Hard for Xi, Trump to make progress on trade: former China central bank chief

BEIJING (Reuters) – China’s President Xi Jinping and U.S. President Donald Trump are likely to find it “difficult” to make major progress toward ending their countries’ trade war when they meet at a G20 summit in Japan in June, a former top Chinese official said on Friday.

Containers are seen at a logistics center near Tianjin Port, in northern China, May 16, 2019. REUTERS/Jason Lee

The U.S. approach to trade talks has been “bullying and America First”, whereas the principles of China’s approach to negotiations were equality and cooperation, said Dai Xianglong, who headed the People’s Bank of China from 1995-2002 and remains an influential figure in China.

“It’s hard to reconcile these,” Dai told a seminar on U.S.-Sino trade relations, noting that trade friction between China and the United States was a long-term issue.

Trade tensions between Washington and Beijing escalated sharply this month after the Trump administration accused China of having reneged on its previous promises to make structural changes to its economic practices.

Washington later slapped additional tariffs of up to 25% on $200 billion of Chinese goods, prompting Beijing to hit back with additional levies on around $60 billion of U.S. imports due to take effect on Saturday.

“I expect that at next month’s meeting of the leaders in Japan it will be difficult to achieve major progress,” Dai said, later adding that he was not confirming that the meeting would take place, but he hoped it would.

Trump has said he is planning on meeting Xi during the G20 summit, set for June 28-29 in Osaka, though China has not formally confirmed this.

Dai said he did not rule out stronger retaliation by China. He said heavy sales of U.S. Treasuries by China was a less likely option for retaliation as it would hurt China’s own interests.

Since the latest round of U.S. tariffs, which caught Beijing by surprise, Chinese state media has gone on the offensive.

The People’s Daily, the ruling Communist Party’s flagship newspaper, warned this week that China was ready to use its dominance of rare earths, crucial minerals used in electronics, to strike back in the trade war.


A deluge of sharply worded commentaries and warnings out of China in the last two weeks has intensified a public relations battle with the United States that could complicate the run-up to any Xi-Trump meeting in Japan.

At the Beijing seminar on Friday, former Chinese vice commerce minister Wei Jianguo said initiating a trade war with China might be the biggest strategic mistake made by the United States since World War II or even its founding.

There is a need to prepare for the likelihood for the trade war to ratchet up tensions to geopolitical areas including the South China Sea, said Wei, adding that the trade conflict might last for 30 years or even half a century.

He suggested that China had many countermeasures it could take, including rare earths and against Boeing Co. or U.S. software.

“There are lots of Chinese countermeasures, and, speaking honestly, we hope not to use them, because we always negotiate with the United States with sincerity and hope to achieve results,” Wei said.

Dong Yang, a former executive director at the China Association of Automotive Manufacturers, said at the seminar that U.S. auto parts suppliers could also be hit.

“U.S. car components companies have presence in China, and set China as a global manufacturing base. The escalation of the trade war between China and the United States will seriously affect their development in China and the world,” Dong said.

Other parts suppliers such as Germany, Japan, South Korea and France can also provide strong substitutes for U.S. components, he said.

All those who spoke at the seminar were former, albeit senior, officials. The government has not organized media appearances for top leaders or trade negotiators to answer questions on the trade talks.

Chinese officials hardly ever take questions from foreign media. And, unlike in the United States, where there is constant direct contact with the media and Trump tweets about policy regularly, senior Chinese officials, including Xi, do not tweet – Twitter is banned in China.

Reporting by Stella Qiu, Cheng Leng, Yilei Sun and Dominique Patton; Writing by Ryan Woo and Ben Blanchard; Editing by Paul Tait & Simon Cameron-Moore

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Trade gloom, rising oil, Boeing 737 MAX woes to cloud aviation summit

SEOUL (Reuters) – Global airlines are meeting under a storm pattern of trade tensions, rising oil prices and a two-month-old grounding of the Boeing Co 737 MAX jetliner – threatening to put a halt to five years of strong profits in the cut-throat air travel industry.

The angle of attack sensor, at bottom center, is seen on a 737 Max aircraft at the Boeing factory in Renton, Washington, U.S., March 27, 2019. REUTERS/Lindsey Wasson

The sector’s bosses converge on Seoul for a summit this weekend, but what might have been a celebration of growth in one of the world’s most vibrant regions now risks being thrown off course by a crippling U.S.-China trade spat and growing environmental pressures spreading from Europe.

“The last six months have been pretty tough for airlines,” the head of the International Air Transport Association (IATA) said ahead of the annual meeting of the body, which groups 290 airlines representing over 80% of air travel.

“Rising costs, trade wars and other uncertainties are likely to have an impact on the bottom line,” IATA Director General Alexandre de Juniac added.

The June 1-3 summit is a chance to examine passenger and cargo trends: key barometers of consumer confidence and trade amid a faltering global economy.

IATA’s most recent projection for $35.5 billion in industry profits this year now looks unsustainable due to the falling cargo market and weaker passenger growth, and de Juniac has given a strong steer that the group would trim the forecast at the upcoming Seoul meeting.

The cargo slump, with volumes down 3.7% in April including a 7.4% fall in the Asia-Pacific, is a concern for big freight carriers like Cathay Pacific and the IATA summit host Korean Air Lines.

“We have really since the end of last year seen quite a deterioration of cross-border trade following the earlier round of tariff increases,” IATA Chief Economist Brian Pearce said.

The meeting of some 200 CEOs is the largest gathering since the industry was plunged into crisis over the grounding of the 737 MAX in March following two crashes. IATA members have invested hundreds of billions of dollars in the MAX and are anxious to contain any public or regulatory backlash.

Aviation leaders maintain flying remains remarkably safe relative to other forms of transport.

But the decision by China, the European Union and others to ground the MAX before the United States opened an unusual split in the regulatory system, worrying airlines and planemakers.


IATA, which is taking an increasingly central role in the crisis by hosting talks of MAX customers, believes the aircraft could return to service in August. But that is too late to prevent significant disruption to summer schedules.

Pressure on Boeing grew ahead of the IATA meeting as the China Air Transport Association estimated losses to Chinese airlines of some 4 billion yuan ($579 million).

IATA began in 1945 as a quasi-regulator and price-setter. It is now mainly a lobbying group but retains a special role as a clearing house for financial transactions and common standards.

Its perennial list of concerns includes high airport charges and what IATA calls “scandalous” air traffic delays in Europe.

But it is also wrestling with a rapid surge in anti-aviation sentiment in parts of Europe and calls in the Netherlands and elsewhere for new taxes to curb airliner emissions.

The aviation industry says it has plans to contribute to climate efforts through a carbon-offset scheme called CORSIA, but critics say the initiative is too timid.

Local airlines seem to encapsulate this year’s subdued tone.

Korean Air is mourning the death of long-time chairman Cho Yang-ho from a chronic illness in April, weeks after shareholders ousted the tycoon from the board of the country’s largest airline.

The carrier, now led by his son Walter, has been receiving negative media attention since an incident dubbed “nut rage” went viral in 2014, when Cho’s eldest daughter Heather lost her temper over the way she was served nuts in first class and ordered the plane to return to its gate at a New York airport.

Rival Asiana’s top shareholder Kumho Industrial Co said last month it was selling its stake in the debt-laden carrier which has been slashing routes to improve profitability.

“It seems there is not much of a celebratory mood given the circumstances at our major carriers,” said Kim Ik-sang, a senior analyst at BNK Securities.

Reporting by Heekyong Yang and Tracy Rucinski in Seoul; additional reporting and writing by Jamie Freed and Tim Hepher; Editing by Himani Sarkar

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ArcelorMittal makes deeper cuts to steel production in Europe

FILE PHOTO: Steel rolls are lined up at the ArcelorMittal steel plant in Sestao, Spain, November 12, 2018. REUTERS/Vincent West/File Photo

BRUSSELS (Reuters) – ArcelorMittal, the world’s largest steelmaker, cut steel production in its main market, Europe, for the second time this month, blaming weak demand and high imports.

The company said it would reduce primary steel production at its facilities in Dunkirk, France and Eisenhuettenstadt, Germany.

It would also cut steel output at its plant in Bremen, Germany, in the fourth quarter of the year, extending a planned blast furnace stoppage for repairs, and extend a similar scheduled stoppage in the final quarter in Asturias, Spain.

At the start of May, ArcelorMittal temporarily idled production at its facility in Krakow, Poland, reduced output in Asturias, and slowed down a planned increase of shipments from Italy.

Geert van Poelvoorde, the head of the flat products division of ArcelorMittal in Europe, said the production cuts would be reversed when market conditions improve.

When publishing its 2018 results, the company cut its forecast for demand in Europe, predicting a contraction due to weak manufacturing and declining automotive production, for which steel is a major input.

ArcelorMittal has steelmaking plants in 18 countries worldwide, with 47 percent of its steel produced in Europe.

Reporting by Philip Blenkinsop; Editing by Mark Potter

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France insists any Renault/Fiat deal must protect French jobs: Le Maire

PARIS (Reuters) – France must protect its own interests and jobs in any merger between Renault and Fiat, even though France’s stake in Renault would automatically be diluted, French Finance Minister Bruno Le Maire told RTL radio on Tuesday.

FILE PHOTO: John Elkann, Chairman of Fiat Chrysler Automobiles (FCA), attends the presentation of the Science Gateway, a new facility dedicated to scientific education and outreach, by architet Renzo Piano at the CERN in Meyrin near Geneva, Switzerland, April 8, 2019. REUTERS/Denis Balibouse/File Photo

Le Maire said the French government would seek “four guarantees” on the Renault/Fiat deal, including the protection of French jobs, ensuring France was well-represented on the board of the new entity, and ensuring Renault/Fiat was a leader in the development of electric batteries.

“The first: industrial jobs and industrial sites. I told the Renault chairman very clearly that it was the first of the guarantees I wanted from him in the opening of these negotiations. A guarantee on the preservation of industrial jobs and sites in France,” said Le Maire.

Le Maire confirmed that if the deal went ahead, France’s stake in Renault would go down to 7.5% from 15% at present.

Le Maire wanted a commitment from Renault chairman Jean-Dominique Senard that no Renault factories in France would close, and that French interests would be well represented in the leadership of a new Renault/Fiat company.

The merged group would be chaired by Agnelli family scion John Elkann, sources familiar with the talks told Reuters, while Renault chairman Jean-Dominique Senard would likely become CEO.

Fiat Chrysler pitched a finely balanced merger of equals to Renault on Monday to tackle the costs of far-reaching technological and regulatory changes by creating the world’s third-biggest automaker.

If it goes ahead, the $35 billion-plus tie-up would alter the landscape for rivals including General Motors and Peugeot maker PSA Group, although trade unions in Italy and France do not want any big job losses from the deal.

A deal could also have profound repercussions for Renault’s 20-year-old alliance with Nissan, already weakened by the crisis surrounding the arrest and ousting of former chairman Carlos Ghosn late last year.

Le Maire said he had spoken to the Japanese personally about the proposed tie-up.

“I want this deal to take place within the framework of the alliance between Renault and Nissan,” said Le Maire.

Asked about Nissan’s reaction so far, Le Maire replied: “I look at the reaction of Nissan president Mr Saikawa, and it’s a reaction that is open.”

Reporting by Sudip Kar-Gupta; Additional reporting by Myriam Rivet and Gilles Guillaume; Editing by Richard Lough

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Fiat Chrysler confirms merger talks with Renault

FILE PHOTO: The logo of FIAT carmaker is seen on a vehicle in Cairo, Egypt, May 19, 2019. REUTERS/Mohamed Abd El Ghany/File Photo

PARIS (Reuters) – Fiat Chrysler has made a “transformative merger” proposal to French peer Renault, the Italian carmaker said on Monday, in a deal which would create a world leader and help address some of the weaknesses in both Renault and Fiat.

Fiat said the combined business would be 50% owned by FCA shareholders and 50% owned by those of Renault.

Pressure for consolidation among carmakers has grown with the challenges posed by electrification, tightening emissions regulations and expensive new technologies being developed for connected and autonomous vehicles.

Reporting by Sudip Kar-Gupta; Editing by Christopher Cushing

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Fiat Chrysler in tie-up talks with Renault: sources

MILAN/PARIS (Reuters) – Fiat Chrysler and Renault are in talks on a comprehensive global tie-up that could address some of the main weaknesses of both carmakers, two sources with knowledge of the discussions told Reuters on Saturday.

FILE PHOTO: A Fiat Chrysler Automobiles (FCA) sign is seen at its U.S. headquarters in Auburn Hills, Michigan, U.S. May 25, 2018. REUTERS/Rebecca Cook/File Photo

The talks are at an advanced stage, the sources said. The Financial Times on.ft.com/2HRDghE earlier reported that FCA and Renault were discussing a deal to forge “extensive ties” to tackle structural challenges facing the global auto industry.

A spokesman for FCA declined to comment on the report. Renault spokesman Frederic Texier said the French carmaker had no comment.

Pressure for consolidation among carmakers has grown with the challenges posed by electrification, tightening emissions regulations and investment-thirsty technologies for connected and autonomous vehicles.

FCA and Renault have a combined market capitalization approaching 33 billion euros ($37 billion) and total global sales of 8.7 million vehicles. Besides bringing greater scale, a tie-up could help patch flaws on both sides.

FCA has a highly profitable North American RAM trucks business and Jeep brand but has been losing money in Europe, where it may also struggle to keep pace with looming carbon dioxide emissions curbs.

Renault, by contrast, is an electric-car pioneer with relatively fuel-efficient engine technologies and a strong presence in emerging markets, but no U.S. business.

Any tie-up would likely face political and workforce hurdles, particularly in Italy. Most of FCA’s European plants are running below 50 percent capacity.

It was unclear whether the FCA-Renault deal talks would conclude successfully, the sources said.

The plan under consideration could involve some transfer of equity, one source said. “This isn’t just another partnership – it’s more than that.”

Both carmakers have also been exploring tie-ups with other partners.

While FCA has recently revived discussions with PSA Group – which have been recurrent over the years – Renault is seeking a merger with Nissan, its partner in a troubled 20-year-old alliance. [nL5N22Q90O]

A tie-up between FCA and Renault would not preclude a consolidation of the alliance with Nissan, one of the sources said.

The Renault-Nissan partnership, underpinned by crossed shareholdings, has been strained by the scandal surrounding former chairman Carlos Ghosn, who was ousted in the wake of a Nissan internal investigation.

A tie-up that included Nissan would vault the ensemble to the rank of global No.1 carmaker with 13.8 million annual sales. It would also maintain a foothold in China, where both FCA and Renault are marginal players.

The discussions follow weakening U.S. auto demand that has prompted cutbacks at several carmakers. FCA reported a 29 percent decline in first-quarter operating profit as sales and margins weakened in its North American profit centre. Sales dropped 5 percent to 24.48 billion euros. [nL5N22F3AD]

($1 = 0.8927 euros)

Additional reporting by Joe White in Detroit, Kanishka Singh in Bengaluru and Inti Landauro in Paris; Editing by Andrew Heavens and Daniel Wallis

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Huawei shipments could fall by up to a quarter this year: analysts

HONG KONG/SHANGHAI (Reuters) – China’s Huawei, hit by crippling U.S. sanctions, could see shipments decline by as much as a quarter this year and faces the possibility that its smartphones will disappear from international markets, analysts said.

FILE PHOTO: A salesman turns on a new Huawei P30 smartphone for a customer after Huawei’s P30 and P30 Pro went on sale at a Huawei store in Beijing, China, April 11, 2019. REUTERS/Jason Lee/File Photo

Smartphone shipments at Huawei, the world’s second-largest smartphone maker by volume, could tumble between 4% and 24% in 2019 if the ban stays put, according to Fubon Research and Strategy Analytics.

Several experts said they expect Huawei’s shipments to slide over the next six months but declined to give a hard estimate due to uncertainties surrounding the ban.

The U.S. Commerce Department blocked Huawei from buying U.S. goods last week amid its escalating trade spat with China.

The ban applies to goods and services with 25% or more of U.S.-originated technology or materials, and may, therefore, affect non-American firms.

Tech companies including Google and SoftBank Group-owned chip designer ARM have said they will cease supplies and updates to Huawei.

“Huawei may be wiped out of the Western European smartphone market next year if it loses access to Google,” said Linda Sui, director of wireless smartphone strategies at Strategy Analytics.

She predicts Huawei handset shipments will decline another 23% next year but believes the company could survive on the sheer size of the China market.

Fubon Research, which previously forecast Huawei would ship 258 million smartphones in 2019, now expects the company to ship just 200 million in a worst-case scenario.

Huawei commands nearly 30% of the European market according to industry tracker IDC, and shipped 208 million phones last year, including half to markets outside China. The company counts Europe as the most important market for its premium smartphones.


Huawei has said it has been developing the technology it needs to be self-sufficient for years.

But experts are not buying the company’s claim.

They said key components and intellectual property needed in Huawei’s devices are not available outside the United States.

Huawei would potentially need to lay off thousands of people and “disappear as a global player for some time,” said Stewart Randall, who tracks the chip industry at Shanghai-based consultancy Intralink.

Potential buyers of Huawei’s phones are likely to switch to high-end devices from Samsung Electronics and Apple Inc, and also buy mid-end phones from domestic rivals OPPO and Vivo, analysts said.

“It leaves an amount of share in its wake that can get picked up by competitors, particularly Samsung given its strength in regions like Europe,” said Bryan Ma, who researches the global smartphone market at IDC.

Huawei handsets are already drawing fewer clicks from online shoppers since the United States blacklisted the company, according to PriceSpy, a product comparison site that attracts an average of 14 million visitors per month.

Workers are seen near the booth of Huawei Technologies Co under construction at the venue of China International Big Data Industry Expo in Guiyang, Guizhou province, China May 22, 2019. Picture taken May 22, 2019. REUTERS/Stringer

“Over the last four days, Huawei handsets have slumped in popularity – receiving almost half as many clicks as they did last week in the UK and 26% less on the global stage,” PriceSpy said.

The export ban on Huawei could also delay China’s 5G rollout, Jefferies analyst Edison Lee said. Huawei has said it signed 5G contracts with 40 clients around the world.

(Clarifies that Huawei market share data in 10th paragraph is for Europe, not global.)

Reporting by Sijia Jiang in HONG KONG and Josh Horwitz in Shanghai; Writing by Sayantani Ghosh; editing by Louise Heavens

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Fears of deeper U.S.-China trade war push Asian shares to four-month low

Tokyo (Reuters) – Asian stocks stumbled to a four-month low on Friday and crude oil plunged on worries the U.S.-China trade spat was developing into a more entrenched strategic dispute between the world’s two largest economies, pushing investors to safe-haven assets.

FILE PHOTO: A man is reflected in an electronic board showing the graph of the recent fluctuations of the Tokyo Stock Price Index (TOPIX) outside a brokerage in Tokyo, Japan, June 27, 2016. REUTERS/Toru Hanai/File Photo

MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.2 percent to a fresh four-month low, and was on track for a third straight weekly loss, down 1.0% so far on the week.

Chinese shares recovered slightly, with the benchmark Shanghai Composite up 0.2% and the blue-chip CSI 300 rising 0.3%, while Hong Kong’s Hang Seng added 0.2%.

Japan’s Nikkei average dropped 0.7%.

On Wall Street, the Dow Jones Industrial Average fell 1.1%, the S&P 500 lost 1.2% and the Nasdaq Composite dropped 1.6%, as traders dumped cyclical names on fears that the escalating U.S.-China trade war would stymie global economic growth.

U.S. President Donald Trump said on Thursday that Washington’s complaints against Huawei Technologies might be resolved within the framework of a U.S.-China trade deal, while calling the Chinese telecom giant “very dangerous.”

Washington last week effectively banned U.S. firms from doing business with Huawei, the world’s largest networking gear maker, citing national security concerns.

The U.S. Commerce Department said on Thursday it was proposing a new rule to impose anti-subsidy duties on products from countries that undervalue their currencies against the dollar, another move that could slap higher tariffs on Chinese products.

China’s Commerce Ministry hit back on Thursday, with its spokesman saying the United States wants to continue trade talks, they should show sincerity and correct their wrong actions.”

Masanari Takada, cross-assets strategist at Nomura Securities in Tokyo, said the U.S.-China trade conflict “has not yet fully dented the global investor sentiment, so there is no panic-selling. But at the same time, the sentiment will likely remain weak.”

As flight-to-safety plays dominated global markets, the benchmark 10-year U.S. Treasury note yield hit 2.292%, the lowest level since mid-October 2017, with the key parts of the yield curve inverted. The yield last stood at 2.326 percent.

Chotaro Morita, chief fixed income strategist at SMBC Nikko Securities, said big falls shown in a fresh U.S. manufacturing survey appear to reflect expectations of a breakdown in the U.S-China trade talks.

“In the last couple of years, the PMI has had a very small gap with hard data, such as industrial output. So if that holds true this time, we could see factory production plunging into negative levels (compared to a year ago).”

“Since the global financial crisis, U.S. output has fallen only once: from 2015 to early 2016 when the shale industry was badly hit. Markets could start to fret over a global slowdown as they have done late last year.”

The dollar index, which measures it against six major currencies, hit a high of 98.371 on Thursday U.S. time. It was last quoted at 97.872, little changed on the day.

The euro on Thursday slumped to levels last seen in May 2017 as a recovery in euro zone business activity was weaker than expected. Early Friday, the currency was steady on the day at $1.1181 .

Sterling weakened again on Thursday as pressure mounted on British Prime Minister Theresa May to name a date for her departure after a backlash over her last-ditch plans for Britain’s exit from the European Union.

While some domestic media said May’s time was up, foreign minister Jeremy Hunt said she would still be prime minister when Trump arrives for a visit trip on June 3.

The pound was last traded at $1.2661 , little changed on the day. Sterling suffered its 14th consecutive day of losses against the euro on Thursday, its longest losing streak on record. It stood at 0.8831 pound to the euro.

Other major currencies were relatively calm, with the safe-haven yen still supported but not aggressively so.

The dollar was holding at 109.56 yen , almost flat on the day.

In commodity markets, oil prices tumbled on Thursday as trade tensions dampened the demand outlook, with the crude benchmarks posting their biggest daily falls in six months.

Oil prices stabilized on Friday amid OPEC supply cuts and tensions in the Middle East.

In Asian trade, U.S. crude rebounded 0.9% to $58.46 a barrel, after Thursday’s 5.7% fall that took it to the lowest in two months. Brent crude futures rebounded 1.0% to $68.46 per barrel, after falling 4.6% in the previous session.

Additional reporting by Hideyuki Sano; Editing by Sam Holmes and Richard Borsuk

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Asia shares sink to four-month low, yen a safe harbor

SYDNEY (Reuters) – Asian shares carved out a four-month trough on Thursday amid worries the Sino-U.S. trade conflict was fast morphing into a technology cold war between the world’s two largest economies.

FILE PHOTO: A man riding on a bicycle looks at an electronic board showing the Japan’s Nikkei average outside a brokerage in Tokyo February 24, 2015. REUTERS/Yuya Shino/File Photo

Late Wednesday, Reuters reported the U.S. administration was considering Huawei-like sanctions on Chinese video surveillance firm Hikvision over the country’s treatment of its Uighur Muslim minority, according to a person briefed on the matter.

After the United States placed Huawei Technologies on a trade blacklist last week, British chip designer ARM has halted relations with Huawei in order to comply with the blockade.

“For China, the key risk is that the combined effects of investment restrictions, export controls, and tariffs will rewire supply chains and weaken manufacturing investment, particularly in the technology sectors driving growth,” ratings agency S&P warned in a special report.

Shanghai blue chips shed 1.5% in response to be near their lowest since February. MSCI’s broadest index of Asia-Pacific shares outside Japan slid 0.9% to reach its lowest in four months.

Japan’s Nikkei lost 1%, while South Korea shed 0.7%. Also feeling the pain, E-Mini futures for the S&P 500 dropped 0.5%.

Minutes of the U.S. Federal Reserve’s last meeting out on Wednesday underlined its readiness to be patient on policy “for some time” given the uncertain global outlook.

The chance of a rate cut seemed to diminish as many Fed policy makers saw recent weakness in inflation as “transitory”, though the latest escalation in the trade war means markets are still wagering on an eventual easing.

Yields on two-year Treasuries of 2.237% are also well below the current effective funds rate at 2.39%.

There remains no end in sight to the trade dispute. Treasury Secretary Steven Mnuchin on Wednesday said it would be at least a month before the U.S. would enact proposed tariffs on $300 billion in Chinese imports as it studies the impact on American consumers.

The mood on Wall Street was cautious with the Dow ending Wednesday down 0.39%, while the S&P 500 lost 0.28% and the Nasdaq 0.45%.

Shares in chipmaker Qualcomm Inc dived 10.9% after a federal judge ruled the company illegally suppressed competition in the market for smartphone chips by threatening to cut off supplies and extracting excessive licensing fees.


In currencies, constant trade friction saw the safe haven yen in demand again as the dollar dipped to 110.20 yen and away from the week’s top of 110.67.

The dollar fared better on the euro at $1.1151 and was steady on a basket of currencies at 98.111.

Sterling was the main mover, sliding to a four-month low at $1.2625 before steadying at $1.2651 in Asia. [GBP/]

British Prime Minister Theresa May came under intense pressure after her latest Brexit gambit backfired and fueled calls for her to quit.

Prominent Brexit supporter Andrea Leadsom resigned from the government on Wednesday and British media reported May could announce her departure date as early as Friday.

“Uncertainty is the only clear certainty in the near term,” said Westpac macro strategist Tim Riddell.

“The risk of a hard-Brexit replacement for May has increased the risks of a hard Brexit result or even a forced no-deal exit,” he added. “Such an event would likely force GBP lower, increase risks of assets sliding and BOE (Bank of England) taking counter action to support assets.”

In commodity markets, spot gold edged up a touch to $1,274.10 per ounce.

Oil prices added to losses suffered overnight after an unexpected build in U.S. crude inventories compounded investor worries about demand.

U.S. crude was last down 44 cents at $60.98 a barrel, while Brent crude futures lost 45 cents to $70.54.

Editing by Shri Navaratnam and Sam Holmes

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China ready for further U.S. trade talks, ambassador says

WASHINGTON (Reuters) – Chinese Ambassador to the United States Cui Tiankai said on Tuesday that Beijing was ready to resume trade talks with Washington, but blamed the U.S. side for frequently “changing its mind” on tentative deals to end U.S.-China trade disputes.

FILE PHOTO: China’s ambassador to the United States Cui Tiankai responds to reporters questions during an interview with Reuters in Washington, U.S., November 6, 2018. REUTERS/Jim Bourg/File Photo

“China remains ready to continue our talks with our American colleagues to reach a conclusion. Our door is still open,” Cui said in an interview on Fox News Channel.

No further trade talks between top Chinese and U.S. negotiators have been scheduled since the last round ended in a stalemate on May 10, the same day U.S. President Donald Trump sharply increased tariffs on $200 billion worth of Chinese goods and took steps to levy duties on all remaining Chinese imports.

Negotiations between the United States and China have soured dramatically since early May, when Chinese officials sought major changes to the text of a proposed deal that the Trump administration says had been largely agreed.

Asked about this reversal, Cui turned the tables and said it was U.S. negotiators that had abruptly backed away from some previous deals that had been tentatively agreed over the past year.

“It’s quite clear it is the U.S. side that more than once changed its mind overnight and broke the tentative deal already reached.” Cui said. “So we are still committed to whatever we agree to do, but it is the U.S. side that changed its mind so often.”

In June 2018, U.S. Commerce Secretary Wilbur Ross held negotiations with Chinese Vice Premier Liu He on an offer by China to increase its purchases of U.S. goods by around $70 billion, U.S. officials said at the time. But U.S. President Donald Trump did not accept the offer, choosing instead to begin imposing tariffs on Chinese goods.

The United States is seeking sweeping changes to China’s trade and economic policies, including an end to forced technology transfers and theft of U.S. trade secrets. Washington also wants curbs on subsidies for Chinese state-owned enterprises and increased access to U.S. markets.

Cui told Fox News Channel that U.S. restrictions on Chinese telecom equipment company Huawei Technologies Co Ltd announced last week “are without any foundation and evidence” and could undermine the normal functioning of markets.

“Everybody knows Huawei is a privately owned company. It is just a normal Chinese private company,” Cui said. “So all the action taken against Huawei are politically motivated.”

Reporting by David Lawder and Makini Brice; Additional reporting by Eric Beech; editing by Grant McCool

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