President Trump last week raged about China's high tariffs against American products. The mainstream media breathlessly predicted a devastating trade war — one the MSM gleefully declared the U.S. would lose — and said the aggressive move would devastate the stock market.
Neither happened. In fact, the exact opposite occurred.
On Tuesday, Chinese President Xi Jingping announced plans to "open" China and vowed to "significantly" lower tariffs on automobile imports from the U.S.
"China does not seek trade surplus. We have a genuine desire to increase imports and achieve greater balance of international payments under the current account," Xi said at the economic Boao Forum for Asia.
Mr Xi also pledged to reject attempts to impose barriers on world trade, saying that “China’s door of opening up will not be closed and will only open up even wider."
Xi warned against a tit-for-tat battle over tariffs.
"We must refrain from seeking dominance and reject the zero-sum game, we must refrain from 'beggar thy neighbor' and reject power politics or hegemony while the strong bully the weak," Xi said.
Instead, countries should "stay committed to openness, connectivity and mutual benefits, build an open global economy, and reinforce cooperation within the G-20, APEC and other multilateral frameworks. We should promote trade and investment liberalization and facilitation, support the multilateral trading system," he said.
On Monday, Trump berated China for its high tariffs, which are charged on imported goods.
"When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%," Trump wrote on Twitter on Monday. "When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade. No, it sounds like STUPID TRADE - going on for years!"
In addition to the move on tariffs, Xi also vowed to strengthen intellectual property rights, addressing another of Trump’s main complaints against the communist country.
"We encourage normal technological exchanges and cooperation between Chinese and foreign enterprises and protect the lawful [intellectual property] owned by foreign enterprises in China," he said.
Now this may be shocking to the MSM, but the markets soared on the news. Dow futures were up more than 350 points heading into the market open on Tuesday.
"Concerns over a potential trade war between the U.S. and China have been alleviated somewhat after Chinese President Xi Jinping discussed plans Tuesday to further open up the country's economy, with measures including lowering import tariffs on autos, enforcing legal intellectual property of foreign groups and reducing duties on other consumer products," CNBC reported.
Larry Kudlow, director of the National Economic Council at the White House, said Xi "did a lot more than blink."
"He made, I don’t know what the code is in China, but he may have blinked three times. And look, he’s talking about market openings. He’s talking about reducing barriers. He’s talking particularly in the automobile industry. It looks like he’s talking about joint companies, you know, American side can get over 50%," Kudlow said.
"We’ll have to clarify that, but that seems to be in there. He also talked about intellectual property theft. He also talked about technology, force technology transfers. In other words, all of the things that we’ve been saying are wrong, he addressed in his speech in a positive way, that change is coming. And he said it’ll come sooner rather than later," he said.