Trump's Hardball on Trade to Test China's ‘Strategic Composure’- Bloomberg

Trump's Hardball on Trade to Test China's ‘Strategic Composure’

Bloomberg News

March 7, 2018, 6:59 PM GMT+11

Escalation in tensions risks pushing President Xi into corner

Gary Cohn resignation a blow to free-trade wing of Trump camp

The Kwai Tsing Container Terminals in Hong Kong Photographer: Brent Lewin/Bloomberg

China’s policy of "strategic composure" in dealing with U.S. President Donald Trump’s America First ethos faces its sternest test yet.

Having already absorbed levies on washing machines and solar panels and last week’s proposed tariffs on steel and aluminum, China awoke Wednesday to news that Trump is mulling a broader clampdown on its investment in the U.S. and tariffs on a range of imports in retaliation for alleged theft of intellectual property. And in a blow to the free-trade wing of Trump’s camp, White House chief economic adviser Gary Cohn announced Tuesday that he’s resigning.

While Chinese media reported Liu He, President Xi Jinping’s top economic policy adviser, said China and the U.S. expressed no desire for a trade war during his recent trip to the U.S., those sentiments may already be out of date. Any escalation of tensions risks pushing Xi into a corner, spurring retaliation and a tit-for-tat trade war between the world’s two biggest economies.

"China is learning the hard way that this administration may not be the pushover that Chinese officials had come to believe it was," said Eswar Prasad, a former chief of the International Monetary Fund’s China division and now a professor at Cornell University in Ithaca, New York. "They may be forced to offer substantive concessions in order to keep the bilateral economic relationship on an even keel. "

In the past few months, China has prepared reforms that may help ease U.S. anger at what it deems to be unfair practices fueling its huge trade deficit with the world’s second-biggest economy. Beijing’s leaders are also wary of a trade war that could increase food prices, which has long been a politically sensitive issue for the Communist Party.

Read More: China’s Most Powerful Weapon in a Trade War May Backfire

Liu in January said China’s reforms this year would exceed the world’s expectations as the nation celebrates the 40th anniversary of its shift away from a closed Communist system. Visiting Washington last week, Liu again told U.S. business leaders that he’d take steps to overhaul China’s economy, according to a person familiar with the situation.

Analysts predict China will press ahead with plans to open its financial sector to the world, probably even using this pledge as a bargaining tool. Another reason to stay the course: it’s in China’s interests to do so as it seeks to lure more global capital to its markets.

The latest measures being mulled by the Trump administration have wider implications and challenge China’s pivotal "Made in China 2025" strategy, said Xie Dongming, a Singapore-based economist at Oversea-Chinese Banking Corp. The policy blueprint envisions global competitiveness by that year across 10 key industries, from robots to medical devices.

Whether tensions escalate into a full-blown trade war likely hinge on the outcome of a so-called Section 301 probe and China’s reaction to it, Xie said.

Tariffs, Restrictions

Under the most severe scenario being weighed, the U.S. could impose tariffs on a wide range of Chinese imports, from shoes and clothing to consumer electronics, according to two people familiar with the matter who spoke on condition of anonymity because the discussions aren’t public.

The Trump administration could combine the tariffs with restrictions on Chinese investments in the U.S., which are reviewed for national-security risks by Treasury’s Committee on Foreign Investment in the U.S., the people said. The new measures being considered by the administration could go beyond even domestic security considerations.

"U.S. strategy towards China has shifted from engagement to containment," said Tao Dong, vice chairman for Greater China at Credit Suisse Private Banking in Hong Kong. "The Sino-U.S. relationship may experience some very volatile times ahead."

China’s posture of "strategic composure” toward Trump initially paid off as Trump withdrew or toned down threats to improve ties with Taiwan, brand China a currency manipulator and punish Beijing over its support for North Korea.

While it’s stuck to the same playbook even as Trump slaps on trade tariffs, Xi has indicated before that his patience has limits. During a discussion with Barack Obama days after the 2016 election, Xi told the outgoing U.S. president that he wouldn’t throw the first punch at Trump -- but he also wouldn’t sit back and take one either.

Apple, Walmart

“China will take active measures and not participate in a trade war with the U.S.,” said Zhou Qi, a research fellow at the Chinese Academy of Social Sciences’s Institute of American Studies in Beijing. “China is sincere about making concessions, but those concessions won’t be without limit.”

Imposing tariffs on a wide range of Chinese exports including consumer electronics would be problematic for Trump too. They would ripple across a vast global supply chain, hurting allies from Japan to South Korea and Taiwan as well as companies like Apple Inc. and Walmart Inc.

"The chance of a full on trade war is still small despite the recent rhetoric from the U.S.," said Wang Tao, head of China economic research at UBS Group AG in Hong Kong. "That said, we fully expect U.S.-China trade friction to rise, with the U.S. imposing more trade restrictions/tariffs on more Chinese products."

— With assistance by Kevin Hamlin, Andrew Mayeda, Miao Han, Dandan Li, Jennifer Jacobs, and Brendan Scott

Democrats Mobilized by Anger at Trump Surge in Texas Primaries - Bloomberg

Democrats Mobilized by Anger at Trump Surge in Texas Primaries

By

March 7, 2018, 5:59 PM GMT+11

Strong turnout recorded in first primary of 2018 campaign

Influx of women candidates reflected in state results

Rep. Beto O'Rourke, right. Photographer: Chip Somodevilla/Getty Images

Texas Democrats surged to voting booths in the first primary of the 2018 election campaign, providing a clear demonstration of a fired-up party on pace to send a significant number of women to face Republican congressional candidates in November.

The Democratic turnout Tuesday was particularly strong in affluent suburban areas that are models for the kind of congressional districts the party is targeting in its quest to win control of the U.S. House in midterm elections that will be the first national referendum on Donald Trump’s presidency.

With 97 percent of precincts counted, the 1,027,160 votes tabulated in the Democratic Senate primary easily exceed the 2014 total, 510,009. The energy displayed by Democrats in a state that traditionally leans Republican may bode well for the minority party in Washington, if it can be sustained throughout the year and replicated in areas with competitive races.

In the U.S. Senate primary, incumbent Ted Cruz easily won the Republican nomination and will face Democratic Representative Beto O’Rourke in November. Cruz is favored to win re-election in a state where Trump won by 9 percentage points and the last Senate election Democrats won was in 1988. While Democrats cast significantly more ballots than they had in the last midterm, Republicans still outnumbered them statewide, casting 1.5 million votes in the Republican Senate primary.

Women on Ballots

The nation’s second-largest state will have at least 13 Democratic women on November’s ballot running for the House from its 36 districts. The total number of Democratic women on the ballot won’t be known until final vote tallies are complete and, in some cases, runoffs on May 22 that were triggered because no candidate secured a majority of the vote.

Democratic energy and the fact that at least eight Texans will leave the U.S. House before the next term swelled the number of primary candidates. For the first time in decades, the Democratic Party fielded at least one candidate in every Texas congressional district.

As Republicans nationally confront Democratic energy spurred by anger with Trump, they’re facing historical trends favoring the party out of power, retirements in their ranks, discouraging polling and a record of generally poor showings in local, state and special elections last year.

House Battle

A switch in House control is well within reach of Democrats when compared with historical averages. They need a net gain of 24 seats, and the party holding the White House has averaged a net loss of 26 in midterm elections since the end of World War II.

Although Democrats need just two seats to claim the Senate, they have a bigger challenge there because they’re defending 26 seats in the upper chamber, compared to just eight for Republicans.

The turnout strength among Democrats in Texas was on display in suburban districts that are the main targets of Democrats. The balloting in the 7th congressional district near Houston and the 32nd congressional district in the Dallas area were well ahead of totals recorded in the 2014 primary.

Both of those districts were won by Hillary Clinton in the 2016 presidential election and are among at least three in the state that Democrats hope to flip from Republican control in their efforts to win the House. Both of those districts will hold runoffs to pick the Democratic candidate.

In the 7th, Democratic candidate Laura Moser advanced, after the national committee that oversees the party’s House election efforts took the unusual step of trying to disparage her campaign because it fears she’s too liberal to win a general election. She’ll be joined by attorney Lizzie Fletcher in a runoff for the right to take on GOP Representative John Culberson in an affluent and highly educated area that Clinton narrowly won.

Democratic Fractures

In the Senate race, some of the Democratic Party’s fractures could be seen in the results, with Sema Hernandez, a self-described “progressive" and follower of 2016 presidential candidate Senator Bernie Sanders, recording a healthy share of the party’s vote.

Before the primary culled the field, there were 50 women running for the House in Texas, up from 13 in 2014 and 18 in 2016, according to the Center for American Women and Politics at Rutgers University. Thirty-seven of them are Democrats, almost matching the total of 38 Democratic women who sought House seats in Texas in the three previous election cycles combined.

The primary election season won’t end until September, although the bulk of the state winnowing contests will be held in May and June.

Next up on the election calendar, on March 13, is a surprisingly competitive special election in a southwestern Pennsylvania congressional district. Trump plans to travel there on Saturday in hopes of saving the seat for his party.

— With assistance by Gregory Giroux

Coca-Cola breaks 130-year-old tradition with first alcoholic drink - Telegraph

Coca-Cola breaks 130-year-old tradition with first alcoholic drink

Coca-Cola is experimenting with the creation of a popular type of Japanese alcopop

Coca-Cola is experimenting with the creation of a popular type of Japanese alcopop CREDIT: AP

Danielle Demetriou

7 MARCH 2018 • 7:27AM

With its iconic red label and secret recipe, it’s been one of the world’s most famous soft drinks for more than a century. Now, however, Coca-Cola is on the brink of a new chapter – with plans to launch its first alcoholic drink.

The company is currently experimenting with the creation of a popular type of Japanese alcopop known as Chu-Hi, containing distilled shochu alcohol mixed with flavoured carbonate water.

The low alcohol canned drink will be launched in Japan, home to a thriving if competitive industry, with countless Chu-Hi flavoured drinks – from kiwi to yuzu - sitting on convenience store shelves across the country.

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Confirming the plan in an interview on the company’s website, Jorge Garduño, Coca-Cola’s Japan president, said: “This is a canned drink that includes alcohol; traditionally, it is made with a distilled beverage called shochu and sparkling water, plus some flavouring. We haven’t experimented in the low alcohol category before, but it’s an example of how we continue to explore opportunities outside our core areas.”

Highlighting how “unique” this venture was for the company, Mr Garduño, who did not specify a timeline for the new product, added: “Coca-Cola has always focused entirely on non-alcoholic beverages, and this is a modest experiment for a specific slice of our market.

“The Chu-Hi category is found almost exclusively in Japan. Globally, it’s not uncommon for non-alcoholic beverages to be sold in the same system as alcoholic beverages. It makes sense to give this a try in our market.”

The concept of alcoholic Coca-Cola drinks, however, was likely to stay within Japan rather than expand globally, due to the “unique and special” qualities of the Japanese market, he added.

Coca-Cola’s inaugural foray into the world of alcoholic beverages takes place more than 130 years after the original drink was first launched in the US, minus any alcohol in order to circumvent restrictive prohibition laws.

It coincides with shrinking global demand for soft fizzy drinks, due to health concerns relating to sugar consumption, with sports drinks and water emerging as Coca-Cola’s strongest performing beverages.

Meanwhile, Japan’s alcopop market has grown expansively since the country’s first ready-to-drink Chu-Hi product for stores – called hiLicky - was reportedly released in 1983, with young women fuelling sales.

Trump denies chaos: Can his zig-zag style bring results? - Fox News

6/3/2018

Trump denies chaos: Can his zig-zag style bring results?

Howard Kurtz By Howard Kurtz | Fox News

President Trump, whose frenetic style of governing has become perhaps his defining media image, could be facing a turning point in the coming weeks.

If he can get results, it would go a long way toward quieting the complaints about the zig-zag nature of his policymaking. If he falls short, his detractors will say he’s merely running a reality TV show.

His is an unconventional negotiating style, to say the least, maybe not in real estate but in the political world. He keeps everyone off balance. Sometimes his allies aren’t sure whether they can depend on him.

The president yesterday pushed back against the media’s “chaos” narrative, tweeting: “The new Fake News narrative is that there is CHAOS in the White House. Wrong! People will always come & go, and I want strong dialogue before making a final decision. I still have some people that I want to change (always seeking perfection). There is no Chaos, only great Energy.”

But that energy often creates sparks around the White House.

Trump surprised his own staff by announcing he’ll slap tariffs on steel and aluminum, despite the opposition of his chief economic adviser, Gary Cohn, who resigned yesterday (adding to the appearance of chaos). Many free-trade Republicans on the Hill also hate the tariffs, and after an outcry from Paul Ryan and company, Trump is sending signals that some industries could be exempt.

And while the president generated outrage in Canada and Mexico, he may give them a pass if they renegotiate parts of NAFTA.

So was taking a maximalist position crazy, or a way to seize more leverage?

The same goes for North Korea’s surprising signal yesterday that it is willing to suspend its nuclear testing in exchange for talks with the administration. Now this may, of course, merely be a tactical move on the part of Kim Jong-un.

But given the thunderous criticism that Trump took for his Twitter taunts against “little rocket man,” it would be striking if that—and sanctions—forced Kim to the table.

Trump put gun legislation at the top of the national agenda by responding to the Florida school shooting with demands for action and no fewer than three televised sessions on the emotional subject.

He has been playing the bipartisan power broker searching for common-sense solutions. He has seemed to side with Democrats on tightening background checks and age limits for certain weapons, even taunting Republican lawmakers by asking whether they’re “terrified” of the NRA.

The president has twice met with NRA leaders during this process, and it’s not clear whether he’s pulling back on his proposals or just vouching for the group’s patriotism.

If Trump can bring along enough Republicans to pass even modest measures, he will have accomplished something that Barack Obama could not.

But if it’s all for naught—and Congress has been a bulwark against any gun measures—Trump will have failed the test he devised for himself.

Television will replay the clips where he said action was urgent, that sometimes leaders have to disagree with the NRA, that he was determined to prevent more mass shootings.

And the president’s critics will say it was all for show, just like on immigration.

There too, at a televised session, Trump said he’d be willing to take the heat from both sides. There, too, he insisted he wanted to help the dreamers in exchange for a border wall and revamping the immigration system.

There, too, he basked in the favorable media attention about his dealmaking with Chuck and Nancy.

But in the end the president seemed to back off the compromise proposal—Democrats have also dug in on their demands—and nothing, so far, has been done.

It’s no secret that the press and official Washington doesn’t like Trump’s style. They prefer consistent politicians who quietly hammer out agreements behind closed doors.

Putting the talks on camera, though, is a more transparent way of doing business, even if it invites more posturing.

But in the end we measure our presidents by results. If the man who wrote “The Art of the Deal” can’t close some of these deals, he’ll be dismissed mainly as a television performer.

Compromise may be a dirty word in Washington these days, but that’s what it takes to get something done.