China readies for trade tensions with U.S.; won’t negotiate from weakness

The leaders of both Canada and Mexico got on the phone with U.S. President Donald Trump this past week to seek solutions after he slapped tariffs on their countries, but China’s President appears unlikely to make a similar call soon.

Beijing, which unlike America’s close partners and neighbours has been locked in a trade and tech war with the U.S. for years, is taking a different approach to Mr. Trump in his second term, making it clear that any negotiations should be conducted on equal footing.

China’s leaders say they are open to talks, but they also made preparations for the higher U.S. tariffs, which have risen 20% since Mr. Trump took office seven weeks ago. Intent on not being caught off guard as they were during Mr. Trump’s first term, the Chinese were ready with retaliatory measures — imposing their own taxes this past week on key U.S. farm imports and more.

“As Washington escalates the tariff, Beijing does not see other options but to retaliate,” said Sun Yun, director of the China programme at the Stimson Center, a think tank. “It doesn’t mean Beijing doesn’t want to negotiate, but it cannot be seen as begging for talks.”

After the U.S. this past week imposed another 10% tariff, on top of the 10% imposed on February 4, the Chinese Foreign Ministry uttered its sharpest retort yet: “If war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we are ready to fight till the end.”

Xi Jinping’s leadership of the ruling Communist Party spans both of Mr. Trump’s terms, giving Beijing more continuity in its planning. He is the one who decided it’s not yet time to speak with Mr. Trump, said Daniel Russel, vice president for international security and diplomacy at the Asia Society Policy Institute.

“That’s not a scheduling issue, it’s leverage for China,” Mr. Russel said. “Xi will not walk into a call if there’s a chance he will be harassed or humiliated and for both political and strategic reasons, Xi will not play the role of a supplicant.”

“Instead, China is hitting back promptly — but judiciously — to each set of tariffs,” he said.

Chinese Foreign Minister Wang Yi on Friday said that “no country should fantasise that it can suppress, contain China while developing good relations with China.”

“Such two-faced acts not only are bad for the stability of bilateral relations but also will not build mutual trust,” Mr. Wang said. He added that China welcomes cooperation with the U.S., but noted that “if you keep pressuring, China will firmly retaliate.”