Gordon Chang: China's Panic and Retreat in Trade Negotiations

China's Trade Negotiation Strategy

• 💡 China appears to be in a state of panic regarding trade negotiations with the United States.
• 🎯 They are not imposing tariffs on essential American goods like semiconductors, industrial chemicals, and aviation products, a move that suggests they are folding.
• 🔑 This indicates China's realization that they need American products they cannot obtain elsewhere.

Xi Jinping's Political Constraints

• ⚠️ China's leader, Xi Jinping, has created a political system where only hostile responses are deemed acceptable.
• 📈 He has previously told the Chinese people that China has surpassed the US, making it difficult to admit they are talking to the US due to pressure without undermining his credibility.

Evidence of Backing Down

• 📊 Reuters reports that China has dialed back its 125% retaliatory tariffs on US-made microchips.
• 🔍 China is also considering exemptions for over 130 categories of US-made products, including vaccines, chemicals, and jet engines.
• 💬 Despite public rhetoric of not talking to the US, it is highly probable that discussions are ongoing regarding tariffs.