Breaking: China's President Promises to Drop Key Tariffs
Trade tensions between the U.S. and China showed some sign of de-escalation Tuesday with comments made by China’s president.
According to The Associated Press, President Xi Jinping was addressing attendees of a business conference when he offered what some analysts are interpreting as a conciliatory gesture toward his American counterpart.
Xi has been a central figure in President Donald Trump’s recent focus on international tariffs. China has been singled out for harsher trade penalties due to allegations of widespread intellectual property theft.
In announcing a strategy that could include up to $100 billion in increased tariffs, Trump made the case for such strong action.
“Now it’s $500 billion in deficits and a theft of $300 billion in intellectual property,” he said. “So you can’t have this.”
In the most recent round of threats, both nations have signaled a willingness to hike tariffs on the other by $50 billion.
As part of his generally optimistic address this week, however, Xi seemed to back down from that position.
He announced plans to “significantly lower” his nation’s tariff on automobiles, one industry China had previously threatened to include in a possible retaliatory move against the U.S.
In addition to reduced tariffs, he also announced plans to make it easier for foreign firms to become involved in the Chinese auto industry.
The speech also addressed the underlying issue of China’s record on intellectual property, with Xi promising to strengthen efforts to protect such rights.
Among his broad pledges on the topic was his promise to “protect the lawful ownership rights of foreign enterprises.”
Free trade was a major theme of the speech and included a promise to boost imports.
“China’s door of opening up will not be closed and will only open wider,” he said.
Though China had a net trade surplus of roughly $423 billion last year, Xi said that is not a sign of things to come for his nation.
“China does not seek a trade surplus,” he said. “We have a genuine desire to increase imports and achieve a greater balance of international payments.”
Furthermore, he expressed a commitment to foster more openness in the nation’s banking industry, which has been another common point of contention in U.S.-China relations.
The Dow Jones Industrial Average futures spiked just prior to the opening bell on Wall Street Tuesday. Similarly, positive indicators were seen in markets around the world.
Last week, Trump downplayed the negative market reaction the dispute had caused, describing it as a temporary phenomenon.
“We may take a hit and, you know what, ultimately we’re going to be much stronger for it,” he said.
While Xi did not mention either Trump or the ongoing trade dispute directly, the specific focus of his highly anticipated speech indicates he is willing to back down from previous threats related to U.S. trade.
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