China offers off-ramp
Beijing recognizes Trump's latest exemptions as a small step in the right direction
China’s Commerce Ministry just posted the following Q&A (all emphasis is mine)
Spokesperson of the Ministry of Commerce Answers Reporter’s Question Regarding the U.S. Exemption of Certain Products from “Reciprocal Tariffs”
Question:
The U.S. recently announced the exemption of certain products from “reciprocal tariffs.” What is China’s comment on this?
Answer:
On April 12 (U.S. Eastern Time), the U.S. released a memorandum exempting certain products—such as computers, smartphones, semiconductor manufacturing equipment, and integrated circuits—from “reciprocal tariffs.” China is currently assessing the impact of this move.
We have noted that this is the second adjustment the U.S. has made to the relevant policy, following its postponement on April 10 of imposing high “reciprocal tariffs” on certain trading partners. It should be said that this marks a small step by the U.S. toward correcting its erroneous unilateral practice of “reciprocal tariffs.”
The imposition of so-called “reciprocal tariffs” through a single administrative order not only runs counter to basic economic and market principles, but also disregards complementary cooperation and supply-demand relations between nations. Since their implementation on April 2, these “reciprocal tariffs” have not solved any of the U.S.’s own problems. On the contrary, they have seriously disrupted the international economic and trade order, gravely interfered with normal business operations and people’s daily consumption, and have proven to be harmful to others without benefiting the U.S. itself.
China’s position on China-U.S. economic and trade relations has been consistent: there are no winners in a trade war, and protectionism leads nowhere. As a Chinese proverb says, “Whoever tied the bell must untie it.” We urge the U.S. to heed the rational voices of the international community and its domestic stakeholders, to take a major step toward correcting its mistakes, to completely abolish the erroneous practice of “reciprocal tariffs”, and to return to the right path of resolving differences through mutual respect and equal dialogue.
So Beijing recognizes the tariff exemption as a “small step” and would like Washington to take a “major step,” which is to “completely abolish the erroneous practice of ‘reciprocal tariffs’,” and then show “mutual respect” and then there could be an “equal dialogue.”
In other words, China wants the U.S. to cut all the additional tariffs imposed since the so-called “Liberation Day.”
It just happens that Bill Ackman, apparently an influential investor, just - two hours ago - called for Trump “to pause the China tariffs for 90 days and reduce them temporarily to 10%.”
Now, 10% is not “completely abolish the erroneous practice of ‘reciprocal tariffs’”, which would be 0%.
But it’s just 10 goddamn percentage points - can they find a way to meet there?
Let me note two points:
While vowing “never yield,” Beijing publicly recognizes the “small step” taken by Washington on a Sunday despite massive tariffs in place, showing it is indeed interested in finding a way out.
I should also note that the Chinese readout set the off-ramp as ONLY for the U.S. to drop the “reciprocal tariffs” imposed on the so-called “Liberation Day,” which is surprisingly conciliatory. That’s because BEFORE that, Trump imposed 20% tariffs on Chinese exports, citing fentanyl.
