eunice yoon took a trip there to see what's going on. >> reporter: this steel mill used to be at the center of life this town in northern china. now it's a relic of its past as the country seeks to reduce the capacity. we're abo a ree-hour drive from beijing. the government here declared this city steel-free bac in november when the authorities visited the steel mill behind me, the last one in this town, and determined it had been officially shut down. in itsheyday, baoding had eight steel mills, contributing to its status as the country's largest mill. but china has come under criticism for flooding other countries like the u.s. with cheap steel. as you can see behind me, there's no actity here,ut the capacity has been shifted to a firm in the south of the country. and that's why so many ofin china's trpartners including the united states are frustrated with the chinese. beijing may be reducing capacity here but it's moving it elsewhere. this man worked 14 years at the plant. now he's jobless. i've been speaking to some of the former steel workers and they say that they haven't been

eunice yoon is live in beijing, karen tso in england, but we start can kawith kayla tausche >> president trump's announcement that he would seek global tariffs stunned investors, white house staff, cabinet staff and close republican allies on capitol hill >> surprised whoever advised him on this ought to be reprimanded. it will cause higher prices and make us less competitive in the world marketplace. >> that was the chairman of the senate finance committee the backlash was swift and wide ranging. you had business lobbies coming out against the decision and u.s. allies like canada requesting exemptions. the world trade organization said the tariffs would break its rules. trump's move is a familiar one to the wto in march 2002 george w. bush slapped 30% tariffs on foreign steel that was met by retaliation from europe. a year after the tariffs were enacted, the wto said they violated international trade agreements, soon after that bush reversed them. it's unclear whether trump can be convinced otherwise yesterday in a meeting with steel and aluminum executives, he shot down gary cohn when

eunice yoon has the details from beijing. >> reporter: china has a new central bank chf. his name is ei g oong and is no stranger to the united states. he studied in minnesota, got his ph.d at the university of illinois and tenure. he was af rotegee outgoing governor. the outgng governor is known as a pro markets voice among chinese a policymaker favors faster liberalization. investors,oreign there are two things that people want to know. first, is ee gong going to be an advocate for opening up the in his first comments of governor, he said a new slew of rerm and opening policies would be announced from now atil early april, though he didn't mentionthing specific. now, the second question for investors is what is he going to do with all of the debt? debt here has beeri ng, and the outgoing governor has expressed his concern about it.s lee didn' anything about that today. now, it's unclear how muchwi influence h have over policymaking. here in china, unlike thel fedeserve or the ecb, the pboc dlsn't have f independence from the government or communist party and the man who

eunice yoon joins us now eunice >> reporter: yeah. they're getting quite specific about that list. coming to you from a steel fra factory that is just one of the metals industry who are calling on their government to take action and retaliate against president trump's tariffs. the associations that red both steel and aluminum issued statements that said they strongly oppose the tariffs. and they've gone through a list of what the chinese government should take action against for metal products, they say that beijing should target stainless steel, galvanized sheet, seamless pipes and scrap aluminum and other industries. and they say that china should also punish cultural products, consumer electronics, luxury goods and coal it's the first time steel has been mentioned as a target china is ramping up its imports of american coal to 3.2 million tons last year that's five times greater than 2016 and valued at $220 million now, the reasoning, according to some analysts here, is that they believe that the beijing government should consider going after products that are made by states tha

eunice yoon is live with more.ood morning >> well, the premier, china's version of the state of the union address, you mentioned the gdp numbers but there were other numbers focused on mainly the reduction in the budget deficit he said it was going to go from 3% to 2.6% of gdp. and it's significant because it hasn't been reduced as much since 2012 and also people are saying the news that the government is going to reduce some of the stimulus it's been using to try to prop up the economy another point that people thought were interesting was the premier said that china would give tax cuts for corporations and individuals equivalent to roughly 1% of gdp. and tax cuts in the u.s. has been a big talking point here in china. because there's been some concern that it means that the u.s. is going to be much more competitive against this country. now 9 premier didn't say much about trade with the united states hong kong' spokesperson said that china does not want to engage in a trade war. it's not what china would offer to

cnbc's eunice yoon joins us live from beijing with more eunice >> thank you very much, brian. u.s. ambassador to china was maintaining the trump administration's tough line. earlier today i was speaking with ambassador terry bransted who outlined to me the areas and industries he believed should be addressed. >> lng is another one. they need to reduce pollution here, replace coal with liquid natural gas. we have an abundance of that that's an area insurance and financial services, cloud computing. there's many areas where i think there's opportunity to correct some of the unfairness in the trade situation and open up new opportunities. semiconductors is another one where i think there's great opportunity and where america has a technologythat could be very beneficial. >> and i asked him about reports that the u.s. treasury was preparing to use national security law in order to block chinese companies from investing in u.s. high-tech firms like 5g for example. he suggested that this could be an option. >> obviously china protects its national defense they have a much stricter r

eunice yoon is live in beijing with more. >> thank you very much north korea's leader, kim jong-un traveledg in order to meet with president xi jinpingment but he also had a message for president trump. he said north korea is willing to start a dialogue with the united states. is agreeable to hold a north korea/u.s. summit and is committed to denuclearizing the korean peninsula the xinhua news agency also quoted kim as saying the issue of denuclearization of the north korea peninsula can be resolved if south korea and the united states respond to our efforts with goodwill. there is also tare a lot of ana believe kim was visiting beijing in order to prepare for meetings, and to confer with chinese officials who have traditionally been his closest allies north korea watchers say that relations between china and north korea have been strained recently because beijing has been adhering more strictly to u.n. sanctions at the same time they believe that beijing is more supportive of these efforts and overtures by kim to reach out to the south koreans and to the americans in fact in state press to

that's quite the administration i would say >>> in other global news china has a new top banker, eunice yoonlive in beijing with all of the details who is this guy, eunice? >> well, his name is yigang. he actually studied in minnesota. he got tenure at indiana university up until now, he's been the deputy governor at the people's bank of china. and he's also a protege of the outspoken, outgoing governor, governor tran has been known as a liberal and pro markets voice among chinese policymakers and very much a favorite in faster liberalization in the financial sector there are two questions that investors have for mr. yi. first of all, is he going to have access to the foreign banks. and in his first comments as governor he said a slew of new reform and opening policies would be announced from now until early april. he didn't mention any specifics, though now, in terms of the question people are going to be asking him what is mr. yi going to be doing about all the debt the debt here has been rising and the outgoing governor has been raising his concerns about it mr. yi didn't say anything abo

countries in southeast asia but not to the united states over to you. >> thank you very much, eunice yo yoon in china. let's go to willem marx in brussels >> we've had this diplomacy with the trade commissioner, cecilia malmstrom traveling to the u.s. and perhaps persuading them tha the security aspect of the tariffs were not legit only a third of u.s. imports will face tariffs now. two big questions for european leaders this morning whether those exemptions that are currently lasting until may 1st will be made permanent and whether the excess steel we'll see facing tariffs into the u.s. will be diverted to europe that's something they expressed concern about when these tariffs were still floated that could end up on european shores and could depress prices and damaging local producers >> willem marx, thank you very much >>> we're also following a developing story out of washington as if trade wasn't enough national security adviser h.r. mcmaster is out at the white house. president trump replacing him with former u.n. ambassador john bolton the president confirming that move in a tweet over

cnbc's eunice yoon with more eunice >> thanks so much, brian well, fears of a trade war did dominateum as the co-chair of the event, tim cook called on the others to have calmer heads. and for president trump to support policies that encourages free trade this is what he had to say >> what will i have seen over my lifetime is that countries that embrace openness, that embrace trade, that embrace diversity are the countries that do exceptional. and the countries that don't, don't. >> other ceos shared cook's concerns including blackstone's steve schwarzman, is he head he's calling for somewhat of a negotiation to happen between the two sides. >> there needs to be a negotiated arrangement between the two countries. and i think it's important to note that most of the types of things that are being discussed from the u.s. side can be delayed in terms of their implementation and hopefully will be. >> and despite the aggressive rhetoric from both sides, there are some reports that there's some behind-the-scenes negotiations taking place. "the wall street journal" has been reporting that th

eunice yoon is live in beijing with more. >> the chinese government makes persistent claims that it's doing everything it can to reduce excess capacity in steel. we went to a town in the heart of china's steel country to find out for ourselves. this steel mill used to be at the center of life in this town in northern china. now it's a relic of its past as the country attempts to clean up the environment and reduce capacity we're about a three-hour drive from beijing the government here declared this city steel-free back in november when the authorities visited a steel mill behind me, the last one in this town and determined it had been officially shut down in its heyday, baoding had eight steel mills contributing to the world's largest steel producer, yet china has come under criticism for flooding global markets with cheap steel, pressuring steelmakers in other countries like the u.s the steel company has been all gated up and there's no activity the capacity la been shifthas bt a firm south of the country. that's why so man

. >> speaking with eunice yoon earlier on "squawk box," terry branstead says beijing has not traded fairly and ultimately the trump administration wants an even playing field for u.s. workers. >> we had a situation for many years where china has not treated american companies fairly and the trade deficit has grown and grown. we had companies such as wechat, you can use that in america but you can't use facebook in china. china has a 25% tariff on automobiles. we have 2.5% there's been a lack of enforcing the laws on intellectual property and they would even require companies to have a joint venture and transfer the technology to the chinese company. lighthizer put together i think about a 200-page report about things that need to be corrected. the chinese have promised to do many of these things, but they have not happened. we want to see this change we want to continue to build the trade relationship with china. china needs to change some of its unfair policies. what does that mean specifically what is the trump administration asking for in negotiations that appear to be ongoing >> of cou

president trump set to announce new tariffs on china today the move triggering retaliation from beijing eunice yoonve in the chinese capital with more. good morning >>> good morning, contessa the message here is shifting from neutral statements like the trade war would be bad for everyone or china seeks cooperation or dialogue to a more stern the world should isolate the united states. the commerce ministry today issued a statement saying beijing opposes the u.s.'s unilateralism and protectionism, this after calling the united states a repeat abuser of world trade rules. the latest editorial also has a headline that reads the rest of the world must stand together to prevent a trade war. behind the scenes we're getting reports that chinese officials have been preparing a list of u.s. products to target. the themes are generally that these products should be coming from red states, states that supported the president, and also u.s. agricultural products. today economists have been picking through what they believe could be impacted in china. so the feeling is that the impact will be limited because c

white house reportedly considering a new round of tariffs on china what is the reaction in asia eunice yoon is live in beijing with more. >>> good morning the chinese reaction today was a reiteration of themes as well as comments that we heard from authorities here over the past couple of weeks. regular press briefing the foreign ministry said today that u.s. and china trade relations should not be a zero-sum game. this is a statement we heard in the past from the foreign ministry and also terms of the state media, the official response there, there was an interesting commentary that came out of the state-run news agency, xinhua, which blames the u.s. for the large trade deficit, saying that u.s. statistics are faulty and also that if the u.s. really did want to narrow the trade deficit, that washington should consider easing restrictions on high-tech exports. this again is another longstanding position of beijing. another theme we heard quite often now is coming out of the chinese statistics bureau. but what's interesting there is that the bureau was messaging to the public about a possibi

morning, china's foreign minister said it is willing to hold talks to resolve differences on trade eunice yoonwith more eunice, it sounds like back channelism quiet talks hines the scenes >> yeah, absolutely. and the foreign ministry was responding to a question as to whether or not a country would host u.s. treasure social secretary steve mnuchin if he were to come here for talks. at a regular press briefing a spokeswoman said china is willing to negotiate with the idea of mutual respect and mutual benefit now, the "the wall street journ has been reporting that the u.s. led by steve mnuchin with what they want to see, more chinese purchases of american semiconductors and greater access toot financial sector now, i was speaking earlier to a source of mine familiar with those discussions. and that person said that the chinese have already been responding saying they would offer to buy more semiconductors from the united states they also said they're willing to accelerate the time line for greater ownership in securities. and the chinese have also told the united states and its officials that th

eunice yoon spoke to the u.s.sador to china terry branstad, iowan, who we know well eunice joins us from beijing good morning >> good morning, joe the u.s. ambassador did not stray far from the trump administration's tough line. earlier today ambassador branstad outlined to me the areas which he believes china should address and that have been part of the ongoing negotiations with the chinese. this is what he had to say >> lng is another one. they need to reduce pollutio here, replace coal with liquid natural gas. we have an abundance of that that's an area insurance and financial services, cloud computing. there's many areas where i think there's opportunity to correct some of the unfairness in the trade situation and open up new opportunities. semiconductors is another one where i think there's great opportunity and where america has a technology that could be very beneficial. >> he also commented on reports that the u.s. treasury was considering using national security laws to prevent chinese companies from inv

eunice yoon visited the heart of steel country in china and went on quite an adventure. she joins live this morning. what happened? >> thanks. just this week the chinese premiere said that china has cut and would continue to reduce steel capacity so we went to a prominent industrial town to find out for ourselves. this steel mill used to be at the center of life in this tow in northern china. now it's a relic of its past as the country attempts to clean up the environment and reduce capacity we're in baoding, about a three-hour drive from beijing. the government here declared this city steel-free back in november when the authorities visited a steel mill behind me, the last one in this town and determined it had been officially shut down in its heyday, baoding had eight steel mills contributing to the country's status as the world's largest steel producer, yet china has come under criticism for flooding global markets with cheap steel, pressuring steelmakers in other countries like the u.s the steel company has been all gated up and there's no activity the capacity has b

again, is a very close ally of president xi jinping carl >> eunice, thank you very much for that eunice yoontreasury secretary steven mnuchin argued on "foxx sunday" tariffs are good for the long term. take a listen. >> i don't expect to see a big impact on the economy. we've been very careful in how we're doing this and what we're doing, but again, i think what we're doing is long-term very good for the economy, which it is pressing for free and fair trade. to the extent that china is willing to open up their markets, which they're making all the right directions on, but if they open up their markets it's an enormous opportunity for u.s. companies >>> for more on this we're joined by former gm vice chair and cnbc contributor bob lutz. good morning >> good to be here thanks. >> you're no stranger to this topic. sounds like your take is at least as it relates to china directly, that it's not a real problem wade fog these waters and that these things can be settled am my kable. >> they can be and let's face it, we have the leverage because china is dependent on exports to the u.s. far more tha

eunice yoon from china >>> joining us for a first on cnbc interview is lee o girard, president of theteel workers do you think this is going to help the steel workers >> we have to quit using rhetoric of trade war and look at what's happening with regard to trade china has a $400 to $500 billion trade deficit. no matter what they say, their penetration into the global market, into the american market, really sets the floor price. as a result of china's actions, hundreds and hundreds of our members have lost their jobs and their mills have closed. our position are those countries that cheat, south korea, china, india, they should be severely sanctionsed. countries that don't cheat, like eu, canada, they should be left out of it. to be talking about a trade war because american workers want some reciprocity, china has a 300 to 400 $500 billion trade deficit in durable goods should we keep closing our plants i don't -- >> you're clear -- >> by the way, let me make one more i want point. let me make one more point. >> before you move on, i want to make sure -- >> china - >> these haven't

guys >> all right, thanks very much, eunice yoon, very insightful we talked so much about chinese steel overcapacity. >> are we destined for a trade war with china >> not necessarily but the president used strong language and i have to say i agree with him i think china has to be challenged i know there's complications on security with north korea and what not but they have to be challenged i don't know that dumping is the biggest issue. >> reciprocity, intellectual property. >> when they invest in china, it has to be with the chinese government, owning more than 50% is nearly impossible they have none of those restrictions. >> you have to go to the provincial governments who then demand that you lay out all your plans and that's where the technology steel comes and with bribery and so forth that's got to stop. i would rather he led with the china trade attack rather than he did having said that, most of the faangs were defanged on mexico and canada that's why your point is so valid. >> you're not talking about facebook, apple and netflix. you're talking about real faangs defang it h de

the shanghai composite down by 0.6% joining us now for the global reaction is our own eunice yoon standingin beijing that's the big question here, not so much this particular tariff, but what this will mean, what other countries will do in response what is the thought there? >> well, absolutely. there is a lot of concern that we could see retaliatory action around the globe first of all when it comes to the chinese reaction, the chinese were critical of trump's actions saying global trade would suffer if all countries were to take the u.s.'s example. that was coming out of the foreign ministry the tone was softer than you would expect compared to other remarks out of the government. that could be because there'sa a widespread belief that the tariffs this time will have little impact on china we were speaking to steel companies as well as aluminum companies, they were saying the reason is they don't sell a lot into the u.s. market directly. in fact, if you look at the numbers, less than 3% of u.s. steel imports are from china china's aluminum makes up about 6% of u.s. aluminum imports. and

eunice yoon joins us now from beijing. with more, hey, june thieunice >> hey, joe.ional people's political congress sets the policy for the year and the congress spokesperson kicked it off by saying that china did not want to engage in a trade warm with the u.s. but it also wasn't going to be sitting idly by and watch it get damaged. 96 to the trade, economic forecasts and targets were also a major talking point. this is a day when the premier gives the chinese equivalent of the state of the union address to the country and he unveiled the gdp growth target up around 6.5% and the inflation target up around 3%. but what economists were really focused on was the reduction of the budget deficit target from 3% to 2.4% this is the first time that china has done this since 2012 now, that, of course, implies that the government is going to be paring back its stimulus to prop up the economy. that's why it was such a point of interest. in addition to that, tax cuts was also a major talking point because the premier said they're going to be reducing the tax, the equivalent of