China planning to sue US over new tariffs

China planning to sue US over new tariffs


MARIA: WELCOME BACK. WE ARE LOOKING AT U.S.-CHINA TRADE THIS MORNING, NEW U.S. TARIFFS ARE NOW IN EFFECT. THEY WENT INTO EFFECT SEPTEMBER 1, CHARGING A 15% TAX ON $112 BILLION WORTH OF CHINESE IMPORTS. THOSE IMPORTS INCLUDE CHOCOLATE, BEEF, CHEESE, A LOT MORE. COMING INTO THE COUNTRY FROM CHINA. A SPOKESPERSON FOR THE CHINESE COMMERCE MINISTRY NOW SAYS CHINA WILL SUE THE UNITED STATES OVER THESE TARIFFS THROUGH THE WORLD TRADE ORANIZATION. JOINING US RIGHT NOW IS CHINA BEIGE BOOK CEO, LELAND MILLER. IT’S GREAT TO HAVE YOU. THANKS SO MUCH FOR BEING HERE. WE WANT TO ASK ABOUT CHINA’S ECONOMY. FIRST, YOUR THOUGHTS ON THE LAWSUIT THROUGH THE WORLD TRADE ORANIZATION.>>IT MAKES ALL THE SENSE IN THE WORLD FOR CHINA TO BE DOING THIS. ONE OF THE THINGS THEY’RE MOST SCARED OF IS BEING GANGED UP BY THE REST OF THE WORLD. THEY FEEL VULNERABLE. HOW DO YOU TALK ABOUT CHINESE RULE OF LAW, HOW DO THE CHINESE BROADCAST THE FACT THEY’RE PART OF THE SYSTEM AND THEY’RE NOT UNFAIR TRADERS, THIS IS ONE WAY. THEY SAY LOOK, WE WORK THROUGH THE SYSTEM. WE DEFEND THE RULE BASED ORDER. IT GIVES THEM NICE TALKING POINTS. MARIA: DOES THE HONG KONG SITUATION PUT MORE PRESSURE ON XI-JINPING? NEXT MONTH, OCTOBER, IS THE 70th ANNIVERSARY OF THE COMMUNIST PARTY BEGINNING ON OCTOBER 1st. YOU HAVE TO WONDER IF HE’S GOING TO DO ANYTHING BEFORE THAT. WHAT ABOUT THE HONG KONG PROTESTS AND HOW THAT ADDS PRESSURE?>>IT’S ENORMOUS PRESSURE FOR XI. THE WORLD IS WATCHING. EVERYBODY WANTS SOME SORT OF GRAPHIC, WANT A GUY STANDING IN FRONT OF A TANK OR THE CLOSEST AAPPROXIMATION. YOU HAVE MILLIONS OF PEOPLE IN THE STREET. YOU HAVE POLICE WHO ARE REACTING TO THEM. YOU’RE GOING TO HAVE IMAGES. IT’S VERY, VERY SENSITIVE FOR CHINA RIGHT NOW. YOU HAVE THE TRADE WAR. YOU HAVE HONG KONG. YOU HAVE ALL THESE OTHER ISSUES. IT’S VERY SENSITIVE TIME FOR BEIJING.>>WHAT DO THE PEOPLE OF HONG KONG WANT? IT STARTED OUT AS A PROTEST AGAINST A SPECIFIC EXTRADITION LAW. IT’S BECOME BIGGER THAN THAT. WHAT DO YOU THINK THEY WANT FROM THE CHINESE GOVERNMENT?>>THE MAJOR PROBLEM IS THERE ISN’T ONE SET OF DEMANDS. THEY’RE PUSHING BACK AT THE IDEA THEY’RE BEING ENGULFED BY THE CHINESE STATE. PEOPLE WHO TALK BAD ABOUT THE STATE ARE GOING TO DISAPPEAR, ALL KINDS OF — MARIA: THEY WANT AUTONOMY, LIKE WHAT THEY WERE PROMISED.>>THEY WANT TWO SYSTEMS. MARIA: CHINA KEEPS BREAKING THE PROMISES.>>THAT’S RIGHT. THERE’S NO REAL WAY OF EASILY PUSHING BACK. THIS IS BASICALLY AN OUTPOURING OF EMOTION AGAINST SOME THINGS THAT HAVE BEEN BUILDING UP WITH THE EXTRADITION LAW BEING THE MAJOR ISSUE. THIS IS REALLY HONG KONG FIGHTING FOR ITS OWN FREEDOMS. MARIA: I THINK IT HELPS THE PRESIDENT, DOESN’T IT, BECAUSE IT PUTS MORE PRESSURE ON XI-JINPING.>>IT YOU IS ADDITIONAL PRESSURE ON XI. IF XI IS TRYING TO SAY DO WE TRUST THE WHITE HOUSE TO DO THIS OR THAT IN RETURN FOR COMMITMENT, IT MAKES IT DIFFICULT TOO. MARIA: THE BREAKING NEWS THIS MORNING IS THAT CHINA’S COMMERCE MINISTRY SAYS IT HAS THE RIGHT TO DECLARE A STATE OF EMERGENCY. SO CHINA SAYS IT HAS THE RIGHT DECLARE A STATE OF EMERGENCY IN HONG KONG. DOES THAT CHANGE ANYTHING FROM YOUR STANDPOINT? THIS JUST HAPPENED THIS MORNING.>>NOT REALLY. CHINA’S ALWAYS FELT IT COULD DECLARE A STATE OF EMERGENCY. CHINA FEELS THAT HONG KONG IS CHINA’S AND AS A RESULT, THEY’RE GOING TO DO WHATEVER IT TAKES. THEY’RE WATCHING THE CAMERAS. THEY DON’T WANT THIS TO PLAY OUT BAD IN FRONT OF TV CAMERAS AROUND THE WORLD. THEY’RE GOING TO DO WHATEVER IT TAKES IN ORDER TO PUT THIS DOWN. THAT’S THE REAL TRAGEDY OF THIS ALL, THAT NO MATTER HOW HARD HONG KONG PEOPLE FIGHT, THIS IS GOING IN ONE DIRECTION.>>IN THE WORLD, ONE OF THE PLACES YOU COULD COUNT ON FOR STABILITY WAS HONG KONG. IT WAS A TRADING PORT, WAY BACK, NOW IT’S A FINANCIAL HUB. NOW IT’S UNSTABLE. LOOK AT THE IMAGES ON THE SCREEN. DOES CHINA CONCERN ITSELF WITH THE FACT THAT HONG KONG IS IMPORTANT FOR THAT PART OF THE WORLD, BEING A PART OF ENTRY FOR COMMERCE. MARIA: IT’S A GLOBAL FINANCIAL HUB.>>WHAT MESSAGE DOES IT SEND TO TIE TAE TAIWAN, WE’RE GOING TO GIVE YOU TWO SYSTEMS. THIS IS A MAJOR PROBLEM THAT XI DIDN’T NEED PARTICULARLY AS YOU SAID BEFORE THE 70th SAID BEFORE THE 70 ANNIVERSARY OF THE PRC. EVERYTHING IS HITTING THE CHINESE RIGHT NOW. I CAN’T IMAGINE BEING A FLY ON THE WALL WHEN THE LEADERSHIP MET. MARIA: THE ADMINISTRATION, I THINK IT WAS A COUPLE WEEKS AGO, SAID IF WE WERE TO SEE ANY VIOLENCE ON THE PART OF THE CHINESE GOVERNMENT, THERE’S ABSOLUTELY NO CHANCE OF A DEAL BETWEEN THE U.S. AND CHINA. RIGHT? SO I MEAN, THE U.S. IS WATCHING WHAT THE CHINESE GOVERNMENT DOES IN HONG KONG VERY CLOSELY.>>THEY ARE. BUT HERE’S WHERE THE CHINESE HAVE A BIT OF A PASS. A LOT OF WHAT IS HAPPENING RIGHT NOW IS DONE BY THE PEOPLE’S ARM POLICE, SOMETIMES ACTING AS HONG KONG POLICEMEN. THE CHINESE HAVE BEEN PREPARING FOR THIS FOR YEARS AND YEARS AND YEARS. YOU’RE UNLIKELY TO SEE THE TYPE OF ARMY ACTION, YOU’RE NOT GOING TO HAVE TANKS ROLLING OVER THE BORDER AND SHUTTING DOWN THE STREETS. YOU’RE GOING TO HAVE MORE POLICE ACTION. ONE THING THE CHINESE HAVE DONE, THEY’VE GOTTEN GOOD AT CROWD CONTROL, RIOT CONTROL. THE TYPES OF THINGS YOU SEE ARE MUCH MORE SMOOTH AND FLUID BUT THEY CAN PUT DOWN PROTESTS VERY EASILY. MARIA: THEY’VE GOT FACIAL RECOGNITION TO DO IT. THEY’VE GOT AI ALL OVER THE PLACE. WHAT ABOUT HUAWEI, THE COMPANY IS NOW AYOU USING IS NOW AYOU CSING IS NOW AYOU CUENG IS NOW AYOU CUEING THE UNITED STATES OF — ACCUSING THE UNITED STATES OF CYBER ATTACKS, OF THREATENING EMPLOYEES, HUAWEI DETAILING ALLEGATIONS IN A NEW RELEASE, PRESS RELEASE, WHERE IT DENIED STEALING SMARTPHONE CAMERA TECHNOLOGY. IT’S STILL DENYING STEALING ANY INTELLECTUAL PROPERTY.>>THAT’S ONE MAJOR CONCERN IS THAT LOST AMIDST THE OTHER MAJOR ISSUES, HONG KONG AND TRADE, IS HUAWEI WILL GET A FREE PASS ON THIS. HUAWEI HAS BEEN A VERY BAD ACTOR FOR A VERY LONG TIME. AND RIGHT NOW THEY’RE UNDER SIEGE. THE COMMERCE ACCIDENT HAS THE ABILITY TO BASICALLY — COMMERCE DEPARTMENT HAS THE ABILITY TO BASICALLY STOP MOST COMMERCIAL RELATIONSHIP WAS THE UNITED STATES UNDER THE ENTITY LIST AND UNDER MORE DRAMATIC THINGS, A DENIAL ORDER, FOR INSTANCE. THIS COULD GET LOST IN A TRADE DEAL. THAT WOULD BE A MAJOR PROBLEM. HUAWEI IS BASICALLY THE TIP OF THE CHINESE SWORD IN TERMS OF IG, IT’S PROBABLY THE MOST IMPORTANT STATE CHAMPION. THIS SHOULDN’T FALL UNDER THE RADAR DESPITE HOW MANY BIG THINGS ARE HAPPENING RIGHT NOW.>>HOW IS THE CHINESE ECONOMY HOLDING UP? MARIA: I’M GLAD YOU ASKED A THAT.>>WE HAD FLASH DATA THAT CAME OUT AND OUR DATA SHOWS THE ECONOMY IS IN MUCH MORE DIFFICULT SHAPE THAN I THINK THE MOST RECENT PUBLIC DATA. WE HAVE NOT SHOWN THIS DETERIORATION THROUGH 2017. THERE’S BEEN VERY STRONG CRED — 2019. THERE’S STRONG CREDIT SUPPORT. EVEN IN THE THIRD QUARTER, THINGS ARE NOW GETTING WORSE. MARIA: IS IT GOING TO HIT THE U.S.?>>THERE’S NOT NECESSARILY A CARRYOVER MECHANISM BUT THE WEAKNESS IN CHINA RIGHT NOW IS QUITE DRAMATIC COMPARED TO ANYTHING THAT WE’VE SEEN SINCE THE FOURTH QUARTER OF LAST YEAR. THERE’S NOT A MECHANISM THAT’S GOING TO TRANSFER ONE TO THE OTHER. IT’S WORRISOME FROM A TRADE STANDPOINT. MARIA: YOU SAID CHINA DOESN’T WANT TO FIGHT THE REST OF THE WORLD. DO YOU FEEL THE U.S. HAS ALLIES AGAINST CHINA?>>IF THEY’RE ASKED. THE PROBLEM IS, AS LONG AS THERE’S AUTO TARIFFS AND OTHER THINGS HOVERING OVERHEAD, THE EUROPEANS AREN’T GOING TO GO TO BAT FULL STEAM UNLESS THEY THINK THEY’VE BEEN CLEARED. A LOT OF THIS WILL BE TO MARSHALLING THE TYPE OF SUPPORT. EVERYONE KNOW WHAT CHINA’S BEEN DOING THE LAST 20 YEARS. THE QUESTION IS CAN THEY BE TAKEN OUT OF THE CROSS HAIRS AND PUT CHINA BACK IN IT. MARIA: DON’T FORGET THE HUAWEI INFRASTRUCTURE THAT’S IN PLACE

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