China Calls For US to Scrap Its Tariffs as Xi Starts SE Asia Tour

China has called on the United States to “correct its mistakes” – scrap its tariff hikes and return to a “path of mutual respect.”

The call on Sunday by the Commerce ministry in Beijing follows US President Donald Trump’s reciprocal tariffs imposed early this month that were paused for 90 days last week for most countries – but not China

“We urge the US to … take a big step to correct its mistakes, completely cancel the wrong practice of ‘reciprocal tariffs’ and return to the right path of mutual respect,” a commerce ministry spokesperson said in a statement.

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There are signs of alarm in Beijing at the Trump Administration’s moves to hit back forcefully at the two countries’ huge trade imbalance, which follows years of complaints about China’s failure to open its markets, as promised, and its massive subsidies for export industries that now dominate multiple market sectors.

China has found itself in a tit-for-tat trade war that has seen both sides announcing repeated tariff increases – up to 145% on Chinese goods, while Beijing has hit back with retaliatory tariffs of 125% on US goods, a strategy that Beijing has condemned as a ‘joke’.

Civilian officials in Beijing have been put on a ‘wartime footing’ and ordered to launch a global charm offensive to try to get other countries to push back against Trump’s tariffs, according to sources who spoke to Reuters.

Communist Party propaganda officials have played a leading role in framing China’s response, one of the people said, with government spokespeople posting defiant clips on social media featuring historic footage of former leader Mao Zedong saying in 1953 “we will never yield.”

Bureaucrats in foreign affairs and commerce have been ordered to cancel vacation plans and keep mobile phones switched on around the clock, with departments covering the US beefed up with staff who worked on China’s response to Trump’s first term, they said.

Beijing had hoped to avoid a spiralling trade war but its diplomats appeared to have trouble setting up a high-level channel of communication with Trump’s administration to push its case for “win-win” trade resolution – a goal likely undermined by China’s failure to fulfill the Phase 1 trade deal agreed with US negotiators during Trump’s first term in office.

Beijing’s diplomats have been engaging other governments targeted by Trump tariffs, with letters sent seeking cooperation to several countries and approaches to longstanding US allies in Europe, Japan and South Korea.

After the initial Chinese retaliation, Trump said: “China played it wrong, they panicked – the one thing they cannot afford to do!” He has also suggested that Beijing wanted to make a deal but “they just don’t know how quite to go about it.”

With some exceptions, trade of goods between China and the US is now largely frozen, and Beijing is starting to crack down on trade of services, while warning its citizens against travel to the US and putting curbs on rare earth elements and imports of American films.

A Trump administration official told Reuters that the US had “made clear to China that we want working-level contact to continue… but will not engage for the sake of engagement and in dialogues that do not advance American interests.”

Diplomatic rebuff

Chinese Foreign Minister Wang Yi tried to meet Secretary of State Marco Rubio, a China hawk who is sanctioned by Beijing, during a visit to New York in February to the United Nations but failed to secure a meeting after the two top diplomats shared a frosty phone call in late January.

Wang was said to have made a derogatory remark to Rubio, according to the Wall Street Journal, but Commerce Secretary Howard Lutnick said on Sunday he expects the two presidents to eventually work things out, despite the fact US requests for Xi to talk to Trump have been rejected.

International relations expert Zhao Minghao at Shanghai’s Fudan University said such outreach “totally doesn’t work in terms of the Chinese policymaking system.”

“For the Chinese side, usually there is agreement and work on the working level and then we can arrange the summit,” he told Reuters.

The way “countries which have tried to negotiate have been treated so far this year also certainly has not done much to encourage China to sit down at the table,” Lynn Song, Chief Economist for Greater China at ING Bank, said.

Meanwhile, China created a retaliatory playbook that includes tariffs as well as restrictions on about 60 US companies.

It has also approached some G20 governments with wording for a joint declaration voicing support for the multilateral trading system, an EU diplomat told Reuters.

But the diplomat said that the messaging did not address concerns also held by non-US governments about Chinese overcapacity, its subsidy regime and alleged unfair competition.

Beijing has said those concerns are overblown and that the rise of its high-tech industries is due to its comparative advantages and benefits the world.

China is also heavily focused on the domestic reaction to the tariffs, with social media users this week widely reposting an April 7 editorial in the official People’s Daily warning against panic.

China has also recently started encouraging households to spend more and has dramatically changed its language about domestic consumption.

Beijing is aiming to shift the engine of growth from exports to consumers at a time when the economy remains hobbled by a prolonged crisis caused by a massive real estate bubble that allegedly left the country with tens of millions of empty apartments.

“The real battlefield is on the domestic front, rather than bilateral negotiations,” said Zhao of Fudan University.