China accuses Trump of ‘blackmail’ after new tariffs threat

China has so far targeted major American exports to China such as soybeans, above, which brought in $14 billion in sales last year. (AFP)
Updated 19 June 2018
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China accuses Trump of ‘blackmail’ after new tariffs threat

  • Donald Trump asked the US Trade Representative to target $200 billion worth of imports for a 10 percent levy, citing China’s ‘unacceptable’ move to raise its own tariffs.
  • China had offered to ramp up purchases of American goods by $70 billion to help cut its yawning trade surplus with the United States, whereas Trump had demanded a $200 billion deficit cut

BEIJING: Beijing on Tuesday accused Donald Trump of “blackmail” and warned it would retaliate in kind after the US president threatened to impose fresh tariffs on Chinese goods, pushing the world’s two biggest economies closer to a trade war.
Trump said on Monday he had asked the US Trade Representative to target $200 billion worth of imports for a 10 percent levy, citing China’s “unacceptable” move to raise its own tariffs.
He added he would identify an extra $200 billion of goods — for a possible total of $450 billion, or most Chinese imports — “if China increases its tariffs yet again.”
“Further action must be taken to encourage China to change its unfair practices, open its market to United States goods and accept a more balanced trade relationship with the United States,” Trump said in a statement.
Last week, he announced 25 percent tariffs on $50 billion in Chinese imports, prompting Beijing to retaliate with matching duties on US goods.
The US leader warned Friday of “additional tariffs” should Beijing hit back with tit-for-tat measures.
“The trade relationship between the United States and China must be much more equitable,” he said in explaining his latest decision.
“I have an excellent relationship with President Xi (Jinping), and we will continue working together on many issues. But the United States will no longer be taken advantage of on trade by China and other countries in the world.”
China’s commerce ministry immediately responded by saying the US “practice of extreme pressure and blackmail departed from the consensus reached by both sides during multiple negotiations and has also greatly disappointed international society.”
“If the US acts irrationally and issues a list, China will have no choice but to take comprehensive measures of a corresponding number and quality and take strong, powerful countermeasures.”
The news hit stock markets in Asia, where Shanghai shed three percent in the morning, Hong Kong lost more than two percent and Tokyo was one percent lower.
Trump is moving forward with the measures after months of sometimes fraught shuttle diplomacy in which Chinese offers to purchase more American goods failed to assuage his grievances over a widening trade imbalance and China’s aggressive industrial development policies.
China had offered to ramp up purchases of American goods by $70 billion to help cut its yawning trade surplus with the United States, whereas Trump had demanded a $200 billion deficit cut.
The China trade offensive is only one side of Trump’s multi-front battle with the United States’ economic partners as he presses ahead with his protectionist “America First” agenda.
Since June 1, steel and aluminum imports from the European Union, Canada and Mexico have been hit with tariffs of 25 percent and 10 percent, respectively.
“This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods,” Trump said of China’s retaliatory tariffs.
“This is unacceptable.”
Two decades ago, China’s economy was largely fueled by exports, but it has made progress in rebalancing toward domestic investment and consumption since the global financial crisis erupted last decade — limiting the damage trade tariffs could inflict on Beijing.
Still, strong exports this year have lifted the economy, which is now showing signs of losing steam under the weight of Beijing’s war on debt, launched to clean up financial risks and rein in borrowing-fueled growth.
Initially, 545 US products valued at $34 billion will be targeted by China, mimicking the Trump administration’s tariff rollout.
Beijing wants to “demonstrate that things will be done their way or not at all,” said Christopher Balding, an economics professor at Shenzhen’s HSBC Business School, who believes Chinese policymakers prefer demonstrations of “power and control” over “technical policy rightness.”
“It is a game of chicken,” Balding said.
So far Beijing has targeted major American exports to China such as soybeans, which brought in $14 billion in sales last year, and are grown in states that supported Trump during the 2016 presidential election, as well as other politically important products.
Officials also drew up a second list of $16 billion in chemical and energy products to hit with new tariffs, though China did not announce a date for imposing them.
More American targets are likely to follow as soon as the Trump administration follows through with publishing an expanded tariff list.


Danske Bank money laundering ‘giga scandal’ spreads to Britain

Updated 12 min 22 sec ago
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Danske Bank money laundering ‘giga scandal’ spreads to Britain

  • By 2013, the number of UK-registered customers in the branch’s non-resident portfolio had topped 1,000
  • Danske Bank Chairman Ole Andersen said that the lender had made an assessment of whether it violated any US laws
LONDON/COPENHAGEN: Danske Bank’s money laundering scandal spread on Friday as Britain’s National Crime Agency (NCA) said it is investigating the use of UK-registered companies.
“This is a giga scandal,” European Union Competition Commissioner Margrethe Vestager said, joining a growing chorus of calls for a clampdown on the billions of euros which are alleged to have been “washed” through European banks.
An NCA spokeswoman said the British agency was working with partners across government to restrict the ability of criminals to use UK-registered companies in money laundering.
British and Russian entities dominate a list of accounts used to make €200 billion ($236 billion) in payments through Danske Bank’s branch in Estonia between 2007 and 2015, many of which the bank said this week are suspicious.
By 2013, the number of UK-registered customers in the branch’s non-resident portfolio had topped 1,000, Danske Bank’s investigation revealed, ahead of clients from Russia, the British Virgin Islands and Finland.
As the scope of the alleged money laundering through Danske Bank has widened, investor concerns over the potential penalties it could face have increased, with particular focus on what action if any US authorities might take against the bank.
So far, the US has not said whether it is investigating, although Danske Bank Chairman Ole Andersen said that the lender had made an assessment of whether it violated any US laws. He has declined to share the bank’s conclusion of this.
“We need to do more to prevent money laundering from happening,” Vestager told reporters in Copenhagen following the resignation on Wednesday of Danske Bank CEO Thomas Borgen after an investigation commissioned by the bank exposed past control and compliance failings.
Borgen, 54, was in charge of Danske Bank’s international operations including Estonia between 2009 and 2012.
He said on Wednesday that he had been “personally cleared from a legal point of view” while Danske said its board had not breached their legal obligations.
The European Commission last week recommended banking supervision changes, including bolstering national authorities, but stopped short of setting up a new financial crime agency called for by the European Central Bank.
In a sign of the growing pressure on Danske Bank, which already faces criminal inquiries in Denmark and Estonia, the chief executive of CARE Danmark said on Twitter that the Danish charity had decided to end its relationship with the lender.
International aid charity Oxfam also called on Danish municipalities to cut ties with the bank, saying it has not been able to re-establish the trust of Danish citizens.
The mayor of Aalborg, Denmark’s third largest municipality, said he would discuss its partnership with Danske Bank at the next municipality committee meeting, but noted that there were only two banks in Denmark would be able to handle a municipality its size.
“Danske Bank has been involved in money laundering which is deeply reprehensible and outrageous but Nordea has been involved in tax havens, so the entire bank sector needs to clean up for us to have a trusting collaboration with the banks,” Thomas Kastrup-Larsen said.
Danske Bank’s tiny Estonian branch accounted for as much as 10 percent of group profit during the period when suspected money laundering was conducted via its operations there.