‘Liberation Day’ is morphing into ‘Capitulation Day’
‘The US backed down. This will make’ China ‘confident that they have leverage over the US’
There was always something comical about President Donald Trump’s “Liberation Day” announcement in the White House Rose Garden last month. Standing in front of the global media, he held up a school-project-style tariffs board, convinced this would rattle China.
Fast forward 41 days, and his hubris after last weekend’s opening round of trade talks in Geneva is melting as quickly as the winter snow on the nearby Swiss ski slopes.
Not that you would know it from the bombastic claims on the White House website, hailing “a historic trade win for the United States.” Sections of the press called it “Capitulation Day.”
“The 90-day tariff reprieve on Chinese goods completes the Trump administration’s walk back of its reciprocal tariff policy – the signature part of the April 2 (‘Liberation Day’) announcement,” Zongyuan Zoe Liu at the Council on Foreign Relations said this week.
“But it’s too late to undo the … damage this skirmish has done to US trade credibility and the role of the dollar on the global stage,” she wrote in a commentary for CFR.
It’s too late to undo the … damage this skirmish has done.
Zongyuan Zoe Liu, Council on Foreign Relations
What happened:
- On Monday, the world’s two largest economies de-escalated the trade war.
- Washington cut tariffs on Chinese goods to 30% from 145% for a 90-day period.
- Beijing responded by dropping its duties on most products to 10%.
- “The dramatic reduction exceeded expectations in China,” Bloomberg News reported.
Delve deeper: Trey McArver, the co-founder of research group Trivium China, was even more bullish. “This is arguably the best outcome that China could have hoped for,” he said.
Between the lines: “The US backed down. Going forward, this will make [China] confident that they have leverage over the US in any negotiations,” he stressed.
Big picture: State-run media and internet influencers were quick to claim a Beijing victory. They pointed out that this was vindication of the Communist Party’s “tough line.”
Bottom line: “China’s firm countermeasures and resolute stance have been highly effective,” a post on X, formerly Twitter and linked to national broadcaster CCTV, read.
China Factor comment: President Xi Jinping might have won the first round. But the next phase will address China’s massive state subsidies policy, manufacturing overcapacity, and technological coercion. Increasing access to the economic superpower is also crucial.