Trade Deal Phase One Result: No More Tariffs?
BRAmble Daily: 5 news items, 2 comments from me and 1 random musing, book or quote
5 News Items
China Insists Trump Give Up His Favorite Trade Weapon—Tariffs
Licenses for US companies to sell to Huawei coming ‘very shortly’
US backs infrastructure scheme to rival China’s Belt and Road?
DHL launches 12-day China–Europe rail service
China signs nearly 200 deals for new Silk Road projects & eyes further expansion
2 Comments
What happens if you take Tariffs away from Tariff Man?
Self-proclaimed “Tariff Man” Donald Trump will likely be giving up his favorite weapon if he agrees to China’s Phase One Tariff Deal. According to insiders, China’s Xi will only travel to the US and give Trump the political “shot in the arm” he needs prior to the election if the U.S. removes most or all of the Tariffs imposed in the last year (including the announced but not yet implemented ones). It remains to be seen how hard China can push to remove all the tariffs as Trump will still need to Tweet-spin it as an all out win for America. If the Trump Administration does give in on tariff removal they will likely ask for other concessions in return such as intellectual property protection for US companies or a firm dollar amound commitment of Chinese purchases of US farm products.
At CIIE in Shanghai Xi toes the line and drinks some French wine
In the opening speech as the China International Import Expo in Shanghai on Tuesday, Xi said, “To date, China has signed 197 documents on Belt and Road cooperation with 137 countries and 30 international organizations.”
Xi also repeated 5 tenets that he has continuously emphasized when making public remarks over the last year:
-- Continue to expand market opening-up;
-- Continue to optimize the framework of opening-up;
-- Continue to improve business environment;
-- Continue to deepen multilateral and bilateral cooperation;
-- Continue to jointly build the Belt and Road.
With regard to the current Trade War with the U.S., Xi said,"We need to 'join hands' with each other instead of 'letting go' of each other's hands. We need to 'tear down walls,' not to 'erect walls,'" Furthermore, Xi said, "We need to stand firm against protectionism and unilateralism. We need to continually bring down trade barriers, optimize global value and supply chains, and jointly foster market demand."
You can read the full text of the speech translated into English here.
…as with real war - in a trade war, the winner is usually not one of the two: protagonist or antagonist. It's usually a third party. - Parag Khanna
I recall a podcast I did with Parag Khanna where he spoke those words. Well, it seems as though French President Emmanuel Macron is taking them to heart. Macron showed up at CIIE to promote French products and toasted Xi with French food and wine specially prepared by a chef. Not surprisingly, the day before Macron announced that the EU and China had reached a trade agreement for the mutual protection of food and alcohol products.
Macron is due to travel to Beijing for a state visit on Wednesday. More on that in upcoming editions of BRAmble.
1 Musing
As a serial entrepreneur who has seen a fair share of success amongst the inevitable failures, to give back I do a lot of mentoring of aspiring entrepreneurs in Beijing, where I live. I set aside a full 15% of my time each week to doing this and have a calendar that allows people to book those free slots. My focus is to help others but I must admit I end up learning and benefitting at least as much (probably way more) via the interactions. It is truly a labor of love. Building on this desire to help young people develop skills that can benefit them in real life inspired me to start Beijing Pitch Club. And it has been a smashing success. Every Wednesday night 10 people give five minute pitches to a group of about 30 attendees. At the end of the pitch session everyone circles the chairs and the magic begins. People give each other really sincere feedback. Since it is all about getting better we also video the pitches and do an online survey immediately afterwards. Those who pitch can review the video, read the written feedback and get live feedback in the group sessions. Oh, and we supply free pizza, water and tshirts for presenters.
Last night, Yuehang, one of our Pitch Club regulars, explained how an Apple iPhone is actually made of parts from “everywhere.” He took a complex topic and whiteboarded it so that the supply chain and the macro-economic dynamics could be understood by anyone. Great pitch Yuehang! As I was listening I couldn’t help thinking that Apple’s world class, history making, competitive advantage sustaining, supply chain he was describing is actually disintegrating and being rebuilt at considerable cost and effort as we live and breathe today. This is happening because Trump administration has resorted to using punative tariffs and its single tool for enforcing his will on the world. We are living in a word where a supply chain drawn on a whiteboard in Beijing today will be completely erased and re-drawn in the not-to-distant future.
And on my way home in the taxi I found myself humming that old Bob Dylan song…
The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is rapidly fadin’
And the first one now will later be last
For the times they are a-changin’
Bob Dylan
Thanks for reading,
James