving towards a deal, tensions reignited this week after Trump angrily accused China of trying to backpedal on its commitments.
“They took many, many parts of that deal and they renegotiated. You can’t do that,” Trump said on Thursday.
But he held out hopes of salvaging a deal.
“It’s possible to do it,” Trump said. “I did get last night a very beautiful letter from President Xi (Jinping).”
At the same time, he said he would be happy to keep tariffs in place. And he has threatened to extend the tough duties to all Chinese goods.
Michael Taylor, a managing director for Moody’s Investors Service, said the tariff hike “further raises tensions” between the two countries.
“While we believe that a trade deal will eventually be reached between the US and China, the risk of a complete breakdown in trade talks has certainly increased,” Taylor said.
The renewed tensions roiled global stock markets this week and unnerved exporters, though Chinese stocks closed sharply higher on Friday.
Liu said on his arrival in Washington that the prospects for the talks were “promising,” but warned that raising tariffs would be “harmful to both sides,” and called instead for cooperation.
“I hope to engage in rational and candid exchanges with the US side,” he told Chinese state media.
“Of course, China believes raising tariffs in the current situation is not a solution to the problem, but harmful to China, to the United States and to the whole world.”
The higher duty rates will hit a vast array of Chinese-made electrical equipment, machinery, auto parts and furniture.
But due to a quirk in the implementation of the higher tariffs, products already on ships headed for US ports before midnight will only pay the 10 percent rate, US Customs and Border Protection explained.
That could effectively provide a grace period for the sides to avert serious escalation.
“While we are disappointed that the stakes have been raised, we nevertheless support the ongoing effort by both sides to reach agreement on a strong, enforceable deal that resolves the fundamental, structural issues our members have long faced in China,” said business lobby the American Chamber of Commerce in China.
The US is pressing China to change its policies on protections for intellectual property, massive subsidies for state-owned firms, and reduce the yawning trade deficit.
Derek Scissors, a China expert at the American Enterprise Institute, said the two sides had clashed over how much of the final trade agreement should be enshrined in a public document, something Beijing has long resisted.
“What the Chinese step-back primarily says is they don’t want to publicly acknowledge that their existing laws, especially on IP, are flawed,” he told AFP.
Washington is counting on the strong US economy to be able to withstand the impact of higher costs from the import duties and retaliation better than China, which has seen its growth slow.
While American companies complain of lost export markets, disrupted supply chains and higher costs, the US continues to see steady growth and falling unemployment.
A Chinese central bank advisor told state-run Financial News that Trump’s tariff hike and Chinese retaliation would lower economic growth by 0.3 percentage points.
It is “within a controllable range”, the advisor Ma Jun said.
Facebook disables billions of accounts
Facebook on Thursday said it recently disabled billions of bogus accounts set up by “bad actors” and that five per cent of active accounts is likely fakes.
An estimate of how many of the online social networks accounts are fake and actions was taken against the creation of more during the first three months of this year was disclosed in Facebook’s latest report on enforcement activity.
Facebook disabled 2.19 billion accounts in the first quarter of this year, nearly double the number of accounts nixed in the prior three-month period, according to vice president of integrity Guy Rosen.
“The number of accounts we took action on increased due to automated attacks by bad actors who attempt to create large volumes of accounts at one time,” Rosen said.
Facebook apparently disabled the accounts as automated imposters were trying to establish them. The leading social network, meanwhile, estimated that five per cent of its 2.4 billion monthly active users were fake accounts yet to be uncovered.
The California-based company also said it has made progress in battling hate speech, automatically detecting 65 per cent of the content removed instead of needing to wait for users to report it.
Facebook took down four million posts considered hate speech in the first quarter of this year and continues to invest in technology to better detect such material in various languages and regions, according to Rosen.
Government Kicks Against Cow-Kissing Challenge
The Austrian government Thursday warned internet users to shun an online cow-kissing challenge, calling it a “dangerous nuisance”.
A Swiss app called Castl launched the #KuhKussChallenge (“Cow Kiss Challenge”) on Wednesday, encouraging users in Switzerland and other German-speaking countries to kiss cows — “with or without tongues” — to raise money for charity.
But Austrian Agriculture Minister Elisabeth Koestinger branded the challenge a “dangerous nuisance” in a statement on Thursday.
“Pastures and meadows are not petting zoos — actions like these could have serious consequences,” she added, pointing out that cows could become aggressive when defending their calves.
Balancing the activities of tourists and cattle farmers is a sensitive topic in Austria’s mountain regions, with both being key pillars of the region’s economy.
In February, a court in the Tyrol region caused uproar after ordering a farmer to pay 490,000 euros ($555,000) in compensation to the widower of a woman who was trampled to death by a herd of his cows in 2014.
The farmer is appealing the verdict and is being supported by Austria’s farmers’ federation, which has warned of the “end of our mountain pastures” if the verdict is allowed to stand.
The government has tried to prevent such incidents by publishing a “code of conduct” for mountain walkers and hikers, advising them to avoid herds of cows wherever possible.
“Actions like this challenge fly in the face of our efforts to promote co-existence on the pastures. I simply can’t understand it,” said Koestinger.
Comedian Volodymyr Zelensky To Be Sworn In As Ukraine’s President On Monday
Ukraine’s parliament voted on Thursday to hold the inauguration of newly elected president Volodymyr Zelensky on Monday after he wrangled with lawmakers over the date.
Zelensky had wanted to hold the inauguration on Sunday, but those plans were controversial because that is a day of mourning for victims of Stalin-era repressions in the former-Soviet country.
The 41-year-old comedy actor, whose only previous experience in politics was playing the president in a television series, crushed the incumbent Petro Poroshenko in a runoff vote on April 21, in which he took 73.2 percent of the vote.
He repeatedly accused MPs of deliberately postponing the inauguration. But they defeated him and voted in favour of holding it on Monday, with 315 backing the date and two opposing.
The long and rancorous wrangling over the date suggest that Zelensky may struggle to impose his will over a parliament in which he does not command a majority despite his decisive victory in the presidential poll.
Following the vote, Zelensky on Facebook slammed the lawmakers as “petty crooks.”
His advisor Dmytro Razumkov told Ukrainian news agency Interfax that some lawmakers voted for a Monday inauguration “simply in order not to support the proposal of the country’s president.”
But pro-Western MP Serguiy Vysotsky wrote on Facebook that “the language of ultimatums is not politics,” accusing Zelensky of behaving “like a child who wants everything to go the way he wants.”
Zelensky’s team has suggested that the lawmakers’ decision to delay the inauguration could affect the president’s ability to call snap elections to take advantage of his current popularity instead of waiting until October.
Zelensky has promised to eradicate Ukraine’s widespread corruption and end the war with Russia-backed separatists in the east of the country, accusing the outgoing president of doing nothing to improve living standards and reduce poverty.
Yet beyond continuing Ukraine’s pro-Western course, his programme remains unclear and his team largely unknown, raising questions over how he will run a country battling pro-Russian separatists in the east and an unprecedented crisis in relations with Moscow as well economic woes.