US Tightens Controls on China Imports of Nuclear Components

US Tightens Controls on China Imports of Nuclear Components

Last month, U.S. President Donald Trump imposed tariffs on almost $200 billion of Chinese imports and then threatened more levies if China retaliated.

Trump renewed his charge that past presidents Obama and George W. Bush "let China get out of control" through the massive United States imports of manufactured goods.

"The big picture is the Chinese exports have so far held up well in the face of escalating trade tensions and cooling global growth, most likely thanks to the competitiveness boost provided by a weaker renminbi", said Julian Evans-Pritchard, senior China economist at Capital Economics. A 2017 Commerce Department report ranked China as the second largest market for United States nuclear exporters, second only to Britain.

Mnuchin met Thursday with Yi Gang, head of China's central bank.

"What's become clear over the last three or four months is that the U.S. focus is much less on the trade imbalances, on the trade deficit", Shaun Roache, S&P's chief economist for Asia-Pacific, said on Friday.

If China is unwilling to move forward with making those structural changes, there could be a longer impasse, Roache said.

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Mnuchin also told Reuters in an interview that China needs to identify concrete "action items" to rebalance the two countries' trade relationship before talks to resolve their disputes can resume. These would be the first direct talks since August, but with both sides digging in their heels, there are few hopes the leaders can secure a major breakthrough.

The growing trade war prompted the International Monetary Fund on Tuesday to cut its global economic growth forecasts for 2018 and 2019.

"A lot of people were concerned when the QEs were done whether the Fed would ever be able to downsize and I think the market has handled the supply very well, ' Mnuchin said".

"We're having discussions about a potential meeting", Mnuchin said, indicating that the two leaders could meet if the USA side felt the trade discussions were moving in a positive direction. An official survey also confirmed a further manufacturing weakening. "According to panellists, subdued market demand and reduced export sales had weighed on overall new business".

While China is one of six countries on the "watch list", the last report in April acknowledged that the RMB "generally moved against the dollar in a direction that should" help reduce China's trade surplus with the United States and had strengthened early in the year. Labeling China a manipulator could lead to a currency war, which IMF Managing Director Christine Lagarde said would hurt the global economy. Imports grew 14.3 percent, down from 20.9 percent.

With global growth cooling and USA threats of more tariff hikes, "the recent resilience of exports is unlikely to be sustained", said Evans-Pritchard. "That said, China's exporters have some room to manoeuvre given China's diversified trade relationship, and the policymakers' active effort to further reduce reliance on the U.S. market".

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