Amid the potential softening of the bruise trade war between China and the US, Beijing said Friday it is considering holding talks with the Trump administration after repeated attempts by senior U.S. officials to launch negotiations.
China's Commerce Department said in a statement that China “evaluates” the US story, but said Beijing's position was consistent.
“If the US does not correct the wrong, unilateral tariff measures, it means that the US has no integrity at all and further undermines mutual trust between the two,” the department said.
There is a Chinese signal about willingness to talk, as tariffs already appear to be taking a blow to Chinese producers. An official report on manufacturing activities in April showed that factories in China had experienced the most sharp monthly slowdown in more than a year.
Both countries have sparred since President Trump last month kept tariffs on Chinese goods at a minimum of 145%, but omitted China from a 90-day suspension of tariffs he has given on all other countries. China has responded with massive tariffs on American goods, blocking some American companies from doing business in China, limiting the export of critical minerals that US manufacturers rely on to make things like semiconductors, drones, and cars.
The clash that doubled the battle of will between Trump and China's top leader Xi Jinping has shaken up global markets and accelerated the decoupling of the world's two biggest economies.
Many countries are putting pressure on US trading partners to limit China's access to exports, and to threaten measures against Beijing's compliant countries.
It is unclear which officials from the US and China are in contact with the negotiations setting up. Analysts say both sides have different approaches to such consultations. Trump prefers to get a lead and speak directly to XI, but Chinese officials tend to prefer to negotiate details in advance and make a deal before leaders meet.
“We know that China and the US are in touch at a work level,” said Wu Simbo, dean of the International Institute at Hudan University in Shanghai. “The key now is that China wants the US to provide a clear signal that negotiations are integral and then they can move from this kind of work contact to formal negotiations. China kicked the ball to the US.”
Complicating the issue is concerns that Trump is concerned that he is also jeopardizing deals on a whim, and that he even embarrassing Xi in conflict, similar to how Ukrainian President Volodimia Zelensky was treated when he visited the White House in February.
Faced with the ghost of a long-term trade war, China's national propaganda was forced into high gear, defending the country for “struggle” and urging people not to succumb to our pressures.
Beijing has been stakes that the Trump administration will ultimately relent as political and financial pressures are rising in the US. Recent polls show that most Americans are unhappy with Trump's treatment of the US economy. This shrunk in the first quarter after recording strong growth at the end of last year.
Recognizing America's dependence on Chinese manufacturing, the Trump administration has exempted Chinese smartphones, computers, semiconductors and other electronic devices from mutual tariffs, but the move could be temporary. And on Tuesday, Trump signed two executive orders and returned tariffs to the car manufacturer.
China also appears to be considering exempting several categories from the 125% tariff on American products, including certain semiconductors, life-saving drugs and other medical products.
Xi's controls are somewhat limited by his nationalistic image and the need to be seen as defying what Beijing characterizes as American bullying. He is also constrained by the weakness of the Chinese economy, hampered by the property crisis and the lack of consumer reliability. The US represents a shrinking China's overall exports, but remains the largest market at just under 15%.
And with the growing frustration in many countries about flooding cheap Chinese exports, it is not easy to divert products from China, which were usually to the US, to other countries.
It is unclear what trade agreements will be met for both Trump and XI. China operated a trade surplus of nearly $300 billion with the US last year. The trade deal aimed at addressing imbalances was negotiated with China during the First Trump administration, some left because of a symbiotic pandemic.
