Facing another U.S. tariff hike, the Chinese President, Mr. Xi Jinping, is getting tougher with Washington instead of backing down. Beijing fired what economists called a 'warning shot' at Washington by letting its yuan currency weaken in response to the US President, Mr. Donald Trump’s latest threat of more punitive import duties on September 1.
Chinese buyers cancelled multibillion-dollar purchases of U.S. soybeans. Regulators are threatening to place American companies on an 'unreliable entities' list that might face curbs on their operations. Both sides have incentives to settle a trade war that is battering exporters on either side of the Pacific and threatening to tip the global economy into recession.
Mr. Xi’s government is lashing out and might be, in a revival of traditional Chinese strategy, settling in for prolonged wrangling in response to what it deems American bullying and attempts to handicap China’s economic development.
On Tuesday, though, the Trump administration may have eased frictions at least slightly when it announced that it would soften the impact of the 10 per cent tariffs it had said would begin Sept. 1 on the 300 billion dollars in Chinese goods it hasn’t already taxed. It will delay until December 15 the tariffs on cellphones, laptop computers, video game consoles, some toys, computer monitors and some shoes and clothing.
Negotiators are to meet in September in Washington, but China’s political calendar makes progress unlikely. The Communist Party is preparing to celebrate its 70th anniversary in power on October 1 — a nationalism-drenched milestone that puts pressure on Mr. Xi, the party leader, to look tough.