As the Trade War Heats Up, So Does China’s Tone

On May 5, as the United States prepared to host a Chinese delegation for the latest round of trade talks, U.S. President Donald Trump threw a wrench in the ongoing negotiations. He announced – on Twitter, his preferred medium – that the United States was going to be raising tariffs from 10 percent to 25 percent on $200 billion worth of Chinese goods. He also pledged that the $325 billion of Chinese imports so far untouched by tariffs would get hit with the same 25 percent rate “shortly.”

“The Trade Deal [negotiation] with China continues, but too slowly, as they attempt to renegotiate,” Trump concluded. “No!”

In effect, Trump’s announcement abruptly ended the trade truce called on December 1, after his meeting with Chinese President Xi Jinping. Back then, the White House agreed to postpone the increase to 25 percent tariffs – previously set to take effect on January 1, 2019 – to allow room for trade negotiations with China. Now not only is the truce broken, but Trump has taken things a step further by threatening to hit every Chinese export to the United States with a 25 percent duty. On May 13, the U.S. Trade Representative’s Office moved forward with that threat, releasing a list of Chinese goods worth $300 billion that will be targeted for the next round of tariffs.

Despite the rapid escalation in the trade war, China’s chief trade negotiator, Vice Premier Liu He, still traveled to Washington, D.C. for talks on May 9 and 10. Unsurprisingly, however, he left without any signs of progress. Though both sides have indicated their interest in continuing talks, no further meetings have been scheduled as of this writing – a far cry from the near-weekly pace of back-and-forth trips prior to Trump’s latest tariff bombshell.

Trump remained optimistic, at least publicly, tweeting on May 14, “When the time is right we will make a deal with China.” But whatever Trump’s intentions, he will have to reckon with the fallout from Beijing. Early signals suggest that China may be ready to cast aside its markedly low-key approach to the trade war in favor of more bombastic rhetoric.

China’s official response – raising reciprocal tariffs on $60 billion in U.S. goods, effective June 1 – was to be expected. Beijing had responded to each previous round of U.S. tariffs in kind, after all. More interesting – and concerning, for those worried about the trade tensions escalating out of control – was the decidedly more strident tone Chinese official sources began using to talk about the trade dispute.

For example, while Foreign Ministry spokesperson Geng Shuang reaffirmed China’s desire for further talks, he also hinted at rising frustration with the U.S. approach to negotiations. “[S]ome people in the US seemed to have misjudged the current situation and underestimated China’s determination and will to defend its rights and interests,” Geng complained. “They were … making offers that are far too demanding.”

“China doesn’t want a trade war, but we are not afraid of fighting one,” Geng also said, repeating an often-used refrain. “If someone brings the war to our doorstep, we will fight to the end. China never succumbs to external pressure.”

On the media front, “Xinwen Lianbo,” the China Central Television daily news program considered a bellwether for official government stances, declared that China was “completely prepared” to respond to the “U.S.-initiated trade war.” Even the use of “trade war” rhetoric was notable, after months of official media outlets preferring the term “trade frictions” to downplay the severity of the issue.

Adopting a decidedly nationalistic tone, the anchor continued,

The Chinese people have experienced over 5,000 years of trials – is there any battle formation we haven’t seen? In the grand course of achieving national rejuvenation, there will inevitably be dangers and difficulties. The trade war America started against China is a critical juncture in China’s development but it’s nothing too serious. China will inevitably stand resolute and confident, facing and overcoming difficulties, turning danger into opportunity, and out of struggle creating a new heaven and earth.

The WeChat account of the CCP’s official newspaper, People’s Daily, put it even more simply, sharing a graphic reading: “Negotiate – sure. Fight – let’s go. Bully us – dream on!”

Meanwhile, an editorial published by both Xinhua News Agency and People’s Daily dusted off the Mao-era term “people’s war” to rally Chinese support. “[T]he entire country and all the people of China are being threatened. For us, this is a real ‘people's war,’” it warned.

Xi himself evoked a different Maoist trope, with comments that China was starting a new “Long March.” Speaking from Jiangxi, which in 1934 served as the beginning point for the Red Army’s arduous, yearlong retreat to the west, Xi announced, “We are now embarking on a new Long March, and we must start all over again.” In CCP canon, the Long March evokes unity in the face of extreme adversity; Xi’s reference to a “new Long March” is being taken as a call for Chinese people to band together and stand strong in the face of the coming economic storm.

This sort of rhetoric was mostly notable in contrast to what preceded it. Since the early stages of the trade war, Chinese official media have adopted a remarkably low-key tone. Yes, there were the expected affirmations that China could weather the storm and would not buckle to outside pressure – but there were also moves to repress reporting (or social media comments) on negative turns in U.S.-China trade talks.

In fact, the most recent spurt of permitted anti-U.S. nationalism had nothing to do with the trade war itself but came after the arrest of Huawei’s chief financial officer at the United States’ request. Chinese media made sure the public knew about the case, and permitted full expression of the nationalist backlash that followed, which included videos of Chinese customers destroying their iPhones and Chinese companies threatening to fine employees who bought or used Apple products (and promising to reward those who went with Huawei alternatives). The episode was a marked reminder of what Chinese anger over the trade war could blossom into – if Beijing permitted it a free hand.

Instead, the general consensus was that Beijing was trying hard to keep its population from souring on the U.S.-China trade relationship. It’s all the more notable, then, that China is now moving toward a more strident response.

Part of the problem is likely that Trump’s tariff announcement came at a very sensitive time in China, between major anniversaries for two seminal protest movements in Chinese history: the May Fourth protests of 1919 (see last month’s cover article for more) and the violent breakup of the Tiananmen Square protests on June 4, 1989 (covered earlier in this issue by Emile Dirks). U.S. tariffs are set to enter into effect right when Beijing is on full lockdown to prevent any whiff of commemoration tied to the Tiananmen anniversary. A burst of righteous national anger directed at Washington might be the perfect tool to help the Chinese Communist Party weather this sensitive month.

However, the problem with unleashing nationalism is that the genie cannot be put back in the bottle. As Jessica Chen Weiss, author of the book Powerful Patriots: Nationalist Protest in China’s Foreign Relations, told The Diplomat via email, “While the [Chinese] government’s tough line appears to be popular at the moment, it could also raise domestic expectations of a complete ‘victory’ in the trade war and make it harder to work out a mutually acceptable compromise.”

In other words, it’s a small step for China’s nationalists to go from bashing the United States over its tariffs to criticizing the Chinese government itself for giving in too easily if and when a deal is reached. Public anger might force Beijing to be less flexible in negotiations, lessening the chance that the trade war comes to a swift end. Trump appears similarly dug in; former and current advisers told the Washington Post that the president believes the trade war with Beijing will boost his chances at re-election next year.

Admittedly, the only constant in the trade war to date is that it has been unpredictable. But given the moods emanating from Beijing and Washington in May, the prospects for a deal seem more remote than ever.