China Tariff Threatens U.S. LNG Boom

[Tom Kirkman + 8,860]

7 minutes ago, ceo_energemsier said:

Nothing against them, lets make deals , sell and buy products and good and services and make money while people get  what they want but on fair terms!!!

Related:

CNN, Axios Suggest Trump Trade Tactics Working

[ceo_energemsier + 1,818]

14 minutes ago, Tom Kirkman said:

Related:

CNN, Axios Suggest Trump Trade Tactics Working

It works and will work despite the media's attempt to undermine the forward going successes.

 

[ceo_energemsier + 1,818]

1 hour ago, ceo_energemsier said:

It works and will work despite the media's attempt to undermine the forward going successes.

 

https://www.industryweek.com/economy/should-we-allow-chinese-buy-any-us-company-they-want

Should We Allow the Chinese to Buy Any US Company They Want?

Letting Chinese corporations acquire American companies, especially energy or technology-based companies is the biggest threat to rebuilding American manufacturing.

We Americans blithely ignore the long-term effects of allowing foreign corporations to purchase the assets of our country in the form of companies, land, and resources. We are selling off our ability to produce wealth by allowing many American corporations to be purchased by foreign corporations. It is not just foreign companies buying our assets that is the problem ─ it is the state-owned and massively subsidized companies of China that are dangerous because China uses its state-owned enterprises as a strategic tool of the state. By pretending they are private companies abiding by free-market rules makes us the biggest chumps on the planet.

How many Americans paid attention to the news that the world's largest pork producer, American company Smithfield Foods, was acquired by a Chinese corporation in 2013? Shareholders approved the sale of the company to Shuanghui International Holdings Limited, the biggest meat processor in China.

 

Very few paid any attention to one of the earliest acquisitions by a Chinese corporation — when the Hoover brand was sold to Hong Kong, China-based firm Techtronic Industries in 2006 after Maytag, which owned Hoover, was acquired by Whirlpool.

In January 2014, Motorola Mobility was sold by Google to Chinese computer corporation, Lenovo, which means that the nation that invented smart phones is just about entirely out of the business of producing smart phones in America. This acquisition will give one of China's most prominent technology companies a broader foothold in the U. S. Lenovo is the same company that bought IBM’s line of personal computers in 2004.

 

Through strategic purchases, China is positioning itself to be our energy supplier as well. Since 2009, Chinese companies have invested billions of dollars acquiring significant percentages of shares of energy companies, such as The AES Corp., Chesapeake Energy, and Oil & Gas Assets. In 2010, China Communications Construction Co. bought 100% of Friede Goldman United, and in 2012, A-Tech Wind Power (Jiangxi) bought 100% of Cirrus Wind Energy. 

In a Fortune article titled  “The Biggest American Companies Now Owned by the Chinese,” Stephen Gandel provides the following list of American companies acquired by Chinese investors in 2016:

• Starwood Hotels acquired by Anbang Insurance, a Chinese insurance company that is rapidly buying up U.S. hotels...It is the latest hotel acquisition by the Chinese insurer, which last year bought the company that owns New York’s Waldorf-Astoria. Starwood would add 1,300 hotels around the world to Anbang’s portfolio.
• Ingram Micro, which is No. 62 on the Fortune 500, bought by Tianjin Tianhai Investment Development Co., a Chinese firm that specializes in aviation and logistics.
• General Electric Appliance Business was bought by Qingdao Haier Co.
• Terex Corp., an 83-year-old Connecticut-based company that makes machinery for construction, agricultural, and industrial purposes, was bought by Zoomlion Heavy Industry Science.
• Legendary Entertainment Group, which has co-financed a number of major movies like Jurassic Park, Godzilla, and Pacific Rim, was bought by Dalian Wanda
• Dalian Wanda also bought AMC Entertainment Holdings, the U.S.’s second largest movie chain at the time of purchase, but now #1.

The acquisition of American companies by foreign corporations isn’t something new. Many prominent companies founded in America were bought by corporations from the United Kingdom, France, Germany, Italy and other European countries in the latter half of the 20th Century. Most Americans don’t realize that such iconic American companies as BF Goodrich and RCA are now owned by French corporations, and that Carnation and Gerber are now owned by Swiss corporations.

Many foreign countries don’t allow 100% foreign ownership of their businesses, but sadly, the United States does not exercise the same prudence. We allow sales of U. S. companies to foreign companies unless there are national security issues, and they almost never sell theirs to us. The Chinese government limits foreign ownership to very few selected industry sectors, that can change annually, and requires joint ventures with Chinese corporations for most industry sectors.

What is enabling Chinese companies to go on a buying spree of American assets? Trade deficits - our ever-increasing trade deficit with China over the past 20 years is transferring America’s wealth to China and making millionaires out of many Chinese. In 1994, our trade deficit with China was $29.5 billion, and it grew to $83.8 by 2001 when China was granted “Most Favored Nation” status and admitted to the World Trade Organization. By 2004, it had doubled to $162.3 billion. After a slight dip in 2009 during the depths of the Great Recession, the trade deficit grew to $347 billion in 2016. If you add the annual trade deficits with China alone for the past 20 years, it totals $4.22 trillion. China now has over one billion serious savers and more than a million millionaires whose assets when combined provide billions to spend to buy our assets.

 

Regulatory Protection Rarely Used

In theory, we have the means to protect ourselves from this. CFIUS, the Committee on Foreign Investment in the United States, has the power to regulate, approve and deny these purchases. Unfortunately, it has been rare for CFIUS to block deals that don’t directly pose a threat to our national security.

The last time CFIUS reviews were expanded was July 26, 2007 when President George W. Bush signed H.R. 556, Foreign Investment and National Security Act of 2007 (FINSA) “after the Dubai Ports World transaction passed through CFIUS without a formal investigation, leaving a surprised and angry Congress determined to avoid a repetition of that scenario.”

However, this new act didn’t stop recommendations for expanding the scope of CFIUS reviews. Diane Francis, author of “Merger of the Century: Why Canada and America Should Become One Country, expressed her opinion of why CFIUS reviews should be expanded in an article in the December 15, 2013, New York Post: “Currently, American authorities only evaluate foreign takeovers on the basis of national-security issues or shareholder rights and securities laws. But these criteria are inadequate. A fairer test in the case of Smithfield, and future buyout attempts by China, should also require reciprocity: Only corporations from countries that allow Americans to buy large companies should be allowed to buy large American companies. That is why Washington must impose new foreign ownership restrictions based on the principle of reciprocity. The rule must be that foreigners can only buy companies if Americans can make similar buyouts in their countries.”

 

The dangers of these foreign acquisitions were also mentioned in the 2013 Annual Report to Congress by the U.S.-China Economic and Security Review Commission, which states, “China presents new challenges for CFIUS, because investment by SOEs can blur the line between national security and economic security. The possibility of government intent or coordinated strategy behind Chinese investments raises national security concerns. For example, Chinese companies’ attempts to acquire technology track closely the government’s plan to move up the value-added chain. There is also an inherent tension among state and federal agencies in the United States regarding FDI from China. The federal government tends to be concerned with maintaining national security and protecting a rules-based, nondiscriminatory investment regime. The state governments are more concerned with local economic benefits, such as an expanded tax base and increased local employment, rather than a national strategic issue, especially as job growth has stagnated.”

This report continues, “China has amassed the world’s largest trove of dollar-denominated assets. Although the true composition of China’s foreign exchange reserves, valued at $3.66 trillion, is a state secret, outside observers estimate that about 70% is in dollars. In recent years, China has become less risk averse and more willing to invest directly in U.S. land, factories and businesses.”

On January 26, 2017, Robert D. Atkinson, president of the Information Technology and Innovation Foundation, testified at a hearing on “Chinese Investment in the United States: Impacts and Issues for Policymakers” before the U.S.-China Economic and Security Review Commission.  He testified: “For many years, China has recycled the earnings from its large and sustained trade deficit with the United States into U.S. Treasury bills. But the last few years have seen a marked increase in the amount of inward foreign direct investment (FDI) from China to the United States, across a range of industries. While the underlying motivation for some of this investment is commercial, at least one-third is from Chinese state-owned enterprises, and it is likely that considerably more is guided and supported by the Chinese government, specifically targeting sectors that are strategically important for U.S. national security or economic leadership. “

After 10 years, there is finally action on expanding the scope of CFIUS reviews. On November 8, 2017, Rep. Robert Pittenger, R-N.C., and Senate Majority Whip John Cornyn, R-Tex., “introduced bipartisan, bicameral legislation to modernize the national security review of potential foreign investments in the United States, Foreign Investment Risk Review Modernization Act (FIRRMA).”

The press release stated, “Chinese investment in the United States increased more than 900% between 2010 and 2016.  Much of this investment was part of a strategic, coordinated, Chinese government effort to target critical American infrastructure…China is buying American companies at a breathtaking pace.  While some are legitimate business investments, many others are part of a backdoor effort to compromise U.S. national security,” said Congressman Pittenger.  “For example, China recently attempted to purchase a U.S. missile defense supplier using a shell company to evade detection.  The global economy presents new security risks, and so our bipartisan legislation provides Washington the necessary tools to better track and evaluate Chinese investment…”

In a letter to Sen. Cornyn, Attorney General Jeff Sessions wrote, "I am particularly supportive of the goals of several aspects of your proposed legislation, including but not limited to (1) the expansion of CFIUS's authority to review certain transactions that may pose national security concerns; (2) an expanded list of national security factors that CFIUS should consider; and (3) mandatory disclosures of certain investments by state-owned enterprises."

Earlier this year, the Coalition for a Prosperous America (CPA) published an issue flyer titled “America Must Modernize its Foreign Investment Rules.” It states:

“A wave of strategic foreign acquisitions of U.S. companies threatens our security and future prosperity. The U.S. liberalized rules on incoming foreign investment believing others would follow our lead. That belief was wrong. Countries like China, South Korea and Japan freely invest here while severely restricting U.S. investment there. America’s trade deficits result in a tsunami of incoming foreign investment, a change from when the U.S. was the world’s sole superpower. The Committee on Foreign Investment in the U.S. (CFIUS) can block incoming investment based upon national security concerns, but not for economic strategy reasons as other countries do.”

The coalition proposed the follow remedies:

• Expand consideration beyond national security to include economic security
• Allow longer review periods, beyond 30 days, for CFIUS to review proposed investments
  Include a “net benefit” test to encompass American economic interests where proposed
  acquisitions of companies important to future U.S. technology and employment, both civilian and defense related
• Gauge systemic threats to U.S. interests in addition to individual cases
• Require country by country reciprocity to allow foreign investment in U.S. companies and technology only to the extent they allow incoming U.S. investment there
• Prescribe heightened scrutiny of investments by state-influenced enterprises

CPA CEO Michael Stumo stated, “We must ensure that foreign greenfield investments in the U.S. and acquisitions of existing U.S. companies provide a clear ‘net benefit’ to the U.S. with special scrutiny in cases of state-influenced foreign entities.”

My question is: Did we let the USSR buy our companies during the Cold War? No, we didn’t! We realized that we would be helping our enemy. This was pretty simple, common sense, but we don't seem to have this same common sense when dealing with China.

It is time to wake up to the real dangers of our relationship with China. The Communist Chinese government is not our friend. China is a geopolitical rival that has a written plan to become the Super Power of the 21st Century. Letting Chinese corporations acquire American companies, especially energy or technology-based companies is the biggest threat to rebuilding American manufacturing. With regard to China’s military buildup, the U.S.-China Commission report states, “PLA modernization is altering the security balance in the Asia Pacific, challenging decades of U.S. military preeminence in the region…The PLA is rapidly expanding and diversifying its ability to strike U.S. bases, ships, and aircraft throughout the Asia Pacific region, including those that it previously could not reach, such as U.S. military facilities on Guam. We must not allow this policy to continue if we want to maintain our national sovereignty.”

________________________________________________________________________________

 

 

[ceo_energemsier + 1,818]

Chinese-Owned Smithfield Will Pay Pork Tariffs

4/5/2018

 

China’s recent announcement of an additional 25% tariff on U.S. pork products has led to questions about what this means for Smithfield Foods. Smithfield is the largest pork producer in the U.S., according to Successful Farming magazine’s annual Pork Powerhouses® ranking, with 930,000 sows. Smithfield is also owned by the Chinese company WH Group.

According to Smithfield representatives, the company will pay China’s new retaliatory tariff on pork, too.

“Smithfield is an American company, so the additional 25% tariff is applicable to any pork we produce in the U.S. and export to China just like all other U.S. producers/processors,” says Keira Lombardo, senior vice president of corporate affairs for Smithfield, based in Smithfield, Virginia. “Remember, there was already a longstanding tariff in place (12% on frozen pork), which we have been paying all along — before and after the WH Group acquisition in 2013.”

 

The majority of product shipped to China is offal (also called variety meats), says Lombardo.

[Dan Warnick + 6,100]

8 hours ago, Tom Kirkman said:

China's 'Ministry of Truth'

Catchy name, don't you think?  Heh-heh.

[ceo_energemsier + 1,818]

PARIS (AP) — The Latest on the disappearance of the president of Interpol, Meng Hongwei (all times local):

Interpol Headquarters in Lyon France, Photo Date: 7/16/2005 / Photo: Massimiliano Mariani / CC BY-SA 3.0 / (MGN)

6:00 p.m.

A Hong Kong newspaper has cited an anonymous source saying the president of Interpol was taken away for questioning by "discipline authorities," a term that usually describes investigators in the ruling Communist Party who probe graft and political disloyalty.

The South China Morning Post reported Friday that Meng Hongwei was placed under investigation in his native China as soon as he arrived in the country last week.

An Interpol spokesman says the international law enforcement agency is aware of the Post's story, but would not comment on it or say if Chinese authorities had detained the 64-year-old Meng.

Meng's wife says she has not heard from him since he left Lyon, France, where Interpol is headquartered, at the end of September.

The Central Commission for Discipline Inspection, the Communist Party's secretive internal investigation agency, had no announcements on its website about Meng and could not be reached for comment.

 

___

The Chinese president of Interpol has been reported missing after he traveled to his native country at the end of September, a French judicial official said Friday.

Meng Hongwei's wife reported Friday that she had not heard from her 64-year-old husband since he left Lyon, France, where Interpol is based, said the official, who spoke on condition of anonymity to provide details of an ongoing investigation.

The French official said Meng did arrive in China. There was no further word on Meng's schedule in China or what prompted his wife to wait until now to report his absence.

Meng, who has been president of Interpol for two years, still holds the post of vice minister for public security, according to the ministry's website.

In a statement, Interpol said it was aware of reports about Meng's disappearance and added "this is a matter for the relevant authorities in both France and China." The statement noted that Interpol's secretary general, and not its president, is responsible for the international police agency's operations.

News of the investigation into Meng's disappearance came during a weeklong public holiday in China. In Beijing, the foreign and public security ministries did not immediately respond to calls and faxed requests for comment Friday.

 

Meng was elected president of Interpol in November 2016. His term runs until 2020.

He has held a variety of positions within China's security establishment, including as a vice minister of public security — the national police force — since 2004. In the meantime, he served as head and deputy head of branches of the coast guard, all while holding positions at Interpol.

Meng's duties in China would have put him in close proximity to former leaders, some of whom had fallen afoul of President Xi Jinping's sweeping crackdown on corruption. In particular, Meng likely dealt extensively with former security chief Zhou Yongkang, who is now serving a life sentence for corruption.

Xi has also placed a premium on obtaining the return of officials and businesspeople accused of fraud and corruption from abroad, making Meng's position all the more sensitive.

When Meng was elected in 2016 as Interpol president, rights groups expressed concern that he would pursue an agenda of politicized policing that targeted Xi's opponents.

___

Bodeen reported from Beijing.

[ceo_energemsier + 1,818]

On 10/2/2018 at 9:15 PM, ceo_energemsier said:

It works and will work despite the media's attempt to undermine the forward going successes.

 

https://finance.yahoo.com/news/jpmorgan-now-forecasting-trade-war-140253587.html

[Mike Marcellus + 157]

On 9/25/2018 at 12:21 AM, Dan Warnick said:

Sorry for the long story, but as I mentioned earlier, the Chinese are quite capable of learning from their mistakes and Tiananmen Square, 1989, was something to learn from.

Thanks for the long story.  I needed the reminder that not everything is black and white.

[ceo_energemsier + 1,818]

https://finance.yahoo.com/news/china-apos-latest-banking-move-093237071.html

[ceo_energemsier + 1,818]

https://finance.yahoo.com/video/trump-tariffs-forcing-china-confront-224818591.html

[ceo_energemsier + 1,818]

https://marketrealist.com/2018/10/will-the-sharp-sell-off-in-europe-and-china-impact-oil-prices?utm_source=yahoo&utm_medium=feed&yptr=yahoo

[ceo_energemsier + 1,818]

I am "copying and pasting" some of these articles in whole. When they arrive in my inbox, there is no link some times, just the source name @ the end of the article.

09/10/2018

 

China will increase export tax rebates from Nov. 1 and quicken export tax rebate payments to support foreign trade, the cabinet said on Monday, as a trade war with the United States escalates.

The rise in export tax rebates will “help reduce costs for the real economy, help it cope with the complex international situation and maintain stable foreign trade growth”, the cabinet said after a regular meeting.

The move conforms to rules of the World Trade Organization (WTO), it said.

The tax rebate will be raised to 16 percent for those exports currently getting a rebate of 15 percent or 13 percent, the cabinet said.

The rebate will be raised to 10 percent for those exports that currently get a 9 percent rebate, though the rebate will be raised to 13 percent for some, the cabinet said.

The rebate will be raised to 6 percent for exports currently getting a 5 percent rebate, though for sone it will be raised to 10 percent.

In September, China raised export tax rebates for 397 items, including steel and electronic products, in a bid to help exporters as the tariff war with the United States worsened.

Chinese policymakers have been stepping up support for the slowing economy as the full impact of U.S. trade tariffs has still to be felt.

Local governments will quicken special bond issuance for shanty-town redevelopment but they will be barred from engaging in fund-raising in the name of such housing projects, the cabinet said after a regular meeting.

China has injected hundreds of billions of dollars of policy loans into redevelopment of shanty-towns. Analysts say the project has boosted property demand as residents are encouraged to use cash compensation to buy a new home when their existing home is demolished.
Source: Reuters (Reporting by China Monitoring Desk and Kevin Yao; Editing by Simon Cameron-Moore)

[ceo_energemsier + 1,818]

08/10/2018

 

While the White House is progressing on trade deals with allies including Canada, Mexico, Korea and Europe, its dispute with China looks increasingly intractable, with tariffs between the world’s two largest economies likely cemented in place for years.

In other trade fights, President Trump used tariffs as leverage to reach deals. Threatening car tariffs helped convince Canada and Mexico to concede to U.S. demands for a new North American Free Trade Agreement, the president boasted. “Without tariffs, we wouldn’t be talking about a deal,” he said Oct. 1 in the Rose Garden.

China is different. Tariffs aren’t simply a negotiating tactic for the U.S., but a way to change economic incentives.

The Trump trade team believes U.S. firms need protection from a predatory Chinese state, which Mr. Trump says coerces U.S. companies to fork over technologies and subsidizes Chinese firms to expand globally.

Using tariffs to make it more expensive for companies to export from China, Trump trade warriors figure, will encourage foreign firms to take their know-how out of the country.

This isn’t a short-term strategy.

“We have changed the paradigm,” U.S. Trade Representative Robert Lighthizer said last month. “We have tariffs in place, and the president is not going to let this go along when you have forced transfer of intellectual property.”

So far, the U.S. has imposed tariffs on about half of the $505 billion that the nation imported from China in 2017. Mr. Trump has threatened to hit the other half with levies too.

For the first half of this year, Treasury Secretary Steven Mnuchin and his allies tried to cut deals with the Chinese which focused mainly on China buying more U.S. goods. Doing so, this camp argued, could address Mr. Trump’s complaints about the $375 billion trade deficit with China. The president rejected the Chinese offers, undermining Mr. Mnuchin with the Chinese and strengthening Mr. Lighthizer’s hard-line position in White House trade fights.

Now the U.S. team is more unified, but only because they are pushing for the kinds of changes sought by Mr. Lighthizer.

They include reducing the role of state-owned firms in China’s economy, allowing U.S. firms to get majority stakes in businesses in China and dropping pressure on U.S. tech firms to reveal their secrets. These are the types of changes that China finds most difficult to accept.

China is a “socialist market economy,” said Zhang Xiangchen, China’s representative to the World Trade Organization, in July. “For those who speculated that China would change and move onto a different path … that was their wishful thinking.”

President Trump is planning to meet Chinese leader Xi Jinping at the Group of 20 leaders’ summit in Buenos Aires at the end of November. A failure there, says Myron Brilliant, the U.S. Chamber of Commerce’s executive vice president, is bound to mean that the U.S. goes ahead with plans to increase tariffs on a tranche of $200 billion of Chinese goods from 10% to 25%. It could also lead to Mr. Trump making good on his threat of tariffs on another $250 billion worth of imports from China, if he hasn’t imposed them beforehand.

Some Wall Street analysts have argued the trade fight won’t have much economic impact. Jesse Edgerton, a JPMorgan analyst, likens tariffs to a tax. A 25% tariff on $500 billion of Chinese goods produces $125 billion in costs. Some of those costs will be absorbed by Chinese exporters, while some will be borne by U.S. importers and U.S. consumers.

In a $20 trillion U.S. economy, JPMorgan figures it should be manageable. It forecasts tariffs would reduce U.S. output growth by just 0.1 percentage point in 2019 and 0.3 percentage points in China. The Chinese, JPM expects, will respond by stimulating their domestic economy and cheapening their currency.

Others argue the impact could be deeper. Seth Carpenter, a UBS analyst, says tariffs hit U.S. manufacturing hard, especially newer firms which depend on China for components and as an export destination. A lengthy trade war could tip the U.S. into recession, he said.

A longer trade war would also force foreign firms to reconsider their global supply arrangements, which would eat at profits.

International Business Machines Corp. warned China’s commerce vice minister in August that IBM might have to move production out of China if the trade conflict wasn’t settled in the next few months, say participants at the meeting in Washington. Other companies are looking at remaking their China operations so the work they do in China is exported to countries other than the U.S., again raising costs.

Tao Wang, a UBS China analyst, says that for China, the potential loss of investment is the “more serious impact of the trade war.” This is also the kind of impact that the White House is aiming for. Trump administration officials have taken the 16% decline in the Shanghai Stock Exchange since the beginning of the year as a sign they are winning.

Tariffs have a kind of inertia, says Derek Scissors, an American Enterprise Institute China expert. Once they are put in place, companies and countries eventually adjust to them by shifting investment and policies. Removing the tariffs rejiggers the trading system again. Even if Mr. Trump should lose the 2020 election, he figures, tariffs could remain in place.

“Both parties are anti-China, and that’s the way protectionism works,” he said.
Source: Dow Jones

[ceo_energemsier + 1,818]

https://finance.yahoo.com/news/unwelcome-guest-u-tariffs-loom-chinas-biggest-trade-095253425--sector.html

[ceo_energemsier + 1,818]

China’s LPG Import Costs Rise On Trade War, Iran Sanctions

 

https://oilprice.com/Latest-Energy-News/World-News/Chinas-LPG-Import-Costs-Rise-On-Trade-War-Iran-Sanctions.html