India and the European Union have given the World Trade Organization lists of the U.S. products that could incur high tariffs in retaliation for U.S. President Donald Trump’s global tariffs on steel and aluminum, WTO filings showed Friday.

The EU said Trump’s steel tariffs could cost $1.5 billion and aluminum tariffs a further $100 million, and listed rice, cranberries, bourbon, corn, peanut butter, and steel products among the U.S. goods that it might target for retaliation.

India said it was facing additional U.S. tariffs of $31 million on aluminum and $134 million on steel, and listed U.S. exports of soya oil, palmolein and cashew nuts among its potential targets for retaliatory tariffs.

One trade official described the lists of retaliatory tariffs as “loading a gun,” making it plain to U.S. exporters that pain might be on the way.

India said its tariffs would come into effect by June 21, unless and until the United States removed its tariffs.

The EU said some retaliation could be applied from June 20.

Trump’s tariffs, 25 percent on steel and 10 percent on aluminum, came into force in March to strong opposition as many see the measures as unjustified and populist.

There were also objections that the tariffs would have little impact on China, widely seen to be the cause of oversupply in the market.

Trump justified the tariffs by claiming they were for U.S. national security, in a bid to protect them from any legal challenge at the WTO, causing further controversy.

Rather than challenging the U.S. tariffs directly, the EU and India, like China, South Korea and Russia, told the United States that they regarded Trump’s tariffs as “safeguards” under the WTO rules, which means U.S. trading partners are entitled to compensation for loss of trade.

The United States disagrees.
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China has dropped an anti-dumping investigation and given long awaited approval for the sale of Toshiba’s memory chip business, in gestures that could suggest a thaw between Beijing and the U.S. as trade talks resumed in Washington.

The Commerce Ministry said Friday ended the probe into imported U.S. sorghum because it’s not in the public interest. A day earlier, Beijing cleared the way for a group led by U.S. private equity firm Bain Capital to buy Toshiba Corp.’s computer memory chip business.

The moves signaled Beijing’s willingness to make a deal with Washington amid talks between senior U.S. and Chinese officials aimed at averting a trade war between the world’s two biggest economies, analysts say.

“I think China is willing to make concessions,” said Wang Tao, chief China economist at UBS. “The Chinese stance has been very clear, that China wants to mute any trade dispute. But of course it doesn’t mean China would heed to all the demands the U.S. would place.”

A White House official said China had offered to work to cut the trade deficit with the U.S. by $200 billion, while stressing that the details remained unclear. But China’s Foreign Ministry denied it.

“It’s untrue,” said spokesman Lu Kang. “The relevant discussion is still underway, and it is constructive.”

The Commerce Ministry said it was ending the anti-dumping probe and a parallel anti-subsidy investigation because they would have raised costs for consumers.

The U.S. is China’s biggest supplier of sorghum, accounting for more than 90 percent of total imports. China’s investigation, launched in February, had come as a warning shot to American farmers, many of whom support the Trump administration yet depend heavily on trade. They feared they would lose their largest export market for the crop, which is used primarily for animal feed and liquor.

The Commerce Ministry said that, “Anti-dumping and countervailing measures against imported sorghum originating in the United States would affect the cost of living of a majority of consumers and would not be in the public interest,” according to a notice posted on its website.

It said it had received many reports that the investigation would result in higher costs for the livestock industry, adding that many domestic pig farmers were facing hardship because of declining pork prices.

China’s U.S. sorghum imports surged from 317,000 metric tons in 2013 to 4.76 million tons last year while prices fell by about a third in the same period.

The ministry said any deposits for the preliminary anti-dumping tariffs of 178.6 percent, which took effect on April 18, would be returned in full.

The announcement came after President Donald Trump met at the White House with Chinese Vice Premier Liu He, the leader of China’s delegation for talks with a U.S. team headed by Treasury Secretary Steven Mnuchin.

Trump had told reporters earlier that he had doubts about the potential for an agreement. He also raised fresh uncertainty about resolving a case involving Chinese tech company ZTE, which was hit with a crippling seven-year ban on buying from U.S. suppliers, forcing it to halt major operations. Trump said the company “did very bad things” to the U.S. economy and would be a “small component of the overall deal.”

Song Lifang, an economics professor and trade expert at Renmin University, said haggling is currently underway.

“It’s time for both to present their demands, but it’s also a time to exhibit their bargaining chips,” said Song, adding that approval for the Toshiba deal, worth $18 billion, was “an apparent sign of thaw” amid a U.S. investigation into Chinese trade practices requiring U.S. companies to turn over their technology in exchange for access to China’s market.

The Trump administration has proposed tariffs on up to $150 billion in Chinese products to punish Beijing while China has responded by targeting $50 billion in U.S. imports. Neither country has yet imposed tariffs.
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The European Commission is proposing that EU governments make direct money transfers to Iran’s central bank to avoid U.S. penalties, an EU official said, in what would be the most forthright challenge to Washington’s newly reimposed sanctions.

The step, which would seek to bypass the U.S. financial system, would allow European companies to repay Iran for oil exports and repatriate Iranian funds in Europe, a senior EU official said, although the details were still to be worked out.

The European Union, once Iran’s biggest oil importer, is determined to save the nuclear accord, that U.S. President Donald Trump abandoned on May 8, by keeping money flowing to Tehran as long as the Islamic Republic complies with the 2015 deal to prevent it from developing an atomic weapon.

“Commission President Jean-Claude Juncker has proposed this to member states. We now need to work out how we can facilitate oil payments and repatriate Iranian funds in the European Union to Iran’s central bank,” said the EU official, who is directly involved in the discussions.

The U.S. Treasury announced on Tuesday more sanctions on officials of the Iranian central bank, including Governor Valiollah Seif,. But the EU official said the bloc believes that does not sanction the central bank itself.

European Energy Commissioner Miguel Arias Canete will discuss the idea with Iranian officials in Tehran during his trip this weekend, the EU official said. Then it will be up to EU governments to take a final decision.

EU leaders in Sofia this week committed to uphold Europe’s side of the 2015 nuclear deal, which offers sanctions relief in return for Tehran shutting down its capacity, under strict surveillance by the U.N. nuclear watchdog, to stockpile enriched uranium for a possible atomic bomb.

Sanctions-blocking law

Other measures included renewing a sanctions-blocking measure to protect European businesses in Iran.

The Commission said in a statement it had “launched the formal process to activate the Blocking Statute by updating the list of U.S. sanctions on Iran falling within its scope,” referring to an EU regulation from 1996.

The EU’s blocking statute bans any EU company from complying with U.S. sanctions and does not recognize any court rulings that enforce American penalties. It was developed when the United States tried to penalize foreign companies trading with Cuba in the 1990s, but has never been formally implemented.

EU officials say they are revamping the blocking statute to protect EU companies against U.S. Iran-related sanctions, after the expiry of 90- and 180-day wind-down periods that allow companies to quit the country and avoid fines.

A second EU official said the EU sanctions-blocking regulation would come into force on August 5, a day before U.S.

sanctions take effect, unless the European Parliament and EU governments formally rejected it.

“This has a strong signaling value, it can be very useful to companies but it is ultimately a business decision for each company to make [on whether to continue to invest in Iran],” the official said.

Once Iran’s top trading partner, the EU has sought to pour billions of euros into the Islamic Republic since the bloc, along with the United Nations and United States, lifted blanket economic sanctions in 2016 that had hurt the Iranian economy.

Iran’s exports of mainly fuel and other energy products to the EU in 2016 jumped 344 percent to 5.5 billion euros ($6.58 billion) compared with the previous year.

EU investment in Iran, mainly from Germany, France and Italy, has jumped to more than 20 billion euros since 2016, in projects ranging from aerospace to energy.

Other measures proposed by the Commission, the EU executive, include urging EU governments to start the legal process of allowing the European Investment Bank to lend to EU projects in Iran.

Under that plan, the bank could guarantee such projects through the EU’s common budget, picking up part of the bill should they fail or collapse. The measure aims to encourage companies to invest.
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Switzerland’s government has requested a report into the risks and opportunities of launching its own cryptocurrency, a so-called “e-franc” that would use technology similar to privately launched coins like bitcoin but have backing of the state.

The lower house of the Swiss parliament must now decide whether to back the Federal Council’s request for a study into the subject, which has been discussed in Sweden.

Cryptocurrencies have drawn scrutiny from lawmakers and international governing bodies coming to grips with the technology’s rapid ascent. The coins use encryption and a blockchain transaction database designed to enable anonymous transactions that do not require centralized processing.

Other countries interested

Several countries have begun evaluating the viability of introducing their own state-backed digital currency, with Sweden’s Riksbank saying an e-crown might help counteract issues arising from declining cash use and help make payment systems more robust.

But existing digital currencies such as bitcoin have been hampered by extreme volatility, high-profile hacks and doubts about long-term viability. Venezuela has issued a state-backed coin, but major developed economies have so far steered clear.

The Bank of International Settlement in March warned central banks to think hard about potential risks and spillovers before issuing their own cryptocurrencies.

Swiss bank cautious

In Switzerland, if the proposal is approved, a study will be produced by the Swiss finance ministry. No timing has been given on when it would be published should the go-ahead be given.

Swiss lawmaker Cedric Wermuth, vice president of the Social Democratic Party, called for the study. In its response Thursday, the Swiss government, or Federal Council, backed the proposal to look into it, although it said there were hurdles.

“The Federal Council is aware of the major challenges, both legal and monetary, which would be accompanied by the use of an e-franc,” it said. “It asks that the proposal be adopted to examine the risks and opportunities of an e-franc and to clarify the legal, economic and financial aspects of the e-franc.”

The Swiss National Bank has so far been cautious on the issue. Private-sector digital currencies were better and less risky than any version that might be offered by a central bank, SNB governor Andrea Maechler said last month.
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The United States sought on Thursday to further choke off funding sources for Iranian-backed Hezbollah, imposing sanctions on its representative to Iran, as well as a major financier and his five companies in Europe, West Africa and the Middle East.

The U.S. Treasury said Mohammad Ibrahim Bazzi was a Hezbollah financier operating through Belgium, Lebanon and Iraq, and was a close associate of Gambia’s former president Yahya Jammeh, who is accused of acquiring vast wealth during his decades-long rule.

It also imposed sanctions on Hezbollah’s representative to Iran, Abdallah Safi Al-Din, who it said served as an interlocutor between Hezbollah and Iran on financial issues.

The department said it had blacklisted Belgian energy services conglomerate Global Trading Group; Gambia-based petroleum company Euro African Group; and Lebanon-based Africa Middle East Investment Holding, Premier Investment Group SAL Offshore and import-export group Car Escort Services. All were designated because they are owned or controlled by Bazzi, the Treasury said.

“The savage and depraved acts of one of Hezbollah’s most prominent financiers cannot be tolerated,” U.S. Treasury Secretary Steven Mnuchin said in a statement.

“This administration will expose and disrupt Hezbollah and Iranian terror networks at every turn, including those with ties to the Central Bank of Iran,” he said.

The sanctions are among a slew of fresh measures aimed at Iran and Hezbollah since U.S. President Donald Trump withdrew from the Iran nuclear deal last week.

U.S. Secretary of State Mike Pompeo is set to outline in a speech in Washington on Monday plans by the United States to build a coalition to look closer at what it sees as Iran’s “destabilizing activities,” spokeswoman Heather Nauert told reporters at the State Department.

In one of the biggest moves this week aimed at clamping down on Iran’s overseas operations, the Treasury sanctioned Iran’s central bank governor, Valiollah Seif.

On Wednesday, the United States, backed by Gulf States, imposed additional sanctions on Hezbollah’s top two leaders, Sayyed Hassan Nasrallah and Naim Qassem.
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U.S. officials and politicians say they are increasingly frustrated and looking for ways to fight back against what they see as China’s use of its market power to impose “politically correct” behavior on American companies. Airlines, retailers and hoteliers all have been pressured to alter products and promotions that offended Beijing.

“These actions are outrageous and disturbing,” Deputy Assistant Secretary of State for East Asian and Pacific affairs Alex Wong told American lawmakers Tuesday.

“China is very much well aware that it’s wading through treacherous waters here. And they understand that if they continue along this path, continue to employ these tactics, that will negatively affect the U.S.-China relationship and that there will be consequences,” said Wong during a hearing at Senate Foreign Relations subcommittee on East Asia, The Pacific, and International Cybersecurity Policy.

“The consequences are under review,” Wong added.

His remarks come after American clothing retailer Gap apologized and recalled the sale in the Chinese market of its T-shirts showing a map that’s seen by Beijing as politically incorrect. The T-shirts were also destroyed. 

A Chinese student earlier this week posted pictures of the T-shirt, which did not include Taiwan, parts of Tibet and islands in the South China Sea that Beijing claims are Chinese territories. Gap quickly apologized, citing “unintentional error.” Photos circulated on Chinese social media network Weibo were said to be have been taken at an outlet store in Canada. 

A Chinese government spokesperson took note of Gap’s apology and the American company’s pledge to respect “China’s sovereignty and territorial integrity and is conducting an internal inspection.”

“We have taken note of this statement. We will continue to listen to its [Gap’s] words, and watch the actions,” said Chinese Ministry of Foreign Affairs Spokesperson Lu Kang on Tuesday.

But U.S. officials and lawmakers are hitting back.

“American companies are being bullied,” said Florida Republican Senator Marco Rubio during Tuesday’s Senate Foreign Relations Subcommittee hearing.

Rubio said U.S. airlines “are being threatened by China, that if their website doesn’t say Taiwan [is part of] China, they’re going to lose their routes and have fines and penalties.”

On April 25, the Chinese Civil Aviation Administration sent a letter to 36 foreign air carriers, including a number of American carriers, demanding the carriers remove references on their websites or in other material that suggests Taiwan, Hong Kong and Macau are independent territories from China.

And in January, Beijing requested U.S. hotel giant Marriott International change the way it referred to Tibet, Taiwan, Hong Kong and Macau to be in line with Beijing’s views.

The request came after a Marriott employee “liked” a tweet by Friends of Tibet that praised Marriott for “listing #Tibet as a country along with #HongKong and #Taiwan” in an online customer questionnaire.

The employee was fired and Marriott apologized to Beijing.

Observers said market access to the growing population of affluent Chinese consumers leads to American companies’ compliance.

“It’s totally based on market strategy or, more precisely, fear of being shut out of the China market,” Brooking Institution’s Senior Fellow Richard Bush told VOA on Thursday. 

U.S. officials said they have raised this issue privately with their Chinese counterparts, while also condemning Beijing’s actions in public. U.S. officials have also talked with companies who have been involved in the incidents.

China claims democratically ruled Taiwan is part of its territory, and it has never renounced the use of military force to bring the island under Beijing’s control. The U.S. broke diplomatic ties with Taiwan in 1979 and has “acknowledged” Beijing’s position, while insisting on a “peaceful resolution of cross-Strait differences.”
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President Donald Trump stepped into a round of tough trade talks with China on Thursday after the White House confirmed a meeting between the U.S. president and Chinese Vice Premier Liu He.

The two world powers are taking part in a second series of trade negotiations that started Thursday. The initial talks were held in Beijing two weeks ago.

Speaking to reporters before his meeting with Liu, Trump repeated his strong dislike for previous deals between Washington and Beijing.

“The United States has been ripped off for many, many years by its bad trade deals. I don’t blame China; I blame the leadership of this country from the past,” Trump told reporters before a meeting with NATO Secretary-General Jens Stoltenberg.

“China has taken out hundreds of billions of dollars a year from the United States, and I explained to President Xi [Jinping] we can’t do that anymore,” Trump added.

The talks are aimed at “rebalancing the United States-China bilateral economic relationship,” according to the White House. They are also aimed at avoiding a full-blown trade war after the two countries exchanged tariff threats in March.

Despite the tough talks, Trump tweeted over the weekend that he was working with Xi to give Chinese phone company ZTE a way to get back into business.

The U.S. slapped sanctions against the Chinese telecommunications company last month for breaking U.S. trade control laws by selling components to Iran and North Korea. The move prompted ZTE to shut down its U.S. operations.

U.S. law enforcement and intelligence communities have long had national security and espionage concerns about ZTE.

“ZTE was a company I spoke to with President Xi. He asked me if I could take a look at that, because it was very harmful to them in terms of their jobs and probably other things, and I certainly said I would — he asked me to do it, and I would do that. I like him, he likes me, we have a great relationship,” Trump said in explaining his tweet to reporters. 

Trump noted it was his administration that had first put strong clamps on ZTE.

“Anything we do with ZTE is just a small component of the overall deal. I can only tell you this: We are going to come out fine with China,” Trump said. “When you’re losing $500 billion a year on trade, you can’t lose the trade war, you’ve already lost it.”

Liu, who is Xi’s top economic adviser, is taking part in two days of talks with a U.S. trade delegation led by Treasury Secretary Steve Mnuchin.

Trump’s top economic adviser, Larry Kudlow, told reporters Wednesday that the administration was conducting “very serious” talks with China, and that Trump was “very hands-on” and “involved in every decision.”

“We have requested that China change their trading practices, which are unfair and in many ways illegal,” Kudlow said.

“This is with respect to the issue of theft of technology, forced transfers of technology, high tariffs and non-tariff barriers” that are preventing the United States from making a competitive effort to export goods and services to China, he said.

The economic adviser said the administration had given China a “lengthy, detailed list” of what the U.S. wanted, including narrowing the U.S.-China trade deficit, lowering non-tariff barriers and permitting American ownership of its own companies in China. 

“Right now, the limit is 49 percent and that’s one of the causes of the theft and transfer of viable technology,” Kudlow said. “When we do these joint ventures, we should have to own 51 percent on to 100 percent. That’s a key part of these talks.”
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Hundreds of truck drivers blocked roads across Bulgaria on Thursday as European Union leaders met in Sofia, protesting proposed EU rules they say would cost their jobs and put their firms out of business.

Transport company owners described the initiative, known as the Mobility Package, as a protectionist measure designed to help rival firms in western Europe. The Bulgarian transport association said around 120,000 drivers from the country would lose their jobs under the proposed rule changes.

Trucks from Bulgaria and other low-wage eastern European countries are a common sight on the roads of western Europe, competing with local firms whose drivers are much higher paid.

Under the package, backed by France, Germany and other higher-wage states, truck drivers from eastern Europe would receive the same payment for work abroad as those employed by western European transport companies.

The package has long been the subject of negotiations between EU member states and has yet to be laid before the European Parliament.

The Bulgarian government backed the local truck companies.

“We declare our strong support for Bulgarian carriers,” Transport Minister Ivaylo Moskovski said.

Prime Minister Boyko Borissov, who is hosting the EU summit, said the proposed changes would “kill the Bulgarian sector.”

French President Emmanuel Macron said he hoped a compromise could be found in the coming months. “We will find a balanced deal together that will ensure the proper working of the single market, good social protection and fair competition in the transport sector. September has to be our objective,” he told a news conference at the Sofia summit.

Drivers from Bulgaria, where average monthly wages of little more than 500 euros ($600) are among the lowest in the EU, often spend weeks moving loads between countries including Germany, France and Britain before returning to their home base.

Under the package, drivers would have to rest for at least 45 hours in a hotel rather than their cab and return home every three weeks.

Bulgarian transport firms said this would nullify eastern European companies’ competitive advantage.

“These restrictions are absolutely unnecessary,” said Vladislav Kalchev, owner of a transport company. “They are trying to help, in some way, the market in the big countries.”
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Canadian Prime Minister Justin Trudeau on Thursday said he felt “positive” about talks to rework the NAFTA trade pact, while a top Mexican official held out hope a deal could be hammered out by the end of May.

U.S. officials say the negotiations need to wrap up very soon to give the current Congress time to vote on a final text for a revamped North American Free Trade Agreement.

“To be honest, we are down to a point where there is a good deal on the table,” Trudeau told the Economic Club of New York, saying top Canadian officials were in Washington for talks on how to advance the negotiations.

“It’s right down to the last conversations … I’m feeling positive about this, but it won’t be done until it’s done.”

Canadian Foreign Minister Chrystia Freeland was due to travel to the U.S. capital later Thursday for internal meetings and talks with key stakeholders, said a spokesman.

A Mexican technical negotiating team is in Washington, but there is no date set for the next NAFTA ministerial meeting with the United States and Canada.

Mexico’s Economy Minister Ildefonso Guajardo said a deal could be reached by the end of May, but added that if no agreement is reached the talks could extend beyond the July 1 Mexican presidential election.

For that to happen, though, the United States and Mexico would have to end what officials say is deadlock over U.S. demands to raise wages in the auto sector and boost the North American content of cars made in the three NAFTA nations.

Critics complain the move is a clear swipe at Mexico, which U.S. President Donald Trump says added low-wage manufacturing jobs at American expense after NAFTA was signed in 1994.

“Any renegotiated NAFTA that implies losses of existing Mexican jobs is unacceptable,” Guajardo said in a tweet.

Under the Trade Promotion Authority statute that would allow a simple yes or no vote on NAFTA, Trump must notify Congress 90 days before he can sign the agreement. The U.S. International Trade Commission then has up to 105 days after the signing to produce a study on the effects of the agreement.

U.S. House Speaker Paul Ryan had said that the Republican-controlled Congress would need to be notified of a new deal by Thursday to give lawmakers a chance to approve it before a newly elected Congress takes over in January.

Ryan, asked Thursday whether there was any wiggle room in the NAFTA approval timeline for Congress, said “the wiggle room would be at the ITC.”

He added: “My guess is there is probably some wiggle room at the ITC for what it takes for their part of the process, but not an indefinite amount and that means time is really of the essence.”
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The European Commission will initiate plans Friday to prohibit European companies from adhering to U.S. sanctions against Iran, a move to help keep the Iran nuclear agreement intact and to defend European corporate interests.

“We have the duty to protect European companies,” Commission President Jean-Claude Juncker said following a meeting of European Union leaders Thursday in Sofia, Bulgaria, “We now need to act and this is why we are launching the process.”

Juncker said the commission will begin the process of activating a so-called blocking statute, which bans EU companies from observing the sanctions and any court rulings that enforce U.S. penalties.

Juncker also said the commission would continue to cooperate with Iran and the European Investment Bank would be allowed to facilitate European corporate investment in the Persian Gulf country.

The commission’s move is in retaliation to U.S. President Donald Trump’s decision to withdraw from the Iranian nuclear deal and a subsequent move to revive stringent sanctions against Tehran.

The U.S. actions sparked concern among European countries over how to incentivize Iran to maintain compliance with the accord signed by world powers in July 2015, and the blocking statute is the most powerful tool at its immediate disposal.

European leaders are also confronted with the threat of U.S. tariffs on European steel and aluminum exports. The Trump administration’s temporary exemptions from the tariffs expire June 1.

 
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