China’s Xi has one big message for Donald Trump
12 Hours AgoCNBC.com
China’s Foreign Ministry has been telegraphing what Xi and his delegation plan to emphasize — that China has contributed greatly to the U.S. economy. Vice Foreign Minister Zheng Zeguang recently listed statistics to support China’s argument, and those figures have been widely circulated in the Chinese state press.
From Beijing’s perspective, China’s trade surplus “does not necessarily mean China benefits while the United States loses,” according to government news agency Xinhua Thursday. “About 40 percent of the trade surplus is actually generated by U.S. companies in China,” it argues.
Other statistics oft-repeated by China: bilateral trade and investment created 2.6 million American jobs in 2015 and each American family saves $850 every year thanks to cheap Chinese goods.
Trump’s Xi Summit Tests His Promise to Win on Trade, North Koreaby Toluse Olorunnipa, Jennifer Jacobs and Nick Wadhams April 6, 2017, 4:00 PM GMT+8 April 7, 2017, 7:45 AM GMT+8
President Donald Trump began his first-ever meeting with the leader of the world’s second-largest economy on Thursday, the country he blames for stealing millions of U.S. jobs and enabling North Korea’s march toward a nuclear missile.
Chinese President Xi Jinping’s arrived at Trump’s Mar-a-Lago club in Florida in the afternoon, the first real test of the U.S. leader’s campaign promises to win negotiations with America’s chief economic and military rival. After defeats on his travel ban and the Obamacare repeal, Trump wants to show progress countering North Korea’s nuclear threat and opening Chinese markets to more U.S. goods.
“We have not been treated fairly on trade for many, many years,” Trump reiterated Thursday morning in a Fox News interview. “We have a big problem with North Korea.”
Asked if he’ll have leverage with his Chinese counterpart, Trump replied, “We’ll be in there pitching and I think we’re going to do very well.”
The two leaders were first introduced to reporters with their wives, seated on couches in a palatial room at Mar-a-Lago. Trump ignored a shouted question about Syria. They were to dine on Dover sole and New York strip in the evening.
“We had a long discussion already and so far I have gotten nothing, absolutely nothing,” Trump joked at dinner. His club remained open to members, who were seen dining apart from Trump and Xi.
The world’s most important international relationship could hinge above all on what kind of rapport Trump and Xi can build.
“They should be happy if they get something fairly symbolic,” said Jacques deLisle, who teaches Chinese law and politics at the University of Pennsylvania Law School. “Now, is that a real big victory? No. But I think the victory for everybody is to keep the relationship from going off the rails.”
Trump entered the meeting talking tough. He said on Twitter last week that negotiations would be “difficult” due to U.S. manufacturing job losses he blames on the world’s second-largest economy and the yawning trade deficit between the countries. He signaled he is out of patience with China on North Korea, saying in a Financial Times interview published April 2 that the U.S. could act on its own to resolve the crisis over North Korea’s nuclear program.
His administration is also trying to prevent Chinese investors from obtaining the nuclear-reactor construction business of Westinghouse, the Toshiba Corp. unit that declared bankruptcy on March 29.
Deficit of a Lifetime
“I think we’re going to have a very interesting talk,” Trump told U.S. business leaders on Tuesday. “We have to do better,” he said, calling the more than $300 billion annual U.S.-China trade deficit “enough for a lifetime.”
But the summit comes at a low ebb in the Trump administration, after House Republicans couldn’t gather enough support for a vote on legislation to scale back Obamacare and Trump’s ban on travel by six predominantly Muslim nations was again blocked by courts. Trump’s approval rating was at 38 percent for the week ended April 2, the lowest of his presidency, according to Gallup.
The summit could be upended, however, by a literal explosion.
South Korean intelligence has warned that North Korea could conduct its sixth nuclear bomb test in the first week of April to “overshadow” the Mar-a-Lago meeting. That would reprise a tactic North Korean leader Kim Jong-Un employed in February, when a Trump summit with Japanese Prime Minister Shinzo Abe at Mar-a-Lago was disrupted by reports of a missile test.
“It’s possible that Kim has plans to interrupt another dinner,” David Dollar, senior fellow at the Brookings Institution in Washington and a former U.S. Treasury attaché in Beijing, told reporters on Tuesday.
North Korea’s pursuit of a nuclear missile capable of striking the U.S. is the most pressing issue in the relationship. Trump has vowed he will never allow the country to develop the capability, and administration officials briefing reporters said the clock has almost expired.
Trump has repeatedly placed blame on China — which provides crucial economic support to the Kim Jong-Un regime — saying that Xi can curb North Korea’s nuclear ambitions but has refused.
Secretary of State Rex Tillerson visited Japan and South Korea last month and said the U.S. would consider all options, including preemptive military action, to prevent North Korea from attacking the U.S. or its allies with nuclear weapons.
China has called for the resumption of diplomatic talks over the nuclear threat and has objected to the U.S. deployment of a missile defense system in South Korea. Xi may offer to take some limited action against North Korea, said Doug Paal, vice president for studies at the Carnegie Endowment for International Peace in Washington.
“I’ve heard from inside China that, after Tillerson’s visit, they really did scratch their heads on how they can do more on North Korea,” Paal, who served as White House director of Asian affairs in the Reagan and George H.W. Bush administrations, said in an interview. “They’re not going to deliver Kim Jong-Un’s head on a platter. But they are looking to see if there are areas where they can do more.”
Paal, who was briefed by Trump administration officials in advance of the trip, said the White House may have set its expectations too high.
“They are talking about setting deadlines for fixing the problem. Well, good luck with that at this kind of meeting,” he said. “It sounds to me like they have a very undeveloped — or, you might say, immature sense — of what you can do in meetings like this and how you work a relationship with China.”
Leading up to the summit, Trump escalated his attacks on China for taking U.S. jobs and contributing to the hollowing out of the U.S. manufacturing sector.
On March 31, Trump signed an executive order requiring a comprehensive study to identify every form of “trade abuse” that contributes to U.S. deficits with other countries. The $347 billion deficit with China last year accounted for almost half of the total U.S. trade deficit.
At the same time, China is among the top three export markets for 33 American states, and Chinese investments have boosted some U.S. industries. Xi will likely highlight China’s U.S. financial investments in the meeting and offer future deals in areas such as aviation and agriculture, Paal said.
The Chinese will try to deter Trump from following through on campaign promises to impose tariffs against China and label the country a currency manipulator.
“The Chinese are acutely aware of the 45 percent tariff threat,” said deLisle, the University of Pennsylvania professor. “They are aware of the currency manipulator threat.”
Chinese leaders may make offers to buy a large number of Boeing Co. airplanes or other investments, allowing Trump to claim he negotiated a deal to help the economy, he said.
“The Chinese know how to play this game,” he said. “They understand the politics of the business relationship.”
Goldman says weather may have wiped out 60,000 jobs from March employment report
3 Hours Ago
Weather may have been messing with this winter’s jobs data in a big way.
Goldman Sachs economists forecast 170,000 jobs were created in March, but they say that number could have been 30,000 to 60,000 higher were it not for the weather. March’s employment report is released Friday morning at 8:30 a.m. ET.
There were 235,000 jobs added in February, and Goldman economists say that unseasonably warm weather in that month could have been responsible for boosting payroll growth by 30,000 to 50,000 jobs.
Wall Street’s consensus forecast is 180,000 for March, according to Thomson Reuters. Other firms also have lower forecasts for non-farm payrolls due to weather considerations. UBS is at 155,000, and JPMorgan Chase economists expect 140,000 non-farm payrolls.
The Goldman Sachs economists note that labor market fundamentals remain strong and that different measures, like the Conference Board labor market differential, are at cycle highs. That differential shows that workers haven’t been this confident about the job market since the year 2001.
“However, we believe the sharp drop in temperatures and the early-month winter storms will depress payroll growth in weather-sensitive categories. Winter Storm Stella impacted the Midwest and East Coast early in the payroll survey week — and much of the snow that accumulated during the storm did not melt until Thursday or Friday. We believe the weather impact could be particularly large in comparison to February, which was marked by unseasonably warm weather and limited snowfall,” the economists wrote.
A civil war between Donald Trump loyalists and establishment-minded Republicans is escalating throughout the federal government — and increasingly the president’s allies are losing.
From the State Department to the Environmental Protection Agency, a sharp dividing line has formed: Cabinet secretaries and their handpicked teams of GOP veterans are rushing to take power as Trump campaign staffers — “originals,” as they call themselves — gripe that they’re being pushed aside.
In over a dozen interviews, the originals, many of whom volunteered to work for candidate Trump when few others were willing to do so, complained that they’d been shut out of meetings and targeted with career-destroying leaks. In recent weeks, a number of longtime Trump supporters have abruptly quit, saying they felt the administration had been overtaken by the same establishment they worked to defeat.
The backbiting is further paralysing federal agencies, which have been hamstrung by slow hiring, disorganisation and an overall lack of direction since Trump’s inauguration. Many of the Trump stalwarts were installed at the agencies during the transition to help them prepare for the presidency, part of so-called beachhead teams.
“You’re always watching your back,” said Sid Bowdidge, a Trump campaign staffer who quit his Energy Department job after news reports that he made anti-Muslim slurs on social media, stories that he blamed on leaks by rival co-workers. “It doesn’t bode well for a cohesive team to be successful toward a common goal. How can you when people are looking over their shoulder to see if they have a knife in their back?”
“As we get further away from Inauguration Day, it is very obvious that no one cares what happens to the people who worked for the campaign or who have loyalty to the president. The swamp is winning the battle,” said one former Trump campaign aide. “And longtime campaign staffers are proving to be the first casualties.”
Others say the Trump acolytes have unrealistic expectations and are simply experiencing the hard realities of Washington. Some Cabinet secretaries have complained privately about having employees foisted upon them with little, if any, relevant policy expertise. The agency heads say they should have discretion over key hires in their departments.