China Prepares for Negotiations with US... Trump Says "Call Within 24 Hours"
by Oh Suyon
Published 04 Feb.2025 11:00(KST)
10% Tariff on China to Be Imposed on the 4th...
"If No Agreement Is Reached, Tariffs Will Rise Further"
Proposals Include Restoring the 292 Trillion Won Trade Deal and Expanding Investments
On the eve of the suspension of high tariffs on Canada and Mexico, a 10% tariff on China is imminent. The Wall Street Journal (WSJ) reported that the Chinese government is preparing negotiations to prevent tariff hikes and technology sanctions by the Donald Trump administration.
On the 3rd (local time), President Trump told reporters at the White House, "We will probably talk within 24 hours" regarding China. He added, "The tariffs on China were the opening salvo," and said, "If we do not reach an agreement, tariffs will increase further."
White House spokesperson Caroline Lybbert said that a call between President Trump and Chinese President Xi Jinping is expected within a few days.
President Trump decided to impose an additional 10% tariff on China starting from the 4th, citing the influx of fentanyl. The New York Times (NYT), citing White House officials, reported that the 10% additional tariff on Chinese goods will take effect from midnight on the 4th.
According to officials familiar with the Chinese government, both countries are expected to propose restoring the 'Phase One Trade Agreement'?which was signed during Trump's first term but not implemented?to prevent the imminent tariff imposition, WSJ reported.
During the first term of the Trump administration in 2020, the US and China agreed that the US would withdraw additional tariffs on Chinese imports, and China would purchase an additional $200 billion (approximately 292 trillion won) worth of goods and services from the US over two years (2020-2021). However, due to the COVID-19 pandemic, China failed to fulfill the agreement. According to the Peterson Institute for International Economics, China only purchased 58% of the promised amount, which is even less than in 2017.
Sources say that since China did not fulfill the Phase One agreement, both countries are preparing to discuss ways for China to purchase more US products. China is expected to propose increasing US investments in sectors such as electric vehicle batteries, promising not to devalue the yuan, and reducing exports of fentanyl precursors. Additionally, the Chinese government plans to treat the sale of the short-form video platform TikTok's business rights purely as a commercial matter to foster a positive negotiation atmosphere. The government will not intervene, allowing TikTok's parent company, China's ByteDance, to negotiate with US companies interested in purchasing shares.
Arthur Crober, founding partner and research director at Chinese consulting firm Gabcal Dragonomics, said, "China will be very pleased to enter negotiations," adding, "China's fundamental goal is to slow down the US attacks rather than gain substantial benefits."
However, WSJ reported that neither side seems likely to engage in a full-scale trade war immediately. President Xi expressed willingness to negotiate with President Trump, and Trump showed willingness to talk by retreating from his campaign promise of a 60% additional tariff to imposing only 10%.
President Trump has hinted at using tariffs as leverage against China on economic and geopolitical issues. He also indicated a willingness to use tariffs as a potential bargaining chip, expressing a desire for President Xi's help to end the war between Ukraine and Russia.
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