A key focal point of President Donald Trump’s time in office thus far is his willingness to take on China in a trade war when no other political leader over the past few decades has done so, and that trade war escalated dramatically on Friday as both China and the United States increased tariffs against each other on imported goods.
The retaliatory tariff hikes sent the various global markets into a downward spiral as threats of additional escalation were lobbed back and forth. However, following a significant decline in Asian markets on Monday, China appears to have reached out with an olive branch to end the ongoing trade war in what has the potential to be a big win for Trump.
China calls for de-escalation
Fox News reported that U.S. markets took a 600-point dive on Friday after China announced an increased tariff on roughly $75 billion worth of American goods.
President Trump responded angrily with a series of sharp tweets on the matter, and following the close of the markets for the week, announced a hike in U.S. tariffs on approximately $550 billion worth of Chinese goods, news that proved devastating to Asian markets and China’s already devalued currency at the open of business on Monday.
That development may have been enough to garner China’s full attention and prove that Trump isn’t bluffing in the trade dispute, as a top Chinese official stated publicly that his country was ready to resume “calm negotiations” and de-escalation to the trade war and tit-for-tat tariff hikes.
Reuters reported, citing a state-run Chinese newspaper, that top Chinese trade negotiator Liu He, while speaking at a tech conference in China, essentially said: “China is willing to resolve its trade dispute with the United States through calm negotiations and resolutely opposes the escalation of the conflict.”
According to Fox News, Trump was pleased with the report that China was ready to “get back to the table” to negotiate and called what transpired a “very positive development.”
“I think we’re going to have a deal,” Trump said to reporters on Monday. “They want to make a deal. That’s a great thing.”
In addition to the increased tariffs, Trump also floated the idea over the weekend, while at the G7 economic summit in France, that he was considering declaring a national emergency that would cause American-owned businesses to freeze all activities and relationships with China, a move that would undoubtedly hurt the U.S. economy but could be exponentially more damaging to the Chinese economy.
On top of that, Trump and his administration also made it clear that, as far as any “regrets” or “second thoughts” the president may have had about the trade war with China, they were only that perhaps he hadn’t been aggressive enough or hiked tariffs to sufficient levels to quickly achieve the fair and balanced playing field for bilateral trade between the rival nations.
Backing words with action
In other words, China has received the message loud and clear that President Trump is not bluffing, while simultaneously bearing in mind the mutually destructive consequences the trade war could bring.
To be sure, it is difficult to take China’s word on much of anything and there are countless other factors at play, but signs increasingly indicate that Trump is gaining an upper hand over China in this fight.