China braces for “protracted war”
On Friday, the FT – quoting AmCham China sources – reported that China plans to exempt certain US products from its 125% tariffs.
- “Healthcare imports to China were under review for possible tariff exemptions.”
- “Companies in sectors including aviation and industrial chemicals said that some of their products had already been granted a reprieve, while local media reported that some semiconductors had been spared tariffs.”
So, is this a signal that China’s ready to de-escalate with the US?
- Probably not.
On Monday, Beijing Daily published an editorial calling on the Chinese people to prepare for a “protracted war.”
- The term is a reference to a series of speeches “On Protracted War” by Mao Zedong during the Second Sino-Japanese war.
Channeling Mao, the editorial argued that China should neither compromise with the US in hopes of getting a "good deal," nor assume that a trade war victory was imminent.
- Instead, China should leverage its strengths to resist US bullying.
On Tuesday, the foreign ministry published a video with much the same message:
- “Compromise won’t earn you mercy, kneeling only invites more bullying.”
Get smart: Beijing's tariff exemptions aim to ensure essential US imports remain affordable – they are not an overture to trade negotiations.
Get smarter: Beijing has sent a clear signal that it won’t be cowed into cutting a deal.
- Drawing on its hallowed Party history, it is also preparing people for a painful, protracted trade war.