China will hold off on entering serious trade talks with the US while it waits to see which of Donald Trump’s advisers will have his ear and how other countries will respond to the 90-day pause on tariffs, according to sources.
The Trump administration was “too divided” and China was in no rush to negotiate an end to the tariff deadlock that Washington initiated, according to a source familiar with the situation.
“There is no clear sign which clique will win,” the source said, referring to the various camps of Trump’s top advisers.
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Three of Trump’s top trade advisers have divergent views on how to deal with China. Peter Navarro and Robert Lighthizer are known for their strongly protectionist positions and advocacy of US-China decoupling, while Scott Bessent, the treasury secretary, thinks it is possible to get a trade deal with China to rebalance the trade system.
The source said that the differences in these views and the uncertainty around what Trump’s final call would be had made Beijing reluctant to enter into talks.
To do so would risk “revealing your cards when you don’t even know who your opponent will eventually be”, the source added.
Yuyuan Tantian, a social media account affiliated with state broadcaster CCTV, said in an article on Thursday that the US had recently sought to contact the Chinese “through multiple channels” to start trade talks.
“There’s no need for the Chinese side to talk to the US before the US makes any substantial moves,” the article said. “But if the US wants to contact China, there’s no downside to China at this stage either.”
It added that China needed to assess the US’ real intention and decide on its own terms.
Various sources said Beijing would be watching closely until the end of July, when the US’ 90-day grace period for the imposition of the US tariffs lapses.
After launching the tariffs to much fanfare on April 2, the White House said it was giving most other countries except China a 90-day reprieve to negotiate duties.
“The key is to see how much the US market can handle and how it performs around July,” a second source said on condition of anonymity.
The person said tariff increases with the US were probably inevitable, but should not be “outrageous”.
According to the source, the trade tension is expected to last for a long time, but this time China was not alone because other countries – rivals and allies alike – had been hit by tariffs and each one had been trying to work out what to do next.
“In fact, we can even afford to sit back and watch how things unfold,” the second source said.
The first source said Beijing was waiting until the end of July to see what deals other countries, particularly India and Indonesia, would cut with the US.
In the meantime, China has been doubling down on efforts to forge stronger and more diverse economic ties with non-US markets. It has also been on a self-reliance drive to boost domestic consumption since 2020.
Those years of effort have paid off as Beijing is confident that it is in a stronger position and its high-end products have become difficult to replace because of their technological sophistication and quality, according to several officials.
“Whether it’s India, Vietnam, or even the US, building comparable manufacturing bases is not something that can be achieved in the short term,” the second source said.
The second source said the US’ strengths were in the dominance of the US dollar and the country’s solid economic foundation, including its mature financial system and consumer market as well as its ability and willingness to correct course quickly and have a clear strategic objective.
“Its weaknesses, however, include a tendency towards unpredictability and internal constraints that hinder coordinated action,” the source said.
In terms of negotiations by other countries, the White House said that by April 15, more than 75 countries had contacted the US administration to discuss new trade deals.
A Japanese delegation went to Washington two weeks ago, prompting the White House to declare that progress had been made.
However, no information about that progress has been made public and it is unclear if there has been any meaningful movement with any other country.
Countries in Asean, the Association for Southeast Asian Nations, which have been hit hard by the tariffs, are finding less “manoeuvring space” and none of them want to be forced to take sides between the US and China, according to a third source.
Joerg Wuttke, a partner at the Washington-based advisory firm DGA-Albright Stonebridge Group, said: “I personally know that the Trump administration finds it very hard to actually not only start negotiations, but also come up with meaningful proposals.”
The European Union has been struggling to get clear expectations from the Trump administration and the Japanese delegation faced a similar problem, according to Wuttke, the former president of the EU Chamber of Commerce in China.
“The US officials seem to be just in a wait-and-see mode in order to check on what the other countries have to offer,” Wuttke said. “It is not an administration that finds a solution. It is one man who decides what’s going to happen and that’s President Trump.”
He said a lack of trust prevented China from sitting down and coming up with proposals with the US, and it would take a while to see what the Trump administration wanted.
Navarro, the grand architect of the April 2 “Liberation Day” tariffs, said it would be possible to close 90 deals with US trading partners within the 90-day grace period. But Bessent, the US treasury secretary and a billionaire hedge fund manager, is leading the trade talks.
“Influence with President Trump is impossible to gauge,” said Dennis Wilder, a professor of practice at Georgetown University and a former CIA official.
He said Trump “respects and listens to all three men [Navarro, Lighthizer and Bessent] for different reasons – there is no question that because of these different powerful voices Beijing is confused as to Trump’s trade and tariff agenda”.
“But their views only count so far. At the end of the day, Trump always makes his own choices. Thus, the key here is where the president himself ends up on the issue of trade versus decoupling,” Wilder said.
Wuttke said that sitting down with 60-70 trading partners within 90 days was going to be “very, very difficult” and China would probably be dealt with last.
All eyes will then be on who starts the negotiations. In an interview with Time magazine last week, Trump suggested that the process was already under way, saying Chinese President Xi Jinping had called him and “we’re meeting with China”.
However, Beijing said any such claims were “fake news”.
The second source said communication between the two sides had never stopped but there was no clear start date or a definitive outcome for trade negotiations.
“They’ve simply taken different forms and approaches, even official statements from various spokespersons are, in themselves, a form of negotiation and strategic manoeuvring.”
The first source said that Beijing and Washington did have high-level talks but from Beijing’s perspective, this was simply a case of keeping the communication lines open.
Things could change after the northern summer, when the full effect of the tariffs will be felt and US consumers face soaring prices in consumer products.
“I think the real influence [on Trump’s thoughts] will show after summer,” Wuttke said.
“We have to see to what extent damage has been inflicted.”
Trump’s approval rate stands now as 41 per cent and it has dropped 7 percentage points since February, largely because of his handling of trade and economic issues, according to a CNN poll from April 17-24.
Yet Beijing still sees Trump as the most powerful figure in the foreseeable future.
More from South China Morning Post:
- How China came up with a game plan to survive a Trump 2.0 trade war
- China’s Xi dials up tech push, Global South solidarity as US tariff war deepens
- China rejects Trump claims of Xi Jinping tariff phone call
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