After taking a beating, China is desperate, looking for a quick resolution to the trade war that has seen them pummeled by a U.S. President who was finally bold enough to challenge the Chinese and their unfair trade practices.
China signaled on Monday it was now seeking a “calm” end to its ongoing trade war with the U.S., as Asian markets crumbled and China’s currency plummeted to an 11-year low following the latest tariffs on $550 billion in Chinese goods announced last Friday by the Trump administration.
Trump said Monday that officials from China called U.S. officials and expressed interest to “get back to the table,” The Wall Street Journal reported. He called the discussions a “very positive development.”
“They want to make a deal. That’s a great thing,” he said.
News of the possible opening in negotiations came shortly after President Trump threatened to declare a national emergency that would result in American businesses freezing their relationships with China. Trump’s tariff barrage on Friday was a response to China imposing its own retaliatory tariffs on $75 billion in U.S. goods.
At the Group of Seven summit in France on Sunday, White House officials rejected suggestions the president was wavering and insisted that his only regret was not implementing even more tariffs on China. Trump wrote on Twitter that world leaders at the G-7 were “laughing” at all the inaccurate media coverage of the gathering.
In response, Chinese Vice Premier Liu He told a state-controlled newspaper on Monday that “China is willing to resolve its trade dispute with the United States through calm negotiations and resolutely opposes the escalation of the conflict,” Reuters first reported, citing a transcript of his remarks provided by the Chinese government. Liu is China’s top trade negotiator.
Speaking at a technology conference in China, Liu added: “We believe that the escalation of the trade war is not beneficial for China, the United States, nor to the interests of the people of the world.”
“We welcome enterprises from all over the world, including the United States, to invest and operate in China,” Liu said. “We will continue to create a good investment environment, protect intellectual property rights, promote the development of smart intelligent industries with our market open, resolutely oppose technological blockades and protectionism, and strive to protect the completeness of the supply chain.”
The yuan also slipped to 7.1487 to the dollar, weeks after the Treasury Department formally designated China a currency manipulator. The Treasury Department said it will work with the International Monetary Fund to try to rectify the “unfair competitive advantage created by China’s latest actions.”
“The gloves are coming off on both sides and as such yuan depreciation is an obvious cushion against US tariffs,” Mitul Kotecha, an economist at Toronto-Dominion Bank, told Bloomberg News.
There are several reasons why China’s central bank would want to allow the yuan to drop, including to help struggling local exporters who want their products to be less expensive for international purchasers. People’s Bank of China Governor Yi Gang, however, has insisted China does not “engage in competitive devaluation.”
On Sunday, Treasury Secretary Steven Mnuchin told reporters that if “China would agree to a fair and balanced relationship, we would sign that deal in a second.”
The market is now dominated by fears of a portending U.S. recession, although the American economy is actually holding up, and much of the U.S. economy is made up of consumption, Innes said. If interest rates come down, he added, consumer spending is likely to go up, working as a buffer for the economy.
“What the market’s really waiting for is for them to drop interest rates,” Innes said. “Right now, we are still sitting on that uncertainty.”
Sen. Lindsey Graham meanwhile, pointed out the hypocrisy, saying that Dems who have been complaining about the Beijing’s policies for years while doing nothing, should be praising President Trump rather than criticizing his every move.
“Every Democrat and every Republican of note has said China cheats,” Graham said on CBS News’ “Face the Nation.” “The Democrats for years have been claiming that China should be stood up to, now Trump is and we’ve just got to accept the pain that comes with standing up to China.”