Kudlow Says Tariffs ‘Will Play A Role’ In Future China Talks, ZTE Will Remain A Separate ‘Enforcement Issue’
WASHINGTON, May 21, 2018 — President Donald Trump’s trade war with China may be on hold after recent talks, but tariffs are still on the table, National Economic Council Director Larry Kudlow said Monday.
“I think we’re just rolling, there’s a lot of momentum from this framework,” Kudlow said, referring to the outcome of recent trade talks between Chinese representatives and U.S. Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and Trump trade adviser Peter Navarro.
Earlier in the day, Mnuchin called the result of the talks a “pause” in the looming trade war between the United States and China brought on by Trump’s announcement that he’d be imposing tariffs on Chinese goods.
Kudlow explained that the tariffs Trump had announced — which had not yet gone into effect — were “suspended for the moment” but added that they “are going to play a role in any negotiation, and enforcement.”
ZTE ‘part of the landscape’ but won’t be included in trade talks
While Kudlow acknowledged that the issue of whether the Trump administration will allow Chinese telecommunications equipment maker ZTE to resume doing business with American companies is “part of the landscape,” it won’t be part of trade discussions because it is an “enforcement issue.”
ZTE became an issue in US-China relations last month after the Commerce Department’s Bureau of Industry and Security issued an order denying ZTE the ability to export American-made products for seven years. But President Trump announced last week that he was asking Commerce Secretary Wilbur Ross to find a solution, which Kudlow said was in response to a request from Chinese President Xi Jinping.
The ban was a response to misconduct by ZTE executives
In March, ZTE executives agreed to settle the sanctions violations by paying a $1.19 billion fine and accepting a suspended seven-year export ban to automatically take effect if it was found that the company violated any aspect of the settlement agreement or committed any more violations of American Export Administration Regulations.
Because the two major components in most mobile phones — Google’s Android operating system and radio chips made by San Diego, California-based Qualcomm — are made in the United States, an export ban is a potential death sentence for the company.
But the Commerce Department imposed the ban after investigators discovered that company executives had made false statements and obstructed justice during negotiations to settle charges against the Shenzen, China-based company, formally known as the Zhongxing Telecommunications Equipment Corporation, for violating sanctions by selling telecom equipment to Iran and North Korea.
The Chinese company will ‘not be off the hook’
Asked about whether American officials’ myriad concerns with ZTE would be addressed, Kudlow promised that the company would not be off the hook.
“If anybody thinks that any changes are going to let them off scot-free, they are wrong,” Kudlow said while speaking to reporters outside the west wing of the White House.
Kudlow emphasized that any deal with Beijing that allows ZTE to once again purchase American-made components needed for mobile phones will involve “large fines” and “huge compliance.
“My sense is you might be looking at some changes around the edges, but I don’t know,” Kudlow added before explaining that any decision will be up to Commerce Secretary Wilbur Ross.
Chinese telecom equipment makers like ZTE and Huawei have also long been considered security risks by the American defense and intelligence establishments, which fear that the Chinese government-owned companies insert backdoor that could be used for espionage into their equipment.
As a result, the Pentagon recently banned the sale of Huawei and ZTE phones in the subsidized retail stores located on military bases known as Post Exchanges, and the Federal Communications Commission also issued an order prohibiting Universal Service Fund dollars from being spent on gear from either manufacturer.
Still, Kudlow reiterated that the Trump administration is “aware of all that,” implying that even if the effort to find a solution is successful, it would not mean ignoring any of the government’s concerns.
“We are aware of security issues, sanctions issues, technology theft issues, et cetera,” he said.
(Creative Commons Image: Chinese President Xi Jinping and his wife with President Donald Trump and Melania Trump at their Mar-a-Lago estate)
In U.S.-China Trade Dispute, Continuing to Impose Tariffs Hurts U.S. Innovation
WASHINGTON, July 22,2019 – As friction continues in the trade war between U.S. and China, policy experts believe that continuing to impose import tariffs will hurt U.S. innovation and provide China more economic leverage in the long run.
The U.S. has an estimated billion-dollar welfare loss due to its heavy reliance on tariffs, said Joshua Meltzer, senior fellow of global economy and development at the Brookings Institute on Thursday. Tariffs are “unlikely” to put U.S-China relations on a stable footing, he said.
The tension within these foreign relations is one of the most consequential and multilateral issues facing the global economy, said Cheng Li, director of the John L. Thornton China Center. Last year, U.S. and China have had zero percent of mutual investment between their tech sectors.
Derek Scissors, resident scholar at the American Enterprise Institute, said that the World Trade Organization is not equipped to resolve these technological issues. The U.S. currently does not have implementing regulations of export controls, he said, and that is why we need unilateral action on this matter.
Panelists also recognized that the Chinese state-led economic model makes future negotiations difficult, said Neena Shenai, visiting scholar at AEI.
China doesn’t believe in comparative advantage but in “absolute” advantage, said Rob Atkinson, president of the Information Technology and Innovation Foundation. That, he said, is the “core” problem.
Atkinson added that the Chinese president made a “strategic blunder” with pushing indigenous domestic innovation, which alienated imports.
For the U.S. to work with China on a “sustained” basis, said Scissors, China needs to have “some level” of pro-competition, pro-property reform. In an anti-competitive market, China will not do well unless it can harness a single, “transformational” technology, he said.
Despite the differences in China’s economic model, continued collaboration may be in the U.S.’ best interests.
If we use dictatorship as a reason not to trade with China, said Atkinson, then we would not be trading with forty percent of the world’s economy.
China has a “long way to go” before it can think of replacing the U.S. as a superpower, said Li. Huawei CEO Ren Zhengfei had acknowledged that within the next couple years, Huawei could lose around 30 billion U.S. dollars due to the import ban.
The goal should not be to stop China from rising, said Atkinson, but rather to stop China from hurting our economy while they do so.
Arsonist or Firefighter?
Trump Says He Won’t Impose Tariffs He Threatened Mexico With
WASHINGTON, June 7, 2019 — President Trump on Friday announced that Americans will not have to pay the five percent tax he recently threatened to impose on Mexican imports, citing an agreement reached with the Mexican government following negotiations led by Vice President Pence.
“I am pleased to inform you that The United States of America has reached a signed agreement with Mexico,” Trump said in a tweet Friday night, adding that the tariffs he’d proposed last week were “hereby indefinitely suspended.”
The Mexican government, Trump said, “has agreed to take strong measures” to curb the flow of migrants passing through their country from South and Central America en route to the United States.
A “US-Mexico Joint Declaration” posted to the State Department website elaborated on the President’s announcement by stating that the two governments “will work together to immediately implement a durable solution” to the influx of migrants seeking asylum in the United States, which the declaration called a “shared challenge.”
According to the declaration, Mexico will deploy its national guard forces throughout the country, with a particular focus on the Mexico-Guatemala border.
For the Trump administration’s part, the declaration references an expansion of “existing Migrant Protection Protocols” across the entire US-Mexico border. But that policy has already been ruled unlawful by a three judge panel of the Ninth Circuit Court of Appeals after a coalition of immigration advocacy groups filed suit, alleging that it violates the asylum provisions of the Immigration and Nationality Act.
The policy remains in effect, however, because the panel stayed its ruling pending an appeal to the full Ninth Circuit or the Supreme Court.
Lies From London
Fact Checking President Trump’s London Adventure
WASHINGTON, June 5, 2019 — President Trump on Wednesday finished up a two-day visit to the United Kingdom, during which he made a number of false or misleading statements. We separate the truth from the lies below.
Denying the existence of London protests
During a Tuesday press conference with British Prime Minister Theresa May, Trump was asked to respond to the highly visible protests against him during his visit to London, including thousands of demonstrators and the “Baby Trump” balloon which debuted during last year’s presidential trip to the UK.
Although Trump spent most of his trip moving from event to event via helicopter, he claimed that throngs of Londoners had taken to the streets in celebration of him and his presidency.
“As far as the protests, I have to tell you, because I commented on it yesterday: We left the Prime Minister, the Queen, the Royal Family — there were thousands of people on the streets cheering. And even coming over today, there were thousands of people cheering. And then I heard that there were protests. I said, “Where are the protests? I don’t see any protests.”
In actuality, protest organizers estimated that a crowd of 75,000 people had turned out to march against Trump’s visit to the UK.
Falsely claiming to have the highest-ever approval rating among GOP voters
During the same press conference with Prime Minister May, Trump was asked if he thought Republicans in Congress would take any action to block his plans to impose a five percent tax on all Mexican imports next week.
Trump replied that he did not think Congressional Republicans would do anything to stop him, in part because of his approval rating among Republican voters.
“I have a 90 percent — 94 percent approval rating, as of this morning, in the Republican Party. That’s an all-time record.”
While polling by Gallup has shown Trump to have a 90 percent approval rating among Republicans in the past, his approval rating slipped by a percentage point last month to 89 percent.
That 90 percent approval rating does not even place him among the top three highest approval ratings for Republican presidents among Republican voters. At the height of his popularity, George W. Bush could boast of a 99 percent approval rating among Republicans. His father, George H.W. Bush, once had the favor of 97 percent of GOP voters, and his predecessor — Ronald Reagan — had a peak approval rating of 93 percent.
Trump’s is the 6th highest-rated Republican president among Republicans, as he is also topped by Presidents Dwight Eisenhower (95 percent) and Richard Nixon (91 percent).
Confusing the United Kingdom with China
During a Tuesday roundtable with British officials and business leaders, Trump claimed that the United Kingdom is the United States largest trading partner.
“We are your largest partner. You’re our largest partner. A lot of people don’t know that.”
The reason “a lot of people” don’t know that the UK is the United States’ largest trading partner is because it’s not true.
According to the Congressional Research Service, the Department of Commerce’s Bureau of Economic Analysis found that America’s largest trading partner in 2017 was China, with $711.7 billion in total goods and services passing between the two countries. Canada is next, with $679.9 billion of goods and services exchanged, followed by Mexico ($622.1 billion), Japan ($286.1 billion), and Germany ($239.8 billion).
Claiming that Winston Churchill never worried about nuclear weapons
During a televised interview with British journalist Piers Morgan, Trump invoked the threat of nuclear weapons when Morgan asked him to compare himself with Winston Churchill.
“Churchill didn’t have to worry so much about the nuclear.”
During World War II, nuclear weapons were a significant enough concern for both Churchill and then-President Franklin Roosevelt that Roosevelt gave the Manhattan Project — the top-secret effort to construct the world’s first nuclear weapons — top priority throughout the war. The project began after Albert Einstein wrote a letter Roosevelt, warning him that German scientists could potentially build a weapon to unleash the terrible destruction that would result from splitting uranium atoms.
According to the Atomic Heritage Foundation, both leaders had ample reason to worry, as Nazi scientists began work towards the construction of atomic weapons in 1939. Though their project was not successful, they nevertheless held a considerable lead when America began the Manhattan Project.
Denying that anyone had told the Navy to hide the U.S.S. John S. McCain
During the same interview, Trump denied that White House staffers had told the Navy to keep the Arleigh Burke-class destroyer U.S.S. John McCain out of sight during his recent trip to Japan.
“I’m not even sure it happened.”
Trump may not be sure that it happened, but the United States Navy recently confirmed to NBC News that the White House Military Office requested that the ship, which was originally named for the late Senator’s father and grandfather, be kept from view while the President delivered a Memorial Day address aboard the U.S.S. Wasp, which was moored nearby.
Calling Ireland part of the United Kingdom
Trump was set to visit France on Wednesday for an event marking the 70th anniversary of D-Day, the beginning of the allied invasion of France that led to the Nazis’ defeat in World War II. But he first made an overnight stop in Ireland, where he owns a golf resort.
To avoid the appearance of making a stop on an international trip solely for the purpose of playing golf, Trump arranged a meeting with Irish Taoiseach (Prime Minister) Leo Varadkar at the Shannon airport. During a media availability with Varadkar, Trump was asked if he’d visited to promote his Doonbeg, Ireland golf resort.
“This trip is really about the great relationships that we have with the UK.”
Doonbeg is located in the Republic of Ireland, which has been a sovereign nation since 1921.