Beijing Prepares Its Opening Bid to Talk Trade With Donald Trump

Having failed to deliver on its Phase One deal to increase US purchases, Beijing is preparing to talk about areas where China can buy more

- Lingling Wei

Beijing is readying an opening bid to try to head off greater tariff increases and technology restrictions from the Trump administration—a sign that China is eager to get trade talks going.

However, what it is prepared to offer, according to people in both capitals familiar with Beijing's thinking—chiefly focused on going back to a previous trade deal that didn't work out—is likely to intensify debates in Washington over how to negotiate with China.

Even though the White House hit China with 10% tariffs starting Tuesday for its failure to crack down on chemicals used to make fentanyl, neither side appears ready to launch a full-on trade war. China, in particular, is in weak economic shape, and Chinese leader Xi Jinping has signaled his interest in engaging in negotiations with President Trump, who has also suggested he is open to dialogue by deferring most of his promised tariffs on China.

Beijing saw the 10% tariffs as Trump's way of exerting pressure, the people familiar said, but also noted his first tariff move wasn't the kind of "maximum pressure" the leadership would find intolerable. Trump has threatened tariffs of as high as 60%.

In an initial response without much bite, China's Ministry of Commerce said it would challenge the tariffs at the World Trade Organization, whose mechanism for resolving trade disputes has been disabled since Trump's first term. The ministry also urged "frank dialogue" between both sides. In a statement, the Chinese Embassy in Washington called on the U.S. to "correct its wrongdoings."

As part of its effort to prepare for negotiations, according to the people, China's initial proposal will center on restoring a trade agreement Beijing signed in early 2020 with the first Trump administration but didn't implement.