Trade war, day 21: ‘A problem with China that’s going to go on for years’


It’s been three weeks since the start of the trade war, and Beijing has today again confirmed that contact with the Americans is frozen.

  • “As far as I know, the two sides don’t have contact to renew talks,” Ministry of Commerce spokesman Gao Feng said, Bloomberg reports (paywall). He added, “We have said many times that the premise for negotiations is to be faithful and honor one’s own words.”
  • Flashback: On June 16, the Chinese Communist Party’s house newspaper, the People’s Daily, published a scathing editorial (in Chinese) calling the Trump White House “rude and unreasonable, selfish and headstrong.”
  • This followed the humiliation of economic envoy Liu He 刘鹤, who thought he had a deal to end trade tensions by offering to purchase $70 billion extra in American exports, right before Trump escalated tariffs to the $50 billion level, citing the “unfair economic practices” of the Made in China 2025 initiative.
  • Liu He is now focusing on domestic issues, having been newly assigned to oversee the reform of China’s state-owned enterprises, the South China Morning Post reports. Though it is not clear whether he retains his importance as the point person on trade, this probably does “reflect a desire in Beijing to focus more on domestic structural problems in the absence of any immediate prospect” for trade war resolution, the SCMP says.
  • “We’re going to have a problem with China that’s going to go on for years,” Robert Lighthizer, the U.S. Trade Representative, told the U.S. senate in testimony today, Bloomberg reports (paywall).
  • The U.S. and China also traded barbs at the World Trade Organization in Geneva, Bloomberg reports (paywall), with the Deputy U.S. Trade Representative Dennis Shea calling China “the most protectionist, mercantilist economy in the world,” and Chinese Ambassador Zhang Xiangchen responding, “Extortion, distortion or demonization does no good to resolve the issues.”
  • China continues to steal American intellectual property, according to a new joint report from U.S. intelligence agencies, though “at lower volumes” since former President Obama and Xi Jinping reached an agreement to “curb the practice,” according to the Washington Post.

More trade war reporting:

  • Visa restrictions for Chinese students alarm academia / NYT (paywall)
    “President Trump’s confrontation with China is beginning to ripple through American academic and research institutions, as a crackdown on visas for certain Chinese citizens has left the higher education community wondering how it will adapt to the administration’s effort to stop intellectual property theft and slow China’s push for technological supremacy.”
  • US House passes defence bill targeting Chinese investments / SCMP
    “The US House of Representatives on Thursday passed a US$716 billion defence appropriations bill that includes language to tighten regulations on Chinese investments in the United States and to prohibit the US government from buying products from major Chinese telecoms firms, including ZTE.”
  • US-China trade war: Idaho may be the biggest victim, but not for its potatoes / CNBC
    “Idaho is the state most exposed to fallout from the U.S.-China trade war, even though its most famous product, potatoes, has so far been spared from the wrath of Beijing’s retaliatory strikes, according to a new study.”

Previously in SupChina’s trade war coverage:

Trade War, Day 20: ‘There will be no winner,’ says Xi Jinping, as Qualcomm deal threatened