China on Thursday announced an explicit contradiction towards President Trump’s assertions that Washington and Beijing are in the midst of strategizing resolutions to the trade tensions threatening to disrupt the global economy. While the President claimed that the two leading global economies are in an ‘active’ dialogue, a representative of China’s foreign ministry countered by stating ‘China and the U.S. have not held any discussions or entered into negotiations concerning tariffs, and they certainly haven’t arrived at an accord.’ The representative gave these remarks during a press conference in Beijing, clearly repudiating claims of ongoing dialogues.
He proceeded to state that while China is open to entering negotiations, ‘if it becomes a battle, we will combat until the conclusion.’ Trump’s tariffs on China, at a significant 145%, surpass those imposed on any other nation. Trump has increased these tariffs on Chinese commodities in the preceding weeks, blaming unjust trade practices. Beijing has reacted in reciprocity, incrementing its total tariffs on U.S. goods to an extraordinary 125% — amounts that draw parallels with a mutual trade prohibition.
The potential for such a scenario has stirred concerns about a worldwide recession, causing market fluctuations as trade conflicts have done the same. Trade relations seemed better after signals from the Trump administration on Wednesday indicating they were contemplating a potential reduction in tariffs with China. Nonetheless, Trump’s description of the state of these negotiations was conflicting and lacked specifics. This ambiguity appeared just a day after Trump made remarks that were seen as a possble easing stance towards Beijing.
Rather than taking a hard-line stance, Trump’s stated policy towards China, according to his comments, is to ‘be very kind’ and that the final tariffs would fall short from the present level of 145%. The proposition that tariffs may soon fall presents an indication of the inflicted damages–and potential damages if continued–on U.S. enterprises and U.S. consumers, say Economists. Speaking openly about reducing tariffs prior to gaining any concessions from China or initiating serious dialogues, appears to be a concession on their part, they reasoned. This aligns with the perception that the President did not fully contemplate upon the aftermath of his tariff policies.
The stalemate occurring between the U.S. and China is raising eyebrow; becoming a pit of growing apprehension as the repercussions become more recognizable. This week, due to the impacts of U.S. tariffs, the International Monetary Fund (IMF) made substantial cuts to growth projections for the U.S., China and majority of other nations. There is a heightened worry within the White House regarding potential shortages imminent on U.S. retail shelves as holiday season orders begin to kick in towards year’s end.
China, which has been prepared for an additional trade war with Trump for some time, has yet to expedite offering of concessions or scheduling of meetings with U.S. trade officials. An advisor within China’s Foreign Ministry expressed that ‘Trump is merely attempting to transmit calming signals to the domestic market by suggesting ‘The Chinese are in communication with us, don’t fret.’ However, this is not the situation at all.’
Meanwhile, China is grappling with its own challenges. They are experiencing a downturn in its export-oriented economy, a situation that would be exacerbated by tariffs. If the internal demand fails to offset the decline in exports, China may find itself compelled to negotiate. There are other elements to consider, such as Chinese President Xi Jinping’s political advantage of not having to account to the electorate, which may afford China some breathing room.