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Trade, North Korea pose challenges as Trump prepares to meet China’s Xi

Donald Trump and Chinese President Xi Jinping. REUTERS/Jonathan Ernst/Aly Song

By Steve Holland and Matt Spetalnick

WASHINGTON (Reuters) – U.S. President Donald Trump holds his first meeting with Chinese President Xi Jinping on Thursday facing pressure to deliver trade concessions for some of his most fervent supporters and prevent a crisis with North Korea from spiraling out of control.

The leaders of the world’s two biggest economies are to greet each other at the president’s Mar-a-Lago retreat in Palm Beach, Florida, late in the afternoon and dine together with their wives, kicking off a summit that will conclude with a working lunch on Friday.

Trump promised during the 2016 campaign to stop what he called the theft of American jobs by China and rebuild the country’s manufacturing base. Many blue-collar workers helped propel him to his unexpected election victory on Nov. 8 and Trump wants to deliver for them.

The Republican president tweeted last week that the United States could no longer tolerate massive trade deficits and job losses and that his meeting with Xi “will be a very difficult one.”

Trump, a former real estate magnate is still finding his footing in the White House and has yet to spell out a strategy for what his advisers called a trade relationship based on “the principal of reciprocity.”

White House officials have set low expectations for the meeting, saying it will set the foundation for future dealings.

U.S. labor leaders say Trump needs to take a direct, unambiguous tone in his talks with Xi.

“President Trump needs to come away from the meeting with concrete deliverables that will restore production and employment here in the U.S. in those sectors that have been ravaged by China’s predatory and protectionist practices,” said Holly Hart, legislative director for the United Steelworkers union.

International Association of Machinists President Robert Martinez said the United States continued to lose manufacturing jobs to the Chinese, saying: “It’s time to bring our jobs home now.”

Some Democratic lawmakers were eager to pounce on Trump on trade.

“We are eager to understand your plans to correct our current China trade policies and steer a new course,” said Democratic U.S. Representative Jim McGovern of Massachusetts.

DIFFERING PERSONALITIES

The summit will bring together two leaders who could not seem more different: the often stormy Trump, prone to angry tweets, and Xi, outwardly calm, measured and tightly scripted, with no known social media presence.

What worries the protocol-conscious Chinese more than policy clashes is the risk that the unpredictable Trump could publicly embarrass Xi, after several foreign leaders experienced awkward moments with the new U.S. president.

“Ensuring President Xi does not lose face is a top priority for China,” a Chinese official said.

The most urgent problem facing Trump and Xi is how to persuade nuclear-armed North Korea to halt unpredictable behavior like missile test launches that have heightened tensions in South Korea and Japan.

North Korea is working to develop an intercontinental ballistic missile capable of hitting the United States.

Trump has threatened to use trade to try to force China to exert influence over Pyongyang. Beijing says its influence is limited and that it is doing all it can but that it is up to the United States to find a way back to talks with North Korea.

A senior White House official said North Korea was a test for the U.S.-Chinese relationship.

“The clock is very, very quickly running out,” the official said. “All options are on the table for us.”

Trump consulted on Wednesday with Japanese Prime Minister Shinzo Abe, who said he and the president agreed by phone that North Korea’s latest ballistic missile launch was “a dangerous provocation and a serious threat.”

A White House strategy review is focusing on options for pressuring Pyongyang economically and militarily. Among measures under consideration are “secondary sanctions” against Chinese banks and firms that do the most business with Pyongyang.

A long-standing option of pre-emptive strikes remains on the table, but despite the tougher recent U.S. talk, the internal review “de-emphasizes direct military action,” the U.S. official said, speaking on condition of anonymity.

Analysts believe any military action would likely provoke severe North Korean retaliation and massive casualties in South Korea and Japan and among U.S. troops stationed there.

(Additional reporting by David Brunnstrom in Washington, Gui Qing Koh in New York, Ben Blanchard in Beijing and William Mallard in Tokyo; Editing by Caren Bohan and Peter Cooney)

White House official says North Korea is test for U.S.-China relations

A combination of file photos showing Chinese President Xi Jinping (L) at London's Heathrow Airport, October 19, 2015 and U.S. President Donald Trump posing for a photo in New York City, U.S., May 17, 2016. REUTERS/Toby Melville/Lucas Jackson/File Photos

By Steve Holland and Roberta Rampton

WASHINGTON (Reuters) – U.S. President Donald Trump will discuss how to rein in North Korea’s nuclear program with Chinese President Xi Jinping later this week in what a senior White House official said on Tuesday would be a test for the U.S.-Chinese relationship.

Trump and Xi are to meet on Thursday and Friday at Trump’s Mar-a-Lago retreat on the Atlantic coast in Palm Beach, Florida. It will be their first face-to-face meeting since Trump took office on Jan. 20, and trade and security issues are to figure prominently in their talks.

“We would like to work on North Korea together,” the official said in a briefing for reporters. “This is a test for the relationship.”

Trump wants China to do more to exert its economic influence over unpredictable Pyongyang to restrain its nuclear and missile programs, while Beijing has said it does not have that kind of influence.

In an interview with the Financial Times last weekend, Trump held out the possibility of using trade as a lever to secure Chinese cooperation.

In the same interview, Trump was quoted as telling the FT that Washington was ready to address the North Korean threat alone, if need be.

The White House official — speaking just as North Korea fired a projectile believed by South Korea’s military to be a ballistic missile into the sea — said the situation had become more urgent.

“The clock is very, very quickly running out,” the official said. “All options are on the table for us.”

Trump does not plan to give in to Chinese pressure for the United States to withdraw its THAAD anti-missile system in South Korea, which Beijing considers destabilizing.

Trump has said he expects the meeting to be a difficult one given his belief that China has taken advantage of U.S. trade policies to help its economy and hurt U.S. job creation.

He plans to discuss with Xi a new “elevated” and streamlined framework for a U.S.-Chinese dialogue with “clear deadlines for achieving results,” the senior White House official said.

He will discuss significant trade and economic concerns with Xi in what the official called a “candid and productive manner.”

(Reporting by Steve Holland and Roberta Rampton; Editing by Sandra Maler)

Israeli PM seeks ‘no gaps’ with Trump ahead of White House talks

Israeli Prime Minister Benjamin Netanyahu

By Luke Baker

WASHINGTON (Reuters) – Prime Minister Benjamin Netanyahu, preparing for his first meeting with President Donald Trump at the White House, will work with advisers on Tuesday to align Israeli and U.S. thinking on the Middle East and ensure “no gaps” remain.

Staff have cleared most of Tuesday for discussions with Israel’s ambassador to the United States, Ron Dermer, and other senior advisers ahead of Wednesday’s Oval Office meeting. The only event of the day is an evening meeting with U.S. Secretary of State Rex Tillerson.

“There isn’t going to be any daylight, no gaps,” one adviser said as the prime minister left for Washington, the first time Netanyahu, the head of a right-wing coalition, has overlapped with a Republican in the White House in four terms in office.

Those reassurances came as Netanyahu took a cautious line on whether he would support a two-state solution to the Israeli-Palestinian conflict, the bedrock of U.S. diplomacy for two decades, when he sits down with Trump.

During the presidential campaign, Trump was often unabashedly pro-Israel, promising to move the U.S. embassy from Tel Aviv to Jerusalem, backing David Friedman, a supporter of settlements, as his envoy to Israel, and saying that he wouldn’t apply pressure for talks with the Palestinians.

But in the three-and-a-half weeks since taking office, positions have shifted. The embassy transfer has been put on hold as the fallout from such a move, not least the potential for unrest across the Middle East, has been explained, including by Jordan’s King Abdullah during an impromptu visit.

When it comes to settlements, Trump has laid out a more nuanced position, saying that while he does not see them as an obstacle to peace, building new ones or expanding existing ones beyond their current boundaries is “not good”.

And rather than no pressure for peace talks, Trump has said he wants to have a go at the “ultimate deal”. In an interview with newspaper Israel Hayom last week, he urged Israel to act “reasonably” in the Middle East peace process.

LEADERS IN LOCKSTEP

For Netanyahu, under investigation at home in two criminal cases involving allegations of abuse of office, ensuring he and Trump are in lockstep is critical to putting the friction of the Obama administration behind him and laying the ground for a more fruitful relationship with the United States.

At a time when the Middle East is in turmoil and Palestinian politics is fractured by long-standing divisions between the Western-backed Fatah party and the Islamist group Hamas, Israeli officials argue that the time is not ripe for peace.

But while Netanyahu has announced plans for 6,000 more settlement homes, he is also uneasy about pressure from the far-right in his coalition for more dramatic steps, such as the annexation of parts of the West Bank, which the Palestinians want for their own state together with Gaza and East Jerusalem, or the rejection of a Palestinian state altogether.

Netanyahu’s task during the scheduled two-hour meeting with Trump will be to find common ground on both the settlements issue and the prospects for a two-state solution to the conflict: Israel and a Palestine side by side and at peace.

The prime minister committed to the two-state goal in 2009 and has reiterated the position since. But on Monday, a senior minister in his cabinet said no ministers, foremost Netanyahu, truly believed in the emergence of a Palestinian state.

Officials with Netanyahu declined to comment on the remark. But Netanyahu has spoken of a “state minus”, something short of full sovereignty for the Palestinians. It was unclear if the contours of that idea would be discussed with Trump.

As well as Palestinian issues, the two leaders will discuss regional stability and the threat from Iran, with both intent on re-examining and strengthening the nuclear deal with Tehran.

“The alliance between Israel and America has always been extremely strong and it’s about to get even stronger,” Netanyahu said as he prepared to leave Israel on Monday.

“Donald Trump and I see eye-to-eye on the dangers emanating from the region but also on the opportunities. We’ll talk about both as well as upgrading the relations between Israel and the United States in many, many fields.”

Aside from Trump and Tillerson, Netanyahu will meet Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, House Speaker Paul Ryan and Vice President Mike Pence during the Feb. 13-16 visit.

(Writing by Luke Baker; Editing by Mary Milliken)

Boeing CEO sees ‘near term’ plane deal after Trump meeting

Dennis Muilenburg, CEO of The Boeing Company, arrives at Trump Tower in New York City, U.S. January 17, 2017.

By Alwyn Scott and Doina Chiacu

(Reuters) – Boeing Co’s chief executive said on Tuesday that he and President-elect Donald Trump “made progress” on lowering the cost of the Air Force One presidential aircraft fleet and on a potential sale of Boeing fighter aircraft, and suggesting a deal could be struck soon.

Boeing CEO Dennis Muilenburg’s visit to Trump Tower on Tuesday marked another step in Trump’s efforts to use his bully pulpit to cut better deals with defense contractors. It also showed Boeing’s adroit use of the meetings to pursue its own sales and herald its importance to the U.S. manufacturing economy.

Trump has been pressuring defense companies on prices through Twitter posts and meetings. Last month he said a $4 billion contract for Air Force One was too expensive and should be canceled. Boeing has said it so far has a $170 million contract for design work on the heavily modified Boeing 747 planes and that no final figure for the fleet of planes had been established.

Trump also last month asked the Chicago-based aerospace and defense company to price a contract for Boeing’s F/A-18 Super Hornet fighter jet to compete with Lockheed Martin’s F-35 fighter, which is famously over budget.

While not offering details, Muilenburg said the “excellent conversation” with Trump could lead to a deal “in the very near term.”

“We made some great progress on simplifying requirements for Air Force One, streamlining the process, streamlining certification by using commercial practices,” Muilenburg told reporters after the hour-long meeting. “That’s going to lead to substantial cost reductions.”

On fighter jets, he said, “we were able to talk about options for the country and capabilities that will, again, provide the best capability for our war fighters most affordably.”

Muilenburg praised Trump’s approach to negotiations.

“I think Mr. Trump is doing a great job of engaging business,” he said, noting that as the U.S.’ top exporter, Boeing supports 1.5 million U.S. manufacturing jobs and 13,000 small and mid-sized supplier companies.

“If you want manufacturing jobs, aerospace is the place to invest,” he said. “We’re proud to take on that mission and I think Mr Trump’s engagement with industry is going to help us grow manufacturing jobs in this country.”

“I appreciate the teamwork approach on this – I think it’s the right way to do business.”

Boeing’s stock was down 0.6 percent at $157.87 in afternoon trade.

(Reporting by Alwyn Scott in Seattle and Doina Chiacu in Washington; Editing by Meredith Mazzilli and Marguerita Choy)

Top diplomats from U.S., Japan, South Korea to meet on North Korea

World leaders from US, Japan, and South Korea

By Tony Munroe and Ben Blanchard

SEOUL/BEIJING (Reuters) – U.S. Secretary of State John Kerry will meet with his Japanese and South Korean counterparts in New York on Sunday to discuss responses to North Korea’s latest nuclear test, South Korea’s foreign ministry said on Wednesday.

The three countries are pushing for tough new U.N. Security Council sanctions on North Korea after the isolated country on Friday conducted its fifth and largest nuclear test.

The blast was in defiance of U.N. sanctions that were tightened in March.

China, the North’s chief ally, backed the March resolution but is more resistant to harsh new sanctions this time after the United States and South Korea decided to deploy a sophisticated anti-missile system in the South, which China adamantly opposes.

South Korea said Foreign Minister Yun Byung-se and his counterparts Kerry and Japanese Foreign Minister Fumio Kishida will meet during the annual U.N. General Assembly to discuss putting further pressure on North Korea.

The United States wants China to do more, with U.S. Defence Secretary Ash Carter last week singling out the role he said China should play in curbing its neighbor.

TESTING TIMES

North Korea has been testing nuclear weapons and ballistic missiles at an unprecedented rate this year under young leader Kim Jong Un.

On Tuesday, Chinese Foreign Minister Wang Yi spoke with South Korea’s Yun by phone, expressing Beijing’s opposition to the North’s latest nuclear test but also reiterating opposition to the planned deployment of the Terminal High Altitude Area Defense (THADD) anti-missile system in the South, China’s foreign ministry said.

China is North Korea’s most important diplomatic and trade partner and refuses to cut the country off completely, fearing it could collapse.

Beijing’s official People’s Daily newspaper on Wednesday called the United States a troublemaker and said it has no right to lecture China about taking responsibility for reining in North Korea as tensions on the peninsula are a direct result of U.S. actions.

In a commentary, the ruling Communist Party’s official paper said the United States was pretending it had nothing to do with the North Korea issue and was putting the blame on others.

“People have reason to doubt whether Washington is willing to make the effort to push the North Korea issue in the direction of a resolution,” the paper said.

China and Russia have pushed for a resumption of six party talks on denuclearization in North Korea. The talks, which also involve Japan, South Korea and the United States, have been on hold since 2008.

Washington has said it is willing to negotiate with the North if it the country commits to denuclearization, which Pyongyang has refused to do.

Japanese Prime Minister Shinzo Abe will seek Cuba’s help in responding to North Korea’s nuclear and missile programs during a rare visit to Havana next week, a spokesman said.

(Editing by Lincoln Feast)

U.N. council to meet on North Korea’s missile launches

North Korean leader watching missile test

By Michelle Nichols

UNITED NATIONS (Reuters) – The United Nations Security Council will meet on Wednesday to discuss North Korea’s latest ballistic missile launches, at the request of the United States and Japan, diplomats said.

French U.N. Ambassador Francois Delattre, president of the 15-member council for June, said the missile launches were an “unacceptable violation” of a U.N. ban. A senior U.N. official will brief the council, diplomats said.

“We want a quick and firm reaction of the Security Council on this,” said Delattre. “We hope that … we’ll have a press statement on this.”

North Korea launched what appeared to be an intermediate-range missile on Wednesday to a high altitude in the direction of Japan before it plunged into the sea, military officials said, a technological advance for the isolated state.

The launch came about two hours after a similar test failed, South Korea’s military said, and covered 400 km (250 miles), more than halfway towards the southwest coast of Japan’s main island of Honshu.

The tests are the latest in a string of demonstrations of military might that began in January with North Korea’s fourth nuclear test and included the launch of a long-range rocket in February.

North Korea has been under U.N. sanctions since 2006. In March, the Security Council imposed harsh new sanctions on the country.

(Writing by Louis Charbonneau; Editing by Bernadette Baum)