China Briefing | Trump’s trade war with China is just his opening gambit

With Sinophobic elements in the White House seemingly intent on containing China’s economic rise, the next moves to throw Beijing off balance are likely to involve Taiwan and the South China Sea

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US President Donald Trump raises a presidential memorandum targeting what the White House termed ‘China's economic aggression’. Photo: EPA

Published: 10:18am, 14 Apr 2018Updated: 12:02pm, 14 Apr 2018

Could the US-China trade war be over before it even starts? The oxymoron may have a ring of truth to it if the latest remarks from the presidents of China and the United States are to be taken seriously.

In a speech billed in official media as a major policy announcement, broadcast live on national television and over the internet, Xi Jinping promised on Tuesday to widen foreign investors’ access to China’s financial and manufacturing sectors, lower trade tariffs, greatly expand imports, and strengthen the protection of intellectual property rights.

Throughout his speech of nearly 40 minutes, Xi did not mention China’s trade spats with the US or US President Donald Trump. But Xi appeared to have singled out some pledges to address Trump’s concerns.

A nasty US-China fight is inevitable. But it needn’t be terminal

In particular, he said China would relax the foreign ownership limit on automobile joint ventures (currently set at 50 per cent) as soon as possible and would “significantly lower” tariffs on imported vehicles. Xi’s pledge came less than a day after Trump complained in a tweet that China imposes a 25 per cent tariff on imported American cars, 10 times the tariff the US imposes on imported Chinese ones.

“Does that sound like free or fair trade,” Trump asked. “No, it sounds like STUPID TRADE – going on for years!”

Following Xi’s speech, Trump reacted favourably. He tweeted he was thankful of Xi’s promises on tariffs and automobile barriers as well as “his enlightenment on intellectual property and technology transfers”.