Trade war, day 26: Gloomy outlook despite private talks
In our last update on the trade war (day 21), official talks were frozen, and American and Chinese officials were bashing each other at multiple public forums, including the World Trade Organization.
Now, the two sides are “having private conversations as they look for ways to re-engage in negotiations,” according to Bloomberg (paywall). “U.S. stocks rose, Treasury yields edged higher, the offshore yuan erased an earlier drop and the dollar pared gains” upon the news, Bloomberg reports.
But the public bashing has not ended.
- Apple was furiously attacked in state media — in “Xinhua and at least four state-supported media outlets” — for “not doing enough to filter banned content on its iMessage service,” the Wall Street Journal reports (paywall).
- “Porn, gambling, medicines! Apple, you don’t even care to manage this?” is how one article from Xinhua’s public WeChat account was headlined (in Chinese).
- “State broadcaster CCTV joined in Tuesday on another front, saying Apple’s app store allowed illegal gambling apps disguised as official lottery apps,” the Journal notes.
- Though the criticism is conspicuously timed with the trade war, users of Apple’s iMessage program in China have been dealing with an unusually large amount of spam recently, according to Abacus.
- The attack on Apple can be seen as a “qualitative measure,” or non-tariff punishment to reciprocate American tariffs that the Chinese Ministry of Commerce threatened back in June.
Other news from the trade war:
- Beijing’s nixing of a $44 billion chipmaker merger last week, between U.S.-based Qualcomm and Netherlands-based NXP, has rubbed American officials the wrong way. The Bloomberg article linked above reports that “[Treasury Secretary] Mnuchin was among the Cabinet officials involved in a last-minute effort early last week to get the Qualcomm-NXP deal approved,” and that “the U.S. has privately expressed dismay to the highest levels of the Chinese government that the deal fell through.”
- The mayor of Los Angeles fears a “stupid” full-blown trade war would doom his city’s growth, the South China Morning Post reports. The city is “the busiest US container port and the No 1 hub for ocean trade with China. The port handled US$284 billion worth of goods last year, including US$145 billion with China,” the SCMP notes.
- “We hope to be the leading Chinese city in America for investment, tourism and students,” LA mayor Eric Garcetti said, the Financial Times reports (paywall).
- “U.S. almond farmers are getting crunched from all sides,” the Wall Street Journal reports (paywall), as a 50 percent tax from China on almond imports has coincided with a bumper crop and the closure of a loophole whereby almonds could be funneled through Vietnam to China.
Do you find the trade war “perplexing,” like Chinese Foreign Minister Wang Yi? Here’s two things to read:
- “The Chinese view: Ten truths about U.S.-China trade” is an article in the LA Times by Wang Yong, a professor at the School of International Studies at Peking University.
- “Made in China 2025: The domestic tech plan that sparked an international backlash” is The China Project’s own explainer breaking down the chief point of contention for Washington, and how China has responded to it.
Previously in The China Project’s trade war coverage:
Trade war, day 21: ‘A problem with China that’s going to go on for years’
