U.S.-China trade negotiation indications emerge

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It seems like the Chinese government might be open to discussions with the Trump administration regarding trade, signaling a potential de-escalation in their ongoing tariff battle. This softening stance comes as both nations feel the heat from their trade war, with China's factories experiencing a slump.

According to reports, export orders have evaporated, causing factory activity to plummet to levels not seen since 2023, as per data from April. This downturn is a clear indication of the impacts of the trade war, with China's economy showing signs of strain.

Yuyuan Tantian, a social media personality affiliated with CCTV, the state broadcaster, shared a post on the popular Chinese platform Weibo on Thursday. The post suggested that China doesn't necessarily need to engage with the U.S. prior to substantial action from the latter. However, if the U.S. is eager for dialogues, it wouldn't hurt China at this point, the post elaborated.

The post also pointed out that US officials have proactively reached out to China, hoping to hold talks about tariffs. It further highlighted America's economic woes, such as congested ports and a GDP contraction in the first quarter, implying that Washington is the more desperate party.

Analysts interpreted this tone as a sign of Beijing softening its stance, which has been noticeably harder since last week, when the commerce ministry made it clear that the U.S. would first need to drop its steep levies before negotiations could commence.

Andrew Polk, co-founder of Trivium China, an advisory group, observed that the post seemed designed to prepare the ground for negotiations. "By portraying the U.S. as the more fretful, more anxious, more desperate party, they're trying to present themselves as coming from a position of strength. This should play well with their domestic audience and give them a justification to start negotiations," Polk commented.

Zichen Wang, author of the Pekingnology newsletter and research fellow at the Center for China and Globalization think-tank in Beijing, agrees. Wang pointed out that social media accounts like Yuyuan Tantian's and other similar ones indicate China's readiness for trade talks. He notes that this method of signaling through social media accounts is relatively new in the Chinese context, but China has employed it before during the first trade war with the U.S.

For any meaningful progress, Wang emphasizes that the U.S. must demonstrate respect, eschew hostile rhetoric, and display genuine sincerity.

Washington and Beijing have been locked in a cycle of retaliatory tariffs since February when Trump started raising duties on Chinese goods. The additional levies have now reached 145%, while China has imposed a 125% retaliatory duty.

Trump recently stated that he expects to speak with Chinese President Xi Jinping at some point. However, his claims about ongoing talks with China have been disputed by people familiar with the situation in both Beijing and Washington.

Jamieson Greer, the U.S. trade representative, admitted on Wednesday that there have been no trade negotiations between the U.S. and China since Trump took office in January. Trump wants to negotiate a trade agreement directly with Xi, but Chinese officials have made it clear that the two sides must first reach some agreement before the leaders can meet.

"Right now . . . they're having tremendous difficulty because their factories are not doing business," said Trump, suggesting that he believes the U.S. could do without Chinese goods. However, direct warnings from big U.S. retailers like Walmart and Target, who have implied that the trade war could lead to empty shelves, may cause him to reconsider.

Both countries are currently at an impasse in the trade war, but they have cushioned the impact of some tariffs by granting exceptions for crucial goods such as iPhones and chemical imports. Despite this, the stand-off has started to take a toll on both economies. U.S. ports are seeing a decline in traffic, while China's export-dependent factories are furloughing workers.

According to Lynn Song, chief economist for greater China at ING, China's primary concern is maintaining the health of its job market during this trade war.

The proposed talks between the Chinese government and the Trump administration may signal a de-escalation in the ongoing tariff dispute over business matters, but untrue claims about ongoing negotiations have surfaced in general-news media.
Analysts interpret Beijing's recent tone as signalling a softer stance, as social media personalities affiliated with CCTV, like Yuyuan Tantian, have highlighted China's economic woes and hinted at a readiness for trade talks.
According to Andrew Polk, co-founder of Trivium China, these social media posts function as a preparatory measure for negotiations, attempting to portray the U.S. as more desperate and in need of dialogue, while signalling China's strength domestically.
Despite the ongoing tariff conflict, both the U.S. and China have been granting exceptions for crucial goods like iPhones and chemical imports, yet both economies are struggling with declining ports traffic in the U.S. and furloughing workers in China's export-dependent factories, with China's primary concern being the maintenance of its job market during this trade war.