Who first blinks to negotiate rates?

In the early hours on Thursday morning, the Chinese state media announced that the United States tried to initiate tariff negotiations with Beijing.

It was news that the rest of the world had waited to hear as amazingly high rates – up to 245% on some Chinese exports to the US – the gas trade between the two largest economies in the world, which increased the ghost of a recession.

President Donald Trump’s government has used various channels to contact Beijing, according to a post on social media platform Weibo by Yuyuuantian, an account affiliated with China Central Television (CCTV).

The declaration, who mentioned not mentioned by the case, was less than a week after Trump claimed that conversations were already underway between the two nations – a suggestion that Beijing later denied.

“China does not have to talk to the United States,” Yuyuuantian said in Thursday’s post. “From the perspective of the negotiations, the United States must currently be the more fearful party.”

The statement follows a cycle of claims and refusal from both the US and China, because each party refuses to initiate public discussions.

The question is not whether the discussions will take place, but rather, under what circumstances and on whose assignment.

Experts characterize the struggle as a game between Trump and the Chinese leader Xi Jinping, while both men try to save the face and at the same time pursue a mutually beneficial result, a de-escalation of the trade war.

“I expect part of this back and forth, because neither Washington nor Beijing want to look like they are the side that admit,” says Ja Ian Chong, assistant professor of political sciences at the National University of Singapore.

“(But) would be a de-escalation for the general advantage of both parties, so there is an umbrella stimulans to do this.”

Wen-Ti Sung, an academic member of the Australian Center on China in the world, puts it a different way: “It is like two racing cars that go together: those who first wave will be seen as the weaker of the two parties. And at the moment neither of them wants to look soft.”

The leader who admits that he was the first to initiate tariff discussions would be seen as the person who jeopardizes his position in negotiations.

“The person who seems desperate loses leverage with negotiation,” says Mr Sung. “Both parties want to portray the other side as desperate.”

This special stalemate – where both parties are looking for the same result, but neither wants to be the first to suggest it – has resulted in a tactic of “constructive ambiguity”: the intentional language that is so vague that each party could demonstrably claim to be in the right side.

It is this tactic that Mr Sung points out as an explanation for the Weibo Post by Yuyuuantian.

“This is Beijing who tries to explore the possibility to use word games to make an off-disaster for both parties, so that they can gradually climb down this escalation spiral,” he says.

One way to escape this game of chicken is when a third party mediates and offers both parties an off-disaster. The other option, Sung explains, is a “much looser concept of what” has achieved the other side “means”.

In this way, the side that indeed comes to the table is still able to characterize it as a reaction instead of the first move.

In the case of Trump and XI, it would also mean that tariff negotiations can start with both leaders who claim to have won a kind of victory in the trade war.

The optic here is important. As Mr. Chong notes, De-escalation is one thing but another top priority for Trump and XI is to “deliver a victory for their domestic audience”.

“Trump naturally wants to show that he is capitulating Beijing. And to the People’s Republic of China side, XI probably wants to show his own people and the world that he has been able to make Trump more reasonable and medier and accommodating,” says Mr. Chong.

On the domestic front, both leaders are confronted with rate-induced headwind. Trump was struggling this week to suppress the fear of a recession like new data indicated that the US economy has been contracted for the first time since 2022 in its first quarter.

In the meantime, XI was before the rates Already fight Surprising low consumption, a real estate crisis and unemployment – should reassure the Chinese population that he can withstand the trade war and protect an economy that has difficulty recovering after the pandemic.

“Both (Trump and XI) acknowledge that on this point of the Trade War it will no longer be a winner-tages-all-all gelgaakt for both parties,” says Mr Sung.

“Trump acknowledges that he won’t get what he wants to get near 100%, so he tries to find a concession point where China can let him win just enough, especially for domestic purposes.”

Although China is not unwilling, he adds: “They are very stuck with what the right price is”.

For Xi, Mr Sung described the situation as a “game on two levels”.

“The China side must manage the bilateral negotiations of the US-China, while Beijing has to save sufficient face in the interior so that Chinese leadership can hold on to this story of” the east and the West refuses, “he says.

“A kowtowing from the east to the west is not an emerging east.”

At the time of writing, the US did not deny China’s claims that it tried to initiate conversations. But the fact that both parties have now made that statement indicates that there is “a kind of contact”, according to Mr. Chong.

“The two parties talk,” he says. “And that is a sign that there is a possibility that some accommodation can be achieved.”

But the start of the negotiations does not mean that the relationship between the US -China – which was rocky, even before Trump started a trade war – is almost steady.

Mr Chong does not hold his breath. First, he believes that the “attitude” suggests that the two parties have not reached the point “where they both try to find a way out”.

“(Each party) may hope that there are concessions from the other side, so they will have this impasse until they see which side flashes first.”