The Trump administration’s threat of 25% tariffs on $50bn of Chinese imports to the United States has inevitably dominated coverage of the President’s decision to escalate a long-standing irritation with Chinese approaches to US inward investment into a full-blown trade dispute. But there are three legs to the US review of Chinese practice under Section 301 of the 1974 Trade Act, and tariffs are only one.
Was it a rehash of old announcements or concessions that could prevent a trade war? These starkly different verdicts have been offered on President Xi’s plans to liberalise the Chinese economy, set out at the Boao forum this week. In practice, it was neither. What Xi provided is a basis for negotiation, which means the hard work still needs to be done if trade tensions between the US and China are to be deescalated.
Signs are clearly pointing to the two winners of Italy’s 4 March election – the Five Star Movement and Lega – being able to work together, and it is looking increasingly likely they will seek to reach some sort of governing arrangement. But, despite successfully reaching an agreement on the speakers for the Chamber of Deputies and the Senate last week, they will find that agreeing on a common policy programme will prove significantly more tortuous, and involve compromises between often conflicting and contradicting positions.
For all of Donald Trump’s flexibility on policy issues, US-China trade is one area where he has demonstrated surprisingly constant views over the years. Unlike the Washington political establishment, Trump and his group of trade advisers not only believe that the integration of the American and Chinese markets since China’s 2001 entry into the WTO has not benefited both countries equally (not an unusual view in Washington), but that the US has not been assertive enough in rebalancing the relationship. The White House’s announcement yesterday of a raft of economic and investment sanctions against China as a response to the country’s “economic aggression”, is Trump’s attempt at doing this.
The UK government has finally started to flesh out what sort of future trade and regulatory relationship it wants to negotiate with the EU. Central to this are a revised set of market access and product standard recognition rights in the EU single market based on what the UK often calls ‘mutual recognition’. This suggestion has been rebuffed in a number of places and ways by the EU. Why is this?
At the China Entrepreneurs Conference in Yabuli last week (see my previous blog for reflections), the theme was 40 years of reform and opening up of China’s economy. Earlier in the week, news seeped out that China’s two-term leadership rule was about to be scrapped, allowing Xi Jinping to stay in power beyond 2023. Commentary flooded the international media, but participants at Yabuli were strangely silent on the issue. This led me to think about the role that political leadership has played in the transformation of China over the last 40 years, and what the Chinese think of their current leader.
Sunday’s result of the SPD membership vote has been welcomed across Europe. Many, from Paris to Rome and Madrid, are relieved that the SPD will be part of the next government (and the FDP in opposition). What makes Social Democrats so attractive is their commitment to ‘more Europe’ and eurozone reform, and their openness to put additional German money on the table to achieve it. The prospect of greater risk sharing in the eurozone has helped lift the euro in recent months. The hope is that Europe will benefit from both, more German money and Germany’s reputation as a sound fiscal manager. A closer look at the grand coalition agreement however calls into question whether it can deliver both.
Most Davos regulars will not know of the town of Yabuli, a remote town in northern China closer to Vladivostok than Beijing. But, having spent much of last week trekking to and from Yabuli, I have realised both towns have something in common. I was there to attend the annual China Entrepreneurs Forum (think the World Economic Forum but with no politicians or NGOs). Yabuli has less of the old-world charm of the Swiss Alps, it is located in the province of Heilongjiang (think industrial rust-belt rather than cuckoo clocks) but both are high-end ski resorts, a long drive from the nearest airport and both events are full of rather self-congratulatory chatter.
The Institute for Government’s model of managed divergence for the UK and EU economies has been influential in shaping the UK government’s position. It’s an ingenious attempt to address some of the thorniest economic and political challenges presented by Brexit. But while it may provide a basis for the UK cabinet ministers to bridge their differences, it is unlikely to be acceptable to the EU, now or in the future.
Transport for London (TfL) is the city’s transport regulator, responsible for operating multiple modes of transport for 1.3bn passengers a year, such as the Tube, the Emirates Air Line and London’s 700 different red bus routes. In addition to this operational role, TfL has a legal duty to grant – and police – the licences of private hire operators, traditional taxis and their drivers.