Trade War, Day 20: ‘There will be no winner,’ says Xi Jinping, as Qualcomm deal threatened

The drama continues in the U.S.-China trade war. Today, the presidents of both countries mentioned the conflict in public statements — Xi Jinping in a speech at the opening of a multilateral forum, and Donald Trump, of course, on Twitter. Meanwhile, more and more companies are being dragged into the trade fight and voicing their concerns.

• “A trade war should be rejected because there will be no winner,” Xi Jinping said at the opening of the BRICS summit of emerging economies in Johannesburg, South Africa, AFP reports.
• “They are being vicious in what will be their failed attempt. We were being nice – until now!,” Donald Trump tweeted this morning, voicing particular umbrage at China’s targeted tariffs of American farm products.
• Yesterday, Trump attempted to reassure American farmers with a brazenly optimistic assertion: “Tariffs are the greatest! … Remember, we are the ‘piggy bank’ that’s being robbed. All will be Great!” Soon after that statement, the White House announced $12 billion in economic aid to farmers hit by the trade war.
• But American farmers aren’t feeling reassured. Both CNN and the Associated Press had soybean farmers describe the economic aid as a “Band-Aid” for a much broader problem, and the AP added, “Farmers said they would rather have Trump settle the trade disputes with China, Mexico, Canada and the European Union and get free trade flowing again.”
• There are no reported negotiations happening between American and Chinese officials, the SCMP says, despite Trump’s tweet (yes, another one) saying “Negotiations are going really well” — though he might have been referring instead to negotiations with the EU, which the Wall Street Journal reports (paywall) yielded an agreement today.

Qualcomm’s bid to buy NXP may become the largest trade war casualty yet:

• The “San Diego-based chipmaker will have to abandon its $44 billion acquisition of the Netherlands’ NXP Semiconductors if it fails to gain approval from regulators in Beijing,” CNN reports.
• For over 20 months, since October 2016, the government in Beijing has held up approval, and analysts don’t agree on whether it is likely to be approved.
• “NXP has given Qualcomm until 11:59 p.m. to get it done. Absent any word from China, Qualcomm doesn’t plan to seek an extension,” Bloomberg reports(paywall).
• “NXP is owed a $2 billion termination fee if Qualcomm walks away from the deal,” Bloomberg adds.

Other trade war news:

• Many Chinese companies ‘will go bankrupt’, if US delivers on tariff threats, court newspaper warns / SCMP
  “In an opinion piece published on Wednesday by People’s Court Daily, Du Wanhua, deputy director of an advisory committee to the Supreme People’s Court, said that courts needed to be aware of the potential harm the tariff row could cause.”
• A message from a C.E.O.: Tariffs are going to hurt American workers / NYT (paywall)
  “Let’s be clear: a tariff is a tax, plain and simple… Our supply chain, which has been developed and optimized over decades, cannot be reorganized in short order,” writes the CEO of machine manufacturer Cummins.
• Chinese deals lose luster for officials across the US / WSJ (paywall)
  “Critics have singled out Chinese deals as national-security risks on the grounds the companies may be directed and subsidized by the government of China, an economic and military rival.”
• China targets economy, not Trump, with weaker yuan / WSJ (paywall)
  “Government advisers and economists say the nation’s leaders will refrain from actively devaluing the currency to hit back at the Trump administration. ‘China has no intention to turn the trade war into a currency war,’ said an official involved in policy making.”
• China’s $9 billion plan to boost 5G undermined by trade war / Bloomberg (paywall)
  “A company that’s a key part of China’s ambitions to be a leader in cutting-edge wireless technology is preparing to go public to fund its expansion, but President Donald Trump’s trade war threatens to put a damper on what could be the world’s biggest initial public offering in almost four years.”
• Factbox: Impact of U.S.-China trade tariffs on U.S. companies / Reuters
  Reuters produces a “list of recent comments made by U.S. companies on the tensions.”

Previously in The China Project’s trade war coverage:

Trade war, day 19: This is not going to end soon