China is 'caving' to Trump's trade war strategy, expert signals
Gatestone Institute senior fellow Gordon Chang believes it's "a win for Trump" as a "really bad story for Beijing" emerges in the trade tensions between China and the U.S.
Early signs are emerging that China is now "caving" to the U.S. and President Donald Trump on tariffs, according to one foreign policy expert.
Gatestone Institute senior fellow Gordon Chang agreed there’s "a win for Trump" after the president revealed he’s spoken to China about trade tensions and the recent exemption of some U.S. goods from its 125% tariff.
"China is doing this, but it's not announcing it. It's just not imposing the tariffs on aviation products, industrial chemicals, and semiconductors. It's sort of like the Chinese way of doing it," Chang said on "Varney & Co." Friday.
"It's basically, they're caving, but they don't want to say they're caving."
TRUMP SAYS RECIPROCAL TARIFFS COULD BE RE-IMPOSED WITHIN WEEKS
From the White House lawn Friday morning, President Trump took questions from the press when he was asked the last time he spoke to Chinese President Xi Jinping.
"I don't want to comment on that, but I've spoken to him many times," Trump responded before pivoting to a question about what exactly they discussed: "I'll let you know at the appropriate time. Let's see if we can make a deal."
Though China on Thursday publicly announced it was not negotiating with the U.S. on trade, a later report from Reuters claimed China’s Ministry of Commerce taskforce is collecting lists of items that could be exempted from tariffs and is asking companies to submit their own requests.
Washington has said the current status quo is economically untenable and has already offered tariff exemptions to some electronic goods. But Beijing has taken a harder stance, saying it is willing to fight to the end unless the U.S. lifts its tariffs.
Chang predicts the tariff back-and-forth between China and Trump’s America "can go on for a very long time."
"Xi Jinping has boxed himself into the corner," he said. "And I believe that if he comes to a deal with the U.S., he's got to explain that to the Chinese people. That's going to be very difficult for him."
"You can't say, 'Well, I'm now dealing with the U.S.,' because that would be undercutting everything that he has said to his own people for years," he continued.
Weighing whether China is indeed "really vulnerable," Chang noted the country’s negative consumer and producer price indices, shrinking gross domestic product and tax receipts down in the first quarter.
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"When you had India a couple days ago slap the 12% tariffs on steel, that was directed at China because they don't want their market flooded with Chinese steel that otherwise would have gone to the U.S. You're going to see other countries do the same thing, which really means China is going to have export problems because that's where they've been looking for growth," the expert analyzed.
"But they can't grow it in a world like we have today. And besides, when you add deglobalization, this is a really bad story for Beijing."
FOX Business’ Bradford Betz contributed to this report.
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