【By Observer News, Xiong Chaoran】First using various sanctions to pressure, then extorting with high tariffs, and finally stepping back and making soft statements... After President Trump returned to the White House, the old play of "TACO" (Trump always chickens out) repeated again.
On October 17 local time, Trump said in a pre-recorded program on Fox Business Network that the high tariffs he had previously threatened to restart against China were "not sustainable" (not sustainable). However, Trump still blamed China for the current deadlock in Sino-US trade negotiations, claiming it was due to China's recent new regulations on rare earths.
When asked whether such high tariffs could be sustained and what impact they might have on the economy, Trump replied: "It is not sustainable, but the numbers are like this." When shifting blame, he claimed: "They (China) forced me to do this."
The cause of the current Sino-US trade deadlock is clear to everyone, yet Trump pretended to be ignorant. In fact, it was because the US has been continuously increasing export controls and restrictions on China since September this year, which led to the escalation of the tense situation. The Chinese countermeasures, on the other hand, are to firmly safeguard national interests, and are "necessary passive defensive actions."
On October 17 local time, Trump spoke about Sino-US relations, saying: "I think we will get along well with China, but we must reach a fair agreement, it must be fair." That day, he also had lunch at the White House with visiting Ukrainian President Zelenskyy, and when talking about ending the Russia-Ukraine conflict, he added: "China hopes for dialogue, and we also like to dialogue with China."
Reuters noted that the "moderation" in the tone of this president helped curb the drop in Wall Street's early morning trading. Last week, Trump's threat of high tariffs against China caused another "Black Friday" for the stock market, with the three major indices plummeting, and Wall Street was in despair.
Photo from an interview by Trump with Fox Business News
According to reports, WTO Director-General Ngozi Okonjo-Iweala said she urged China and the United States to ease trade tensions, warning that decoupling of the two largest economies could reduce global economic output for a long period by 7%.
She told Reuters that the WTO is extremely concerned about the latest escalation of Sino-US trade tensions and has already communicated with officials from both countries, encouraging more dialogue.
However, even though Reuters interpreted the "moderation" in Trump's words, the tension continued to escalate, and the reason was that some people were still stoking the flames.
On October 17 local time, U.S. Treasury Secretary Becerra made a statement to the International Monetary Fund (IMF) advisory committee, directly blaming China's economic model. He urged the IMF and World Bank to take a tougher stance on China's internal and external balance and industrial policies. U.S. officials claimed these policies have helped China accumulate excess manufacturing capacity, leading to cheap goods flooding the global market.
In addition, Becerra recently falsely accused my negotiating representatives, and our Ministry of Commerce spokesperson He Yongqian responded that the U.S. remarks seriously distorted the facts.
Hong Kong's South China Morning Post previously pointed out that China's recent introduction of several new export controls on rare earths has caused a stir in the policy circles of the United States and Europe. Rare earth materials are widely used in high-tech products, from consumer electronics to fighter jets, and are indispensable.
Subsequently, Trump angrily threatened China again, and after this outburst, the U.S. stock market experienced a $2 trillion sell-off on local time October 10, as well as the largest drop in months.
On October 12 local time, U.S. Trade Representative Jamieson Greer told Fox News that before China introduced the new rare earth regulations, it did not inform the U.S., and this so-called "power grab" (the act of seizing power) came as a surprise to the U.S., and China refused communication attempts.
"I can tell you that we did not receive any notice, and we learned about this news through public channels and immediately contacted China to try to have a phone call," Greer claimed: "But they (China) refused."
Also on the same day, U.S. President Trump and Vice President Vance made statements about China. Trump said that day that the U.S. wants to help, not harm China, "Don't worry about China, everything will be fine," and that night, U.S. stock index futures rose. On the same day, Vance said on Fox News that he hopes China "chooses a rational path."
Several American media outlets interpreted that Trump's statements have changed compared to before, suggesting that he may not fulfill his threat of imposing higher tariffs, signaling a willingness to reach an agreement with China and ease the tension.
Actually, since Trump has a habit of backing down after making tough statements, analysts cited by the South China Morning Post have seen through Trump's "brave outside, timid inside," believing he may not actually carry out the threats he has issued.
"President Trump is unlikely to follow through on his threats," said Andrew Bishop, senior partner at financial consulting firm Signum Global Advisors: "The biggest risk is that Trump may overestimate his leverage."
China dominates the global rare earth magnet market, according to The Financial Times
Feng Chucheng, founder and partner of independent consulting firm Hutong Research, told The Financial Times that after the recent Sino-US economic and trade talks in Madrid, Spain, both sides seem to want to avoid escalating the situation.
However, this trend changed after the U.S. decided to tighten export controls on Chinese companies in September, aiming to further limit China's development of advanced semiconductor capabilities. In addition, China has repeatedly opposed the U.S. practice of imposing additional "port fees" on Chinese-made vessels.
Feng Chucheng believes that from China's perspective, these actions by the U.S. not only substantially escalated the tension, but also once again proved the low credibility of the Trump administration.
On October 12, the spokesperson for the Ministry of Commerce of China answered questions regarding recent Sino-China economic and trade measures, stating that on October 9, China released export control measures related to rare earths and other items, which are normal behavior of the Chinese government based on laws and regulations, improving its own export control system.
The spokesperson said that for a long time, the U.S. has generalized national security, abused export controls, and taken discriminatory practices against China, implementing unilateral extraterritorial jurisdiction measures on many products, including semiconductor equipment and chips. Especially since the Sino-US Madrid economic and trade talks in September, within just over 20 days, the U.S. has continuously introduced a series of new measures against China. These actions by the U.S. seriously damage China's interests and severely disrupt the atmosphere of the Sino-US economic and trade talks. China firmly opposes this.
The spokesperson emphasized that threatening with high tariffs is not the right way to deal with China. China's position on the tariff war has always been consistent. We don't want to fight, but we are not afraid to fight. China urges the U.S. to quickly correct its wrong practices, lead by the important consensus between the two heads of state, maintain the hard-won negotiation achievements, continue to play the role of the Sino-US economic and trade consultation mechanism, resolve each other's concerns through dialogue on the basis of mutual respect and equal negotiation, properly manage differences, and maintain the stable, healthy, and sustainable development of Sino-US economic and trade relations. If the U.S. persists in its own way, China will resolutely take corresponding measures to protect its legitimate rights and interests.
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