Escalating a war of words between the US and China over trade, Donald Trump took to Twitter yesterday (April 9) to lash out at Chinese tariffs on American cars, calling the 25% duty “stupid.”
Hours later, during his highly anticipated speech at the Boao Forum—Asia’s answer to Davos—Chinese president Xi Jinping did not respond in kind to Trump’s provocations. Instead, he declared that China was “entering a new phase of opening up,” and among other things, vowed to open up China’s financial sector for foreign investment, enhance protection of foreign intellectual-property rights, and reduce China’s massive trade surplus with other countries—all things Trump has railed against.
Most importantly, Xi said China would “significantly” lower import tariffs for vehicles, a specific concern mentioned in Trump’s tweet.
State mouthpiece People’s Daily, however, was quick to dismiss the idea that Xi made the pledges under pressure from Trump in a commentary (link in Chinese) published hours after the speech. The piece also noted that many of the measures—including the duty reduction on automobiles—had been previously announced. In most cases, Xi didn’t give a specific timetable for his broad promises, but said China would implement these measures “as soon as possible.”
The Chinese president also called on developed countries to ease limits on China’s high-tech exports, and on other nations to improve protection of Chinese intellectual-property rights. Positioning himself as a champion of globalization, Xi added that in today’s world, “the Cold War and zero-sum mentality look even more out of place.” Toward the end of his speech, Xi also touted his flagship “One Belt, One Road” infrastructure project as a centerpiece for globalization—one that he stressed comes without geopolitical calculations.
Amid a looming trade war between the US and China, Xi’s speech was a balancing act that at once served to display his commitment to globalization and opening up, while showing that he’s prepared for a trade fight against the US. That Xi chose to focus more on China’s openness makes sense, given that the Boao Forum is the first global event hosted by China since Xi abolished term limits for his presidency last month. This year also marks the 40th anniversary of China’s economic reforms and opening up policies.
Trump, however, may well choose to cast Xi’s comments as vindication of his tough talk, and chalk up a victory in his war of words against Beijing.