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TRADE WARS
Trump, backed by Australia's Morrison, talks tough on China
By Sebastian Smith
Washington (AFP) Sept 21, 2019

Trump lifts tariffs on hundreds of Chinese goods
Washington (AFP) Sept 20, 2019 - President Donald Trump on Friday temporarily lifted tariffs on hundreds of Chinese goods that he imposed last year, softening his stance in the trade conflict ahead of next month's negotiations.

The decision helped buoy stock markets looking for light at the end of the tunnel as the trade war drags into its second year.

With high-level talks due to restart in Washington early next month, Trump's decision marked the third time since August that the United States has delayed or removed tariffs on Chinese imports ahead of the year-end shopping season.

Earlier this month, Trump announced a two-week delay in a new round of duties increases on hundreds of billions of Chinese goods that had been due to take effect on October 1.

According to Federal Register notices published Friday morning, hundreds of goods that had been subject to three waves of tariffs imposed last year will be exempted from those additional duties for about a year.

The goods now exempted cover a broad range of uses and applications and include steel girders, electronics, such as data processors used by manufacturers, as well as pumps, filters, forklifts, mechanical equipment and pet supplies.

The trade war has weighed on the global economy. The Organization for Economic Cooperation and Development this week slashed growth forecasts due to the conflict.

While slowing, the US economy has so far been more resilient, with a recent batch of economic data showing surprising strength in important areas.

The Federal Reserve this week however cut interest rates for the second time this year, moving to counter the danger posed by the trade war, which has badly damaged the US manufacturing and agricultural sectors.

After last month's sharp deterioration in trade relations, US duties on the majority of Chinese imports are nevertheless due to rise in stages through the end of 2019.

China, Solomon Islands establish diplomatic relations
Beijing (AFP) Sept 21, 2019 - China and the Solomon Islands established diplomatic relations Saturday, days after the Pacific island nation severed ties with Taiwan.

"We look forward to the quick development of bilateral relations between China and the Solomons," Chinese foreign minister Wang Yi said at a ceremony in Beijing alongside his Solomons counterpart Jeremiah Manele.

"We welcome this decision by the Solomon Islands and support the country to move forward in the development path it has chosen for itself."

Solomon's foreign minister said his country's decision to switch diplomatic recognition to China -- its largest trading partner -- was based on "national needs."

"The development challenges for our country are huge. We need a broader partnership with countries that also includes China," he said.

The switch is a major coup for Beijing just weeks before it celebrates the 70th anniversary of the founding of the People's Republic of China.

And it leaves Taiwan more isolated than ever with just 15 states left that recognise it.

Taiwan has been a de facto sovereign nation since the end of a civil war in 1949, but China still views the island as its territory and has vowed to seize it -- by force if necessary.

Over the decades, as China's economic and military power have grown, most countries, including the United States and most Western nations, switched recognition to Beijing.

Only a handful still recognise Taiwan, largely in Latin America and the Pacific.

Taipei has accused Beijing of using "dollar diplomacy" to buy off its few remaining allies.

Kiribati, another tiny Pacific island nation announced it has switched diplomatic recognition to China on Friday.

President Donald Trump said Friday that only a "complete" deal with China on trade will be acceptable and his tough approach won support from visiting Australian Prime Minister Scott Morrison.

"I'm not looking for a partial deal. I'm looking for a complete deal," Trump told reporters during a joint news conference with Morrison at the White House.

Trump denied that he was under pressure to resolve the massive trade dispute between the world's two main economic powers, saying "I don't think I need it before the election" in 2020.

Morrison, enjoying an unusually lavish reception and state dinner, said he backed the US push to force China to reform on issues that include routine violation of foreign companies' intellectual property.

"We need to make sure that we all compete on the same playing field," he said. China can't have "special rules."

Morrison's supportive stance contrasted with worries he expressed in June about smaller economies suffering collateral damage in the US-China standoff and the global system coming "under real pressure."

Later the United States Trade Representative's office issued a statement announcing that deputy-level US and Chinese negotiators had completed "productive" talks in Washington on Thursday and Friday.

Top level talks are expected in October.

- Dinner under the stars -

This was only the second state-level visit to the White House granted under Trump and the first for an Australian premier here since John Howard in 2006.

In a shift from tradition, and taking advantage of perfect end-of-summer weather, the dinner was served under the stars in the Rose Garden.

Pale yellow tablecloths and floral arrangements decorated the tables, bathed in a golden glow from the outdoor lighting.

Trump gave a toast praising the "free and proud spirit" shared by the two nations.

Earlier, Morrison and his wife were greeted with an honor guard, military band and 19 gun salute on the South Lawn.

"Australians and Americans understand each other like few other peoples," Morrison said, adding that he and the Republican US president had also "established a very early understanding."

In addition to Friday's festivities, Morrison and Trump are due to reunite Sunday for a visit at a new Australian-owned factory in Wapakoneta, Ohio, that the White House says will "demonstrate the strong trade and investment relationship."

- Conservatives club -

Trump's relations with the previous Australian premier, Malcolm Turnbull, got off to a bad start.

But Morrison has already cemented his place in a growing conservative club -- also including the likes of Brazilian President Jair Bolsonaro and British Prime Minister Boris Johnson -- drawn into Trump's orbit.

Trump and Morrison agree on much, with Australia joining the US-led patrols of the Strait of Hormuz off Iran and following Washington's lead to exclude China's Huawei from its 5G phone market.

Trump has defied controversy over his push to prevent illegal immigrants and asylum seekers from crossing the Mexican border. Similarly, Morrison, a former immigration minister, has worked to make Australia less attractive to would-be asylum seekers.

His Liberal-National coalition also has much in common with Trump's climate change skepticism, rejecting overwhelming scientific warnings to encourage lucrative fossil fuel industries. Australia is the world's largest coal exporter.

This is "one of our strongest and most enduring relationships anywhere in the world," a senior Trump administration official said Thursday, asking not to be identified.

One area that Trump especially appreciates is trade where the United States enjoys a surplus. The trade conflicts proliferating under Trump have bypassed Australia.

The administration official said that cooperation between Australia's space agency and NASA on a return to the Moon and joint efforts to ensure "stable and secure" access to rare earth metals were on the agenda Friday.

The relationship gets more complicated over how to deal with China.

Under Trump, the United States has embarked on what some are comparing to a new Cold War. Huge trade tariffs and growing competition in the military-strategic sphere are sending ripples through the entire Pacific region.

As China rises, there are even worries in some quarters that Australia may not always be able to rely on its US security umbrella.

A hard-hitting report from the United States Studies Centre at the University of Sydney in August said the US military is an "atrophying force" that is "dangerously overstretched" and "ill-prepared" for a confrontation with China.


Related Links
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TRADE WARS
US wants to make 'meaningful progress' in China trade talks
Washington (AFP) Sept 13, 2019
US trade negotiators want to make "meaningful progress" in upcoming talks with China, Treasury Secretary Steven Mnuchin said Thursday, one day after conciliatory gestures by both sides boosted hopes of an eventual resolution. Mnuchin said on CNBC he is "cautiously optimistic" about chances for a deal to resolve the conflict, while President Donald Trump hinted at a watering down of his position with the possibility of an interim deal. Washington and Beijing will first hold talks at the deputy le ... read more

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