TPM World News

WASHINGTON (AP) — The Russian government says it’s preparing to retaliate after new U.S. sanctions against Moscow for allegedly interfering in the 2016 American presidential election.

Russia’s deputy foreign minister, Sergei Ryabkov, says the Kremlin is responding calmly to the new sanctions and — in his words — “taking this in our stride.” But he says Russia has “begun preparing retaliatory measures.”

Ryabkov suggests the Trump administration timed the sanctions to come ahead of this weekend’s presidential election in Russia.

The official is quoted by the Russian state news agency Tass as saying that the U.S. action is “tied to U.S. internal disorder, tied of course to our electoral calendar.”

Read More →

LONDON (AP) — Britain announced Wednesday it will expel 23 Russian diplomats — the biggest such expulsion since the Cold War — and break off high-level contacts with the Kremlin over the nerve-agent attack on a former spy and his daughter in an English town.

Prime Minister Theresa May told lawmakers that the 23 diplomats, who have been identified as undeclared intelligence officers, have a week to leave.

She announced a range of economic and diplomatic measures, including the suspension of high-level bilateral contacts with Russia. An invitation for Russian Foreign Minister Sergey Lavrov to visit Britain has been canceled, and May said British ministers and royals will not attend the soccer World Cup in Russia this summer.

May also said Britain would clamp down on murky Russian money and strengthen its powers to impose sanctions on abusers of human rights.

“We will freeze Russian state assets wherever we have the evidence that they may be used to threaten the life or property of U.K. nationals or residents,” May said, without giving details.

May announced the measures after Moscow ignored a midnight deadline to explain how a nerve agent developed by the Soviet Union was used against Sergei and Yulia Skripal. The father and daughter remain in critical condition in a hospital in Salisbury, southwestern England.

May accused Moscow of reacting with “disdain” to Britain’s request for an explanation and said Russia’s actions were “an unlawful use of force by the Russian state against the United Kingdom.”

“It is an affront to the prohibition on the use of chemical weapons,” May said. “And it is an affront to the rules-based system on which we and our international partners depend.”

Russia’s ambassador in London, Alexander Yakovenko, said Britain’s actions were “absolutely unacceptable” and “a provocation.”

Moscow has refused to comply with Britain’s demands unless the government provided samples of the poison collected by investigators.

Putin spokesman Dmitry Peskov told reporters on Wednesday that Russia “rejects the language of ultimatums.”

Peskov said Britain has so far only offered “baseless accusations which are not backed up by any evidence.” He said Russia would cooperate with the investigation but does not see Britain’s willingness to reciprocate.

“We hope reason will prevail and other countries will think hard how serious the evidence against Russia is,” he said.

Russia has claimed that the nerve agent could have come from another former Soviet country, pointing to Moscow’s foe, Ukraine.

Lawmaker Vladimir Gutenev, a member of the state commission for chemical disarmament, said Russia had scrapped its stockpile of Novichok, the nerve agent used against the Skripals.

“It is hard to say what may be happening in neighboring countries,” he was quoted as saying by the Interfax news agency.

Britain has sought support from allies in the European Union and NATO, including the United States. May’s office says President Donald Trump told the prime minister the U.S. was “with the U.K. all the way.”

On Wednesday it also called for an urgent meeting of the U.N. Security Council to discuss the investigation.

European Council President Donald Tusk said Wednesday that the attack was “most likely” inspired by Moscow and announced he would put the issue on the agenda at an EU leaders’ summit next week.

Read More →

LONDON (AP) — Russia on Tuesday dismissed accusations of any involvement in the poisoning of an ex-spy and his daughter as “nonsense,” saying it will only cooperate with a British investigation if it receives samples of the nerve agent believed to have been used.

Police, meanwhile, said the investigation of who poisoned Sergei Skripal and his daughter, Yulia, will last many weeks and that they are not ready to identify any persons of interest in the inquiry. The father and daughter remain in critical condition in a Salisbury hospital.

British Prime Minister Theresa May has said Russia’s involvement is “highly likely,” and she gave the country a deadline of midnight Tuesday to explain its actions in the case. She is reviewing a range of economic and diplomatic measures in retaliation for the assault with what she identified as the military-grade nerve agent Novichok.

U.S. and European officials were quick to offer words of support for Britain, which will need the backing of its allies if any new sanctions are to have any impact.

“It sounds to me that they believe it was Russia and I would certainly take that finding as fact,” said U.S. President Donald Trump. He said Washington will condemn Moscow if it agrees with Britain’s findings, adding that he would discuss the incident with May.

James Nixey, head of the Russia program at the Chatham House think-tank, said Britain must offer more than a symbolic response.

“Will actions meet with responses which have real-world effects?” he said. “Or are we going to have more fudge?”

Russian Foreign Minister Sergey Lavrov told reporters in Moscow that his country’s requests to see samples of the nerve agent have been turned down. He insisted that Russia is “not to blame” for the poisoning.

“We have already made a statement to say this is nonsense,” he said. “We have nothing to do with this.”

It was not immediately clear if Lavrov’s comments constituted Russia’s official response to May’s ultimatum.

Meanwhile the cases of other Russians who have died under mysterious circumstances are being raised. British Home Secretary Amber Rudd said police and the domestic security service will look into 14 deaths in Britain that might be linked to Russia.

“In the weeks to come, I will want to satisfy myself that the allegations are nothing more than that,” Rudd said. “The police and MI5 agree and will assist in that endeavor.”

BuzzFeed News reported in 2017 that 14 deaths in Britain and the U.S. dating to 2006 may have been linked to Russia. Among them are prominent critics of Russian President Vladimir Putin, including oligarch Boris Berezovsky and whistleblower Alexander Perepilichny.

Russian officials and media have responded with a variety of accusations against Britain in recent days, including suggestions that it was seeking to influence Sunday’s presidential election, which Putin is expected to win easily.

British Foreign Secretary Boris Johnson said Britain was talking to its international partners about the situation.

“I’ve been encouraged by the willingness of our friends to show support and solidarity,” he said, specifically citing U.S. Secretary of State Rex Tillerson, who was ousted on Tuesday, and others.

“I think in particular from President (Emmanuel) Macron of France, I talked to Sigmar Gabriel my German counterpart, and from Washington where Rex Tillerson last night made it absolutely clear that he sees this as part of a pattern of disruptive behavior … malign behavior by Russia … the support for the reckless use of chemical weapons which stretches from Syria now to the streets of Salisbury.”

Tillerson told reporters late Monday that Russia’s actions would “certainly trigger a response.” He said it was “almost beyond comprehension” that a government would use such a dangerous substance in a public place.

The chief of the world’s chemical weapons watchdog also said that those responsible “must be held accountable.”

In a speech Tuesday to the Executive Council of the Organization for the Prohibition of Chemical Weapons, Director-General Ahmet Uzumcu said Johnson called him Monday evening to inform him of the results of investigations.

“It is extremely worrying that chemical agents are still being used to harm people. Those found responsible for this use must be held accountable for their actions,” he said.

Skripal, a former Russian military intelligence officer, was convicted of spying for Britain and then released in a spy swap. He had been living under his own name in Salisbury for eight years before the attack without attracting any public attention.

Police are appealing to the public to come forward if they saw Skripal and his daughter driving in his red BMW in the early afternoon of March 4 in the city, located 90 miles (145 kilometers) southwest of London.

New counterterrorism chief Neil Basu, who referred to Skripal as a British subject and his daughter as a Russian national, also said Salisbury residents would see much police activity in the coming days and that they should not be alarmed.

Some 38 people have been seen by medics in connection with the case.

Read More →

LONDON (AP) — Britain has given Moscow until midnight Tuesday to explain how a Russian-made nerve agent came to poison a former spy in Britain. If no explanation is given, Prime Minister Theresa May says Russia will be hit by “extensive” retaliatory measures.

Foreign Secretary Boris Johnson said U.K. officials are speaking to allies in the European Union and beyond to draw up a “commensurate but robust” response to the attack, which has left Sergei Skripal and his daughter Yulia in critical condition.

Britain has faced a similar crisis before. After former Russian agent Alexander Litvinenko was killed in London with radioactive poison in 2006, London expelled several Russian diplomats, imposed visa restrictions, broke off intelligence cooperation and froze assets of the two prime suspects.

Critics say that response was too weak, and claim Britain was reluctant to act because London’s property market and financial sector are magnets for billions in Russian money.

What are Britain’s options now?


Britain is highly likely to expel some Russian diplomats, possibly including Ambassador Alexander Yakovenko. That would almost certainly result in the tit-for-tat expulsion of British envoys in Moscow. While that will further fray already strained diplomatic relations, it would have a limited effect on Russia.



London is a magnet for wealthy Russians, and Britain could seek to stop those suspected of involvement, or close to President Vladimir Putin, from enjoying their money and property in the U.K.

“Russian oligarchs over the last few months have been moving money and liquid assets back to Russia from various places around the world, but you can’t move fixed assets,” said historian Martin McCauley, a former senior lecturer on Russian affairs at the University of London. “So therefore if they’ve got property — and they have a lot of property in London and elsewhere — (May) could in fact impose a freeze or even say confiscate those assets.”

Britain has recently introduced new powers to seize money and property whose origins are suspicious, and is considering adopting a version of the United States’ Magnitsky Act, which allows authorities to ban or seize the assets of individuals guilty of human rights abuses.

The EU — of which Britain remains a member until 2019 — has already imposed sanctions on Russian banks, businesses and officials over Moscow’s invasion of Crimea. Britain is likely to urge the bloc to toughen those measures. But several leading EU nations, including Germany, are wary of antagonizing Russia.



Russia is due to host one of world sport’s biggest events, the World Cup of soccer, in June and July. Johnson has said the U.K. may downgrade its participation by not sending politicians or Prince William, who is president of England’s Football Association.

Some are urging a British boycott of the event, at which England is one of 32 teams competing for the trophy. But that is likely a step too far.



Britain could seek to bolster NATO forces in the Baltic states, where Western troops have been deployed to counter an increasingly assertive Russia.

But Britain will probably stop short of invoking NATO’s principle of collective defense, under which an attack on one is considered an attack on all.

British Housing Minister Dominic Raab said May chose her words carefully when she called the attack “an unlawful use of force” against the U.K.

“The words ‘unlawful use of force’ are different and have a different meaning in international law from ‘armed attack,'” he told the BBC.



U.K. intelligence officials have warned that Russian hackers are targeting the country’s telecommunications systems, media and energy networks.

So far, Britain has concentrated on strengthening its cyber defenses — but it could take offensive action of its own, possibly targeting Russian websites that generate “fake news.” That would mark an escalation in international cyber-conflict, with unknown consequences.

Britain is also under pressure to revoke the license of state-owned Russian broadcaster RT, which has been repeatedly censured by the U.K. broadcast regulator for a lack of impartiality.

The regulator, Ofcom, said it would wait until May outlines Britain’s response to Russia on Wednesday and then “consider the implications for RT’s broadcast licenses.”

Read More →

LONDON (AP) — Britain’s prime minister said Monday that it was “highly likely” that Russia was responsible for poisoning ex-spy Sergei Skripal with a military-grade nerve agent in southwestern England last week.

Theresa May said that should Russian state involvement be proven, it would be considered an “unlawful use of force by the Russian state against the United Kingdom,” and gave the Russian ambassador until the end of Tuesday to respond.

May said that Skripal and his daughter were poisoned with a form of nerve agent known as Novichock, and there were two possible explanations: the attack was an act of the Russian state, or Russia has lost control of a deadly banned substance.

She said that Britain expects the Russian ambassador to explain which version is true.

May spoke in the House of Commons after chaired a National Security Council meeting to hear the latest evidence in the case. She has been under mounting pressure to hit Russia with sanctions, diplomatic expulsions and other measures in response to the poisoning, the latest in a string of mysterious mishaps to befall Russians in Britain in recent years.

May said Britain would consider tough action if the Russian explanation is inadequate, though she didn’t give details.

“There can be no question of business as usual with Russia,” she said.

Skripal, 66, and his 33-year-old daughter, Yulia, remain in critical condition following the March 4 nerve agent attack. A police detective who came in contact with them is in serious but stable condition.

The case has similarities to the killing of former Russian spy Alexander Litvinenko, who was poisoned with radioactive tea in London in 2006. A British inquiry concluded that his death was the work of the Russian state and had probably been authorized by Russian President Vladimir Putin.

The Kremlin has rejected suggestions that it’s behind the poisoning.

Putin spokesman Dmitry Peskov told reporters that Sergei Skripal worked for British intelligence and was poisoned on British soil, and therefore the incident “has nothing to do with Russia, let alone the Russian leadership.” Peskov also said the Kremlin hasn’t heard any official statements of Russian involvement.

Skripal was a Russian military intelligence officer when he was recruited to spy for Britain in the 1990s. He was jailed in Russia in 2006 for revealing state secrets before being freed in a spy swap in 2010. He had settled in the cathedral city of Salisbury, 90 miles (140 kilometers) southwest of London.

He and his daughter were found comatose on a bench near the city center after visiting an Italian restaurant and a pub.

Almost 200 troops, including soldiers trained in chemical warfare and decontamination, have been deployed to Salisbury to assist the police investigation into where the nerve agent came from and how it was delivered.

British officials have said the risk to the public is low, but urged people who visited the Zizzi restaurant or the Mill pub to wash their clothes and take other precautions. Some have questioned why it took health authorities a week to issue the advice.

Andy Harder, 63, who works in a coin and stamp collector’s shop in Salisbury, had been in the Mill pub the day after the Skripals were attacked, and before police cordoned off the area.

Harder said he washed his jacket off with an antiseptic cleaner after authorities gave the guidance Sunday.

“So I’ve washed all my clothes, I’ve taken my jacket and done that with Dettol — I mean I don’t know what to use, really,” he said. “That’s supposed to kill most things. I’ve had a good scrub up, so it should be OK.”

Read More →

TOKYO (AP) — News of the planned summit between President Donald Trump and North Korean leader Kim Jong Un sent shockwaves around the globe. But in North Korea — as of Monday, several days after the announcement — not a word about it had been reported by the state-run media.

Pyongyang has been surprisingly quiet on the slew of momentous, and possibly even historic, events that have come in quick succession over the past few months.

It has essentially barred foreign media from visiting the country for more than a month and, while trumpeting the need for better inter-Korean relations, clung to the same anti-U.S., pro-nuclear weapons tone it struck at the height of its missile-testing frenzy last year.

Officials in Seoul say Pyongyang is keeping them in the dark as well.

“Regarding the North Korea-U.S. summit meeting, there hasn’t been an official response by the North Korean government. So we think North Korea is having a cautious approach on the issue as it needs time to organize its stance,” Unification Ministry spokesman Baik Tae-hyun said Monday.

It’s not unusual for the North Korean media to take their time in getting out the news.

Because they are state-run, all newspapers, radio and television broadcasters and the official news agency are without fail on message. As Baik suggested, sometimes it takes a while to figure out what that message should be.

The North Korean government might have also been holding off because it’s concerned the summit proposal could fall through, which could be hard to explain to their own public.

But as of Monday, the only official word of the North’s offer of a summit with Trump in exchange for a moratorium on missile and nuclear tests had come from South Korea. The North’s main newspaper, the Rodong Sinmun, which is run by the ruling party, had only put out a few paragraphs about a visit by senior South Korean officials last week.

It made no mention of any summit plans, let alone any conditions or statements on whether Kim is seriously mulling abandoning his nuclear weapons.

Though it warranted just a brief in the North’s main newspaper, last week’s meeting in Pyongyang was a big one.

It led to an agreement for Kim to have a summit with South Korean President Moon Jae-in next month. The same officials then carried to Washington a verbal message of Kim’s willingness to meet Trump, which the U.S. president is said to have immediately accepted. The Trump-Kim summit is supposed to take place by May.

The lack of confirmation from Pyongyang has generated skepticism about how accurately Seoul and Washington are depicting Kim’s intentions.

The silence on the summits was even more glaring because of how the North had played up the Olympic diplomacy that started it all off.

Kim used his nationally televised New Year’s address to launch the first salvo of his new charm offensive, wishing for the success of the Pyeongchang Olympics and vowing 2018 would be a historic year for Koreans on both sides of the Demilitarized Zone. The annual address is a major news event and Kim’s biggest regular platform for making important policy announcements.

The North then grabbed the spotlight for several days at the Olympics by dispatching a made-for-the-cameras delegation of female cheerleaders, pop singers and even Kim’s own younger sister, who managed to upstage a visit at the same time by U.S. Vice President Mike Pence. Photos of her with Moon were front-page news in the North.

Not a single story was written or broadcast about the performance of the North’s athletes, however.

Their best finish was 13th, in pairs figure skating.

Read More →

SANTIAGO, Chile (AP) — Trade ministers from 11 Pacific Rim countries signed a sweeping free trade agreement Thursday to streamline trade and slash tariffs just hours before President Donald Trump announced his plans to impose new tariffs on aluminum and steel to protect U.S. producers.

Trump withdrew the U.S. from the Trans-Pacific Partnership last year, causing fears that it would not prosper without its most influential country. But the remaining 11 members pressed ahead, saying they were showing resolve against protectionism through global trade.

The ministers dropped key provisions that the Americans had required on protection of intellectual property, among others. The renegotiated pact signed in Chile’s capital was also renamed the Comprehensive and Progressive Trans-Pacific Partnership, or CPTPP.

“Despite the diverse and difficult challenges, the CPTPP is a historic achievement that creates free and fair 21st century rules in the Asia-Pacific region,” Japanese Economy Minister Toshimitsu Motegi said a news conference after the signing of the deal.

The pact that covers 500 million people includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which together account for 13 percent of the global economy. Its success highlights the isolation of the U.S. under Trump’s protectionist rhetoric on trade and his “America first” philosophy.

“It leaves the U.S. at a disadvantage from both a trade and a broader strategic perspective,” said Joshua Meltzer, senior fellow in the global economy and development program at the Brookings Institution. “It is now a trade bloc that discriminates against the U.S.”

Meltzer said the United States’ ability to shape the rules of trade in the Asia-Pacific region “is very much diminished.”

The U.S., originally the biggest TPP economy, was one of the trade deal’s strongest supporters before Trump took office. Trump has said he prefers country-to-country deals and is seeking to renegotiate several major trade agreements, including the North American Free Trade Agreement that includes the U.S., Mexico and Canada.

This is “a strong sign against the protectionist pressures, and in favor of a world open to free trade, without unilateral sanctions and the threat of trade wars,” Chilean Foreign Minister Heraldo Munoz said.

The European Union said this week that it is ready to retaliate against Trump’s tariffs — of 25 percent on imported steel and 10 percent on aluminum imports — with counter-measures against iconic U.S. products like Harley Davidson motorcycles, Levi’s jeans and bourbon.

The EU threat and Trump’s impending announcement on the tariffs were expected to escalate the risk of a trade war, in which nations try to punish each other by hiking taxes on traded goods. Experts say that tends to harm both exporting nations as well as importing countries’ consumers, who face higher costs.

The EU considers itself to be caught in the crossfire of a trade dispute, in which Trump has mainly singled out China for being unfair in its commercial deals.

The original TPP was conceived by the U.S. as a counterweight to China’s growing economic influence through a robust trading bloc that excluded the Asian giant. The thinking was that China would have an incentive to open its market and liberalize its policies in an effort to eventually qualify for TPP membership.

“Without the United States, it doesn’t serve that purpose,” said Edward Alden, senior fellow at the Council on Foreign Relations. “It becomes a modest liberalization measure.”

China’s foreign minister, Wang Yi, commented Thursday on the deal before it was signed.

“China did not participate in the CPTPP Agreement. However, China has always been a staunch supporter of trade liberalization and an important participant in Asia-Pacific regional cooperation and economic integration,” Wang Yi said at a news conference.

“Of course, we also hope that the various free trade arrangements in the Asia-Pacific region will be able to communicate and coordinate with each other and form a benign interaction, playing a constructive role in their respective fields in resisting trade protectionism and building an open world economy.”

Read More →

MOSCOW (AP) — Russian President Vladimir Putin lavished praise on President Donald Trump on Wednesday, but added that he was sorely disappointed with the U.S. political system, saying that it has been “eating itself up.”

Speaking in an interview with the Russian state television, Putin described Trump as a great communicator.

“I have no disappointment at all,” Putin said when asked about the U.S. president. “Moreover, on a personal level he made a very good impression on me.”

The two leaders met on the sidelines of international summits last year. Putin praised Trump as a “balanced” man, who easily gets into the gist of various issues and listens to his interlocutor.

“It’s possible to negotiate with him, to search for compromises,” Putin added.

He also noted that he spent some time talking to Melania Trump when he sat next to her during an official dinner at the Group of 20 summit in Hamburg, Germany in July. The Russian leader said he told her and the wife of the Italian premier “about Siberia and Kamchatka, about fishing … about bears on Kamchatka and tigers in the Far East.”

“I made some exaggerations,” the action-loving Russian leader said with a grin. “When you talk about fishing, you can’t help exaggerating.”

Asked jokingly by the interviewer if he was trying to recruit the women, the KGB veteran responded by saying: “No, I stopped dealing with that a long time ago.”

He added with a smile: “But I liked doing that, it was my job for many years.”

Venting his frustration with the U.S. political system, Putin said “it has demonstrated its inefficiency and has been eating itself up.”

“It’s quite difficult to interact with such a system, because it’s unpredictable,” Putin said.

Moscow’s hopes for better ties with Washington have been dashed by the ongoing congressional and FBI investigations into allegations of collusion between Trump’s campaign and Russia.

Speaking about the bitter tensions in Russia-West relations, Putin said they have been rooted in Western efforts to contain and weaken Russia.

“We are a great power, and no one likes competition,” he said.

He said he was particularly dismayed by what he described as the U.S. role in the ouster of Ukraine’s Russia-friendly president in February 2014 amid massive protests.

Putin charged that the U.S. had asked Russia to help persuade then-President Viktor Yanukovych not to use force against protesters and then “rudely and blatantly” cheated Russia, sponsoring what he called a “coup.”

Russia responded by annexing Ukraine’s Crimean Peninsula.

“Few expected us to act so quickly and so resolutely, not to say daringly,” Putin said.

He described the Western sanctions over Crimea and the insurgency in eastern Ukraine as part of “illegitimate and unfair” efforts to contain Russia, adding that “we will win in the long run.”

“Those who serve us with poison will eventually swallow it and poison themselves,” he said.

Putin wasn’t speaking in the context of a former Russian spy who was left in critical condition, along with his daughter, after coming into contact with a mysterious substance in Britain. Some have suggested it was a poisoning in which Russia may have had a hand, even though British authorities haven’t revealed what the substance was and are still investigating. Moscow has denied any involvement.

Responding to a question about Russia’s growing global leverage, Putin responded: “If we play strongly with weak cards, it means the others are just poor players, they aren’t as strong as it seemed, they must be lacking something.”

Putin, who presented a sweeping array of new Russian nuclear weapons last week, voiced hope that nuclear weapons will never be used — but warned that Russia will retaliate in kind if it comes under a nuclear attack.

“The decision to use nuclear weapons can only be made if our early warning system not only detects a missile launch but clearly forecasts its flight path and the time when warheads reach the Russian territory,” he said. “If someone makes a decision to destroy Russia, then we have a legitimate right to respond.”

He added starkly: “Yes, it will mean a global catastrophe for mankind, for the entire world. But as a citizen of Russia and the head of Russian state I would ask: What is such a world for, if there were no Russia?”

Read More →

BERLIN (AP) — German Chancellor Angela Merkel has spoken with U.S. President Donald Trump about Syria, and both sides agreed that Syrian government forces and their Russian and Iranian allies must abide by a U.N. Security Council cease-fire resolution, her office said Friday.

Following their call Thursday, Merkel and Trump urged Russia to stop participating in the bombardment of Damascus’ rebel-held suburbs known as eastern Ghouta, according to her office.

“The five-hour cease-fire announced by the Russian side isn’t being adhered to. The Syrian regime in particular is constantly breaking it,” Merkel’s spokesman, Steffen Seibert, told reporters.

Germany appeals “to all parties to the conflict to fully implement this U.N. resolution and we see a particular responsibility on the part of Russia,” he added.

Seibert said attacks should stop for 48 to 72 hours in order for aid to be effectively delivered to civilians. He called it “particularly cynical that the regime in Damascus used chlorine gas against its own population again just one day after the passing of the U.N. resolution.”

According to Merkel’s office, both she and Trump also expressed concern about Russian President Vladimir Putin’s unveiling of new weapons systems Thursday “and their negative consequences for international arms control efforts.”

Seibert said Germany watched Putin’s announcement with concern, noting the Russia’s military modernization program and what he described as doubts about Moscow’s adherence to international treaties, its annexation of Crimea and threats against some of its neighbors.

Still, Seibert said Berlin was always ready to talk with the Kremlin even when the two sides differ significantly on the issues.

Read More →

BEIJING (AP) — China had no immediate reaction Friday to U.S. President Donald Trump’s vow to impose high tariffs on steel and aluminum, which he followed up by insisting that trade wars “are good, and easy to win.”

Chinese leaders have threatened in the past to retaliate if Trump raises trade barriers, but now need to weigh whether to back up those threats with action and risk jeopardizing U.S. market access for smartphones and other exports that matter more to their economy than metals.

“China will definitely respond. It doesn’t want to be seen as weak. But it will be relatively restrained,” said economist Louis Kuijs of Oxford Economics. “They don’t want to be seen as a party that is wrecking the international trading system.”

Global stock markets fell sharply Friday over worries of a possible trade war following Trump’s announcement that he will levy tariffs of 25 percent on steel and 10 percent on aluminum.

Early Friday, Trump thumbed his nose at the concerns over rising trade tensions and higher prices for U.S. consumers, tweeting that “trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”

Beijing has accused Trump of undermining global trade regulation by taking action over steel, technology policy and other disputes under U.S. law instead of through the World Trade Organization.

Chinese officials have appealed to the White House since last March to avoid hurting both sides by disrupting aluminum trade. Their tone hardened after Trump launched a probe in August of whether Beijing improperly pressures companies to hand over technology and in January raised duties on Chinese solar modules and washing machines.

“China will take necessary measures to defend its interests,” a Commerce Ministry official, Wang Hejun, said in a statement this week.

Japan and South Korea, both U.S. allies and major exporters of steel and aluminum, said they would ask for exemptions from the tariff hike, which Trump justified in part on national security grounds.

“We don’t think imports from Japan, an ally, have any effect at all on U.S. national security,” said Japan’s trade and industry minister, Hiroshige Seko, at a news conference.

A South Korean trade envoy, Kim Hyun-chong, met with Trump’s chief economic adviser, Gary Cohn, and Commerce Secretary Wilbur Ross to “strongly demand” they keep the impact on South Korean companies to a minimum, according to a trade ministry statement.

The president of the European Union’s governing body, Jean-Claude Juncker, said the 28-nation trade bloc will retaliate if Trump follows through.

“Risks of trade wars are rising, but should be contained for now,” said Cesar Rojas and Ebrahim Rahbari of Citigroup in a report. “We expect U.S. major trade partners’ reaction to be moderate, including by taking cases to the WTO.”

Adding to the political stakes in China, Trump’s announcement came ahead of next week’s meeting of its ceremonial legislature, the year’s most prominent political event. Action against American companies or goods would compete for attention with the National People’s Congress, which the ruling Communist Party uses to showcase its economic plans.

Beijing has an array of high-profile targets for retaliation including suppliers of soybeans, the biggest American export to China. A curb on purchases could hurt farm state voters who supported Trump.

“We’ve clearly heard from the Chinese” that soybeans “are definitely one of the largest things that could be targeted,” said Jake Parker, vice president for China operations for the U.S.-China Business Council.

However, Parker said, soybeans might be held for use later on a bigger issue such as the “301” investigation into Beijing’s technology policy, which could have a broader impact.

Trade makes up a smaller share of China’s economy than it did a decade ago. But export-driven industries support millions of jobs, raising the potential political cost of any disruption.

The United States, China’s No. 2 trade partner after the EU, buys about 20 percent of Chinese exports but allows Beijing to run multibillion-dollar surpluses that offset its deficits with other partners.

Last year, China exported goods worth $2.80 to the United States for every $1 of American goods it bought, according to Chinese data. Its trade surplus of $275.8 billion with the United States was equal to 65 percent of its global total.

“That makes China the more vulnerable partner in this,” said Kuijs.

Also Friday, the Commerce Ministry expressed “grave concern” about a trade policy report sent to the U.S. Congress by the White House this week that accuses China of moving away from market principles. It pledges to prevent Beijing from disrupting global trade.

The ministry said Beijing has satisfied its trade obligations and appealed to Washington to settle market access and subsidy disputes through negotiation.

Read More →