China's Xi renews pledges to open economy, cut tariffs this year

Michele Moreno
April 10, 2018

The comments from both countries followed a week of escalating tariff threats sparked by USA frustration with China's trade and intellectual property policies, worrying financial markets over potential damage to global growth.

China, U.S. trade issues aren't newChina's proposed 25% tariff on U.S. soybean imports was anticipated by the industry, says Kirk Leeds, chief executive of the Iowa Soybean Association.

USA businesses seem inclined to back China's position, with many complaining the tariffs will make other countries more attractive to Chinese buyers.

On April 4, China retaliated by expanding its list, saying it will place a 25% tariff on US soybeans, beef and 100 other products.

Trump, showing his anger via social media, retorted strongly, "When a auto is sent to the United States from China, there is a Tariff to be paid of 2 1/2%".

"President Xi's remarks do not represent a dramatic departure from existing Chinese policy, but rather a reiteration of the same themes Xi has promoted throughout his tenure atop China's policy making system", said Chaoping Zhu, global market strategist at JP Morgan Asset Management.

China said it was considering a "fierce counter strike" if Trump moves forward with his proposals.

That said, China's proposed tariff on USA soybeans is disconcerting for Iowa farmers poised to plant this year's crop.

"Under the current circumstances, both sides even more can not have talks on these issues", Foreign Ministry spokesman Geng Shuang told reporters at a regular news briefing. Equally, political elites in Beijing state that under the prevailing conditions then it is nigh impossible to solve trade frictions with America.

Xi Jinping speaks at the Boao Forum for Asia.

Chinese President Xi Jinping is due to deliver remarks at the Boao conference on Tuesday that will be his first public reaction to the tariff standoff.

US President Donald Trump today exuded confidence about the future of the US and China, saying China will ease trade barriers "because it is the right thing to do".

China will "significantly broaden market access" to its banking, securities and insurance sectors and increase cooperation with foreign financial markets, Xi said, as well as lower tariffs on several products including automobiles.

But he also made a demand of the United States: "We hope developed countries will stop imposing restrictions on normal and reasonable trade of hi-tech products and relax export controls on such trade with China".

Trump has threatened to raise tariffs on Chinese goods worth $50 billion in response to complaints Beijing pressures foreign companies to hand over technology in violation of its market-opening pledges.

China's growing list of tariffs aimed at US exports could be enough to sink farmers in Iowa and other states, as they struggle to survive a five-year decline in the farm economy, mainly due to big crops and low prices.

Speaking to the National Rural Electric Cooperative Association in Washington, Perdue declined to provide any details on how that would be achieved.

China's retaliation so far has targeted Midwest farmers, many of whom were bedrock Trump supporters. We'll make it up to them.

"It goes back to the fact that there is still uncertainty on trade wars and even if we get a slight indication that it won't be the worst case scenario, the market reacts positively", he said, while predicting ongoing trade tensions throughout 2018.

Trade negotiations are going on between US and Chinese officials.

Other reports by Insurance News

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