China warns of legal action against anyone applying US restrictions on use of Huawei AI chips
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Straits Times
an hour ago
- Straits Times
US, China to resume tariff talks in effort to extend truce by 90 days
Find out what's new on ST website and app. US Treasury Secretary Scott Bessent and Chinese Vice-Premier He Lifeng will lead tariff talks on July 28, in Stockholm. STOCKHOLM – Senior US and Chinese negotiators will meet in Stockholm on July 28 to tackle longstanding economic disputes at the centre of the countries' trade war, aiming to extend a truce keeping sharply higher tariffs at bay. The South China Morning Post reported on July 27 that the two sides are expected to agree to extend the truce by three more months. China is facing an Aug 12 deadline to reach a durable tariff agreement with President Donald Trump's administration, after Beijing and Washington reached a preliminary deal in June to end weeks of escalating tit-for-tat tariffs. Without an agreement, global supply chains could face renewed turmoil from duties exceeding 100 per cent. The Stockholm talks, led by US Treasury Secretary Scott Bessent and Chinese Vice-Premier He Lifeng, take place a day after European Union chief Ursula von der Leyen meets Mr Trump at his golf course in Scotland to try to clinch a deal that would likely see a 15 per cent baseline tariff on most EU goods. Trade analysts on both sides of the Pacific say the discussions in the Swedish capital are unlikely to produce any breakthroughs but could prevent further escalation and help create conditions for Mr Trump and Chinese President Xi Jinping to meet later in 2025. Previous US-China trade talks in Geneva and London in May and June focused on bringing US and Chinese retaliatory tariffs down from triple-digit levels and restoring the flow of rare earth minerals halted by China and Nvidia H20 AI chips and other goods halted by the United States. Top stories Swipe. Select. Stay informed. Singapore Sewage shaft failure linked to sinkhole; PUB calling safety time-out on similar works islandwide Singapore Tanjong Katong Road sinkhole did not happen overnight: Experts Singapore Workers used nylon rope to rescue driver of car that fell into Tanjong Katong Road sinkhole Asia Singapore-only car washes will get business licences revoked, says Johor govt World Food airdropped into Gaza as Israel opens aid routes Sport Arsenal beat Newcastle in five-goal thriller to bring Singapore Festival of Football to a close Singapore Benchmark barrier: Six of her homeschooled kids had to retake the PSLE Asia S'porean trainee doctor in Melbourne arrested for allegedly filming colleagues in toilets since 2021 So far, the talks have not delved into broader economic issues. These include US complaints that China's state-led, export-driven model is flooding world markets with cheap goods, and Beijing's complaints that US national security export controls on tech goods seek to stunt Chinese growth. 'Stockholm will be the first meaningful round of US-China trade talks,' said Mr Bo Zhengyuan, Shanghai-based partner at China consultancy firm Plenum. Deals, deals, deals Mr Trump has been successful in pressuring some other trading partners, including Japan, Vietnam and the Philippines , into deals accepting higher US tariffs of 15 to 20 per cent. He said there was a 50-50 chance that the US and the 27-member European Union could also reach a framework trade pact, adding that Brussels wanted to 'make a deal very badly'. Two of Mr Trump's top trade officials, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer, will attend the Scotland talks and then travel to Stockholm. Analysts say the US-China negotiations are far more complex and will require more time. China's grip on the global market for rare earth minerals and magnets, used in everything from military hardware to car windshield wiper motors, has proved to be an effective leverage point on US industries. Trump-Xi meeting? In the background of the talks is speculation about a possible meeting between Mr Trump and Mr Xi in late October. Mr Trump has said he will decide soon whether to visit China in a landmark trip to address trade and security tensions. A new flare-up of tariffs and export controls would likely derail any plans for a meeting with Mr Xi. 'The Stockholm meeting is an opportunity to start laying the groundwork for a Trump visit to China,' said Ms Wendy Cutler, vice-president at the Asia Society Policy Institute. Mr Bessent has already said he wants to work out an extension of the Aug 12 deadline to prevent tariffs snapping back to 145 per cent on the US side and 125 per cent on the Chinese side. Still, China will likely request a reduction of multi-layered US tariffs totaling 55 per cent on most goods and further easing of US high-tech export controls, analysts said. Beijing has argued that such purchases would help reduce the US trade deficit with China, which reached US$295.5 billion (S$379 billion) in 2024. China is currently facing a 20 per cent tariff related to the US fentanyl crisis, a 10 per cent reciprocal tariff, and 25 per cent duties on most industrial goods imposed during Mr Trump's first term. Mr Bessent has also said he would discuss with Mr He the need for China to rebalance its economy away from exports toward domestic consumer demand. The shift would require China to put an end to a protracted property crisis and boost social safety nets to encourage household spending. Mr Michael Froman, a former US trade representative during former president Barack Obama's administration, said such a shift has been a goal of US policymakers for two decades. 'Can we effectively use tariffs to get China to fundamentally change their economic strategy? That remains to be seen,' said Mr Froman, now president of the Council on Foreign Relations think-tank. REUTERS
CNA
4 hours ago
- CNA
US commerce secretary says Trump really likes TikTok, but app has to move to US ownership
WASHINGTON :U.S. President Donald Trump likes TikTok but the Chinese-owned short video app, used by some 170 million Americans, has to move to U.S. ownership, Secretary of Commerce Howard Lutnick said on Sunday. "The President really likes TikTok, and he said it over and over again, because, you know, it was a good way to communicate with young people," Lutnick said in an interview on Fox News Sunday with Shannon Bream. "But let's face it, you can't have the Chinese have an app on 100 million American phones, that is just not okay. So, it's got to move to American ownership, it's got to move to American technology, American algorithms," he said. "I know the President is positive towards TikTok, if it can move into American hands."
CNA
5 hours ago
- CNA
US Fed poised to hold off on rate cuts, defying Trump pressure
WASHINGTON: The US central bank is widely expected to hold off slashing interest rates again at its upcoming meeting, as officials gather under the cloud of an intensifying pressure campaign by President Donald Trump. Policymakers at the independent Federal Reserve have kept the benchmark lending rate steady since the start of the year as they monitor how Trump's sweeping tariffs are impacting the world's biggest economy. With Trump's on-again, off-again tariff approach - and the levies' lagged effects on inflation - Fed officials want to see economic data from this summer to gauge how prices are being affected. When mulling changes to interest rates, the central bank - which meets on Tuesday and Wednesday - seeks a balance between reining in inflation and the health of the jobs market. But the bank's data-dependent approach has enraged the Republican president, who has repeatedly criticised Fed Chair Jerome Powell for not slashing rates further, calling him a "numbskull" and "moron". Most recently, Trump signalled he could use the Fed's US$2.5 billion renovation project as an avenue to oust Powell, before backing off and saying that would be unlikely. Trump visited the Fed construction site on Thursday, making a tense appearance with Powell in which the Fed chair disputed Trump's characterisation of the total cost of the refurbishment in front of the cameras. But economists expect the Fed to look past the political pressure at its policy meeting. "We're just now beginning to see the evidence of tariffs' impact on inflation," said Ryan Sweet, chief US economist at Oxford Economics. "We're going to see it (too) in July and August, and we think that's going to give the Fed reason to remain on the sidelines," he told AFP. "TRIAL BALLOON" Since returning to the presidency in January, Trump has imposed a 10 per cent tariff on goods from almost all countries, as well as steeper rates on steel, aluminium and autos. The effect on inflation has so far been limited, prompting the US leader to use this as grounds for calling for interest rates to be lowered by three percentage points. Currently, the benchmark lending rate stands at a range between 4.25 per cent and 4.50 per cent. Trump also argues that lower rates would save the government money on interest payments, and floated the idea of firing Powell. The comments roiled financial markets. "Powell can see that the administration floated this trial balloon" of ousting him before walking it back on the market's reaction, Sweet said. "It showed that markets value an independent central bank," the Oxford Economics analyst added, anticipating Powell will be instead more influenced by labour market concerns. Powell's term as Fed chair ends in May 2026. JOBS MARKET "FISSURES" Analysts expect to see a couple of members break ranks if the Fed's rate-setting committee decides for a fifth straight meeting to keep interest rates unchanged. Sweet cautioned that some observers may spin dissents as pushback on Powell but argued this is not necessarily the case. "It's not out-of-line or unusual to see, at times when there's a high degree of uncertainty, or maybe a turning point in policy, that you get one or two people dissenting," said Nationwide chief economist Kathy Bostjancic. Fed Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman have both signalled openness to rate cuts as early as July, meaning their disagreement with a decision to hold rates steady would not surprise markets. Bostjancic said that too many dissents could be "eyebrow-raising", and lead some to question if Powell is losing control of the board, but added: "I don't anticipate that to be the case." For Sweet, "the big wild card is the labour market". There has been weakness in the private sector, while the hiring rate has been below average and the number of permanent job losers is rising. "There are some fissures in the labour market, but they haven't turned into fault lines yet," Sweet said. If the labour market suddenly weakened, he said he would expect the Fed to start cutting interest rates sooner.
