The Indigenous People of Biafra, IPOB, sued the U.S. Secretary of State, Antony Blinken and Defense Secretary, Lloyd Austin over the sale of A-29 Super Tucano Aircraft to Nigeria which they say would be used on their supporters.
This was revealed in a report by Bloomberg on Monday after Constitutional lawyer, Bruce Fein filed the case on behalf of IPOB and 10 unidentified persons in a federal court in Washington.
IPOB is seeking a judge to order the Secretary of State and Defense Secretary to block the transfer of six A-29 Tucano aircraft to Nigeria.
According to the report, IPOB’s lawyer said the U.S, by allowing Nigeria to receive six Super Tucano planes on July 21 violated laws that are supposed to “shield citizens of foreign sovereigns from harm caused by United States weapons in the hands of security forces guilty of gross human rights violations.”
What you should know Nairametrics reported last week that the Nigeria Air Force (NAF) announced that the first batch of the twelve A-29 Super Tucanos ordered by the FG has arrived, as six Tucanos arrived in Nigeria from the United States.
The Super Tucano Aircraft, which has been described as devastatingly effective against covert insurgents was approved for sale to the Nigerian Government by the Trump-led US administration to support Nigeria’s military operations against terrorist organizations, Boko Haram and ISIS West Africa, and Nigeria’s efforts to counter illicit trafficking in Nigeria and the Gulf of Guinea.
This deal came after the Obama-led US government reportedly refused to help Nigeria with military equipment to fight insurgency in the country.
Insecurity: Six A-29 Super Tucanos arrive Nigeria A-29 Super Tucano aircraft project on track to be delivered on schedule – Air Force Nigeria to receive 6 Super Tucano aircraft from US in July 2021 to fight insurgency. (Nairametrics)
■Trump-era measure restricting many visa applicants cited need to protect US jobs amid COVID-19 pandemic.
US President Joe Biden has revoked a proclamation issued under the Trump administration that blocked many green card applicants from entering the United States.
The order by former President Donald Trump, known as Presidential Proclamation 100014, cited a need to protect US jobs amid high unemployment rates caused by the coronavirus pandemic.
In a statement on Wednesday, the White House announced that Biden overturned the measure through an executive order, saying Trump’s ban separated families and “does not advance the interests of the United States”.
“To the contrary, it harms the United States, including by preventing certain family members of United States citizens and lawful permanent residents from joining their families here,” the statement reads.
Human rights advocates have been calling on the Biden administration to overturn the measure, which was set to expire on March 31.
“I’m thrilled that Biden has cancelled this proclamation,” Curtis Morrison, an immigration lawyer based in California, told Al Jazeera.
“But I’m also worried,” said Morrison, explaining that the US is currently facing a backlog of hundreds of thousands of visa applicants.
“That backlog may take [Biden’s] entire first term to clear out, unless he is ambitious to doing something to solve that problem.”
Since taking office on January 20, Biden has overturned several of Trump’s anti-immigration policies, including the so-called Muslim ban and a policy that forced asylum seekers to wait in Mexico while their US asylum applications are processed.
But his efforts – including a bill unveiled this month that would create an eight-year pathway to citizenship for 11 million undocumented people who live in the US – are expected to be met with stiff resistance by Republicans in Congress.
Bill Gates, the fourth richest person in the world and a self-described nerd who is known for his early programming skills rather than his love of the outdoors, has been quietly snatching up 242,000 acres of farmland across the U.S. — enough to make him the top private farmland owner in America.
After years of reports that he was purchasing agricultural land in places like Florida and Washington, The Land Report revealed that Gates, who has a net worth of nearly $121 billion according to Forbes, has built up a massive farmland portfolio spanning 18 states. His largest holdings are in Louisiana (69,071 acres), Arkansas (47,927 acres) and Nebraska (20,588 acres). Additionally, he has a stake in 25,750 acres of transitional land on the west side of Phoenix, Arizona, which is being developed as a new suburb.
According to The Land Report’s research, the land is held directly and through third-party entities by Cascade Investments, Gates’ personal investment vehicle. Cascade’s other investments include food-safety company Ecolab, used-car retailer Vroom and Canadian National Railway.
While it may be surprising that a tech billionaire would also be the biggest farmland owner in the country, this is not Gates’ only foray into agriculture. In 2008, the Bill and Melinda Gates Foundation announced $306 million in grants to promote high-yield, sustainable agriculture among smallholder farmers in sub-Saharan Africa and South Asia. The foundation has further invested in the development and proliferation of “super crops” resistant to climate change and higher-yield dairy cows. Last year, the organization announced Gates Ag One, a nonprofit to advance those efforts.
It is not entirely clear how Gates’ farmland is being used, or whether any of the land is being set aside for conservation. (Cascade did not return Forbes’ request for comment.) However, there is some indication that the land could be used in a way that aligns with the foundation’s values. Cottonwood Ag Management, a subsidiary of Cascade, is a member of Leading Harvest, a nonprofit that promotes sustainable agriculture standards that prioritize protections of crops, soil and water resources.
Gates is not the only billionaire on The Land Report’s list of top private farmland owners. Wonderful Company cofounders Stewart and Lynda Resnick (net worth: $7.1 billion) ranked number three with 190,000 acres. Their farmland produces the goods for their brands including POM Wonderful, Wonderful Pistachios and Wonderful Halos mandarins.
While Gates may be the country’s biggest farmland owner, he by no means is the largest individual landowner. In its list of 100 top American landowners, The Land Report gives the top spot to Liberty Media Chair John Malone, who owns 2.2 million acres of ranches and forests. CNN founder Ted Turner ranked number three with 2 million acres of ranch land across eight states. Even Amazon CEO Jeff Bezos is investing in land on a large scale, landing the 25th spot with his ownership of 420,000 acres, mainly in west Texas. (Forbes)
Anxiety continues to mount in government circles in Nigeria as a London court sits next Tuesday in a case that may see Nigeria forfeiting up to $9billion in foreign assets. The expected loss is in respect of an enforcement application to the United States of America and the United Kingdom courts by Process and Industrial Development, a British firm tied up in a legal dispute with the Federal Government.
The court case arose out of the failure of a contract awarded the company in 2010 to process wet gas to power Nigeria’s generating plants. On 16 March 2018, a BVI-based engineering and project management company sought to enforce in the US a USD6.6 billion award it obtained in January 2017 against Nigeria. This is one of the highest arbitral awards known to date. It shows the importance of the Respondent challenging facts, assumptions and calculations provided by the Claimant and of providing alternative evidence to the Tribunal. That figure has since been attracting interest at the rate of $1.2 million per day and currently stands at over $9 billion. The next hearing on the case will come up in a London court on May 21, 2019. A former Attorney General of the Federation, Chief Bayo Ojo is representing Nigeria in the case. Brendan Cahill, Founder, P&ID, said the company looks forward to the UK and US courts granting enforcement rights that will allow it to collect what is rightfully its. Cahill said: “If history is any guide – just look at how creditors seized Argentina’s naval frigate, while docked in Ghana. “Efforts by Nigeria to evade this judgment will inevitably fall flat.
“The ball is in Nigeria’s court. “If the government is prepared to find a good-faith solution.” Cahill, however, indicated that the company was open to negotiations with the Nigerian Government to settle the dispute out of court. He said: “P&ID remains open to a settlement on a reasonable basis, but we need a willing partner in government to help resolve this matter.
“The onus is on the Nigerian Government to act in good faith to find a solution.” After the P&ID’s Gas Supply and Processing Agreement with the Federal Government failed, the company initiated arbitration proceedings in London, in line with the original contractual agreement between the parties. Cahill said the company decided to go to court after several attempts at salvaging the deal were botched. He said: “P&ID’s Gas Supply and Processing Agreement failed when the government did not uphold its commitments.
“In August 2012, after several attempts over two and half years by P&ID to salvage the agreement, including offers to renegotiate the deal, the company initiated arbitration proceedings.” Cahill is saddened by the failure of such a promising project and government’s lack of interest in trying to resolve the dispute amicably, adding that the original project would have brought power and economic growth to Nigeria by supplying free natural gas for electricity generation, as well as building a highly successful commercial venture with a share of profits going to the Nigerian Government. He said: “The P&ID project would have supplied 2,000 megawatts of electricity in a country where tens of millions do not have access to electricity. “The award judgment was handed down by the independent arbitration panel because it represented the loss of profits for P&ID over the 20 years of the project.” In late February this year, the Office of the Attorney-General of Nigeria issued a statement contesting the huge amount the court awarded P&ID as damages, largely on the grounds that the project did not actually kick off the ground. But Cahill reacted to the statement, explaining that the company had already put in years of planning, field work, design and on-the-ground preparation. He stated: “We spent two and a half years offering solutions, while the government consistently failed to deliver its side of the contract. “This is a tragic ending to a venture that would have delivered low-cost electrical energy to hundreds of thousands of households throughout Nigeria, and would have brought vital revenue to the Nigerian treasury.” Cahill and his late partner, Michael Quinn, had over 30 years’ prior experience of executing successful engineering projects in Nigeria before the failed P&ID project that is now in dispute.
Background In January 2010, Process and Development Limited (P&ID or the Claimant) and the Ministry of Petroleum Resources of the Federal Republic of Nigeria (Nigeria or the Respondent) entered into a 20-year Gas Supply and Processing Agreement (GSPA). Under this agreement Nigeria would supply Wet Gas to P&ID, who would process it in a newly-built facility and return it in the form of Lean Gas. P&ID could then sell the by-products of the refinement process (natural gas liquids (NGLs) for their own profit. Nigeria did not make arrangements for the agreed supply of Wet Gas, including building the necessary pipelines. In March 2013, P&ID treated this failure as a repudiation of the GSPA. By that date PI&grin estimated that it had invested USD40 million in the project, although it had not yet acquired the land or built the facilities. In July 2015, an ad hoc tribunal seated in London decided that Nigeria was liable to damages to P&ID. In a majority decision in January 2017, the tribunal awarded USD6.6 billion in damages to P&ID. The dissenting opinion estimated the loss at USD250 million over three years.
Claimant’s position The Claimant estimated that the project would produce a net profit of USD5 to USD6 billion over a 20-year period. Income projections were based on several assumptions relating to the expected yield of NGLs and the price of NGL. The Claimant estimated capital expenditure at USD580 million and operational expenditure at cUSD60 million per year. The Claimant used a discount rate of 2.65% based on US Treasury bonds to represent only the time value for money.
Respondent’s position The Respondent objected that P&ID should only be entitled to nominal damages as it had not fully performed its obligations under the GSPA at the date of the repudiation. It argued that production would be disrupted by militancy in the Niger Delta so that utilisation should be reduced to 40-50%. The Respondent’s expert challenged the Capex calculation as being based on inadequate material. The Respondent also insisted that damages could only be awarded for a period of three years as the Claimant had a duty to mitigate its loss and it should have pursued other investment opportunities. The Respondent adopted a discount rate of 7% to reflect the risk of investing in Nigeria.
Approach taken by the tribunal The Tribunal considered that there was no evidence that the Claimant was unable or did not intend to perform its obligations under the GSPA. Consequently, the Tribunal rejected the Respondent’s argument on nominal damages. In addition, the Tribunal determined that there was no actual evidence that militancy in the Niger Delta had any impact on gas production or transport around the site earmarked by P&ID, or that other NGL prices than the ones forecast by the Claimant should be used.
In the absence of a meaningful challenge from the Respondent, the Tribunal agreed with the Claimant on key aspects of the measure and calculation of damages, including the 20-year period, the other underlying assumptions to project net income, and the discount rate. It awarded USD6.6 billion in damages together with pre and post-award interest of 7%. This interest rate reflects what PI&grin would have had to pay to borrow the money or could have earned by investing in Nigeria.
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The leader of the Indigenous People of Biafra (IPOB), Nnamdi Kanu, says he will be embarking on a tour of the United States of America (USA) and Canada. The secessionist leader made this known on Thursday, May 16, during what he tagged a “live global address.”
During the broadcast, Kanu who is currently in the United Kingdom (UK), said he would be visiting the countries to preach the gospel of “Biafra restoration.
“In the next couple of days, I will be in the United States of America and I will also be touring Canada where this same gospel will be preached before a privileged audience of the children of Biafra, that Biafra may come in our time,” Kanu said during a broadcast monitored by by this reporter. It was understands that Kanu’s planned tour is coming days to the scheduled “Biafra Remembrance Day.”
It would be recalled that IPOB declared May 30 as sit-at-home day throughout the Southeast referred to as “Biafraland” by pro-Biafra activists and Nigeria in remembrance of its fallen heroes and heroines. Meanwhile, Kanu is leading a group seeking secession from Nigeria. The group has since been proscribed by the Nigerian government led by President Muhammadu Buhari. (Pointer News)
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The United States mission to Nigeria has announced the indefinite suspension of interview waivers for visa renewals, otherwise known as the “Dropbox” process.
The embassy said visa applications will “no longer be accepted by DHL in Nigeria.”
It said all applicants in Nigeria seeking a non-immigrant visa to the United States must apply online, and will be required to appear in-person at the U.S. Embassy in Abuja or U.S. Consulate General in Lagos to submit their application for review.
Applicants are to appear at the location they specified when applying for the visa renewal.
Those who have already submitted their passports via “Dropbox” to DHL for processing either at the U.S. Embassy in Abuja, or the Consulate General in Lagos, will not be impacted by this change, the mission said.
Also, the processing of diplomatic and official (A, G, and NATO class) visa applications will continue unchanged.
The statement said, “Mission Nigeria’s processing procedures are regularly reviewed in order to assess our ability to quickly, efficiently, and securely process visa applications.
“The U.S. Mission is taking this step to provide more efficient customer service and promote legitimate travel, and will continue to facilitate applications of established travelers to the best of its ability.”
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Security agencies are probing alleged plot by the defeated presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar, to prevail on the United States to recognise him as the ‘authentic President’ of Nigeria.
The agencies are already on the trail of members of the Atiku Deservation Group behind the printing and distribution of the defeated candidate’s posters in some parts of the country.
The posters bore the inscription PUKKA, which in Hindi and Urda figuratively means ”fully formed”, “solid”, “permanent”, “for real” or “sure, authentic, genuine, solid and excellent”.
It was learnt that the security agencies are working on a theory that some groups loyal to Atiku were out for subversive activities against Buhari administration.
A part of the plot was to lobby members of the inner circle of President Donald Trump and the US Congress to delay its recognition of President Muhammadu Buhari.
The agenda was said to be an attempt to stop the inauguration of President Muhammadu Buhari on May 29.
Despite denial by Atiku and the Peoples Democratic Party (PDP), The Cable, an online news medium, yesterday claimed to have confirmed the payment of $30,000 by Atiku to a lobbying firm to “defeat” what it called “flagrant violence and irregularities orchestrated” by the All Progressives Congress (APC) and Buhari to compromise the presidential election.”
According to a top source, the government does not treat the intelligence at its disposal on the engagement of the US firm, Fein & DelValle PLLC, with levity.
The source said: “The whole script is about subversive plot against the administration of President Muhammadu Buhari. Security agencies picked up some intelligence and they are already investigating individuals and groups connected with it.
“It is not a case of crying wolf or an attempt to intimidate Atiku. Some clues were presented to the Federal Executive Council (FEC) meeting on Wednesday. In fact, about eight ministers contributed to the issue to underscore the gravity of the case at hand.
“It was a resolution of FEC that the Minister of Information and Culture, Alhaji Lai Mohammed, should alert the nation through a media briefing.”
Responding to a question, the source added: “What we have at hand points to a semblance of treasonable felony, but security agencies are probing it.
“They are also on the trail of groups and individuals connected with this fresh plot against the government.”
When asked of the nature of the intelligence at the disposal of the government, Mohammed said: “You do not expect me to disclose this.”
Meanwhile, The Cable claimed yesterday to have confirmed that Atiku paid $30,000 to Fein & DelValle PLLC, a US firm.
It said the PDP presidential candidate “sought the services of the company in his bid to unseat President Muhammadu Buhari.”
The newspaper said: “The Centre for Responsive Politics (CRP) had reported how Atiku hired Bruce Fein, a former official of the US justice department, and his firm Fein & DelValle PLLC, in March.
“In its terms and conditions for representation, Fein & DelValle PLLC had said it would establish and operate a situation room located in its Capitol Hill offices in the US and enlist the services of Lloyd Ukwu, a Nigerian barrister and trusted confidant of Atiku, to assist in the operation of the situation room.
“The firm also proposed to execute strategies to secure the US endorsement of Atiku’s efforts to defeat what it called “flagrant violence and irregularities orchestrated” by the All Progressives Congress (APC) and Buhari to compromise the presidential election.
“Twenty-four hours after the report was published, Atiku denied paying money to US consultants in his bid to dislodge Buhari, his main rival in the February 23 election.
“But documents seen by The cable showed that Atiku paid the money to the firm two days after signing a 90-day contract (April 1, 2019 to July 1, 2019). He signed the contract on March 24 and paid the money on March 26.
“The amount was budgeted for costs and expenses for the 90-day period. In addition, the agreement was for Atiku to separately pay all pre-approved international travels, business class.
“According to a document received by the United States’ department of justice foreign agents’ registration act (FARA), with registration number 6654, on April 2, Fein & DelValle, PLLC, registered as a foreign agent for Atiku and the PDP on March 20.
“FARA is a disclosure statute that requires persons acting as agents of foreign principals in a political or quasi-political capacity to make periodic public disclosure of their relationship with the foreign principal, as well as activities, receipts and disbursements in support of those activities.
“The firm said it received $30,000 from Atiku on March 26, which was confirmed in item 9(a) under the financial information clause of the registration statement.
“In item 9(b), the firm made it clear that it did not receive any other thing of value other than money from Atiku.
“The lobbyist firm, a registered and active corporate law firm in the US, stated that the agreement with Atiku is in a formal written document.”
In an interview with NAN, the Executive Director of the Deservation group, Dr. Sani Adamu, justified the theme of PUKKA.
He claimed that Alhaji Atiku Abubakar, candidate of the PDP in the just concluded presidential election is Nigeria’s authentic president.
Reminded that Atiku already has a case before the presidential election petition tribunal, Adamu expressed confidence that Abubakar would get justice at the tribunal.
NAN said a search on the web address (www.deservation.org) shows Atiku Deservation Movement (Project 774 for Atiku 2019) with RC 1167591 with the contact Magaji/Sanda Ward Yola South Adamawa State as well as phone number and a mail address. (The Nation)
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President Donald Trump headed into his first summit with Vladimir Putin on Monday determined to forge a personal bond with the Kremlin chief, saying only “stupidity” by prior administrations had brought US-Russian ties to their present low.Hours before the Helsinki summit, Trump was asked if he would press Putin over Russia’s alleged manipulation of the 2016 election that brought the mercurial property tycoon to power. He said only: “We’ll do just fine.”
Democrats had called for the summit’s cancellation after new revelations surrounding the alleged election meddling.
But Trump has insisted it is “a good thing to meet”, as he attempts to replicate with Putin the sort of personal rapport he proclaims with the autocratic leaders of China and North Korea.
If the pair does find common ground, then the summit may take the heat out of some of the world’s most dangerous conflicts, including Syria.
But there are many points of friction that could yet spoil Trump’s hoped-for friendship with the wily former KGB spymaster.
Trump began the day’s talks by meeting Finland’s President Sauli Niinisto, who has loaned his harbour-front palace for the occasion.
But first, he fired a Twitter broadside at his domestic opponents, blaming the diplomatic chill on the investigation into alleged Russian election meddling.
“Our relationship with Russia has NEVER been worse thanks to many years of U.S. foolishness and stupidity and now, the Rigged Witch Hunt!” Trump tweeted.
After a stormy NATO summit in Brussels last week, Trump was accused by critics of cosying up to Putin while undermining the transatlantic alliance.
But over breakfast with Niinisto, he insisted NATO “has never been stronger” and “never been more together” thanks to his insistence on all allies paying their fair share.
With Washington and Moscow at loggerheads over Ukraine, Iran and trade tariffs as well as Syria, even Trump has cautioned that he is not approaching the Putin summit “with high expectations”.
The brash 72-year-old billionaire has been president for 18 months while Putin, 65, has run Russia for the past 18 years.
In a weekend interview with CBS News, Trump admitted that Russia remains a foe, but he put Moscow on a par with China and the European Union as economic and diplomatic rivals.
The Kremlin has also played down hopes that the odd couple will emerge from their first formal one-on-one summit with a breakthrough.
Putin, who arrived in Helsinki Monday after playing host at the World Cup final in Moscow on Sunday, has remained tense in the run-up to the summit.
On Friday his adviser Yuri Ushakov played down expectations, saying: “The state of bilateral relations is very bad…. We have to start to set them right.”
Giving up ground?
Indeed, after the bad-tempered NATO summit and a contentious trip by Trump to Britain, anxious European leaders may be relieved if not much comes out of the Helsinki meeting.
Those leaders are already fuming over Trump’s imposition of trade tariffs on various countries, including Russia.
Turning the tables, European Union President Donald Tusk said Trump was guilty of “spreading fake news” with his remark about foes, and warned that the trade tensions could spiral into violent “conflict and chaos”.
“Europe and China, America and Russia, today in Beijing and in Helsinki, are jointly responsible for improving the world order, not for destroying it,” he tweeted.
“I hope this message reaches Helsinki.”
Protesters have been on the streets of Helsinki to denounce the policies of both Trump and Putin. Greenpeace draped a giant banner down a church tower urging: “Warm our hearts, not our planet.”
Trump is also under pressure from Britain to press Putin over the nerve agent poisoning of four people in southern England.
One of the victims, Dawn Sturgess, has died and her 19-year-old son Ewan Hope told the Sunday Mirror newspaper: “We need to get justice for my mum.”
Many fear that Trump — in his eagerness to prove that he was right to seek the summit with Putin despite US political opposition — may give up too much ground.
Trump has refused to personally commit to the US refusal to recognise Russia’s annexation of Crimea, leaving open the possibility of a climbdown linked to a promise by Putin to somehow rein in Iranian influence in Syria.
If Washington were to acquiesce in Russia’s 2014 land-grab, this would break with decades of US policy and send tremors through NATO’s exposed eastern flank.
And there will be outrage at home if Trump does not confront Putin over the election scandal.
But the US leader would not say whether he would demand the extradition of 12 Russian intelligence officers who were indicted last week by US special prosecutor Robert Mueller. (The Guardian)
China said it doesn’t fear a trade war with the U.S. and announced plans for reciprocal tariffs on $3 billion of imports from the U.S. in the first response to President Donald Trump’s ordering of levies on Chinese metal exports.China plans tariffs on imports of U.S. pork imports, recycled aluminium, steel pipes, fruit and wine, according to a Commerce Ministry statement on Friday. China will also pursue legal action against the U.S. at the World Trade Organization in response to the U.S. planned tariffs on steel and aluminium imports, the statement said and called for dialogue to resolve the dispute.
The announcement came hours after Trump instructed U.S. Trade Representative Robert Lighthizer to slap tariffs on at least $50 billion in Chinese imports. That was in addition to the metals duties ordered earlier this month on China and other countries. The news sent U.S. equities tumbling, with the Dow Jones Industrial Average falling 724 points, almost 3 percent, its biggest drop in six weeks. All major indexes in Asia also fell on Friday.
“The U.S. declared a trade war, but China is acting quite restrained. The list that China has announced appears to be a retaliation, but still, it is very measured,” said Li Yong, senior fellow of China Association of International Trade. “The move sends a message that China is able to fight back, but we still want a trade peace instead of a trade war.”
The U.S. will impose 25 percent duties on targeted Chinese products to compensate for the harm caused to the American economy from China’s policies, according to a fact sheet released by USTR. The proposed product list will include items in aerospace, information and communication technology and machinery. The USTR will announce the proposed list in the next “several days,” according to the fact sheet.
Long in Making
“This has been long in the making,” Trump said, adding that the tariffs could affect as much as $60 billion in goods. “We have a tremendous intellectual property theft situation going on” with China affecting hundreds of billions of dollars in trade each year, he said.
As he signed the tariffs order, Trump told reporters, “This is the first of many.”
“This is an opening gambit by China, signalling that the imposition of tariffs by the U.S. will elicit what Beijing views as a proportionate retaliatory response,” said Eswar Prasad, a former chief of the International Monetary Fund’s China division and now a professor at Cornell University in Ithaca, New York. “China has the ability to inflict significant economic harm on U.S. exporters of certain goods and can also use other overt as well as covert actions such as supply chain disruptions to hurt U.S. manufacturers.”
Brookings Institution’s Eswar Prasad discusses President Trump’s tariffs against China and the expected retaliation.
Policymakers across the world are warning of a brewing trade war that could undermine the broadest global recovery in years. Meanwhile, business groups representing companies ranging from Walmart Inc. to Amazon.com Inc. are warning U.S. tariffs could raise prices for consumers and sideswipe stock prices.
Even central banks, which normally stay above the fray of trade spats, are weighing in. “A number of participants reported about their conversations with business leaders around the country and reported that trade policy has become a concern,” Federal Reserve Chairman Jerome Powell said this week while cautioning that trade issues haven’t changed the Fed’s outlook. The Bank of England warned Thursday that increased protectionism could have a “significant negative impact” on global growth.
Trump also directed Treasury Secretary Steven Mnuchin to propose new investment restrictions on Chinese companies within 60 days to safeguard technologies the U.S. views as strategic, said senior White House economic adviser Everett Eissenstat.
The Trump administration is framing the move as a major turning point in U.S.-China relations. It followed a seven-month investigation by USTR into allegations China violates U.S. intellectual property, under the seldom-used section 301 of the 1974 Trade Act. The U.S. concluded China engages in a range of violations, including policies that force American companies to transfer technology and the accessing of trade secrets through hacking, said Eissenstat.
The initial Chinese response may not be as severe as many fear but the conflict could easily escalate, said Robert Manning, an expert on U.S.-China relations at the Atlantic Council in Washington.
“What you’re probably going to get from the Chinese is a low-key response to try to negotiate their way out of it,” Manning said. “I just worry if it gets really ugly, they may go for the nuclear option.”
He says nuclear option would be to sell a “couple hundred billion” in U.S. Treasuries, which would tank markets and raise U.S. interest rates.
Trump tried to make it clear he wasn’t trying to provoke China or its leader, President Xi Jinping.
“I view them as a friend. I have tremendous respect for President Xi,” Trump said. But, the U.S.’s trade deficit with China is “the largest deficit in the history of our world,” he said.
Trump’s actions represent a “seismic shift from an era dating back to Nixon and Kissinger, where we had as a government viewed China in terms of economic engagement,” White House trade adviser Peter Navarro told reporters on Thursday. “That process has failed.”
“The problem is that with the Chinese in this case, talk is not cheap. It has been very expensive for America,” said Navarro. “Finally the president decided that we needed to move forward.”
Commerce Secretary Wilbur Ross predicted a strong stand on trade would bring concessions without escalating into a broader conflict. ‘We will end up negotiating these things rather than fighting over them, in my view,” Ross said.
Before the tariffs become final, there will be a 30-day comment period, the White House said. Trump also directed his officials to pursue a World Trade Organization complaint against China for discriminatory licensing practices. (Bloomberg)