27 May 2019


No easy options for China as trade war, U.S. pressure bite

KONFRONTASI-China is running out of options to hit back at the United States without hurting its own interests, as Washington intensifies pressure on Beijing to correct trade imbalances in a challenge to China’s state-led economic model.

China said this week it would impose higher tariffs on most U.S. imports on a revised $60 billion target list. That’s a much shorter list compared with the $200 billion of Chinese products on which Washington has hiked tariffs.

Washington has also turned up the heat on other fronts, from targeting China’s tech firms such as Huawei and ZTE to sending warships through the strategic Taiwan Strait.

As the pressure mounts, Chinese leaders are pressing ahead to seal a deal and avoid a drawn-out trade war that risks stalling China’s long-term economic development, according to people familiar with their thinking.

But Beijing is mindful of a possible nationalistic backlash if it is seen as conceding too much to Washington.

Agreeing to U.S. demands to end subsidies and tax breaks for state-owned firms and strategic sectors would also overturn China’s state-led economic model and weaken the Communist Party’s grip on the economy, they said.

“We still have ammunition but we may not use all of it,” said a policy insider, declining to be identified due to the sensitivity of the matter.

“The purpose is to reach a deal acceptable to both sides.”

The State Council Information Office, finance ministry and commerce ministry did not immediately respond to Reuters’ requests for comment.

Of the retaliatory options available to China, none come without potential risks.


Since July last year, China has cumulatively imposed additional retaliatory tariffs of up to 25 percent on about $110 billion of U.S. goods.

Based on 2018 U.S. Census Bureau trade data, China would only have about $10 billion of U.S. products, such as crude oil and big aircraft, left to levy duties on in retaliation for any future U.S. tariffs.

In contrast, U.S. President Donald Trump is threatening tariffs on a further $300 billion of Chinese goods.

The only other items Beijing could tax would be imports of U.S. services. The United States had a services trade surplus with China of $40.5 billion in 2018.

But China does not have as much leverage over the United States as it might seem because large parts of that surplus are in tourism and education, areas that would be more difficult for the Chinese government to significantly roll back, James Green, a senior adviser at McLarty Associates, told Reuters.

China is more likely to further erect non-tariff barriers on U.S. goods, such as delaying regulatory approvals for agricultural products, said Green, who until August was the top U.S. Trade Representative official at the embassy in Beijing.

Polish far-right supporters protest against restitution of Jewish property

KONFRONTASI-Hundreds of far-right supporters marched in Warsaw on Saturday to protest against a U.S. law on the restitution of Jewish property seized during or after World War Two, an issue increasingly featuring in campaigns for upcoming Polish elections.

Carrying placards with slogans including “Poland has no obligations” and “Holocaust hyenas”, demonstrators marched from the prime minister’s office to the U.S. embassy in central Warsaw.

Cubans protest U.S. sanctions as Trump raises pressure on Venezuela

KNFRONTASI-Millions of Cubans took to the streets on Wednesday in protest over new sanctions imposed on the Caribbean island by the Trump administration and U.S. efforts to topple the government of socialist ally Venezuela.

“We will give a strong, firm and revolutionary response to the statements loaded with threats, provocations, lies and slander of the Yankee empire,” tweeted Cuban President Miguel Diaz-Canel as dawn broke over Havana.

Nations using oil as a weapon threatens OPEC: Iran oil minister

KONFRONTASI-Any country using oil as a weapon could cause the collapse of oil producer group OPEC, Iran’s Oil Minister Bijan Zanganeh said on Wednesday, according to SHANA, the news outlet of the oil ministry.

Oil prices hit their highest since November in recent days after Washington said all waivers for those importing sanctions-hit Iranian oil would end this week, pressuring importers to stop buying from Tehran and further tightening global supply.

Trump seeks to designate Muslim Brotherhood as terror group

KONFRONTASI-The Trump administration is reportedly seeking to issue an order that would designate the Muslim Brotherhood as a "foreign terrorist organisation", the New York Times has reported.

According to the paper, which cited officials familiar with the matter, Egyptian President Abdel Fattah el-Sisi urged US President Donald Trump to take the step during an April 9 visit to the White House.

The Muslim Brotherhood, or Ikhwan al-Muslimeen, is a revivalist Islamic movement, formed in Egypt in 1928.

US commander of Guantanamo Bay prison 'relieved of duty'

KONFRONTASI-Military officials say the commander of the task force that runs the prison at the US Naval Station at Guantanamo Bay, Cuba, has been fired for a "loss of confidence in his ability to command".

A statement from US Southern Command issued on Sunday says Navy Rear Admiral John Ring was relieved of duty on Saturday.

The facility's deputy commander, Army Brigadier General John Hussey, is now the acting commander.

Thai navy tows floating home of fugitive U.S. 'seasteader'

KONFRONTASI-Thailand’s navy on Monday began towing to shore the floating cabin of a fugitive U.S. citizen and his Thai girlfriend, both prominent members of the “seasteading” movement who face possible death sentences for setting up their offshore home.

The cabin set on top of a spar 14 nautical miles off the Thai island of Phuket had been touted as milestone in the movement to build floating communities in international waters as a way to explore alternative societies and governments.

US Democrats demand Trump tax returns by April 23

KONFRONTASI-US congressional Democrats have given the Internal Revenue Service (IRS) a final deadline of April 23 to hand over President Donald Trump's tax returns.

US, China 'agree to establish trade deal enforcement offices'

KONFRONTASI-US Treasury Secretary Steven Mnuchin said on Wednesday that US-China trade talks continue to make progress and the two sides have basically settled on a mechanism to police any agreement, including new enforcement offices.

Mnuchin, speaking on CNBC television, said that a call with Chinese Vice Premier Liu He on Tuesday night was productive and discussions would be resumed on Thursday.

US Democrats say Barr should retract spying statement

KONFRONTASI-US Attorney General William Barr sparred with Democrats on Wednesday over whether "spying" occurred on President Donald Trump's 2016 presidential campaign in the United States, and said that a redacted version of Special Counsel Robert Mueller's report on Russian interference in the election would be out next week.

During questioning by senators, Barr said "spying" on Trump's campaign was carried out by US intelligence agencies, but he later rephrased his comments saying it was "unauthorised surveillance".

Initially using language echoing Trump's attempts to discredit Mueller's probe, Barr pulled back under questioning by Democratic Senator Brian Schatz, who said the use of the term "spying" was "unnecessarily inflammatory".

Barr, a Trump appointee, said, "I want to make sure there was no unauthorised surveillance", modifying his language.

Barr was testifying for a second day at a congressional budget hearing that was dominated by questions about Special Counsel Mueller's Trump-Russia investigation. 

He said the Department of Justice (DOJ) would release a redacted version of the Mueller report next week.

"I'm landing the plane right now," Barr said at a Senate Appropriations Committee hearing. "I've been willing to discuss my letters and the process going forward, but the report is going to be out next week and I'm just not going to get details of the process until the plane's on the ground."