Is Beijing spoiling for a trade war?

If U.S. officials wanted to provoke a sharp response from China, they got one.

Comments on the internet here burst out Friday with insults and invective, calling U.S. President Donald Trump a “shortsighted bully.” They threatened war, and not just the kind over trade, echoing the kind of language being used on the other side of the Pacific.

Trump is proposing tariffs of up to $ 60 billion on Chinese goods as punishment for what U.S. officials call Beijing’s “economic aggression.”

“Trump acts like he is a hoodlum when he loses money to China,” posted a Chinese internet user named Wind. “Luckily China has a strong military now.”

China Financial Markets

Chinese investors monitor stock prices at a brokerage house in Beijing on March 23, 2018. Fears of a trade war roiled financial markets after Beijing retaliated against the Trump administration’s tariff hikes by threatening import duties on U.S. goods. (Mark Schiefelbein/Associated Press)

There was plenty of official reaction, too. The trade blast from Washington — and accusations that China is stealing U.S. industrial secrets and abusing American firms — brought blowback from the Chinese ambassador to the U.S.

Americans “should not believe that they have a monopoly over innovation and everybody else is just stealing from them,” said Cui Tiankai. “I think this is a kind of discrimination.”

The United States is adopting a “Cold War mentality,” said China’s official news agency Xinhua. It is showing “panic” over China’s rise, one that threatens to overtake the U.S. as the biggest economy in the world.

None of this indignant reaction comes as surprise in today’s China. Perhaps more than ever, the country is projecting confidence in its place in the world and a conviction of its economic and military power. 

‘Make China Great Again’

There is a strong “Make China Great Again” undercurrent, stoked by President Xi Jinping’s frequent appeals to nationalistic pride and his dark warnings to anyone who challenges its intentions or territorial integrity.

“All manoeuvres and tricks to split the motherland are sure to fail,” Xi said at the closing of China’s parliament earlier this week in Beijing’s Great Hall of the People. “Not one inch of the territory of the great motherland can be carved off from China.”

Carving off its revenue seems to be equally unacceptable.

China US Trade Dispute

A woman pushes a shopping cart past a display of nuts imported from the United States at a supermarket in Beijing on March 23, 2018. (Mark Schiefelbein/Associated Press)

But it’s the bluntness of the attack from Washington that leaves Xi with little choice but respond in kind, say Beijing political observers.

“I think right now there’s no room for China to make concessions or to back off,” says Zhao Hai from the National Strategy Institute at Tsinghua University. “I think they have to be very strong and tit-for-tat in terms of trade measures against the U.S.”

It is a direct challenge to China’s leadership, he says.

“President Xi has just consolidated power and started to carry out his ambitious plan for the future of China. So at this moment, the leadership cannot be seen as weak or wriggling or giving up to the U.S. side,” says Zhao.

Zhao does believe there is room for compromise, but it has to be done discreetly, almost secretly.

Chance for talks

He also believes Washington has left some time for a deal.

In a presidential memorandum signed by Trump on Thursday, there will be a 30-day consultation period that only starts once a list of targeted Chinese goods is published.

That leaves a chance for potential talks to address Trump’s allegations on intellectual property theft and forced technology transfers from U.S. companies who want to do business in China.

Indeed, despite the accusations, Trump said he views China as “a friend,” and both sides are in the midst of negotiations. A Chinese Commerce Ministry official said both sides were in touch and communication channels were smooth.

China US Trade Dispute

Chinese women sit on a bench with a U.S. flag theme outside an apparel store in Beijing on March 23, 2018. (Ng Han Guan/Associated Press)

Meantime, China did move to retaliate by declaring plans to impose additional duties on up to $ 3 billion of U.S. imports, including fresh fruit, wine and pork — as well as metal pipes — in response to import tariffs that were due to go into effect Friday on Chinese steel and aluminum coming to the US.

Chinese officials have hinted that U.S. food imports could soon face further duties.

Xie Tao, a political science professor from the Beijing Foreign Studies University, says it’s clear the trans-Pacific battle is just beginning.

“The first shot in the largest trade war of the 21st century was fired by the U.S.”

Willing to compromise?

He is less optimistic of a negotiated solution in time to head off real damage to both sides.

“Let’s assume that Chinese leaders are willing to compromise a little bit,” says Xie, “but that compromise will take at least six, seven months to really have an effect felt and seen by the American government, one that satisfies them.”

Still, many here aren’t convinced Chinese leaders are willing to compromise. And based on public reaction so far, it’s not clear the Chinese people want a deal with Trump.

“Many are saying, let’s have a trade war,” says Xie.

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