Bangkok, July 30: China’s top leaders have pledged to help companies slammed by higher US tariffs but held back on major moves after trade talks with the US this week kept businesses and planners in limbo.
At their summer economic planning meeting, the powerful Politburo of the ruling Communist Party pledged to stabilise foreign trade and investment.
“We must assist foreign trade enterprises that have been severely impacted, strengthen financing support, and promote the integrated development of domestic and foreign trade,” the official Xinhua News Agency said in reporting the closed door meeting. It mentioned export tax rebates and free trade pilot zones but gave no other specifics.
The inconclusive outcome of two days of trade talks in Stockholm, Sweden, leaves open the question of higher tariffs on Chinese exports to the United States.
Chinese Vice Premier He Lifeng said the two sides had agreed to work on extending a deadline for higher tariffs. The US side said the extension was discussed, but not decided.
US Treasury Secretary Scott Bessent told reporters after the talks that President Donald Trump would decide whether to extend the Aug 12 deadline for reaching an agreement or to let tariffs that have been paused for 90 days to “boomerang” back to a higher level.
“We haven’t given the sign-off,” Bessent said, though he emphasised that the talks had been “very constructive.”
China remains one of the biggest challenges for the Trump administration after it has struck deals over elevated tariff rates with other key trading partners — including Britain, Japan and the European Union.
Many analysts had expected that the Stockholm talks would result in an extension of current tariff levels, which currently stand at a US tariff of 30% on Chinese goods and a Chinese tariff of 10% on US products, far lower than the triple-digit percentage rates raised in April.
The truce in the tariffs war to allow time for talks, agreed on in early May to allow time for negotiations, allowed exporters and other traders to ramp up shipments in hopes of beating any higher tariffs that might follow.
The meeting headed by Chinese leader Xi Jinping mostly reiterated Beijing’s priorities for the year, including a need to “unleash domestic demand” which has lagged, leading to a surge of exports by industries unable to find growth at home. It also stressed the need to promote jobs and prevent a “large scale relapse into poverty.”
The economy “has demonstrated strong vitality and resilience,” the Xinhua report said. But it acknowledged many risks and challenges. That includes reining in brutal competition that has led to damaging price wars among automakers and some other manufacturers and managing excess capacity in some industries, it said.
China’s economy expanded at a 5.2% annual pace in April-July, slowing slightly from the previous quarter. But analysts have said actual growth may have been significantly slower.
Even with the hiatus in higher tariffs, companies are feeling a pinch. Industrial profits in China fell 1.8% in the first half of the year and 4.3% in June, according to data released earlier this week.
It’s unclear what level of tariffs might eventually be imposed on Chinese exports to the United States.
Chinese Foreign Ministry spokesman Guo Jiakun said Thursday that Beijing hopes the U.S. side would follow through on the “important consensus” reached between Trump and Xi in a phone call to promote stable relations between the world’s two largest economies.
But Guo reiterated China’s stance on its US objections to its purchases of oil and gas from Russia, which Bessent raised during the talks in Stockholm, threatening more tariffs.
“China will take reasonable measures to ensure energy security in accordance with its national interests,” Guo said. “There are no winners in a tariff war. Coercion and pressure will not solve the problem. China will resolutely safeguard its sovereignty, security and development interests.” (AP)
