China signals opening for trade talks with Trump

Beijing/Washington — The US has approached China for talks on President Donald Trump’s 145% tariffs, a social media account affiliated with Chinese state media said on Thursday, potentially signalling Beijing’s openness to negotiations.

“The US has proactively reached out to China through multiple channels, hoping to hold discussions on the tariff issue,” Yuyuan Tantian said in a post published on its official Weibo social media account, citing anonymous sources.

US officials, including treasury secretary Scott Bessent and White House economic adviser Kevin Hassett, also expressed hope for progress in easing trade tensions.

Hassett told CNBC there have been “loose discussions all over both governments” about the tariffs, and China’s easing of duties on some US goods last week was a sign of progress.

Beijing says the tariffs are tantamount to bullying and cannot stop the rise of the world’s second-largest economy.It has also  rallied public and global condemnation of the import curbs, showing no interest in a reprieve.

Besides leveraging its propaganda machine to hit back at the duties, China has compiled a list of US-made products it will exempt from its retaliatory 125% tariffs — including select pharmaceuticals, microchips and jet engines — to ease the duties' impact.

Bessent mentioned no specific talks during a Fox Business Network interview, but said that tariffs of 145% by the US and 125% on the Chinese side needed to be de-escalated for negotiations to begin.

“I am confident that the Chinese will want to reach a deal. And as I said, this is going to be a multistep process,” Bessent said. “First, we need to de-escalate, and then over time, we will start focusing on a larger trade deal.”

Bessent said that among the first steps would be to revisit China’s failure to make good on purchase commitments for American goods made as part of Trump’s 2020 deal that ended his first-term trade war with Beijing.

That deal called for China to increase purchases of US manufactured and agricultural products and services by $200bn annually over two years, but the Covid pandemic hit just after its signing.

Bessent also said that “insidious” nontariff trade barriers and intellectual property theft also would be part of negotiations with China. “Everything is on the table for the economic relationship,” he added.

Tariffs too high

Once Trump’s tariffs topped 35% they became prohibitively high for Chinese exporters.

Nomura Securities said that about 16-million Chinese could lose their jobs once the long-term ripple effects of a 50% drop in the country’s exports to the US work their way through the economy.

Bessent said the pressure was on China because it is more dependent on exports to the US than vice versa.

“They sell us about five times more than we sell them. So their factories are closing down as we speak,” Bessent said. “We’re going into the holiday season. Orders are placed for that now. So if those orders aren’t placed, it could be devastating for the Chinese.”

Still, Beijing has been adamant it will stand and fight rather than rush to the negotiation table, with the foreign ministry likening yielding to Trump’s tariffs to “drinking poison”.

“Before the US takes any substantive action, China has no need to engage in talks with the US,” the post from Yuyuan Tantian added, citing anonymous experts.

“However, if the US wishes to initiate contact, there is no harm at this stage for China to engage. China needs to observe closely, even force out the US’s true intentions, to maintain the initiative in both negotiation and confrontation,” it added.

Trump said in a US media interview published last Friday that his administration was talking with China to reach a tariff deal and that Chinese President Xi Jinping had called him. Beijing last week repeatedly denied such talks were taking place, accusing Washington of “misleading the public”.

No known talks

“As far as I know, there have been no consultations or negotiations between China and the US on tariffs,” Guo Jiakun, a Chinese foreign ministry spokesperson, said on Wednesday. 

Chinese officials have consistently stated that Beijing is open to talks, with the caveat that “dialogue and negotiation must be based on equality, respect and mutual benefit”.

Yuyuan Tantian is not among China’s most authoritative state media outlets. It is controlled by China Central Television which is run by Beijing. The Global Times, which is owned by the newspaper of the governing Communist Party, People's Daily, has often been first to report the government’s next steps in trade disagreements over the past few years.

Trump said on Wednesday he believed there was a “very good chance” his administration could do a deal with China, hours after Xi called on officials to take action to adjust to changes in the international environment, without explicitly mentioning the US.

Reuters