Victory: China's Pres. Caves, Hands Trump Massive Win on Trade
In remarks widely seen as a victory on trade for the Trump administration, Chinese President Xi Jinping said Tuesday that he would work to cut tariffs on foreign automobiles and improve protections for intellectual property holders, The Associated Press reported.
The remarks came at the Boao Forum on the island of Hainan in the South China Sea, where China’s president also promised to open its financial institutions to foreign investors and work on “regional economic integration,” the South China Morning Post said.
The remarks come less than a week after President Trump floated the idea of tariffs on another round of Chinese goods, this time affecting $100 billion worth of Chinese imports to the United States.
During the speech, Xi tried to paint his China as one of openness and free trade, even though the AP noted that it was the “most-closed major economy” in the world.
“China’s door of opening up will not be closed and will only open wider,” Xi told the audience at the economic forum.
“We will significantly lower the import tariffs for vehicles, and also reduce import tariffs for some other products,” Xi said. “We will work hard to import more products that are competitive and needed for our people, while taking more efforts to join the WTO product procurement agreement.”
Xi also committed China to encouraging “normal technological exchange” and pledged to “protect the lawful ownership rights of foreign enterprises.”
He also urged foreign powers to “stop” tariffs on high tech Chinese exports, a clear reference to the Trump administration’s levying of tariffs on $50 billion in certain technology products as a result of China’s practices regarding intellectual property theft.
Xi tried to paint his country’s territorial disputes with his neighbors in a friendly light.
“We will not bully our neighbors,” Xi said.
“Cold war thinking and zero-sum games are increasingly obsolete,” he said. “Arrogance or self-righteousness can only bump into walls at every turn.”
“Ours is a nation that has courageously engaged in self-revolution and self-reform … and kept overcoming systematic obstacles,” the president added.
Well, whatever. One does not expect the president of China to speak with blunt-force honesty in front of the world at an economic forum hosted in his own country. That being said, everything Xi said pretty much lined up with America’s demands for ending the burgeoning trade war between the U.S. and China.
The two major points that Americans ought to take away was the promise to lower tariffs on automobiles — which the Chinese just raised on American imports last week — and to protect intellectual property.
The former is no small victory for Trump; the Chinese tariffs implemented in response to the Trump administration’s trade penalties on China were designed to inflict damage on the president and the Republican Party where it hurts — their base. Farmers and blue-collar workers were the hardest by the tariffs, and one could easily surmise that the tariffs were designed to influence the 2018 midterm elections.
If the protections on intellectual property aren’t actually just for show, that could be even bigger. Commerce Secretary Wilbur Ross has estimated that China’s intellectual property theft may cost America up to $600 billion a year. Beijing’s loose protections on intellectual property are what led to the tariff showdown in the first place, after all.
Don’t overlook Xi’s promise to open up China’s financial market to foreign investors, either. Whether he does it or not is another thing (China has promised this in the past without result), but it’s an encouraging sign that the Chinese are willing to come to the table on trade.
It remains to be seen what comes of this. However, Xi’s speech — happening while most of America was asleep and after an eventful day where Syria and the Michael Cohen raid were very much in the news — was undoubtedly a great thing for the Trump administration to hear.
While the Chinese leader chastised the administration for its decision to enact trade penalties, the tone was primarily one of conciliation, no matter how he tried to mask it. It’s clear that China is willing to come to the table this time. What comes of it is anyone’s guess, but it’s a positive sign for the administration that its policies are working.
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