As the FT first reported yesetrday, in a dramatic development for Sino-US relations, Trump picked Peter Navarro, a Harvard-trained economist and one-time daytrader, to head the National Trade Council, an organization within the White House to oversee industrial policy and promote manufacturing. Navarro, a hardcore China hawk, is the author of books such as “Death by China” and “Crouching Tiger: What China’s Militarism Means for the World” has for years warned that the US is engaged in an economic war with China and should adopt a more aggressive stance, a message that the president-elect sold to voters across the US during his campaign.
In the aftermath of Navarro’s appointment, many were curious to see what China’s reaction would be, and according to the FT, Beijin’s response has been nothing short of “shocked.” To wit:
The appointment of Peter Navarro, a campaign adviser, to a formal White House post shocked Chinese officials and scholars who had hoped that Mr Trump would tone down his anti-Beijing rhetoric after assuming office.
“Chinese officials had hoped that, as a businessman, Trump would be open to negotiating deals,” said Zhu Ning, a finance professor at Tsinghua University in Beijing. “But they have been surprised by his decision to appoint such a hawk to a key post.”
A funny thing happened when US slapped a major tariff on China’s steel exports… prices exploded higher. But the almost 50% surge in steel prices since mid-December back to 15-month highs have left traders equally split on what happens next. Will record production levels exaggerate a global glut amid tumbling exports and rising tariffs, or will China’s trillion-dollar surge in credit fuel yet more so-called “iron rooster” projects driving domestic demand even higher. For now, it appears the former is more likely as US Trade reps suggested further protectionism looms.
Since Dec 23rd 2015 when the US imposed a 256% tariff on Chinese steel imports, composite steel prices have soared almost 50% even as exports have slipped…
At a time when India-US relations are just limping back to normal after the recent month-long diplomatic spat over the Devyani Khobragade issue, the United States Trade Representative (USTR) was on Monday gearing itself up to announce a trade enforcement action relating to India.
“Ambassador (Mike) Froman will announce a new enforcement action with regard to India,” the Office of USTR said, without offering any details. Froman was scheduled to address a news conference 2 pm ET (12.30 Monday night India time). The US move is being seen against the backdrop of a strong demand from the US Chamber of Commerce last week to designate India as a “Priority Foreign Country” for possible trade sanctions over its alleged failure to protect intellectual property rights in the pharmaceutical sector.
US firms have been complaining that India is allowing its companies to produce cheap generic versions of medicines developed by American pharmaceutical giants that are still under patent protection. Separately, the US International Trade Commission (USITC) is slated to hold an extensive hearing on Wednesday and Thursday on India’s trade, investment and industrial polices in relation to their effects on the US economy.
The USITC, egged on by US lawmakers, had announced last August an elaborate investigation on the subject following representations from Corporate America that included sending out letters to President Barack Obama and Secretary of State John Kerry. The USITC has said its investigation will “enumerate restrictive trade and investment policies that India maintains or has recently adopted, determine which sectors of the US economy are most affected by these policies, and describe the competitiveness of Indian firms in these sectors”. Read More