SHIFTING STRATEGIES
Analysts say China’s latest response to Trump’s tariff moves is a calculated shift from its approach in 2018, when Beijing imposed retaliatory tariffs after Washington fired the first shot.
A full-blown trade war ensued, hurting consumers and businesses in and beyond the world’s top two economies, with its impact still lingering today.
This time, China has held off, although authorities have warned that “corresponding countermeasures” will be taken to safeguard the country’s rights and interests.
Roberts from the Atlantic Council said Beijing is trying to avoid direct escalation with the US, especially as it contends with domestic economic challenges like weak consumer spending and local debt concerns.
“Exports and investment can only drive growth so far … I think it’s actually a sign that China does not want this to flare up even more,” said Roberts. “They are not eager to be in a cold war with the US right now.”
ISEAS-Yusof Ishak Institute’s Olson noted that going down the WTO route and delaying retaliation is a “tactical move” that allows China to assess how Trump’s tariff actions play out with Canada and Mexico.
At the same time, it affords Beijing some wiggle room in potentially negotiating a deal with Trump, and averting the worst of US tariffs, experts note.
Days before Trump took office, he had what he described as a “good, friendly” phone call with Xi, who the businessman-turned-president invited to his inauguration.
In an interview with Fox News on Jan 23, Trump said “I can do that” when asked if he could make a deal with China over fair trade practices. The US leader then followed up by saying he would “rather not” use tariffs against China, but called it (tariffs) a “tremendous power.”
Speaking to reporters at the Oval Office on Feb 3, Trump said the planned 10 per cent blanket tariffs on Chinese goods would just be “an opening salvo”.
“If we can’t make a deal with China, then the tariffs would be very, very substantial,” he said.
Against this backdrop, the anticipated conversation between Trump and Xi in the coming days will be closely watched.
