Kanye West defends pro-Trump sentiments in new song

After a week of controversial Twitter postings, Kanye West has defended his support of the US president in a new song.

The track Ye vs. The People sees the star trading lyrics with fellow-rapper T.I., who takes him to task over his support of Donald Trump.

“You representin’ dudes who seem crude and cold-hearted,” argues T.I., adding that West is emboldening “white supremacy”.

But the star stands his ground, insisting that he’s “fighting for the people”.

Alluding to a photo he posted of himself wearing Donald Trump’s famous Make America Great Again baseball cap, West raps: “Wearing the hat will show people that we are equal.”

Skip Twitter post 2 by @kanyewest

my wife just called me and she wanted me to make this clear to everyone. I don't agree with everything Trump does. I don't agree 100% with anyone but myself.

— KANYE WEST (@kanyewest) April 25, 2018

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End of Twitter post 2 by @kanyewest

“I love Hillary too,” he added in another post.

Skip Twitter post 3 by @kanyewest

If your friend jumps off the bridge you don't have to do the same. Ye being Ye is a fight for you to be you. For people In my life the idea of Trump is pretty much a 50 50 split but I don't tell a Hillary supporter not to support Hillary
I love Hillary too.

— KANYE WEST (@kanyewest) April 25, 2018

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End of Twitter post 3 by @kanyewest

‘Kind of a big deal’

Nonetheless, the president has seized upon this rare, A-list endorsement and tweeted his approval.

“Kanye West has performed a great service to the black community,” he wrote on Friday. “Big things are happening and eyes are being opened for the first time in decades – Legacy stuff!”

“Kind of a big deal,” added his son, Donald Trump Jr, on Instagram. “Seems like a cultural turning point.”

Skip Instagram post by donaldjtrumpjr

Kind of a big deal. Seems like a cultural turning point. Nice to see some real influencers push back on the nonsense narrative and actually push for free speech and thought and not just thought that falls totally in line with Hollywood’s and the far left’s ideology. #kanyewest #maga

A post shared by Donald Trump Jr. (@donaldjtrumpjr) on

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End of Instagram post by donaldjtrumpjr

However, West has come in for criticism from fellow musicians, including his friend and former protégé John Legend.

Legend pleaded with the rapper not let his support for Trump tarnish his “legacy” in a private text message, which West later posted online.

Skip Twitter post 4 by @kanyewest

pic.twitter.com/zxcloMEj9I

— KANYE WEST (@kanyewest) April 26, 2018

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End of Twitter post 4 by @kanyewest

“Think freely,” he advised West. “Think with empathy and context too. Your words and actions have consequences.”

Fellow Chicagoan Chance The Rapper initially defended West, saying “Black people don’t have to be democrats”.

But after President Trump praised his comments, the star issued a clarification.

I’d never support anyone who has made a career out of hatred, racism and discrimination,” he wrote.

“Unfortunately, my attempt to support Kanye is being used to discredit my brothers and sisters in the movement and I can’t sit by and let that happen.”

A prolonged publicity campaign?

Ultimately, it’s possible the entire controversy has been a bizarre, prolonged publicity campaign for West’s new music; but the exchange of views seems genuine.

T.I. even hinted that Ye vs. The People was recorded just two days ago, amidst the fallout of West’s return to Twitter.

“Yesterday spent the day with Kanye,” he wrote on Instagram on Friday.

“Still optimistic something from our discussion gon stick… I refuse to just give up on him.”

Before the release of Ye vs. The People, West trolled his fans by releasing another song – Lift Yourself – filled with nonsense lyrics.

The track opens with a sped-up sample of the 1973 Amnesty song Liberty, a soulful call to arms that states, “we need to strive for more liberty”.

However, West’s sole contribution was a verse built around the lyrics: “Poopy-di scoop / Scoop-diddy-whoop / Whoop-di-scoop-di-poop.”

The two releases are West’s first new music since 2016’s Life Of Pablo album.

He has hinted he will release a new album on 1 June, followed a week later by a collaborative record with Kid Cudi.

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North Korea nuclear test site to close in May, South Korea says

North Korea’s nuclear test site will close in May, the South Korean president’s office has said.

A spokesman said the closure of the Punggye-ri site would be done in public and foreign experts from South Korea and the US would be invited to watch.

Scientists have said the site may have partially collapsed in September.

On Friday, North Korean leader Kim Jong-un and South Korea’s President Moon Jae-in agreed to work to rid the Korean peninsula of nuclear weapons.

Their summit came after months of warlike rhetoric from the North.

On Saturday, US President Donald Trump he would likely hold talks with the North Korean leadership “over the next three or four weeks” about the denuclearisation of the peninsula.

What did South Korea say?

Presidential spokesman Yoon Young-chan said that Mr Kim had stated he “would carry out the closing of the nuclear test site in May”.

Mr Yoon added that the North Korean leader had also said he “would soon invite experts of South Korea and the US to disclose the process to the international community with transparency”.

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    The office also said North Korea would change its time zone – currently half an hour different – to match that of the South.

    North Korea has so far made no public comments on the issue.

    What is known about the test site?

    Situated in mountainous terrain in the north-east, it is thought to be the North’s main nuclear facility.

    The nuclear tests have taken place in a system of tunnels dug below Mount Mantap, near the Punggye-ri site.

    • North Korea’s Punggye-ri nuclear test site

      Six nuclear tests have been carried out there since 2006.

      After the last, in September 2017, a series of aftershocks hit the site, which seismologists believe collapsed part of the mountain’s interior.

      Mr Kim made an apparent reference to these reports, according to South Korea’s Yonhap news agency.

      “Some say that we are terminating facilities that are not functioning, but you will see that they are in good condition,” the North Korean leader was quoted as saying by Mr Yoon on Sunday.

      The information about the nuclear site has been gathered mainly from satellite imagery and tracking the movement of equipment at the location.

      Building trust

      Analysis by the BBC’s Korea correspondent Laura Bicker

      This is another significant and symbolic step by Kim Jong-un.

      He had already announced he’d be closing the Punggye-ri test site, but now he has told officials in South Korea that he’s prepared to make it public and invite experts and media from Seoul and the US to inspect it.

      Mr Kim also told President Moon that he hoped trust could be built with the US and reiterated that there would be no need for him to have nuclear weapons if they formally ended the war on the Korean peninsula.

      Mr Kim said once Washington spoke to him North Korea would know he was not an aggressor.

      He added that his heart was broken when he saw the two clocks with different Korean time zones hanging on the wall of the peace house at the border between the two countries.

      He will now match the time zone in the North with that of the South.

      What was agreed at the inter-Korean summit?

      Mr Kim and Mr Moon said they would pursue talks with the US and China to formally end the Korean War, which ended in 1953 with a truce, not total peace.

      The commitment to denuclearisation does not explicitly refer to North Korea halting its nuclear activities but rather to the aim of “a nuclear-free Korean peninsula”.

      Catch me up

      The statement talks about this taking place in a phased manner, but does not include further details.

      Many analysts remain sceptical about the North’s apparent enthusiasm for engagement.

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        Previous inter-Korean agreements have been abandoned after the North resorted to nuclear and missile tests and the South elected more conservative presidents.

        Mr Kim said the two leaders had agreed to work to prevent a repeat of the region’s “unfortunate history” in which progress had “fizzled out”.

        Other points the leaders agreed on in a joint statement were:

        • An end to “hostile activities” between the two nations
        • Changing the demilitarised zone (DMZ) that divides the country into a “peace zone” by ceasing propaganda broadcasts
        • An arms reduction in the region pending the easing of military tension
        • To push for four-way talks involving the US and China
        • Organising a reunion of families left divided by the war
        • Connecting and modernising railways and roads across the border
        • Further joint participation in sporting events, including this year’s Asian Games

Burning Man founder Larry Harvey dies aged 70

Larry Harvey, founder of the Burning Man arts festival, has died in San Francisco aged 70.

He suffered a stroke earlier this month and passed away at home on Saturday morning, a statement on the organisation’s website said.

The annual counterculture festival sees up to 70,000 people gather in Nevada’s Black Rock Desert.

It features giant interactive art installations and a huge wooden man that is burnt at the end of the event.

“Larry was never one for labels. He didn’t fit a mould; he broke it with the way he lived his life,” Burning Man CEO Marian Goodell wrote.

“He was a landscape gardener, a philosopher, a visionary, a wit, a writer, an inspiration, an instigator, a mentor, and at one point a taxi driver and a bike messenger.”

“The loss of his presence in our daily lives will be felt for years, but because of the spirit of who he is, we will never truly be without him,” she added.

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    Burning Man was founded in June 1986 when Mr Harvey and his friend Jerry Goodell burned a wooden man on Baker Beach in San Francisco to mark the summer solstice.

    This then grew into the festival, which in 1990 was held in Nevada’s Black Rock Desert for the first time.

    It quickly became one of America’s most well-known cultural events, attracting famous faces such as singer Katy Perry and the actor Will Smith.

    By 2015 the Burning Man Project reported annual revenues of $37.5m (£27.2m), of which $30.4m was ploughed back into running the event.

    Mr Harvey, who had the title Chief Philosophical Officer, spoke to the BBC in 2016 about how the festival came to be.

    “It happened to be the anniversary of a broken love affair,” he said.

    “That story has been inflated forever. I was burning my girlfriend, you hear that, I was burning my girlfriend’s lawyer, I made that one up just to make it interesting! Where the man came from I don’t know.”

    “The spirit of the (event) is alive and well,” he said.

    “We tend to tell people, when they ask what it’s all about: I don’t know, that’s for you to find out.”

Trump lawyer Michael Cohen under criminal investigation

US President Donald Trump’s top lawyer is under criminal investigation, the US justice department has announced.

Prosecutors say they are focusing on Michael Cohen’s business dealings rather than his work as a lawyer.

Mr Cohen has been under investigation for months, the court filing says.

The filing was in response to efforts by Mr Cohen’s own lawyer to stop prosecutors reviewing material seized from Mr Cohen’s office on Monday.

Mr Cohen’s team argues that the papers are covered by the attorney-client privilege.

During a court hearing in New York on Friday, prosecutor Tom McKay accused Mr Cohen of trying to use attorney-client privilege “as a sword to challenge the government’s ability to review evidence”.

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    Government prosecutors also said they believed Mr Cohen had “a low volume of potentially privileged communication” because he seems to only have one client – President Trump.

    “It is neither apparent that Cohen, in his capacity as an attorney, has many, or any, attorney-client relationships other than with President Donald Trump,” the filing said.

    It added that while Mr Cohen was an attorney, “he also has several other business interests and sources of income”, and is “being investigated for criminal conduct that largely centres on his personal business dealings”.

    A new lawyer for President Trump, Joanna Hendon, said the president had an “acute interest” in the case. Ms Hendon, who was hired on Wednesday, asked the judge to adjourn the session so she had more time to prepare.

    According to a New York Times report, the president phoned Mr Cohen to “check in” on him today.

    Lawyers tend to advise clients not to discuss investigations – which means their discussion could cause them problems, depending on what they talked about.

    In a separate development, Mr Cohen reportedly negotiated a $1.6 million settlement with a former Playboy model on behalf of a Republican fundraiser, according to a Wall Street Journal article.

    Elliott Broidy, a Los Angeles investor, acknowledged “a consensual relationship” with the Playmate, who became pregnant.

    Mr Broidy said it was “unfortunate” that the personal matter was “the subject of national discussion” because of the involvement of Mr Cohen.

    The investor was previously in the news after he urged President Trump to sack then-Secretary of State Rex Tillerson over a diplomatic dispute.

Syria air strikes: Trump hails ‘perfect’ mission

US President Donald Trump has hailed an overnight military strike on Syria as “perfectly executed”, adding “Mission Accomplished”.

The US, UK and France bombed three government sites, targeting what they said were chemical weapons facilities.

The strikes were in response to a suspected deadly chemical attack on the town of Douma last week.

Russian President Vladimir Putin said he condemned the Western strikes “in the most serious way”.

Russia, Syria’s main ally, had threatened military retaliation if any Russian forces had been hit.

He added: “So proud of our great military”, saying that after extra funding it would be “the finest our country has ever had”.

In a Friday evening address to the nation from the White House, he had said: “The nations of Britain, France, and the United States of America have marshalled their righteous power against barbarism and brutality.

“The purpose of our actions tonight is to establish a strong deterrent against the production, spread, and use of chemical weapons.”

The wave of strikes is the most significant attack against President Bashar al-Assad’s government by Western powers in seven years of Syria’s civil war.

Mark Sorryberg 1, Congress 0 – for now

Many of us could probably lay claim to a split personality, but few people are as blatant about it as Mark Zuckerberg.

Facebook doesn’t have one CEO – it has two.

There’s Mark Zuckerberg, the Ultimate Millennial. He wears t-shirt and jeans, is a Harvard dropout, happiest in New York and San Francisco, who talks a good game about connecting the world. He’s an engineer and geek who built perhaps the most remarkable network in human history, innovating his way to astronomical wealth. This guy is shy, but has a public persona that accommodates it.

Then there’s a chap I call Mark Sorryberg – the Big Tech Villain. He wears an ill-fitting suit, squirms when in Washington, is blamed for damaging all we hold dear – from rigging elections (“He’s killing democracy”!) to promoting extremism (“He’s unweaving society”!) and not paying enough tax (“He’s screwing the poor”!). This guy is so shy he comes across as awkward and uncomfortable when he should be projecting authority.

As the excellent Zeynep Tufekci wrote in an entertaining blast for Wired, we’ve seen a lot of this second character since the company was founded. In fact, over the past fourteen years, “sorry” seems to have been the easiest word for Facebook’s leader.

In 2006, after the launch of News Feed annoyed users, Sorryberg wrote in a blog: “This was a big mistake on our part, and I’m sorry for it.” In 2007, failures in the Beacon advertising system prompted another grovelling blog: “We simply did a bad job… and I apologise for it.” As Tufekci notes, by 2008, all of his blogs for Facebook were in effect apologies, and we saw several other examples even before he said about the Cambridge Analytica leak to CNN: “I’m really sorry this happened”.

So Mark Sorryberg is a familiar figure by now. He was on display in Washington this week, following the biggest crisis in the history of his company. There were several open goals in front of his interrogators, and opportunities to make him squirm and wriggle were not in short supply.

Yet, for the most part, they missed. After nearly 10 hours of grilling, Facebook is – for now – a richer company, Zuckerberg’s authority as CEO is re-asserted, and the potential disaster this week might have been was averted. These are all very short-term interpretations. There could be big trouble ahead. But the lawmakers fluffed it.

Ineffective questioning

The format didn’t help. For non-partisan reasons that are laudable in principle but ludicrous in practice, each lawmaker was given a maximum of 5 minutes on Tuesday and 4 minutes on Wednesday. You simply cannot build pressure, interrogate answers, or pursue a line of inquiry in the way necessary over such a short time.

But the representatives didn’t help themselves. In his allotted time, Senator Roy Blunt first told a boring story about his business cards, then gave a shout out to his 13 year-old son Charlie who is “dedicated to Instagram… [and] he’d want to be sure that I mentioned that while I was here”, which was sweet.

I’ve transcribed what followed.

Blunt: “Do you collect user data through cross-device tracking.”

Sorryberg: “Er, Senator, I believe we do link people’s accounts between devices in order to make sure that their Facebook and Instagram and their other experiences can be synced between devices.

Blunt: “And that would also include off-line data? Data that is tracking, that is not necessarily linked to Facebook but linked to one… some device they went through Facebook on?”

Sorryberg: “Senator, I want to make sure we get this right. So I want to have my team follow up with you on that afterwards.

Blunt: “That doesn’t seem that complicated to me. You understand this better than I do. But maybe you can explain to me why that’s complicated. Do you track devices that an individual who uses Facebook…has… that is connected to the device they use for their Facebook connection but not necessarily connected to Facebook?”

Sorryberg: “I’m not, I’m not sure [of] the answer to that question.”

Blunt: “Really.”

Sorryberg: “Yes”.

A work of literature that penultimate question was not. I don’t understand it, Zuckerberg didn’t understand it – and Blunt definitely didn’t understand it. He seemed poorly briefed, despite the gravity of the occasion.

Unfortunately, it was emblematic of the meandering, ineffective mode that dominated Tuesday. Wednesday’s interrogation was better, but still not as good as it should have been, not least because there were many questions that weren’t asked. The Facebook CEO’s weaknesses weren’t really exploited.

For instance, he should have been pushed harder on how hard it is to retrieve data that has fallen into the wrong hands. He should have been pushed harder about Facebook’s reaction to news that The Observer newspaper was publishing a story on the subject. His claims that something awry may have been going on at Cambridge University – vigorously denied by the institution – deserved more of a probing.

And the long history of errors at the company, plus its initial denial that there had been a data “breach” when it came to Cambridge Analytica, were worthy of a mauling that was never heard.

First do no harm

Given the scale of the recent controversy, and the courtroom theatrics of these cross-examinations, there was much to fear for Facebook this week. It was Zuckerberg’s first time getting grilled by the Senate and Congress, and his awkwardness in such public arenas was clear for all to see.

His facial expressions garnered comment on social media – but it was his body language and garb, over which he exercises more control, that struck me. On Tuesday, Zuckerberg’s tie knot was chunky and loose; and his halting responses and nervous smiles didn’t project much authority.

But he maintained his composure and politeness throughout. Investors gave a clear enough verdict: the two days added $26bn, or 6 per cent, to the company’s value.

There is some gridlock in Congress, and America’s politicians have a range of very big problems on their plate. That means that for the time being, the regulatory threat to Facebook – though of course they would say they welcome the chance to work with regulators – comes from Brussels and GDPR, rather than Washington.

In terms of new law or regulation, the question is: what kind? One of the great intellectual challenges in this field is in devising regulations that can keep pace with technological innovation: a very hard task. It is wrong to think, for instance, that you can just import the kind of regulation that Ofcom do for broadcasters, and apply it to video content on social media platforms.

The interrogation to come

While this week has not been the disaster for Facebook that many anticipated, and some wanted, the medium-term threats certainly haven’t gone away. And events of recent months have fundamentally changed the level of scrutiny the company is getting, while making perhaps hundreds of millions of users aware of the trade-off between their free use of Facebook and the digital footprint they leave behind.

As my esteemed colleague Dave Lee has noted, there are plenty of deferred questions that the CEO and his team will need to address. And the demands of British regulators that he gives evidence here, too, won’t quieten any time soon.

In particular, perhaps Congress members who realise this week was a missed opportunity will invite their guest back to clarify several of the points he made. If they are smart, they should see this as the beginning of a process, rather than the end.

But in adopting his apologetic posture with an efficacy his interrogators sadly lacked, Mark Sorryberg got one over America’s lawmakers when they should have scored an easy win. If he came to Britain, he wouldn’t get such an easy ride – which is the main reason he probably won’t.

Trump threatens further $100bn in tariffs against China

US President Donald Trump has instructed officials to consider a further $100bn (£71.3bn) of tariffs against China, in an escalation of a tense trade stand-off.

These would be in addition to the $50bn worth of US tariffs already proposed on hundreds of Chinese imports.

China’s Ministry of Commerce responded, saying China would “not hesitate to pay any price” to defend its interests.

Tit-for-tat trade moves have unsettled global markets in recent weeks.

The latest US proposal came after China threatened tariffs on 106 key US products.

In response to Mr Trump’s latest announcement, Foreign Minister Wang Yi said: “China and the US as two world powers should treat each other on a basis of equality and with respect.

“By waving a big stick of trade sanctions against China, the US has picked a wrong target.”

Ministry of Commerce Spokesman Gao Feng said: “We do not want to fight, but we are not afraid to fight a trade war.”

He said that if the US side ignores opposition from China and the international community and insists on “unilateralist and protectionist acts,” then China will “not hesitate to pay any price, and will definitely strike back resolutely… [to] defend the interests of the country and its people.”

Analysts have warned of the risk of a full-blown trade war for the global economy and the markets, and believe ongoing behind-the-scenes negotiations between the two giants are crucial.

Market reaction in Asia on Friday suggested investors were relatively untroubled by the latest twist in the trade row. Hong Kong’s Hang Seng index rose more than 1% while Japan’s Nikkei index edged lower.

How has this unfolded?

Earlier this year, the US announced it would impose import taxes of 25% on steel and 10% on aluminium. The tariffs were to be wide-ranging and would include China.

China responded last month with retaliatory tariffs worth $3bn of its own against the US on a range of goods, including pork and wine. Beijing said the move was intended to safeguard its interests and balance losses caused by the new tariffs.

Then the US announced it was imposing some $50bn worth of tariffs on Chinese-made goods, blaming what it described as unfair Chinese intellectual property practices, such as those that pressured US companies to share technology with Chinese firms.

Mr Trump argues that because Beijing forces any US firms setting up shop in China to tie up with a Chinese company, US ideas are left open to theft and abuse.

Mr Trump reiterated in his statement on Thursday that China’s “illicit trade practices” had been ignored by Washington for years and had destroyed “thousands of American factories and millions of American jobs”.

The draft details of the $50bn to $60bn worth of tariffs were released last week when Washington set out about 1,300 Chinese products it intended to hit with tariffs set at 25%.

China responded this week by proposing retaliatory tariffs, also worth some $50bn, on 106 key US products, including soybeans, aircraft parts and orange juice. This set of tariffs was narrowly aimed at politically important sectors in the US, such as agriculture.

In Mr Trump’s Thursday statement he branded that retaliation by Beijing as “unfair”.

“Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers,” he said.

“In light of China’s unfair retaliation, I have instructed the USTR (United States Trade Representative) to consider whether $100bn of additional tariffs would be appropriate… and, if so, to identify the products upon which to impose such tariffs.”

He said he had also instructed agricultural officials to implement a plan to protect US farmers and agricultural interests.

What could the impact be?

On the political front, Mr Trump’s latest announcement has elicited a less-than-friendly reception from some fellow Republicans.

They have warned that the tariffs will hurt Americans and cost jobs. They have also said relationships the US has with its other big trading partners could be hurt.

US retail giants including Walmart and Target have also asked Mr Trump to consider carefully the impact the tariffs would have on consumer prices and American families.

On Thursday, Ben Sasse, a Republican Senator from the farming area of Nebraska, said Mr Trump’s latest plan was “nuts” and that he hoped the president was “just blowing off steam”.

“Let’s absolutely take on Chinese bad behaviour, but with a plan that punishes them instead of us,” he said.

“This is the dumbest possible way to do this.”

Mr Sasse’s comments echo sentiment pouring out of various Republican-voting farming belts in the US. America’s soybean farmers are expected to be particularly hurt by Mr Trump’s tariff tactics.

To get a sense of how things might play out for those farmers, the trade tit-for-tat could hit soybean producers in the US – and possibly around the world.

China, which is a big producer of soybeans itself, buys about 60% of all soybeans exported by the US.

It uses the product to feed farmed animals, including pigs and chickens, as well as fish. Those animals are in turn used to help feed China’s enormous population.

China’s demand for soybeans and soybean products has buoyed the price of US soybeans for some time.

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    But Beijing’s tariffs against US soybeans will mostly likely see sales to China fall off, which will in turn hurt American farmers.

    Meanwhile, China will need to set about sourcing the extra soybeans it needs from other countries.

    India is one of the world’s biggest soybean producers, and analysts there have already pointed to a potential trade war between the US and China as an opportunity for its economy.

    Other big soybean producers are Argentina and Brazil, and some studies suggest that is where China will turn to should the current set of proposed tariffs come into force.

    But it could end up paying more than it currently does, ultimately forcing up the price of those animals which eat soybean products. So that would mean pork, for example, China’s most popular meat, could get more expensive. And food price inflation is something that will worry Beijing.

    Beijing Deals

    What China sells to the US

    $462.6bn

    The value of of goods bought by the US from China in 2016.

    • 18.2% of all China's exports go to the United States

    • $129bn worth of China-made electrical machinery bought by US

    • 59.2% growth in Chinese services imported by US between 2006 & 2016

    • $347bn US goods trade deficit with China

      CIA Factbook; USTR. All data for 2016. Getty Images

      How long could this last?

      China has initiated a complaint with the World Trade Organization over the US tariffs, in what analysts say is a sign that this will be a protracted process.

      The WTO circulated the request for consultation to members on Thursday, launching a discussion period before the complaint heads to formal dispute settlement process.

      Meanwhile, under US law, the proposed set of tariffs against about 1,300 Chinese products must now go under review, including a public notice and comment process, and a hearing.

      The hearing is scheduled at the moment for 15 May, with post-hearing filings due a week later.

      So, it could be some months before the USTR will announce its final findings or any decision on whether or not it will move ahead with the proposed tariffs.

Not a trade ‘war’ but a trade ‘dance’

President Trump has tweeted the US is “not in a trade war with China”.

The Chinese say they don’t want a trade war either.

But both sides don’t appear to be backing down from their list of demands.

So if it’s not a trade war – is this a trade dance?

Negotiating tactics

What I mean by that of course, is that these are negotiating tactics.

It’s what happens in any business negotiation – each side is trying to get the other to do what it wants. And while the public declarations of potential tariffs may be quite dramatic, behind the scenes US and Chinese officials are still talking, and laying out all the options.

At the heart of this conflict is one key point : the US says China has used unfair tactics – dumping its cheap products in the US, stealing technology from US firms by forcing them into joint ventures, and limiting their market access – to pull ahead in the global economic race.

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    It’s how, the US alleges, China has been able to see an unprecedented rate of economic growth, improvement in quality of life, and win a bigger share of the global economy in the last few decades.

    China says: that’s not true.

    Both sides have used the threat of tariffs on key products in equal size and scale.

    “I think the parties will make concessions,” international negotiator Martin Medeiros of Medeiros Law told the BBC’s Asia Business Report programme.

    “I think this is a precursor to some negotiations that will get China on a path…to have a robust set of intellectual property laws… that’s the endgame.”

    No one wins in a trade war

    All well and good, but it doesn’t look like we’re getting to that point anytime soon.

    And both sides stand to lose if this turns into a full blown trade war.

    The US

    • China’s $50bn of retaliation covers more than 40% of US goods exports to China, and accounts for 0.3% of US GDP.
    • Politically sensitive areas like the agricultural sector, car manufacturers and aircraft makers have been targeted.
    • US tariffs on Chinese goods include electronics which China is a major exporter of. It’s hard to see where else American suppliers could get these products.

      China

      • While US tariffs on China won’t hurt overall GDP much, but…
      • Restrictions on soybeans could come at a cost to China. The US is the second largest exporter of soybeans to China. Stopping imports of them is not an option, so prices would rise at home – not good news for a government trying to keep food inflation low.

        The endgame

        Both sides have shown they are willing to act boldly if necessary. And they both have strong hands to play.

        China holds the “nuclear threat” of selling US treasuries (government bonds) if it doesn’t feel the US is playing ball. That would hurt the US economy, as I’ve written about before.

        And the US could call China out as a currency-manipulator in the US Treasury’s semi-annual currency report which is due later this month. Donald Trump promised to do that on the campaign trail – but still hasn’t.

        If the US does that, under a 2015 law it has a year to resolve the issue with China through – you guessed it – more negotiations.

        The reality is that a decision like that wouldn’t have any immediate tangible effect – but it would be another way for the Trump administration to cast China as the villain in this story, and if talks don’t go as the US would like – this may be one tool in it’s arsenal.

        So this could go two ways. There’s room for more negotiation, but that mean both sides need to give something up.

        Question is, will they dance and make a deal?

Trump threatens further $100bn in tariffs against China

US President Donald Trump has instructed officials to consider a further $100bn (£71.3bn) of tariffs against China, in an escalation of a tense trade stand-off.

These would be in addition to the $50bn worth of US tariffs already proposed on hundreds of Chinese imports.

China’s Ministry of Commerce responded, saying China would “not hesitate to pay any price” to defend its interests.

Tit-for-tat trade moves have unsettled global markets in recent weeks.

The latest US proposal came after China threatened tariffs on 106 key US products.

In response to Mr Trump’s latest announcement, Foreign Minister Wang Yi said: “China and the US as two world powers should treat each other on a basis of equality and with respect.

“By waving a big stick of trade sanctions against China, the US has picked a wrong target.”

Ministry of Commerce Spokesman Gao Feng said: “We do not want to fight, but we are not afraid to fight a trade war.”

He said that if the US side ignores opposition from China and the international community and insists on “unilateralist and protectionist acts,” then China will “not hesitate to pay any price, and will definitely strike back resolutely… [to] defend the interests of the country and its people.”

Analysts have warned of the risk of a full-blown trade war for the global economy and the markets, and believe ongoing behind-the-scenes negotiations between the two giants are crucial.

Market reaction in Asia on Friday suggested investors were relatively untroubled by the latest twist in the trade row. Hong Kong’s Hang Seng index rose more than 1% while Japan’s Nikkei index edged lower.

How has this unfolded?

Earlier this year, the US announced it would impose import taxes of 25% on steel and 10% on aluminium. The tariffs were to be wide-ranging and would include China.

China responded last month with retaliatory tariffs worth $3bn of its own against the US on a range of goods, including pork and wine. Beijing said the move was intended to safeguard its interests and balance losses caused by the new tariffs.

Then the US announced it was imposing some $50bn worth of tariffs on Chinese-made goods, blaming what it described as unfair Chinese intellectual property practices, such as those that pressured US companies to share technology with Chinese firms.

Mr Trump argues that because Beijing forces any US firms setting up shop in China to tie up with a Chinese company, US ideas are left open to theft and abuse.

Mr Trump reiterated in his statement on Thursday that China’s “illicit trade practices” had been ignored by Washington for years and had destroyed “thousands of American factories and millions of American jobs”.

The draft details of the $50bn to $60bn worth of tariffs were released last week when Washington set out about 1,300 Chinese products it intended to hit with tariffs set at 25%.

China responded this week by proposing retaliatory tariffs, also worth some $50bn, on 106 key US products, including soybeans, aircraft parts and orange juice. This set of tariffs was narrowly aimed at politically important sectors in the US, such as agriculture.

In Mr Trump’s Thursday statement he branded that retaliation by Beijing as “unfair”.

“Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers,” he said.

“In light of China’s unfair retaliation, I have instructed the USTR (United States Trade Representative) to consider whether $100bn of additional tariffs would be appropriate… and, if so, to identify the products upon which to impose such tariffs.”

He said he had also instructed agricultural officials to implement a plan to protect US farmers and agricultural interests.

What could the impact be?

On the political front, Mr Trump’s latest announcement has elicited a less-than-friendly reception from some fellow Republicans.

They have warned that the tariffs will hurt Americans and cost jobs. They have also said relationships the US has with its other big trading partners could be hurt.

US retail giants including Walmart and Target have also asked Mr Trump to consider carefully the impact the tariffs would have on consumer prices and American families.

On Thursday, Ben Sasse, a Republican Senator from the farming area of Nebraska, said Mr Trump’s latest plan was “nuts” and that he hoped the president was “just blowing off steam”.

“Let’s absolutely take on Chinese bad behaviour, but with a plan that punishes them instead of us,” he said.

“This is the dumbest possible way to do this.”

Mr Sasse’s comments echo sentiment pouring out of various Republican-voting farming belts in the US. America’s soybean farmers are expected to be particularly hurt by Mr Trump’s tariff tactics.

To get a sense of how things might play out for those farmers, the trade tit-for-tat could hit soybean producers in the US – and possibly around the world.

China, which is a big producer of soybeans itself, buys about 60% of all soybeans exported by the US.

It uses the product to feed farmed animals, including pigs and chickens, as well as fish. Those animals are in turn used to help feed China’s enormous population.

China’s demand for soybeans and soybean products has buoyed the price of US soybeans for some time.

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    But Beijing’s tariffs against US soybeans will mostly likely see sales to China fall off, which will in turn hurt American farmers.

    Meanwhile, China will need to set about sourcing the extra soybeans it needs from other countries.

    India is one of the world’s biggest soybean producers, and analysts there have already pointed to a potential trade war between the US and China as an opportunity for its economy.

    Other big soybean producers are Argentina and Brazil, and some studies suggest that is where China will turn to should the current set of proposed tariffs come into force.

    But it could end up paying more than it currently does, ultimately forcing up the price of those animals which eat soybean products. So that would mean pork, for example, China’s most popular meat, could get more expensive. And food price inflation is something that will worry Beijing.

    Beijing Deals

    What China sells to the US

    $462.6bn

    The value of of goods bought by the US from China in 2016.

    • 18.2% of all China's exports go to the United States

    • $129bn worth of China-made electrical machinery bought by US

    • 59.2% growth in Chinese services imported by US between 2006 & 2016

    • $347bn US goods trade deficit with China

      CIA Factbook; USTR. All data for 2016. Getty Images

      How long could this last?

      China has initiated a complaint with the World Trade Organization over the US tariffs, in what analysts say is a sign that this will be a protracted process.

      The WTO circulated the request for consultation to members on Thursday, launching a discussion period before the complaint heads to formal dispute settlement process.

      Meanwhile, under US law, the proposed set of tariffs against about 1,300 Chinese products must now go under review, including a public notice and comment process, and a hearing.

      The hearing is scheduled at the moment for 15 May, with post-hearing filings due a week later.

      So, it could be some months before the USTR will announce its final findings or any decision on whether or not it will move ahead with the proposed tariffs.

Remington: Oldest US gunmaker files for bankruptcy

The oldest gun manufacturer in the US, Remington Outdoor, has filed for bankruptcy in the wake of slumping sales.

The firm, founded more than 200 years ago, filed for bankruptcy protection to cut a deal with its creditors.

Remington’s chief financial officer said the company’s sales dropped significantly in the year before its bankruptcy, court papers show.

The filing comes amid fresh demands for greater gun control in the US.

A shooting at a Florida high school in February has revived the debate on gun control, and on Saturday hundreds of thousands of protesters took to the streets of US cities.

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    Some US retailers have raised the age limit for certain firearms purchases to 21 or stopped stocking semi-automatic weapons.

    The FBI processed a record number of background checks on gun purchases during the election year in 2016, but the rate of background checks plunged following Mr Trump’s election.

    Analysts say more Americans were buying guns two years ago because they feared a possible Hillary Clinton presidency could usher in gun control policies.

    It is thought that gun sales slowed after Mr Trump took office because firearms enthusiasts generally do not fear a Republican president will try to deprive them of their constitutional right to bear arms.

    Remington, best known for its rifles and shotguns, was founded in 1816.

    After it emerged a Remington rifle was used in the 2012 Sandy Hook elementary school shooting, victims’ family members filed a lawsuit against the gunmaker.

    In court papers filed in Delaware, Remington’s chief financial officer, Stephen Jackson, said the company was having difficulty meeting requirements from its lenders as a result of declining sales.

    During the bankruptcy process, the company will stay in business.

    In most US Chapter 11 bankruptcy processes, the debtor proposes a reorganisation plan to maintain its business and pay creditors over a period of time.