China Says Xi Speech Was "Not A Concession" To Trump, Denies Any Trade Talks Took Place

Last week, in an attempt to soothe jittery markets, Trump's chief economic advisor Larry Kudlow said the US and China would probably strike an agreement to stop tariffs from being imposed - though he admitted that talks hadn't started just yet.

Well, more than a week later, the two sides have apparently made zero progress toward a deal, because early Thursday, Beijing hit back with a pair of announcements that are sure to pop the bubble of trade-war optimism that has buoyed markets this week, according to CNBC.

First, China's Ministry of Commerce confirmed that there have not been any trade negotiations between the two sides at any level recently. It added that the liberalization measures touted by President Xi Jinping and PBOC Gov. Yi Gang pertained solely to China proactively opening up its market - not trade.

Xi

But in one of the strongest hints that China doesn't intend to surrender even an inch of ground to the US - though it recently ruled out currency manipulation as a means of retaliation - the MoC confirmed that China will not hesitate to retaliate should the US escalate its trade spat with Beijing.

When Xi said earlier this week that China intends to lower some import duties on automobiles, he wasn't making a concession to the US - rather, lowering autos tariffs was part of China's liberalization plan all along.

Following Xi's speech, President Trump tweeted that he was "thankful" for the president's kind words.

Trump had earlier criticized China in a tweet for maintaining its 25% import tariffs on cars compared with the US's 2.5% duties, touting this as an example of "stupid trade." 

MoC spokesman Gao Feng, speaking during his regular press briefing, said it's unreasonable to have tariffs be completely equal for both sides, and that there is no requirement for tariff equalization between two countries according to the rules of the WTO. Gao added that Beijing has been unwilling to negotiate because it believes Washington hasn't been sincere.

As the Financial Times said then, all of the measures unveiled in Xi's speech had been announced earlier, and Xi offered no new details about how they would be implemented.

Furthermore, as we noted at the time, sell-side analysts quickly seized on this, explaining that the market and the president were both misguided in their initial interpretation of Xi's remarks. For example, UBS explained that "President Xi's economic speech recycled the January Davos remarks." Citi echoed this sentiment, adding that while Xi's conciliatory speech had surprised the market, "a careful read of the original text in Chinese reveals that the speech was more a reiteration of existing commitments rather than new major initiatives or concessions to Trump."

Citi further added that "a 360 degree swing of attitude within one week is not improbable but highly unlikely". And that equity traders have behaved like a substantial concession had been made.

For now stocks - which were delighted to soar on the misreading of Xi's speech - are completely ignoring China's clarification of what really happened.

Comments

Cognitive Dissonance ne-tiger Thu, 04/12/2018 - 08:17 Permalink

I'm not sure if you understand how it works over in China.

In China a 'foreign' entity is not allowed to own a majority interest in any company/manufacturer physically located in China. (There are a few exceptions, but very few.) And in order to avoid the 25% surcharge on imported autos, foreign manufacturers must make the cars in China.

So a foreign entity must invest its capital in plants in China, but only own 49.9% of that investment and profit.

Gotta love the Chinese.

In reply to by ne-tiger

ne-tiger Cognitive Dissonance Thu, 04/12/2018 - 08:44 Permalink

GM has 50% in one of their joint ventures:

https://en.wikipedia.org/wiki/SAIC-GM

My point is US companies make much more money from China on cars than vice versa. The orange clown doesn't know shit twitting his shit every day.

But fucking tards will never understand this: it's those multinationals moved jobs out. Blaming everything on China's getting you no where.

In reply to by Cognitive Dissonance

Jack Oliver Thu, 04/12/2018 - 08:14 Permalink

Trump is an intellectual FUCKING nobody - completely controlled by intellectual FUCKING nobody’s !!! 

Whatever he does is bound to FAIL !! 

What we have is ‘Creative Destruction’ economics ( Greenspan mentioned it many times ) ! 

The Zio/US bankers and corporations want to control the world’s resources ! 

That dream is travelling away at FUCKING light speed !! 

Thanks to Russia and China - who will not have their futures determined by Wall St !! 

Davidduke2000 Thu, 04/12/2018 - 09:45 Permalink

China should cancel all imports and exports to the us and increase its exports to the current clients, this will hurt the us big time.

the us must be stopped from bullying everybody and now that a wider war is about to start, let's separate the men from the boys.

China will invade Taiwan and the us cannot do anything about it.

China is already siding with the Russians in Syria and it has few missiles frigates ready for action.

major shipments of arms to Hezbollah were sent in 2017 which includes manpads and high precision sniper rifles, bombs, mines and jamming equipments. 

snblitz Thu, 04/12/2018 - 14:03 Permalink

In voluntary exchange your are free to create any terms for your trade you wish.

If you think of trade as between sovereign nations than the nations can create the terms they wish.

For the most part, the countries of the world except the US, have created trade policies favorable to themselves.

Take this for example

  • Auto Import Tariff: US 2.5% vs EU 10%
  • Auto Import Tariff: US 2.5% vs China 18%+

It is not a "trade war" for the US to change this to:

  • Auto Import Tariff: US 10% vs EU 10%
  • Auto Import Tariff: US 18% vs China 18%+

and believe it or not it is not a "trade war" for the US to change it to

  • Auto Import Tariff: US 15% vs EU 10%
  • Auto Import Tariff: US 30% vs China 18%+

If either of the last 2 sets of trade policies represents a "trade war", then why doesn't the first set of policies represent a "trade war"?

For the most part, the US has been on the losing side of trade policy for 40+ years.

https://www.finitespaces.com/2018/02/15/taxes-and-trade-wars/

https://www.finitespaces.com/2018/03/20/protectionism-vs-why-buying-locally-makes-you-wealthy/

 
 

 

DFCtomm Thu, 04/12/2018 - 14:36 Permalink

The U.S. and China are married now, so you can't just sever the bond all at once. It has to be done bit by bit, or it will cause chaos in the U.S. since many staples won't be available to consumers. Demand concessions from China and then process those concessions and then demand some more in a year or two. Slowly chop at the parasitic umbilical cord.