I was wrong (in part) about US-China talks - DSTC #2
China was more open to trade negotiation than I guessed
This is the second in my occasional series Didn’t see that coming! (DSTC), in which I take up events that did not match my expectations.
On May 1 I wrote that “it feels a bit much to say China’s government ‘appears ready for trade talks.’” I was objecting to reports that read between the lines of two Chinese government–linked social media posts and identified an apparent opening. So it is fair to say, after the Switzerland meetings between US and Chinese officials and today’s joint statement (en, zh) on a partially-temporary reduction in tariffs: Didn’t see that coming!
What happened
The concrete outcomes of the Geneva meetings are limited but significant:
The two governments each committed to lower tariffs and then establish “a mechanism to continue discussions (协商) about economic and trade relations” led by Vice Premier He Lifeng on the Chinese side and Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer on the US side. There is no timetable for this mechanism, and it is explicitly noted that working level contacts may also continue.
The US commitment to lower tariffs comes in two parts:
A 24% decrease that is to be effective for 90 days.
A 91% decrease that, according to the plain language of the joint statement, is permanent. This is composed of removing a 50% hike from April 8 and a 41% hike from April 9 during the tit-for-tat period last month.
(A 20% tariff Trump imposed citing the fentanyl issue, and 10% of the April tariffs remain, for a total of 30%.)
The Chinese commitment to lower tariffs is parallel (indeed, unlike the original US action, it is reciprocal in the conventional, non-Trumpian meaning of the word):
So the two sides cut overall tariffs by 91% in both directions and, for a period of 90 days, cut them 24% further. That 24% appears to be ready to “snap back” in mid-August.
Some things I seem to have gotten wrong, and right
(1) Attitude problem. I argued that China’s message was that negotiations would be possible when the US side showed a different attitude. I didn’t think that was happening, and, though I didn’t put it in my post, I did’t think it was about to happen. I certainly didn’t see it coming that Trump would publicly state that (lower but still very high) 80% tariffs “seem[] right,” but in many ways this public back-off before the high-level meetings may have fulfilled a Chinese desire to see concessions before any talks. After the Trump 80% statement, it seemed a lot more likely talks were coming. But I also failed to anticipated that the US administration would back off as far as it did.
(2) Word games about “talks,” “negotiations,” “dialogue.” In discussing Chinese denials of US statements that talks were under way, I wrote, “My hunch has been that there are indeed talks between US and Chinese government officials, but from the Chinese perspective these are working-level conversations about the logistics and conditions of potential future negotiations.” This seems to have been right.
The Ministry of Foreign Affairs spokesperson and others repeatedly made variations of a statement that “[d]ialogue and negotiations (对话谈判) must be equal, respectful, and mutually beneficial.” Neither the joint statement nor China’s Commerce Ministry statement refer to the Geneva meeting as “negotiations,” but the Commerce Ministry does characterize them as “equal dialogue and consultations” (平等对话协商). Here I think I was basically right, though I hadn’t foreseen the US side making concessions that would make the Chinese side call their dialogue “equal.”
(3) Chinese side less petty than expected. I wrote that US public statements that talks were ongoing while, probably, they were being negotiated would likely “piss off” Chinese diplomats. I’m pretty sure I was right about that! My embedded assumption, however, was that this would be a barrier to getting something like the Geneva meeting, and there I was wrong.
What have I learned?
In addition to a reminder that I don’t like predicting things and might do well to be more careful in that regard, I have learned:
When
goes all caps in a headline, he might be right, even if it seems flimsy to me based on the available text!Don’t take prideful public statements by the Chinese government OR Trump’s US administration at face value. (Duh, though I apparently need to be reminded that some texts do not gain value with close reading!)
The economic pain and political consequences of total US-China economic decoupling appear to be too much for either government to bear, even if backing away from the brink makes them look weaker. (This is especially true for the Trump team, who retreated from rash moves with ZERO public concessions from the Chinese side. China only reversed retaliatory measures and changed nothing else.) Trump et al. appear to have fought to get the Chinese side to the table.
The Chinese government never said they wouldn’t talk, only that there had to be vague appropriate conditions. The Trump team appears to have been willing to walk through that door.
Speculation about bilateral conversations where I have no inside information is messy.
About Here It Comes
Here it Comes is written by me, Graham Webster, a research scholar and editor-in-chief of the DigiChina Project at the Stanford Program on Geopolitics, Technology, and Governance. It is the successor to my earlier newsletter efforts U.S.–China Week and Transpacifica. Here It Comes is an exploration of the onslaught of interactions between US-China relations, technology, and climate change. The opinions expressed here are my own, and I reserve the right to change my mind.