No more MOUs! USTR Lighthizer tweaks trade terminology after dispute with Trump By Reuters


© Reuters. U.S. President Trump meets with China’s Vice Premier Liu He at the White House in Washington

By Jeff Mason

WASHINGTON (Reuters) – In trade talks between the United States and China, Memorandums of Understanding – the building blocks of what would be a historic deal – are officially out.

President Donald Trump, in an extraordinary dispute with U.S. Trade Representative Robert Lighthizer on Friday, dismissed the MOUs that have formed the outline of a potential trade pact as a waste of time, despite protests from his chief negotiator.

Sitting in the Oval Office across from Lighthizer and his Chinese counterpart in the trade talks, Vice Premier Liu He, Trump unloaded about his feelings on MOUs, which Reuters reported on Wednesday had been drawn up in six critical areas to form the outline of a broad deal.

“I don’t like MOUs because they don’t mean anything. To me they don’t mean anything. I think you’re better off just going into a document. I was never … a fan of an MOU,” Trump said from his perch behind his desk.

Lighthizer, who was sitting with other members of Trump’s negotiating team including Treasury Secretary Steven Mnuchin, economic adviser Larry Kudlow, and Commerce Secretary Wilbur Ross, explained that writing MOUs was a standard procedure in forming trade agreements.

“An MOU is a contract. It’s the way trade agreements are generally used … A Memorandum of Understanding is a binding agreement between two people,” Lighthizer said. “It’s a legal term, it’s a contract,” he said.

Trump was not satisfied. “By the way, I disagree,” he countered, addressing reporters as well as the Chinese delegation that has been negotiating the MOUs with the U.S. team. “I think that a Memorandum of Understanding is not a contract to the extent that we want. … We’re doing a Memorandum of Understanding that will be put into a final contract, I assume. But to me the final contract is really the thing, Bob, and I think you mean that too.”

Reuters reported on Wednesday that negotiators have been drawing up six MOUs on structural issues: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture, and non-tariff barriers to trade.

Lighthizer, clearly not making traction in the back-and-forth with his boss, decided to go for a change in terminology.

“From now on we’re not using the word Memorandum of Understanding anymore. We’re going to use the term trade agreement, all right?” he said.

“OK,” the Chinese vice premier, sitting next to Lighthizer, responded.

“Assuming you decide on an agreement … it’ll be a trade agreement between the United States and China,” Lighthizer told the president.

“Good,” Trump said. “I like that much better.”

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Dow Rallies as Trump Talks up Prospects of Trade Deal By Investing.com


© Reuters.

Investing.com – The Dow closed higher Friday on trade optimism after President Donald Trump said there is a “very good chance” a trade deal can be made with China.

The rose 0.70%. The added 0.62%, while the gained 0.91%. The Dow finished higher for an eighth straight week. The S&P 500’s gain was its fourth in a row. The Nasdaq was higher for a ninth straight week.

A sea of green washed over Wall Street on growing investor hopes that the United States and China will avoid escalating their bitter trade dispute as both nations signaled progress had been made in latest round of trade talks.

Following a meeting with Chinese Vice Premier Liu He, Trump said there was a “very good chance” that a deal could happen, adding that the final points on a trade pact would likely be worked out in a potential meeting with Chinese President Xi Jinping in the “not-too-distant” future.

In a sign that both sides remained committed to resolving their differences on trade, Liu extended his visit to the U.S. to continue talks with his U.S. counterparts.

Beyond trade, tech stocks surged thanks to gains in Intuit and Intel.

Intuit (NASDAQ:) soared 6.8% after it posted fiscal second-quarter results Thursday that topped estimates compiled by Investing.com.

Intel (NASDAQ:) rose 2.1% on the back of an upbeat assessment from Morgan Stanley.

Morgan Stanley (NYSE:) upgraded Intel’s shares to overweight from equal-weight and raised its price target to $64 from $55 on expectations the chip maker will be one of the major winners when spending on cloud computing increases.

In consumer staples, Kraft Heinz (NASDAQ:) plummeted 27.5% after disclosing Thursday the SEC had launched a probe into the company’s accounting practices. The company also reported a as it revealed a $15.4 billion write-down.

Energy stocks ended the day higher, meanwhile, as U.S. oil prices rose on hopes a U.S.-China trade deal would fuel global economic growth, driving up crude demand.

On the monetary policy front, Federal Reserve members continued to suggest the central bank is ready to stop tightening its balance sheet if the heath of the labor market or the pace of inflation turns sour.

“If ever it appears that our plans for the balance sheet are running counter to the achievement of our dual-mandate objectives, we would quickly reassess our approach to the balance sheet,” Fed Vice Chair Randal Quarles said at the Chicago Booth U.S. Monetary Policy Forum in New York.

Top S&P 500 Gainers and Losers Today:

Intuit (NASDAQ:), Western Digital (NASDAQ:) and DISH Network (NASDAQ:) were among the top S&P 500 gainers for the session.

Kraft Heinz (NASDAQ:), Campbell Soup (NYSE:) and Evergy (NYSE:) were among the worst S&P 500 performers of the session.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



EU debates when to start trade talks with Trump


BUCHAREST (Reuters) – European Union ministers began debating on Friday when to start trade negotiations with the United States, aware that U.S. President Donald Trump may impose punitive tariffs on EU car imports if they wait too long.

The European Commission has asked the EU’s 28 countries to approve two negotiating mandates so that formal talks can begin.

Diplomats say Germany, whose exports of cars and parts to the United States are worth more than half the EU total, wants to press ahead. But France, with very few U.S. car exports, is reluctant to move before the European Parliament election in May, convinced that dealing with Trump is not a vote winner.

“We need to start negotiating,” EU Trade Commissioner Cecilia Malmstrom told reporters before Friday’s meeting.

It made sense to wait for a vote in the European Parliament on the issue in March, then move quickly, she said — a matter of weeks, not months.

French junior minister Jean-Baptiste Lemoyne agreed on waiting for the non-binding parliament vote but did not share Malmstrom’s sense of urgency.

“The leaders will meet later. For the moment, it’s a first political discussion. It’s clear there could be more to come,” he said.

German Economy Minister Peter Altmaier said he was not aiming to “rush something through”. His Austrian counterpart Margarete Schramboeck was more forthright.

“I expect from all the countries to give a mandate to the Commission… so that the Commission can negotiate and not hold back because my car industry, maybe in France or one other country, is not as affected as much as in another country.”

The United States and Europe ended a stand-off of several months last July, when Trump agreed to hold off on car tariffs while the two sides looked to improve trade ties.

They committed, among other things, to work toward removing tariffs on “non-auto industrial goods”.

The EU is looking now to start negotiations on tariff reductions, possibly including cars, as well as a separate set of talks on making it easier for companies to clear their products for sale on both sides of the Atlantic.

Slideshow (2 Images)

Industrial good tariffs are already low, at around 4 percent. However, the Commission has said that removing them would boost EU exports to the United States by 8 percent and U.S. exports to the European Union by 9 percent by 2033.

The United States has a wide-ranging wish list, including comprehensive agricultural market access. EU unwillingness to include farm products could set it on a collision course with Washington.

Friday’s gathering is billed as “informal”, meaning no official decision will be taken. Malmstrom said this could occur at any subsequent formal meeting of national ministers.

Reporting by Philip Blenkinsop; additional reporting by Foo Yun Chee in Brussels; editing by Hugh Lawson, Larry King



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Europe Says It Could Clinch Trade Deal With Trump This Year By Bloomberg


© Reuters. Europe Says It Could Clinch Trade Deal With Trump This Year

(Bloomberg) — European Union Trade Commissioner Cecilia Malmstrom said a trans-Atlantic trade deal could be achieved before year-end, stressing a readiness to work speedily as the bloc tries to keep at bay the threat of U.S. automotive tariffs.

Malmstrom said she expects EU governments to give her the go-ahead in March to start negotiations with the U.S. to cut tariffs on industrial goods. A final agreement with President Donald Trump’s administration could be reached before the European Commission’s term ends on Oct. 31, she said.

“I think it can be done during this mandate,” Malmstrom told reporters on Friday in Bucharest before a meeting of trade ministers from the 28-nation EU. “We’re not delaying anything.”

Europe is rushing to show progress in enacting a political accord reached at the White House seven months ago to work toward reducing trans-Atlantic market barriers including industrial tariffs.

Tariff Threat

The pact last July put on hold the threat of U.S. tariffs on EU cars and auto parts based on the same national-security grounds that Trump invoked to hit foreign steel and aluminum with duties. Those levies prompted tit-for-tat retaliation by the EU, which has vowed to act in a similar fashion should the U.S. apply automotive levies.

“It is important that we all agree on lowering tariffs internationally rather than on raising them,” Economy Minister Peter Altmaier of Germany, which has the most to lose from possible U.S. curbs on imports of EU autos, told reporters in Bucharest.

Malmstrom repeated the EU’s position that any decision by Trump to apply auto duties against Europe would shatter the trans-Atlantic trade truce.

“While we are talking, we should not impose any tariffs on each other,” she said.

Last month, Malmstrom unveiled a blueprint for a free-trade deal with the U.S. that would cut tariffs on a wide range of industrial goods including cars. It is that proposal that EU trade ministers are discussing in the Romanian capital before a formal decision is made in the coming weeks.

The removal of trans-Atlantic tariffs on industrial goods would expand U.S. exports to the EU by 13 percent and the bloc’s shipments to the American market by 10 percent, according to the commission. The average tariff on non-farm products is 4.2 percent in the EU and 3.1 percent in the U.S., the commission said.

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Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



EU debates how and when to start trade talks with Trump


BUCHAREST (Reuters) – European ministers will begin debating on Friday how and when to start trade negotiations with the United States, aware that U.S. President Donald Trump may impose punitive tariffs on EU car imports if the bloc waits too long.

FILE PHOTO: U.S. President Donald Trump speaks about trade relations with President of the European Commission Jean-Claude Juncker in the Rose Garden of the White House in Washington, U.S., July 25, 2018. REUTERS/Joshua Roberts

The European Commission has asked the EU’s 28 countries to approve two negotiating mandates so that formal talks can begin. Germany is keen to start as soon as possible, while France is reluctant to engage with Trump.

The United States and Europe ended a stand-off of several months last July, when Trump agreed to hold off on car tariffs while the two sides looked to improve trade ties.

They committed to work towards removing tariffs on “non-auto industrial goods”, discuss ways to agree on product standards to boost trade and increase EU imports of U.S. soybeans and liquefied natural gas.

The EU is looking now to start negotiations on tariff reductions, possibly including cars, as well as a separate set of talks on making it easier for companies to clear their products for sale on both sides of the Atlantic.

The ministers in Romania will face three questions.

The first concerns timing. Germany, whose exports of cars and car parts to the United States are worth more than half of the EU total, is keen to press ahead, but France is hesitant of moving before European Parliament elections in May.

The second question is whether to include fisheries, which is technically an industrial good. Some countries, such as France again, are concerned about increased competition in the sector, which is already strained by Brexit.

The third question is what to do about the previous broader “TTIP” negotiations, which drew thousands to streets in Europe in protest. The Commission has insisted the slimmed-down trade deal it is proposing is not a TTIP relaunch. One option to make that clear could be to formally end TTIP.

Industrial good tariffs are already low, at around 4 percent.

However, the Commission has said that removing them would boost EU exports to the United States by 8 percent and U.S. exports to the European Union by 9 percent by 2033, corresponding to extra exports of respectively 27 and 26 billion euros

Reporting by Philip Blenkinsop; Editing by Hugh Lawson



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Trump has never mentioned FX when talking about Japan trade By Reuters


© Reuters. Japan’s Finance Minister Taro Aso attends the G20 Finance and Central Bank Deputies Meeting in Tokyo

TOKYO (Reuters) – Japanese Finance Minister Taro Aso said on Friday that U.S. President Donald Trump has never mentioned currencies when discussing trade with Japan.

Aso, speaking to reporters, said Trump and Japanese Prime Minister Shinzo Abe have agreed that currencies would be discussed between each country’s finance ministry.

Aso spoke in response to a question about media reports that the United States had requested a provision on yuan stability in trade talks with China and how that could affect Japan’s trade talks with the United States.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Trump urges U.S. telecommunications companies to step up 5G systems By Reuters


© Reuters. AT&T’s CEO Stephenson shows Trump a 5G model during in an event highlighting emerging technologies, in the East Room at the White House in Washington

WASHINGTON (Reuters) – U.S. President Donald Trump on Thursday called on U.S. telecommunications companies to boost their work to build faster 5G networks, saying they were lagging and at risk of being left behind other countries’ efforts.

“I want the United States to win through competition, not by blocking out currently more advanced technologies,” Trump said in a pair of tweets. It was not immediately clear what blockage the president was referring to, and representatives for the White House could not be immediately reached for comment.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Trump Warns EU of Car Tariffs as Commerce Probe Offers New Ammo By Bloomberg


© Bloomberg. A Bayerische Motoren Werke AG (BMW), assembled in the U.S., sits in a rail car at the Port of Charleston in Charleston, South Carolina, U.S., on Tuesday, Oct. 4, 2016. The U.S. Census Bureau is scheduled to release wholesale trade figures on October 7.

(Bloomberg) — President Donald Trump reiterated his threat to impose tariffs on cars imported from the European Union if the U.S. can’t reach a trade deal with the EU, ratcheting up pressure amid already strained relations between the traditional allies.

Trump’s latest threat came just days after the Commerce Department sent him the findings of a probe into the national-security risks of auto imports. The Trump administration hasn’t disclosed the conclusions in the report, but it isn’t wasting time trying to use it as leverage to extract concessions.

“If we don’t make the deal we’ll do the tariffs,” Trump told reporters at the White House on Wednesday. “We’re trying to make a deal. They’re very tough to make a deal with, the EU.”

The U.S. and EU have been clinging to a fragile trade truce since July, when Trump and EU Commission President Jean-Claude Juncker agreed to launch new trade talks. At the time, Trump promised not to impose new tariffs while the talks were ongoing.

But the trans-Atlantic tension between America and Europe was on full display at a security conference in Munich this weekend, where European diplomats gave Vice President Mike Pence a frosty welcome. German Chancellor Angela Merkel rejected the notion that European cars are a threat to U.S. national security, noting that many European models are built in America.

90-Day Review

Commerce Secretary Wilbur Ross submitted his recommendations from the security probe to Trump on Sunday, without publicly offering any insights into the findings. Trump has 90 days to decide whether to act.

Commerce started the investigation in May under Section 232 of the Trade Expansion Act, the same provision the administration used last year to slap tariffs on steel and aluminum. The car probe covers imports of vehicles including SUVs, vans and light trucks, as well as auto parts.

Trump has threatened levies of as much as 25 percent on foreign-made vehicles. Companies and governments from Europe to Asia have warned Trump that such tariffs would hurt the U.S. economy and disrupt the global auto industry.

On Monday the EU said that it will stick to its word not to impose new tariffs, as long as the U.S. does the same. The 28-nation bloc is readying retaliatory tariffs totaling 20 billion euros ($22.7 billion) of U.S. goods should Trump follow through on his threat to impose duties on EU cars and auto parts.

Negotiations for a trade agreement have not officially started and the two sides are still at odds over the scope any deal would take. While the U.S. insists agriculture should be part of the discussions — and many key U.S. lawmakers have pressed the Trump administration to hold a firm line on the issue — EU officials consider the topic off limits.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Trump team to scrap talks with California on auto emissions: official By Reuters


© Reuters. Fuel tanks are shown in National City, California

WASHINGTON (Reuters) – U.S. federal officials have decided to end negotiations with California over the Trump administration’s plans to roll back fuel economy rules designed to reduce greenhouse gas emissions, a government official said on Wednesday.

California and 19 other states have demanded the Trump administration abandon a proposal made in August to freeze fuel efficiency standards after 2020 and strip California of the ability to impose stricter rules.

Aside from the threat of increased pollution, Detroit automakers have the greatest financial interests at stake.

General Motors (NYSE:), Ford Motor (NYSE:) Co and Fiat Chrysler Automobiles generate most of their global profits from sales of fuel-thirsty large pickup trucks and sport utility vehicles in the United States. All three have discontinued or planned to drop small and medium-sized sedans from their lineups to focus on trucks and SUVs.

The rules to require automakers to roughly double average fuel efficiency by 2025 – with a corresponding decline in carbon dioxide emissions – were one of the Obama administration’s most significant climate policy actions.

Since taking office, Trump has worked to roll back a broad range of Obama environmental policies that were opposed by the oil and coal industries.

As the 2020 election cycle heats up, the fight over automotive emissions promises to be a dividing line between Trump and Democrats, many of whom are embracing a platform of aggressive action to curb climate emissions in what they call the Green New Deal.

The California Air Resources Board (CARB), California’s top clean air regulator, has been meeting with officials from the White House, U.S. Environmental Protection Agency and Transportation Department over Trump administration efforts to stop California from tightening vehicle emissions rules in the state.

The government official offered no further details on the end of the talks and it was not immediately clear when an announcement would be made.

California officials already have filed suit to block the Trump administration proposal to roll back federal fuel economy targets for 2022-2025. It is not clear how the industry would respond to the formal adoption of Trump’s proposed freeze, and likely litigation by California and other states.

CARB Chair Mary Nichols last year said the state was willing to give automakers more flexibility to comply with vehicle greenhouse gas limits.

EPA Administrator Andrew Wheeler and Nichols met two weeks ago in San Francisco but there were no substantive discussions, said CARB spokesman Stanley Young.

“The administration broke off communications before Christmas and never responded to our suggested areas of compromise — or offered any compromise proposal at all. We concluded at that point that they were never serious about negotiating,” Young said.

A source familiar with those discussions said EPA officials did not work on the rule during the government shutdown. “There was no real effort to get to yes,” the source said.

Trump’s EPA and the National Highway Traffic Safety Administration proposed a rule in August that would maintain emissions standards at 2020 levels rather than requiring that they improve.

Scientists have linked rising fossil fuel emissions to higher temperatures that have worsened drought conditions in California blamed for devastating fires.

California officials and environmental groups have said the Trump administration proposal would deal a blow to efforts to contain that damage.

Ford Motor Co on Wednesday said it was “disappointed” the talks had fallen apart. “The auto industry needs regulatory certainty, not protracted litigation,” Joe Hinrichs, Ford’s president of global operations said in a statement.

Fiat Chrysler declined comment. General Motors and the Alliance for Automobile Manufacturers did not respond to a request for comment for this story.

Trump’s proposed freeze would result in 500,000 barrels per day more oil consumption by the 2030s. The administration says it would reduce regulatory costs for automakers by more than $300 billion over the next decade.

The administration was supposed to finalize the new rules by the end of March in order for the softer requirements to take effect by the 2021 model year, but some automakers and officials have questioned if it will meet that deadline.

Most automakers oppose freezing the requirements but also want relief from standards approved during the Obama administration that called for a roughly 5 percent annual reduction in carbon emissions – targets that translate to fuel efficiency requirements for various classes of vehicles.



Trump threatens tariffs on European cars if no EU trade deal By Reuters


© Reuters. U.S. President Donald Trump greets Austrian Chancellor Sebastian Kurz at the White House in Washington

WASHINGTON (Reuters) – President Donald Trump on Wednesday said the United States would impose tariffs on European car imports if it cannot reach a trade deal with the European Union.

Speaking to reporters at a White House meeting with Austrian Chancellor Sebastian Kurz, Trump said the auto tariffs were something his administration was considering.

“We’re trying to make a deal. They’re very tough to make a deal with – the EU,” Trump said. “If we don’t make the deal, we’ll do the tariffs.”

Earlier this week, European Commission President Jean-Claude Juncker said the U.S. president, known for a strong protectionist approach to trade, had promised he would not impose additional import tariffs on European cars for the time being.

But a confidential Commerce Department report sent to Trump over the weekend was widely expected to clear the way for him to threaten tariffs of up to 25 percent on imported autos and auto parts by designating the imports as a national security threat.

Trump on Wednesday downplayed the report, calling it a study.

“We’ve studied it very carefully. We’ve seen the results. But the bottom-line result is whether or not we can make a deal with the EU that’s fair,” he said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.