china usa

Key details still remain unclear despite the US-China trade agreement

After the U.S. and China announced the “phase-one” trade agreement, a critical point remains in question: agricultural purchases.

Bilateral trade is a significant part of the dispute between the world’s two largest economies, especially after both sides decided to break the negotiations into phases, rather than tackling a slew of American concerns, which range from the trade deficit in goods to state control in the economy.

On Friday, both countries held separate press conferences to announce that they reached the phase-one agreement.

President Donald Trump said the Chinese would buy $50 billion in agricultural purchases “pretty soon.” More specifically, Reuters reported that U.S. Trade Representative Robert Lighthizer told reporters that China would buy at least $16 billion more agricultural goods in each of the next two years. The report said that could bring total purchases to near $50 billion in 2020 and 2021.

“That scale of purchases seems implausible and Chinese officials were reluctant to mention any specific target during their press conference,” Nomura analysts, including chief China economist Ting Lu, said in a note released Saturday, Beijing time.

Trade between the U.S. and China has fallen as both sides applied tariffs on billions of dollars’ worth of goods from the other. In 2018, China ranked fifth of top destinations for U.S. agricultural exports at $9.2 billion, down from second place a year earlier, according to the U.S. Department of Agriculture Foreign Agricultural Service.

In an encouraging first step, the U.S. held off raising tariffs on Chinese goods on Sunday, and Beijing did not go ahead with planned retaliatory tariffs. China has also been increasing its purchases of American soybeans this year, despite an overall expected decline in Chinese demand for the product, according to the U.S. Soybean Export Council.

Chinese stocks traded mildly lower Monday, following a muted U.S. stock market response to news of the trade agreement on Friday.

Larry Hu, head of Greater China economics at Macquarie, said in a note Saturday that the trade tensions have a greater impact on sentiment than economic growth, which is more reliant on other factors.

“Therefore, a phase-1 trade deal could prevent things from getting worse by cancelling the new tariff, but could not make things much better,” Hu said.

It’s still unclear how and when the U.S. will roll back other tariffs, a condition for a phase-one deal that the Chinese side has firmly maintained. The Office of the U.S. Trade Representative said in a statement that the United States will keep 25% tariffs on about $250 billion of Chinese imports, along with 7.5% duties on roughly $120 billion of Chinese imports.

Both sides also still need to sign the text of an agreement, which Chinese officials said requires legal review and translation. Lighthizer said both countries hope to sign the deal in Washington in early January, and there would be no new tariffs as long as China negotiates in good faith.

Scott Kennedy, senior advisor and trustee chair in Chinese business and economics at the Center for Strategic and International Studies, pointed out Friday in an online article that this marks the “fifth instance during the U.S.-China trade dispute that a deal has been prematurely declared.”

“With only limited concessions, China has been able to preserve its mercantilist economic system and continue its discriminatory industrial policies at the expense of China’s trading partners and the global economy,” he said. “Trump could reverse course and renew tariffs, but Beijing has bought itself a likely respite from the daily uncertainty for at least a few months and perhaps for the remainder of Trump’s current term.”

Source: The Loadstar

How to make Europe climate-neutral by 2050 – New EC president unveils Green Deal

The new European Commission president today presented the policies of the European Green Deal, which have been largely welcomed by clean transport groups. 

Ursula von der Leyen announced a package of measures to make Europe climate-neutral by 2050, which include reducing emissions by half in the next 10 years, a €100bn fund to finance the change, a carbon border tax and various industry initiatives.  

Under plans for transport, aviation will see its free allowances in the Emissions Trading System (ETS) carbon market reduced, and the end of kerosene tax exemptions. And shipping would finally be included in the ETS. 

“The European Green Deal could be a defining moment in the fight against pollution and climate change,” said William Todts, executive director of NGO Transport & Environment. 

The plan to end aviation’s tax holiday, make sure shipping pays for its emissions and mandate the deployment of clean fuels and technology is welcome.  

In this respect, it is reassuring that ICAO and IMO, the UN agencies that have been sabotaging climate progress in these two sectors for at least two decades, are only mentioned in passing as bodies that the EU should coordinate with. 

But he added: “Of course this is just a declaration of intent. The devil will be in the detail of the new laws and whether EU governments support the Green Deal, but it is a good start.”   

The Green Deal will also see tighter emissions standards for cars and vans from 2021 and create a “clear pathway” to zero emissions. 

However, T&E warned that the plan fell short of what’s needed to reach the 2050 target.

“For example, the commission’s plan to boost “sustainable alternative fuels in different sectors” risks reopening the door for gas as well as deforestation and hunger-causing biofuels.” 

However, the airline industry disagrees. In a speech to media this morning, IATA director general Alexandre de Juniac said: “We must get governments to focus on driving the technology and policy solutions that will make flying sustainable. In the immediate term, that means focusing on sustainable aviation fuels which have the potential to cut our carbon footprint by up to 80%.” 

But Mr Todts argued: “We really can’t afford to waste time revisiting failed policies, like the promotion of biofuels, or wasting limited resources promoting gas vehicles.

“Europe’s green energy policy is driving deforestation and wildlife destruction worldwide. We need to end this now, not make it worse. We need  a realistic plan to deploy zero-emission electrofuels in aviation and green hydrogen in shipping. 

He added that truck emissions had been largely ignored in the Green Deal.  

“The revision of CO2 standards for trucks needs to come as early as possible and must mandate zero-emission trucks.” 

T&E also argued that a revisited plan to apply the ETS to road transport would not work. It said earlier this month: “Moving these sectors from the Climate Action Regulation to the ETS framework, would actually lead to member states washing their hands of their legal obligations to reduce emissions from these sectors.

“Letting national governments off the hook and implementing a socially unjust, high-risk/low-reward policy is not how the new EC should start its mandate.” 

Jo Dardenne, ETS and aviation expert with T&E, said: “The ETS is not the miraculous solution to regulate the climate impact of road transport. On the contrary, it won’t do much to transport emissions unless the carbon price goes through the roof.

“Let’s not push a sector to fit a policy, but ensure the policy is fit for the sector.” 

Source: The Loadstar



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