The Necessary War

Sen. Lindsey Graham: "Accept the pain that comes with trade between US and China"
By Andrew O'Reilly 

Sen. Lindsey Graham, R-S.C., said on Sunday that Democrats should not criticize President Trump for taking on China over trade as they have complained for years about Beijing’s policies but done nothing.
“Every Democrat and every Republican of note has said China cheats,” Graham said on CBS News’ “Face the Nation.” 

“The Democrats for years have been claiming that China should be stood up to, now President Trump is and we’ve just got to accept the pain that comes with standing up to China.”
Graham added: “To my Democratic colleagues: he’s doing the things you’ve been calling for all these years.”
Graham’s comments come as President Trump faced a tense reception from his counterparts on the world stage as they gathered in a French beach resort for the Group of Seven summit.
President Trump suggested during a breakfast meeting with United Kingdom Prime Minister Boris Johnson that he harbored qualms about the spiraling conflict. 

"Yeah. For sure," he told reporters when asked if he had any second thoughts about ramping up tariffs on China after Beijing imposed new tariffs to retaliate against earlier tariff moves by the U.S.

Then hours later, however, White House Press Secretary Stephanie Grisham issued a statement saying the news media had "greatly misinterpreted" President Trump's response. 

Grisham said the president only responded "in the affirmative -- because he regrets not raising the tariffs higher."
President Trump had been trying to use the summit to rally the other leaders to do more to stimulate their economies, as fears rise of a potential slowdown in the U.S. before he stands for reelection in November 2020.

The meetings come days after President Trump responded to China's announcement Friday that it would slap new tariffs on $75 billion in American goods with more tariffs of his own. 

President Trump also issued an extraordinary threat to declare a national emergency in an attempt to force U.S. businesses to cut ties with China.
Graham on Sunday did admit that the trade war would hurt some of his constituents – saying “consumer prices on commodities are going to go up” – but called it a necessary evil to take on Beijing.
“Until [the Chinese] feel the pain they’re not going to stop,” he said. 

“They never will until they feel a heavier price.”

Rogue Company

U.S. officials and lawmakers say China is the problem not only Huawei
By Joseph Marks

Senate Judiciary Committee Chairman Lindsey Graham (R-S.C.)
Trump administration officials have warned for months that Huawei’s global expansion into next-generation 5G wireless networks would amplify the threat of Chinese digital spying.
But now they’re taking the gloves off, accusing the Chinese government of running roughshod over international norms and its own laws to steal Western innovations. 

The stepped up rhetoric comes as President Trump imposed high tariffs on a wide range of Chinese imports, leading to a major escalation in trade hostilities between the two countries.
The move to 5G makes concerns about spying and sabotage significantly more pressing because its super-fast speeds will allow far more systems critical to public safety to run on wireless internet connections, such as high-tech medical equipment and driverless cars.
If Huawei gains a foothold in U.S. allies’ 5G networks, the Chinese government could force the company to send software updates to spy on Western companies or sabotage critical infrastructure, Chris Krebs, director of the Homeland Security Department’s Cybersecurity and Infrastructure Security Agency, warned lawmakers during a Senate Judiciary Committee hearing Tuesday.
Beijing could also exploit hidden vulnerabilities that already exist in Huawei products to hack adversaries or it could plant spies inside Huawei teams that work abroad servicing the company’s technology, Krebs said.
“It’s not about overseeing Huawei. It’s about overseeing China,” Judiciary Committee Chairman Lindsey Graham (S.C.) said during the hearing.
Administration officials formerly attributed their concerns about Huawei to a 2017 cybersecurity law they said would force the company to cooperate with Chinese intelligence requests. 

But Krebs abandoned that nicety Tuesday.
“This is a single-party government. Everything that flows from the central party is a manifestation of their philosophy,” he said. 

“The [cybersecurity] law is important because it is telling you what they want to do. But they’re going to get what they want anyway, law or not.”
The U.S. and China stepped away from trade negotiations last week amid recriminations, and the heightened rhetoric on digital spying probably will make tensions worse.
The White House, which has struggled to convince allies to restrict Huawei from their 5G networks, may also impose its own ban on Huawei as soon as this week, Reuters reported Tuesday.
Lawmakers are also taking a cue from the administration and moving to restrict China from access to U.S. technological innovations.
On Tuesday, Sen. Josh Hawley (R-Mo.) introduced a bill to bar exporting large categories of technologies to China including artificial intelligence, robotics, semiconductors and advanced construction equipment.
Hawley and five other Republicans also proposed another bill to bar Chinese students from science or engineering schools connected with the People’s Liberation Army from receiving U.S. visas.
“This is a strategy with multiple tentacles,” Sen. Thom Tillis (R-N.C.) said, describing Chinese digital spying efforts, “and we as members of Congress need to understand every one of those and chop them off.”

Trump Seen Having Support If He Dubs China Yuan Manipulator

Graham, Shaheen cite bipartisan backing for declaration on FX

By Patrick Donahue

President Donald Trump would have the support of Congress if he declared China a currency manipulator, as he pledged during the election campaign, according to two members of the Senate Foreign Relations Committee.
Senator Lindsey Graham of South Carolina, a Republican, said on a panel at the Munich Security Conference on Sunday that the Republican-led Congress has an opportunity to unite around action against China.

Lindsey Graham

“There’s bipartisan support to declare China a currency manipulator,” said Graham, whose stance was backed by Jeanne Shaheen, a Democrat from New Hampshire. 

“I don’t want a war with China; I want a better relationship. But what they’re doing needs to be pushed back against -- and I think currency manipulation will be an issue that may unite the Congress.”
While the U.S. has long accused China of undervaluing its currency to boost exports, Beijing has actually been burning through foreign reserves to support the yuan amid an economic slowdown and capital outflows. 

The yuan gained 0.9 percent against the dollar in January, its steepest advance since March, after sinking 13 percent in the three years through 2016. 

The currency was little changed on Monday at 6.8671 per dollar.
Trump, who pilloried China on the campaign trail for its trade practices, has the power to brand the country a currency manipulator and doesn’t need Congressional support.
In spite of vowing throughout the campaign that he would do that on his first day in office, Trump has yet to act one month into his presidency.
Steven Mnuchin, who was sworn in on Feb. 13 as Treasury secretary and would play a key role in any decision about China’s foreign-exchange policies, said during his Senate confirmation process that he’s willing to label the country a manipulator if warranted.
Trump this month also recommitted the U.S. to the “One China” policy that’s underpinned U.S. relations since the 1970s, backing off a threat made before his inauguration in January to abandon a stance that acknowledges that China and Taiwan are part of the same country.
“I’m not clear yet what the policy is of this administration on China,” Shaheen said. 

“I think a One China policy is very important. I agree that it’s a currency manipulator and I think there’s probably bipartisan agreement in Congress on that.”
The U.S. last singled out China for unduly influencing its currency in 1994, when Democrat Bill Clinton was president. 

Successive U.S. leaders since then -- both Democrat and Republican -- have refrained for taking such a step, in spite of sporadic pressure from lawmakers to do so.