China: A Message to Trump from Beijing

Published on July 16, 2018

From what we understand, China’s Vice Minister Liu He turned down a request a few days ago from the US Ambassador to China, former Iowa Governor Terry Branstad, to meet

In the interest of diplomacy, Ambassador Branstad’s request to meet with Liu was handled delicately, not being rejected outright, but rather deflected. The real reasons for Liu’s refusal were, however, significant, and meant to carry a message from Beijing:

*** The first reason Liu turned down the Ambassador’s request for a meeting was that Beijing did not trust or believe that Branstad’s request was made on President Trump’s behalf, or with Trump’s explicit authorization. The second reason, according to senior Chinese officials, was that Branstad requested Beijing make unilateral concessions to the US first, namely the suspension of tariffs on US agricultural exports to China, in exchange for concessions from Washington. ***

*** The third, and perhaps most significant, intended signal was that Beijing now believes only a summit with Trump can or will break the trade impasse. Given their high level of uncertainty over Trump’s trade policy, very highly placed officials in Beijing indicate they would not have confidence in proposals even from Treasury Secretary Steve Mnuchin or Commerce Secretary Wilbur Ross anymore. A decision on when to end the trade wars can only be negotiated at this point by the two top leaders themselves. ***

*** China’s President Xi Jinping, from what we understand, will not take the initiative as things stand for a meeting with Trump. But, conveys a highly placed official, if Trump were to ask for a meeting, Xi would “surely” accept. ***

For its part, China’s highest decision-making body has taken the position that it will not consider Trump’s threat of a potential additional round of tariffs on $200 billion of Chinese exports as a real threat if and until the White House follows through on imposing tariffs on the $16 billion of goods still remaining from the original $50 billion list.

Until then, China will not publicly lay out or announce any measures in response to Trump’s latest $200 billion threat.

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