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Business Standard
06-06-2025
- Business
- Business Standard
Xi's message to Trump: Rein in the hawks trying to derail the truce
By Daisuke Wakabayashi and Berry Wang During his phone call with President Trump, Xi Jinping leaned on a maritime analogy to try to salvage the fragile trade truce that seemed to be fracturing from a series of escalating punitive economic measures. The Chinese leader compared the relationship between the United States and China to a large ship, with the two men serving as powerful captains holding the rudder firmly to maintain the proper course. The analogy also came with a warning. Do not let others steer the ship off course and jeopardize the relationship. For weeks, the White House seemed to openly lobby for a direct conversation between the two leaders — a point underscored by China stating that Mr. Xi had agreed to the call on Thursday at Mr. Trump's behest. With the United States ratcheting up the pressure on Beijing with technology and other restrictions, China may have acquiesced partly out of concern in Beijing that the China hawks in Mr. Trump's administration were succeeding in undermining the truce, analysts said. 'China is quite concerned about this,' said Wu Xinbo, the dean of the Institute of International Studies at Fudan University in Shanghai. 'There has to be communication at the leadership level to stop the momentum of the rapid deterioration of the US-China relationship.' The call between Mr. Trump and Mr. Xi came at an especially precarious moment. Less than one month after the two countries agreed to roll back punishing tariffs for 90 days and negotiate a trade deal, the truce seemed to be crumbling. Want to stay updated on what's happening in China? Sign up for Your Places: Global Update, and we'll send our latest coverage to your inbox. China continued to throttle the exports of rare earth minerals, throwing the supply chains of US manufacturers into disarray. In response, the United States imposed restrictions on the sale of chip design software to China. It barred American companies from using artificial intelligence chips from the Chinese technology giant Huawei. It suspended some sales to China of components and software used in jet engines. In addition, the Trump administration proposed a plan to revoke visas for some Chinese students. Yun Sun, director of the China program at the Stimson Center, a Washington think tank, said China saw an opportunity to use 'top leader diplomacy' to send this message to Mr. Trump directly: 'Hold off your hawks. The responsibility is on the top leaders. If you want a good relationship, don't let your cabinet members or team run freely with their crazy ideas.' Mr. Wu, of Fudan University, said the measures taken by the United States since last month's trade agreement demonstrated how different members of the Trump administration were pursuing their own agendas, pointing to the Commerce Department imposing export controls and the State Department saying it would revoke visas. China has maintained a tough posture, refusing to back down in response to Mr. Trump's tariffs, unlike other countries that have treaded carefully so as not to antagonize the United States. In April, before the truce, Beijing engaged in a tit-for-tat tariff escalation, raising import duties on American goods to 125 percent after the United States pushed its taxes on Chinese imports to 145 percent. China appears ready to withstand the hardship from a prolonged trade war with the United States, with the economic levers to make life equally difficult for Americans and test Mr. Trump's resolve. At the same time, China has its own economic vulnerabilities and probably wants to avoid a full decoupling with the United States. The country's economy is struggling to rebound from a real estate crisis. Already grappling with high levels of youth unemployment, China's manufacturing sector, a key provider of jobs, could bear the brunt of a trade war that closes off the US market and escalates fears in the rest of the world about the flood of inexpensive Chinese imports. China had resisted overtures from Mr. Trump for direct engagement with Mr. Xi for months, reflecting Beijing's cautious approach. Mr. Xi may have accepted such a call now to buy his government more time to prepare for a prolonged fight. The two leaders seemed to take away different things from the call. In a post on social media, Mr. Trump implied that they had resolved the dispute over the export of critical minerals, but China's readout mentioned no such thing. China's official summary included a warning from Mr. Xi to Mr. Trump that the United States should handle the Taiwan issue 'prudently' to prevent a dangerous conflict, while Mr. Trump characterized the call as being focused almost entirely on trade. China has responded angrily to remarks by Defense Secretary Pete Hegseth last week urging America's Asian allies to work with the United States to deter China from trying to seize Taiwan, a self-governed island democracy. Mr. Trump and Mr. Xi did agree that both sides would work once again to implement the agreement from last month and that further talks for a more permanent deal would proceed. Mr. Trump also said the talks with China will now include Commerce Secretary Howard Lutnick, in addition to Treasury Secretary Scott Bessent and Jamieson Greer, the US Trade Representative. And Mr. Xi urged the United States to withdraw 'negative measures' against China. To some extent, China could claim a win from the call, as Mr. Trump seemed to soften his administration's stance on Chinese student visas. Last week, Secretary of State Marco Rubio, one of Mr. Trump's hawkish advisers, said the United States would 'aggressively' revoke the visas of Chinese students, specifically those associated with the Communist Party or studying in critical fields. But Mr. Trump, on Thursday, rolled out the red carpet. 'Chinese students are coming. No problem,' Mr. Trump said during a briefing from the Oval Office. 'It's our honor to have them.' Before the call, Mr. Trump wrote on social media that Mr. Xi was 'VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH.' In his summary of the call, Mr. Trump sounded gracious, noting that the two leaders had invited each other to visit their respective countries. Scott Kennedy, a senior adviser at the Center for Strategic and International Studies, a Washington research group, said the call could signal that the two countries had shifted into a 'fragile equilibrium' after having demonstrated their willingness to turn up the pressure on each other. Mr. Kennedy noted that China is the only country to win concessions from the United States since Mr. Trump launched his global 'reciprocal' tariff campaign in April. 'I think they feel they probably figured Trump out and that this is a manageable relationship,' he said. 'If this agreement falls apart again, they know what buttons to push to make the Trump administration take notice.'
Boston Globe
10-04-2025
- Business
- Boston Globe
For US and China, a risky game of chicken with no off-ramp in sight
Advertisement China's new tariffs, which will take effect Thursday, mean all American goods shipped to China will face an additional 84 percent import tax. On Wednesday afternoon, Trump retaliated, raising tariffs on Chinese exports to 125 percent. Both figures would have been unimaginable a few weeks ago. With China's top leader, Xi Jinping, and Trump locked in a game of chicken -- each unwilling to risk looking weak by making a concession -- the trade fight could spiral even further out of control, inflaming tensions over other areas of competition such as technology and the fate of Taiwan, the self-governing island claimed by Beijing. Trump's bare-knuckle tactics make him a singular force in US politics. But in Xi, he faces a hardened opponent who survived the turmoil of China's late-20th-century political purges, and who views the United States' competitive tactics as ultimately aimed at subverting the ruling Communist Party's legitimacy. Advertisement 'Trump has never gone into a back-alley brawl where the other side is willing to brawl and use the same kind of tactics as him,' said Scott Kennedy, a senior adviser at the Center for Strategic and International Studies, a Washington think tank. 'For China, this is about their sovereignty. This is about the Communist Party's hold on power. For Trump, it might just be a political campaign.' China's economy, which was already in a vulnerable state because of a property crisis, now faces the specter of a global recession and a devastating slowdown in trade, its defining industry and main driver of growth. In a sign of Beijing's growing unease, Chinese censors appeared to be blocking social media searches of hashtags that referred to the number 104, as in the size of the US tariffs before Trump's latest announcement. 'This is a huge shock to the China-US economic relationship, like an earthquake,' Wu Xinbo, dean of the Institute of International Studies at Fudan University in Shanghai, said of the tariffs imposed Wednesday. 'It remains to be seen if this is temporary turmoil or a long-term unavoidable trend.' To be sure, a US-China decoupling is still far from becoming reality. Chinese and American companies such as TikTok and Starbucks are both still entrenched in each other's countries. And Chinese banks remain hitched to the US dollar-dominated financial system. China and the United States are still at the brinkmanship stage, Kennedy said, each trying to force the other to offer a deal on bended knee. But the spat could become more dangerous if the Trump administration goes after Chinese financial institutions -- for instance, by rescinding the licenses of Chinese banks in the United States or booting them off the international payments system SWIFT. Advertisement In pushing back against Trump's moves, Beijing has cast itself as a victim of unfair US trade practices and protectionism. The irony is that China has done the same, if not worse, over the decades by limiting foreign investment and subsidizing Chinese firms. Xi himself has made no direct comment about the latest US tariffs. On Wednesday afternoon, though, shortly after they took effect, Chinese state media announced that he gave a speech in a meeting with the other six members of the Politburo Standing Committee, the apex of power in China, as well as other top officials. In it, Xi called on officials to bolster ties with China's neighbors and 'strengthen industrial and supply chain cooperation.' A spokesperson for China's Foreign Ministry, Lin Jian, did address the new tariffs, saying Wednesday that China would 'never accept such arrogant and bullying behavior' and would 'definitely retaliate.' The new tariffs were announced hours later. Any fracture between the Chinese and American economies will be felt across the world. Business was the bedrock of the bilateral relationship for nearly five decades. Without it, their engagement on other global issues, such as security, climate change, and future pandemics and financial crises, would likely stall. China has tried to downplay its vulnerability to the economic chaos unleashed by the Trump administration. It says it has reduced its reliance on US markets for its exports and that its economy is getting more self-sufficient, especially when it comes to developing homegrown technologies. Advertisement But that papers over serious problems in the Chinese economy, which has been largely stagnant because of a collapse in the property market. Moreover, Trump's assault on the global trading system, which includes targeting countries such as Vietnam where Chinese companies had opened factories to circumvent earlier US tariffs, strikes at the core of one of China's only current economic bright spots. The fallout from the trade disruption will hurt the United States, which relies on China for all sorts of manufactured goods, but will do more damage to China, said Wang Yuesheng, director of the Institute of International Economics at Peking University. 'The impact on China is mainly that Chinese products have nowhere to go,' Wang said. That will ravage export-oriented companies making things such as furniture, clothing, toys, and home appliances along China's eastern seaboard, which largely exist to serve American consumers. Beijing's strategy now is to push back at the United States and hope Trump succumbs to domestic pressure to reverse course, said Evan Medeiros, a professor of Asian studies at Georgetown University who served as an Asia adviser to former president Barack Obama. 'They know that if they give in to pressure they will get more pressure,' he said. 'They will resist it with the belief that China can withstand more pain than they can.' This article originally appeared in
New York Times
31-03-2025
- Business
- New York Times
Why China Is Wary of a Trump-Xi Summit
In Washington, President Trump has said he is willing to meet with Xi Jinping, China's top leader. In Beijing, Chinese officials and experts agree that a meeting between the heads of state must precede any broad reset of relations with the United States amid Mr. Trump's aggressive approach to trade and foreign policy. But arranging a meeting is already proving slow and difficult. Senator Steve Daines, Republican of Montana, who came to Beijing this month as an informal representative of Mr. Trump, said one of the main goals for his trip was to lay the groundwork for a presidential summit. After meeting China's vice premier for economic policy, He Lifeng, Mr. Daines said in an interview that he believed a summit would be held by the end of the year — a slower pace than many in Washington had expected. On the Chinese side, Communist Party officials and government advisers said in interviews over the past week that they were taken aback by Mr. Trump's rapid-fire moves on tariffs, Greenland, Ukraine and other issues. They have been startled by his hostile treatment in public of foreign leaders like President Volodymyr Zelensky of Ukraine. As a result, they are cautious about scheduling a summit. Tensions between Beijing and Washington could worsen this week, when a new set of Mr. Trump's tariffs is set to take effect in a potentially broad limit on trade. Chinese officials are reluctant to schedule a summit until the two sides have negotiated details in advance, including a deal between the two countries that would endure for the rest of Mr. Trump's term. The Trump administration has not yet specified what an acceptable deal might be. 'The Chinese side believes the Trump administration has not really figured out what is the way to deal with China and make a deal,' Wu Xinbo, the dean of the Institute of International Studies at Fudan University in Shanghai, said on Friday. 'The Chinese side would like to wait for a more constructive and sensible signal from the administration,' said Mr. Wu, who was part of an unofficial delegation of retired senior Chinese officials and academic advisers who met with American officials and experts last month in the United States. Two other Chinese experts familiar with discussions between the United States and China mentioned the possibility of the two leaders meeting in New York City around the time of the United Nations General Assembly in September. But it remains unclear whether their governments can make enough progress by then, said the experts, who were not authorized to comment. In a faxed reply to questions about the possible timing of a summit, the spokesperson's office at China's Ministry of Foreign Affairs said that it had 'no information to release at this time.' Mr. He held a video call on Wednesday with Jamieson Greer, the United States trade representative. Mr. He expressed concern about Mr. Trump's imposition of two rounds of 10 percent tariffs on Chinese goods so far this year, according to a Chinese statement after the meeting. China has already retaliated against Mr. Trump's initial tariffs on Chinese goods by imposing extra tariffs on imports of American fossil fuels and agricultural products. Senator Daines's trip was only the second congressional visit to China in more than five years. While members of Congress usually travel in groups to foreign countries, no other senators or representatives chose to accompany Mr. Daines to Beijing. Beijing has not rewarded the American side for Mr. Daines's outreach. In an unannounced move on March 16, China, the world's largest importer of beef, halted practically all imports of American beef. It had previously been buying $1 billion a year of American beef, much of it from Mr. Daines's state. Beijing granted five-year licenses in March 2020 to several hundred American slaughterhouses to export beef to China. That came after years of intermittent interruptions in shipments because of trade frictions and China's purported concerns over mad cow disease in the United States, although international animal health experts found the beef to be safe. China's own beef industry has also long opposed imports. The recent expiration of the export licenses has in effect closed the Chinese market, with shipments plummeting to 54 tons in the week after the licenses expired, from about 2,000 tons a week. Beijing's decision not to renew the slaughterhouse licenses put pressure on Mr. Daines. 'The effects of this decision on U.S. ranchers can hardly be overstated, which is why I raised this issue directly with Vice Premier He Lifeng,' Mr. Daines said, adding that he was 'calling on China to reverse this decision.' The spokesperson's office at China's foreign ministry said that it was 'not aware' of the slaughterhouse license dispute.
