Trump-Xi Truce Appears Elusive as China Prepares to Dig In
President Donald Trump has floated talks with his Chinese counterpart more than half a dozen times since the trade war started. But prospects look remote, even as their tariff fight appears to have peaked.
Inflicting trade pain is unlikely to bring President Xi Jinping to the negotiating table. Instead, Chinese authorities seem intent on proving that they can withstand more economic and political suffering than their archrival.
On Friday, Beijing hiked tariffs on all US goods to 125%, mirroring a move by the White House that pushed duties on Chinese imports to the same level, on top of an existing 20% tax. China said it won’t match any further hikes, calling the repeated use of steep tariffs economically meaningless, but reiterated its vow to “fight to the end” with other, unspecified countermeasures.
“The fact that the Chinese authorities have once again matched US tariff hikes suggests that they are in no rush to negotiate with the Trump administration,” said Julian Evans-Pritchard, head of China economics at Capital Economics.
For talks to happen, Beijing would likely want more than just a pause in tariffs, like the 90-day reprieve Trump gave other trade partners. China has called for dialogue on an equal basis and with mutual respect. So far, Trump’s answered every retaliation with more tariffs and pushing the two sides closer to a drawn-out dispute that could put their $690 billion in trade on the line.
“The complaint in Beijing is that they can’t get a consistent set of demands from the Trump administration,” said Christopher Beddor, deputy China research director at Gavekal Dragonomics. “It’s hard to negotiate when the other side won’t say what they want, or when the demands are constantly shifting.”
Despite that, Trump has continued to express optimism about eventually talking with Xi. Over the past week, he’s called the Chinese leader a “friend” and said he has “great respect” for him — highlighting Trump’s preference for negotiating leader-to-leader, even in the early stages of talks. He’s also praised other trade partners who reached out after his tariff announcements rather than retaliate, suggesting he wants Beijing to follow a similar path.
“China also wants to make a deal, badly, but they don’t know how to get it started. We are waiting for their call. It will happen!” Trump posted this week on social media.
White House officials have said the steep tariff rates will eventually push Xi to pick up the phone. Trump’s top economic adviser Kevin Hassett suggested it’s only a matter of time “because the pressure on China right now is extreme.”
Xi on Friday made his first public remarks on the escalating trade war, saying China is unafraid of any “unjustified suppression” and will stay focused on its own path, no matter how the external environment changes.
“China will by no means be coerced into coming to the negotiation table,” said Shen Jianguang, who met with Premier Li Qiang this week along with other experts consulted for their views on the economy. China needs positive signal from Trump that he’s sincere about a “mutually beneficial deal” for talks to happen, said the Hong Kong-based chief economist of JD.com Inc.
Source: Bloomberg
