Why China Won’t Retaliate…

China indicated that it wouldn’t immediately retaliate against the latest U.S. tariff increase announced by President Donald Trump last week, emphasizing the need to discuss ways to deescalate the trade war between the world’s two largest economies.

“China has ample means for retaliation, but thinks the question that should be discussed now is about removing the new tariffs to prevent escalation of the trade war,” Ministry of Commerce spokesman Gao Feng told reporters in Beijing on Thursday. “China is lodging solemn representations with the U.S. on the matter.”

When asked if that meant China wouldn’t retaliate at all for the latest escalation by the U.S., Gao didn’t elaborate but repeated the same comments. China has hit back against each previous tariff increase by the U.S., so not responding in kind this time may signal a change in strategy.

Stocks across Asia pared losses and European stocks turned higher with U.S. equity futures as investors interpreted the comments as an olive branch from Beijing aimed at getting talks back on track. Gao said that both sides are discussing the previously announced trip in September by Chinese negotiators to Washington.

Gao’s remarks came amid signs China’s economy slowed further in August as weak domestic conditions. The downshifting is evident in a Bloomberg Economics gauge aggregating the earliest available indicators from financial markets and businesses.

The U.S.-China Tariffs

The U.S. announced new tariff rates earlier this month on $300 billion of Chinese goods that will come into effect in September and December. Beijing then retaliated last week, announcing its own higher import taxes.

That prompted a reaction from Trump, who tweeted that existing 25% tariffs on some $250 billion in imports from China would rise to 30% come Oct. 1, the 70th anniversary of the founding of the People’s Republic of China. He also lifted planned levies on $300 billion in Chinese goods due on Sept. 1 and Dec. 15 even higher.

“Escalation of the trade war won’t benefit China, nor the U.S., nor the world,” Gao said. “The most important thing is to create the necessary conditions for continuing negotiations.”

Gao also repeated Vice Premier Liu He’s comments on Monday that China is “willing to solve the problem through consultation and cooperation with a calm attitude, but firmly opposes escalation of trade war.”

If Chinese officials go to the U.S. for talks next month, the two sides should work together to create conditions for talks to progress, Gao said. Both sides are currently discussing the trip, and information on that will be released in a timely manner when available, according to Gao, indicating that the schedule isn’t set yet.

Treasury Secretary Steven Mnuchin said Wednesday that U.S. trade officials expect Chinese negotiators to visit Washington, but wouldn’t say whether the September meeting would take place.

When asked about Trump’s claims that China had called over the weekend to resume trade talks, Gao said the two teams have been in “effective communications,” but he had no more details to reveal.

“There are all kinds of rumors flying around right now. We will clarify the facts regarding trade and let the public know the truth.”

— With assistance by James Mayger, and Miao Han

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6 comments

  1. What I have a hard time figuring out is where or who is doing these damned Polls and/or getting their Made Up Figures that President Trump is failing in ” their ” Polls. ” WE THE PEOPLE ” know better yet their are some Fools that just do not seem to get the ” CORRECT INFORMATION ” about President Trumps ” Positive Stature ” . I am a Trump Supporter and voted for him in the Last Primary and also in the Presidential Election and plan to do so again. When he gave us that first Tax Cut , it automatically gave me back over $ 1,000.00 Dollars in Take Home Pay. Ever since President Trump was Elected, our Economy has gone up and all things needed to survive , are still affordable and getting BETTER EVERY DAY. Somebody needs to find out just , WHO , is making these ” FALSE FIGURES AND POLLS ” available to those ” FAKE NEWS BASTARDS ” so they can maybe be shut down or Prosecuted for LYING to ” WE THE PEOPLE ” . TSgt., USAF Vietnam Vet. , Retired.

  2. China can’t win and they know it! Trump/Pence 2020 landslide!

  3. It’s about time we held ground against china. Their bullies in their own right that need to be taken down. The problem their really experiencing is Bad advice from people like kerry. Two faced polititions who think their going to receive a big lump of money for selling this country out.democrats are too stupid to know when their being played.

  4. The outcome can be simple and swift. All the tariffs will be removed if China will merely stop the technical thievery and play fair.

  5. If your past and present administrations had invested in your own country instead of spending the trillions on weapons and trying to rule the world you would be in a good position. All your politicians accept money from multi-nationals to lobby for them even if their products they produce are detrimental to Americans and the rest of the world. Does having over 800 US bases over the world make Americans feel good and safer or do you ever consider that selling weapons to factions and training the use of them is good for peace in the world, to Saudi for example.
    The US has involved itself in the internal problem of Hong Kong, how would you like if the Chinese fanned the flames of civil war between the right and left divide. So I suggest you all get a life or build a Trump wall around your whole country so the world can live in peace.

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