China Xi Pledges To Lower Tariffs As Trump Takes Victory Lapse On Twitter
China’s President Xi Jinping announced moves yesterday to open up China to foreign investment and free trade. Xi delivered his comments at the Boao Forum for Asia.
Xi promised to expand imports and lower tariffs on automobiles. Xi said, “This year we will significantly lower the import tariffs for vehicles and also reduce import tariffs for some other products.”
The President said China was not interested in a trade surplus and will fully commit to intellectual property protections. Xi said, “We will strengthen protection of intellectual property rights or IPR.”
The Chinese President stressed that these efforts are in China’s best interest. He believes imports are required by the Chinese people and will help improve their quality of life.
Xi did not mention an evolving trade dispute with the United States or US President Donald Trump’s threat to impose new tariffs on $150 billion of Chinese goods.
Xi’s comments did not suggest a major policy shift in Chinese trade practice. Many of the initiatives outlined were previously proposed. Still, Xi’s words might provide President Trump an unpopular, trade war exit strategy. Trump complained recently about a 25% Chinese tariff on automobile imports.
Trump tweeted on Monday, “When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like a free or fair trade? No, it sounds like STUPID TRADE – going on for years!”
The US President followed up with an appreciative tweet yesterday that will likely precede a media blitz, a victory lap.
Very thankful for President Xi of China’s kind words on tariffs and automobile barriers…also, his enlightenment on intellectual property and technology transfers. We will make great progress together!
— Donald J. Trump (@realDonaldTrump) April 10, 2018
US-China trade relations have been strained for the past several weeks. Trump unexpectedly announced and imposed tariffs on Chinese steel and aluminum imports. He then ordered the US Trade Representative to review tariff increases for an additional $50 billion of Chinese goods. The Chinese retaliated by threatening tariffs on $3 billion of US goods followed shortly thereafter with a threat of $50 billion in US agricultural products.
Xi’s speech and Trump’s tweets may represent a ratcheting down of tensions although no concrete solutions have been implemented.
In his speech Xi also suggested China is the real victim of unfair, global trade practices. Xi said, “We hope developed countries will stop imposing restrictions on normal and reasonable trade of high tech products and relax export controls on such trader with China.”
On Tuesday China filed a complaint with the World Trade Organization. The Chinese challenged the legality of Trump’s steel and aluminum tariffs. China requested a 60-day moratorium on the tariffs that would include consultations with the United States.
Xi also announced that China will host the “first China International Import Export in Shanghai” in November. Xi said the annual event will be a major policy initiative to open up the Chinese market. Xi invited “friends from around the world” to participate.