President of the United States Donald Trump said that he plans to be very nice to China in any trade negotiations and noted that the US tariffs on the Asian country will be reduced if Beijing and Washington can reach an agreement.
The media interpret the mentioned statement by Mr. Trump as a likely signal that he is gradually starting to abandon his tough stance towards China amid high market volatility, which has become a reality against the background of Washington’s sweeping levies and Beijing’s retaliatory measures.
Donald Trump said that tariffs will come down, but will not become zero. He made the corresponding statement last Tuesday, April 22, in Washington. It is worth noting that before this, United States Treasury Secretary Scott Bessent said that the standoff was unsustainable. The corresponding statement was made at the closed-door investor summit hosted by JPMorgan Chase & Co. in Washington. It is worth clarifying that this event was not public, so the information about the discussions and opinions that were expressed there is insider information. As reported by the media, referring to its informants from among the people who attended the investor summit, Scott Bessent stated that the tariff standoff with China cannot be sustained by both countries. In this context, according to insiders, he also noted that the two largest economies in the world will have to look for ways to de-escalate. Moreover, Scott Bessent stated that the mentioned de-escalation will come in the very near future. Media informants who attended the closed-door summit also claim that the US Treasury Secretary described the current situation as essentially a trade embargo.
Besides, according to information published by the media with reference to insiders, Scott Bessent stated that the United States does not set itself the goal of decoupling from China. Also in this context, he noted that the current status quo, consisting of 145% tariffs from the US on goods imported from an Asian country and 125% retaliatory levies from Beijing against Washington, is not sustainable. Scott Bessent, through the prism of an optimistic attitude, perceives the realism of the likelihood that in the coming months, the level of tension between the two largest economies in the world will decrease, and this will become a kind of relief factor for the markets. At the same time, he noted that it may take more time to conclude a larger deal. Scott Bessent told the participants of a closed-door summit that a comprehensive deal between the United States and China could be concluded in two to three years. He also once again noted that Beijing has stifled its consumer economy and favored the manufacturing sector at the US’s expense. According to Scott Bessent, any agreement between Beijing and Washington will require a rebalancing of trade, which will allow the United States to increase production. He clarified that negotiations with China on the corresponding deal have not yet begun.
A spokesperson for the Treasury Department declined to comment on the statements made during the closed-door summit.
According to media reports, the White House is currently trying to focus on statements about moving forward with trade deals at the level of public rhetoric, but at the same time, Donald Trump administration officials are not signaling that there is a real result in the context of relevant activities, which could indicate that concrete agreements are being reached. White House Press Secretary Karoline Leavitt stated that 18 different nations have provided Washington with their trade offers. Also, according to her, this week, Donald Trump’s trade team will meet with representatives of 34 countries to discuss possible agreements. Moreover, Karoline Leavitt said that Mr. Trump told her that the United States was doing very well in respect to a potential trade deal with China. At the same time, she did not answer the question of whether there was an actual conversation between the President of the United States and the head of the People’s Republic of China Xi Jinping.
The media also published information according to which the White House is close to announcing high-level agreements with India and Japan. At the same time, the journalists noted that in this case, it is expected that, most likely, there will be official signals of readiness for negotiations, rather than final deals. The media claims that the details of the final draft agreements will be worked out within a few months or even years. Karoline Leavitt did not make any statements about whether the mentioned expected framework announcements would be sufficient to stave off the resumption of tariffs after the end of the 90-day pause, which was decided by Donald Trump in April.
The President of the United States, commenting on the prospects of a trade deal with China, also noted on Tuesday that Washington is going to be very nice, and Beijing is going to be very nice. Moreover, Donald Trump has stated that he sees no need to play hardball with Xi Jinping. The US president also noted that he would not bring up the issue of coronavirus during the discussions. It is worth noting that this is a remarkable statement since Covid-19 is an extremely sensitive political issue for Beijing. In the relevant context, it is also noteworthy that the White House launched a website that published information that the coronavirus came from a laboratory in China. Washington’s refusal to use this data in negotiations with Beijing is eloquent.
Chinese Foreign Ministry spokesman Guo Jiakun said at a regular press briefing on Wednesday, April 23, in Beijing that the door for talks is wide open. He also once again repeated the thesis repeatedly declared by the authorities of the Asian country that there are no winners in trade wars. According to media reports, China is committed to ensuring that Beijing and Washington work out the contours of an agreement before Xi Jinping and Donald Trump begin communication. At the same time, Mr. Trump has already sought several times to get his counterpart from an Asian country on the phone.
Chinese stocks traded in Hong Kong closed up 2.1% amid optimism that tensions between Beijing and Washington may ease. At the same time, the offshore yuan was last up 0.2% against the dollar.
Donald Trump’s statement, signaling a softening of his position towards interaction with China, was made at a time when US stocks and Treasuries suffered significantly after Washington imposed sweeping tariffs on goods imported from almost all countries of the world in the first half of the current month. Later, the President of the United States decided on a 90-day pause in raising levies. However, 145% tariffs continue to apply to goods imported from China, although exceptions have been made for shipments of computers and popular consumer electronics.
Alicia Garcia Herrero, chief Asia Pacific economist at Natixis, argues that Donald Trump is panicking due to the markets plummeting and still very high US Treasury yields. According to the expert, the president of the United States needs a deal and quick. Alicia Garcia Herrero also stated that China does not need to offer anything big in such circumstances.
Currently, Xi Jinping is not showing any haste in the context of seeking talks with Donald Trump. This may indicate his considerable confidence in the strength of the Chinese economy. Xi Jinping probably assumes that the Asian country is capable of coping with the challenges generated by the current configuration of global economic reality, and therefore is in no hurry to negotiate with Donald Trump, despite Washington’s unequivocal signals of corresponding readiness. In a certain sense, both sides are currently striving to demonstrate maximum pride and self-sufficiency. At the same time, the consequences of a tariff confrontation will be inevitable for both the United States and China. A trade deal, which is still realistic, will significantly reduce the burden on the economies of both countries, but it is still unknown when exactly this will happen. Also, according to media reports, there are currently no signs that the negotiation process between the United States and China is being conducted in a so-called behind-the-scenes format.
At the same time, Beijing is stepping up its efforts to strengthen economic ties with other countries. Moreover, China warns nations against concluding trade deals with the United States that harm the interests of the Asian country.
During a meeting with Azerbaijani President Ilham Aliyev on Wednesday, Xi Jinping said that tariff wars undermine the rights and interests of all countries.
China’s Foreign Minister Wang Yi told his counterparts in the United Kingdom, and Australia that Beijing’s stance towards Washington is aimed not only at safeguarding its own interests but also at protecting international rules and the multilateral trading system.
The media also published information according to which Chinese Prime Minister Li Qiang wrote a letter to his Japanese counterpart Shigeru Ishiba this week, calling for a coordinated response to the measures of the current configuration of the United States trade policy. It is worth noting that this does not negate the realism of the deal between Beijing and Washington.
The Chinese media predictably characterized Donald Trump’s recent statements about cooperation with the Asian country as a sign that he is softening his stance on his signature tariff policies.
In the current month, Beijing signaled that it wants to see a number of moves from Washington before agreeing to any discussions. In this context, China drew special attention to the fact that it takes extremely negatively disparaging remarks about itself from some members of Donald Trump’s cabinet. Beijing expressed displeasure at the statements of the United States Vice President JD Vance about Chinese peasants. One of the diplomats of the Asian country called the mentioned statements disrespectful and ignorant.
Beijing has sent People’s Bank of China Governor Pan Gongsheng, his deputy, Xuan Changneng, and Finance Minister Lan Fo’an to Washington, which this week will host meetings of the World Bank Group and International Monetary Fund. According to media reports, this could potentially be an opportunity for an exchange of views between Chinese and US officials and open the door to trade talks. The journalists also noted that one major member to the Chinese team that will negotiate with the Donald Trump administration was likely put in place last week when Li Chenggang was appointed vice commerce minister and trade envoy.
Henry Wang Huiyao, founder of the Center for China and Globalization research group in Beijing, said Li Chenggang’s appointment demonstrated that China is ready to talk, and the comments by the president of the United States signal a more reasonable tone. He is confident that this would get a response from an Asian country and hopes for a period of stabilization and cooling.
