Trump says tariffs on China could remain in place

Market: Crude oil, Fertilizers, Metals, Natural gas
20/03/19

The tariffs imposed by the US on imports from China could remain in place even after the two countries sign a comprehensive trade agreement, President Donald Trump said today.

"We are not talking about removing (tariffs), we are talking about leaving them for a substantial period of time," Trump told reporters at the White House today. "We have to make sure that if we do a deal with China, China lives by the deal. Because they had a lot of problems living by the previous deals."

Trump's remarks appear to drive a harder bargain for a potential deal to end the ongoing trade war than what US officials have suggested they would seek. US trade representative Robert Lighthizer has told members of Congress the terms of the agreement would include lifting the tariffs in exchange for extensive changes in China's trade policies, with the possibility of reimposing tariffs later if Washington believes its concerns are not addressed.

Trump is proposing a different sequence, keeping the tariffs in place unless China is shown to adhere to its end of the trade deal.

The terms of the agreement outlined by Lighthizer would include an inspection mechanism to ensure Beijing's compliance on the so-called "structural issues" — protecting intellectual property, ending forced technology transfer and lifting restrictions on US companies' participation in banking and other sectors. The US administration holds that the large US trade deficit with China — $419bn last year — reflects Beijing's protectionist measures that it is working to overturn.

The enforcement mechanism will include monthly meetings between the US Trade Representative's (USTR) office and the Chinese Commerce Ministry, quarterly meetings at the deputy ministerial level, and a semi-annual meeting between Lighthizer and his Chinese counterpart to review complaints from companies.

While public remarks by Trump and his senior Cabinet members in recent weeks provide an outline of what Washington expects, Beijing's position is less clear. Both sides insist that negotiations are going well and making progress, even though the timeline for a meeting between Trump and Chinese president Xi Jinping that was expected to seal the deal is starting to slide.

Chinese market participants expect the US to lift all tariffs imposed last year once the agreement is signed, paving the way for Beijing to lift the retaliatory taxes on imports of energy, agricultural and other commodities from the US. The trade war cut off China's imports of crude and LNG from the US for most of the second half of 2018.

Trump last month he wanted a "grand deal" covering all bilateral issues — preferably agreed to in a one-on-one session with Xi. A meeting between the two leaders was tentatively scheduled to take place this month at Trump's Mar-a-Lago property in Florida. But it is delayed until April, US officials said. Lighthizer and treasury secretary Steven Mnuchin are expected to travel to Beijing next week to continue negotiations. Lighthizer last week said the two sides remain apart on major issues.

The bargain offered by the US may be a hard one for Beijing to accept, especially the enforcement mechanism. Beijing has offered to buy more US energy and agricultural products, in addition to addressing structural issues. Chinese negotiators likely would prefer to finalize terms of the agreement before committing to Xi's meeting with Trump.

Existing US tariffs affect about half of the $539bn/yr in imports from China, including many chemical and industrial products. USTR has indefinitely postponed a further escalation in tariffs. Reciprocal tariffs imposed by Beijing cover 90pc of the $120bn/yr of China's imports from the US, including most energy commodities.

"We have our representatives going there this weekend to further the deal. We are taking in billions and billions of dollars in tariff money, and for a period of time that will stay," Trump said.

"Recent consultations between the economic and trade teams of China and the US have made substantial progress," the Chinese foreign ministry said. "We believe the two teams will follow the instructions of the two heads of state and reach a mutually beneficial and win-win agreement on the basis of mutual respect."

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Cop: German opposition pushes for Article 6

Berlin, 14 November (Argus) — Germany's main opposition parties have welcomed the progress achieved on Article 6 of the Paris Agreement in at the UN Cop 29 climate summit in Baku, Azerbaijan. They have called on Germany and the EU to make better use of the instrument to allow for more cost-efficient climate action. Germany's dominant opposition party, the right-of-centre CDU/CSU, on 14 November commended the framework under Article 6 as an efficient way of reducing greenhouse gas (GHG) emissions. Article 6 of the Paris accord aims to help set rules on global carbon trade. The Article 6 mechanism allows for reductions to happen where they are quickest, cheapest and easiest to be carried out, the CDU head of the working group on climate action and energy, Andreas Jung, said in a debate in the lower house of parliament, the Bundestag. The deputy head of the FDP faction Lukas Koehler, also speaking in the Bundestag on 14 November, called on Germany and the EU to "finally" integrate the Article 6 in their climate action plans. Koehler argued that if for instance Germany's progress in emissions reduction should turn out to be too slow, the country could temporarily shift its efforts — and the associated finance — to where more rapid mitigation might be achieved, such as Brazil. The EU, of which Germany is a member state, will not make use of Article 6 credits, at least until 2030, to reach its so-called nationally determined contribution (NDC) – its climate action pledge — under the Paris climate accord. The EU has been seeing progress on ongoing Article 6 negotiations at Cop 29, the European Commission's principal advisor for international aspects of EU climate policy Jacob Werksman said today, "mostly because parties are now agreeing with the EU and others that were concerned about the transparency and accountability of the bilateral markets that operate under Article 6.2". Werksman believes there is enough momentum for negotiations to be concluded next week, noting that the atmosphere has "improved" compared with previous negotiations, which echoes the sentiment expressed by a number of negotiators earlier this week . Werksman pointed in particular to the US now agreeing with others and helping to broker compromises. Koehler also warned German government representatives in Baku to refrain from "expensive" pledges which may strain the country's budget. Developed countries agreed in 2009 to deliver $100bn/yr in climate finance to developing nations, and Cop 29 is focused on the next iteration of this — the new collective quantified goal (NCQG) . In a statement, Germany — represented by Scholz despite his absence at the Cop — and other G7 members like Canada, France, or the Netherlands agreed that "developed countries must continue to take the lead and live up to existing finance commitments". Germany faces early elections as the government lost its majority last week following the sacking, by chancellor Olaf Scholz of the Social Democrat SPD, of finance minister Christian Lindner of the pro-business FDP party and the FDP's subsequent withdrawal from the ruling coalition. Polls suggest that the CDU/CSU group will easily win the next federal elections which are scheduled to take place on 23 February. The FDP's persistent refusal to allow Germany to take on more debt to enable more public funding, including of clean technologies, was the main reason for Lindner's sacking. By Chloe Jardine and Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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LAT Nitrogen halts sales to Germany on high gas costs

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Guyana hires floating generators to avert outages

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European urea market braces for CBAM impact in 2026

14/11/24

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14/11/24

European urea market braces for CBAM impact in 2026

London, 14 November (Argus) — European producers and traders of urea are preparing for the phase-in of the EU's Carbon Border Adjustment Mechanism (CBAM) in early 2026. While EU producers expect their market share to rise, questions about the implementation, pricing, and oversight remain, leading to uncertainty among agricultural urea traders. The European AdBlue market is also weighing the possible impact. Under CBAM, which was passed by the EU in May 2023, urea importers will have to buy certificates to cover the carbon emitted during production wherever the plant is located. In the UK, the government confirmed its CBAM application on fertilizers and other commodities from 1 January 2027. CBAM is aimed at creating a level playing field for imports to the EU and the UK, while nudging non-EU countries towards climate action. 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Cop: EU ETS volatility problem for corporate CCS case

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