In the early days of President Trump’s second term, China was ready to negotiate on trade. Then came Liberation Day. Now China is ready with a trade war arsenal taking aim at U.S. companies. WSJ’s Lingling Wei explains how China is gearing up for an extraordinary conflict with no immediate exits. Kate Linebaugh hosts. Further Listening: - Trump’s Tariffs Force a New Era in Global Trade - The Trade War With China Is On Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What triggered the escalation in the U.S.-China trade war?
In the last week, the U.S.-China trade war has spiraled. It started in the Rose Garden.
We're going to be charging a discounted reciprocal tariff of 34%. I think, in other words, they charge us, we charge them. We do have some breaking news right now from China.
And China hit back. China announcing retaliatory tariffs of 34%, effective April 10th. Then the U.S. countered China's counter-retaliation.
Now a 104% tariff on Chinese imports.
Then China countered the U.S. 's counter-counter-retaliation.
An 84% hit on all U.S. goods coming into China.
And then yesterday, President Trump paused tariffs on most other countries, with one big exception.
The tariff on China will now go up to 125% because China imprudently decided to retaliate against the United States.
There has been quite a sense of shock, frustration, and anger in Beijing. That's our colleague Lingling Wei.
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Chapter 2: How did China respond to U.S. tariffs under Trump?
The Chinese definitely were trying to engage with the administration at that point of time. In fact, they have been trying to get to the core team of the Trump administration. They really want to talk to cabinet-level officials. However, they have had no luck whatsoever. Some lower-level communication has been taking place. However, higher-level communication really has gone dark.
Do you have examples?
Sure. So in late February, the foreign minister we just talked about, Wang Yi, he flew to New York. On the surface, you know, he was here to attend a United Nations Security Council meeting, but there was a much bigger goal for him. which was to have a meeting with senior officials at the Trump administration.
In particular, Foreign Minister Wang Yi wanted to talk to National Security Advisor Mike Waltz, but he had no luck. He didn't get a meeting with him. He didn't even get a call with him.
According to one of Ling Ling's sources, Waltz didn't meet with Wang Yi, in part because of that warning that had been delivered to Rubio. The Chinese pursued other avenues into the administration and also had no luck. The Chinese ambassador to Washington had tried to engage with Elon Musk and failed. The Chinese commerce minister wrote letters to the U.S. Commerce Secretary and the U.S.
Trade Representative. No response. Lingling says the White House wanted communication from higher levels in Beijing.
The Trump administration, to their credit, they know China pretty well these days. They know who in China is more important than others. And they basically told the Chinese, OK, you want to talk? Sure. But we want to talk to the people who are really close to Xi Jinping. But to the Chinese, that demand was something they couldn't really agree to because that's not how China works.
You know, they have very established ways of doing things and they didn't want to improvise or they did not have the ability to improvise. So basically, what China is offering for conversations is not in line with who the Trump administration wants to talk to.
But it seems like it's going both ways, like both sides are making efforts to communicate, but those efforts weren't going anywhere.
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Chapter 3: Why is China frustrated with the U.S. trade policy?
Today, China announced it would reduce imports of American movies. In response, President Trump said, I think I've heard worse things. The administration also said today the new tariffs on China add up to a total of 145 percent, not the 125 percent it previously indicated. That news sent U.S. stock markets down sharply. That's all for today, Thursday, April 10th.
The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode by Gavin Bade. Thanks for listening. See you tomorrow.