President Donald Trump has expressed a more conciliatory tone toward China in upcoming trade negotiations, signaling a potential shift from his previously hardline stance.
Speaking in Washington, Trump stated that tariffs could decrease substantially if a trade agreement is reached, although he clarified they wouldn’t be completely abolished.
He emphasized mutual cooperation, remarking, “We’re going to be very nice, and they’re going to be very nice, and we’ll see what happens.”
Unsustainable trade tension
Treasury Secretary Scott Bessent emphasized the unsustainability of the ongoing trade tensions, further reflecting the administration’s changing approach.
- Trump assured he wouldn’t raise sensitive topics, such as COVID-19, with Chinese President Xi Jinping, particularly given its political sensitivities in Beijing.
- Recently, the White House launched a controversial website hinting at the virus’s origin from a Chinese lab, which had drawn sharp criticism from Chinese diplomats.
- China has reciprocated the softer tone, with Foreign Ministry spokesman Guo Jiakun affirming that dialogue channels remain open, reiterating that trade conflicts yield no victors.
However, Beijing insists on setting clear parameters for negotiations before its leaders engage directly with Trump.
Optimism in global markets
These developments have injected optimism into global markets, with Chinese stocks closing 2.1% higher in Hong Kong and the yuan appreciating 0.2% against the dollar.
- Despite these diplomatic overtures, the heavy 145% tariffs imposed by Trump on Chinese imports earlier this year remain firmly in place, though exclusions have been made for certain tech products and popular consumer electronics.
- Analysts suggest that Trump’s urgency for a deal stems from the plummeting stock market and persistently high US Treasury yields.
Alicia Garcia Herrero, chief Asia Pacific economist at Natixis, remarked, “Trump is panicking due to the markets plummeting. China does not need to offer anything significant in such circumstances.”
- The impasse is further highlighted by Xi Jinping’s continued silence, with no direct communication since Trump’s return to office.
- Beijing has ramped up its global engagement, cautioning other nations against striking deals with the US that may compromise Chinese interests.
During a meeting with Azerbaijan’s President Ilham Aliyev, Xi stressed the detrimental impact of tariff wars on the rights and interests of all nations.
What you should know
- China’s diplomatic outreach remains robust, with Foreign Minister Wang Yi highlighting the broader implications of the US-China trade dispute, emphasizing the need to safeguard international trade norms and multilateral systems.
- Premier Li Qiang has also sought alignment with Japan’s leadership, urging a united response to the US tariffs.
- Chinese media have interpreted Trump’s recent remarks as a softening of his signature tariff policies, with phrases like “Trump chickening out” trending widely on social media platforms such as Weibo.
