Trump open to negotiate China tariffs with Xi as part of TikTok deal

The US President suggests he could cut the 65 per cent tariff rate if Beijing allows a sale of TikTok, but Chinese government advisers warn China is now in a ‘struggle for survival’ with America.

China President Xi Jinping is yet to respond to Donald Trump’s tariffs. Picture: AFP

You can now listen to The Australian's articles. Give us your feedback.

You can now listen to The Australian's articles.

President Donald Trump has suggested he could cut the 65 per cent tariff rate on China if Beijing allows a sale of TikTok, but Chinese government advisers are urging caution as they argue “Liberation Day” has confirmed China is now in a “struggle for survival” with America.

China’s leader Xi Jinping has not commented on the thumping tariffs the American president has ordered to be imposed on Chinese imports from next week.

As Chinese exporters fretted about the future of their businesses, President Xi tried to project an unruffled demeanour on Thursday as he oversaw a tree-planting ceremony with school kids in Beijing and spoke about the importance of the environment. Beijing’s initial responses were delegated to government ministry spokesmen.

Chinese Foreign Ministry spokesman Guo Jiakun said America’s actions “gravely violates WTO rules” and said Beijing would “do what is necessary to defend our legitimate rights and interests”.

Speaking later on Thursday evening, Trump indicated he was open to negotiating the size of his tariffs on China in return for Beijing’s approval of a sale of social media giant TikTok from its Chinese parent company ByteDance.

“We have a situation with TikTok where China will probably say we’ll approve a deal, but will you do something on the tariffs,” Trump said. “The tariffs give us great power to negotiate.”

“We’re very close to a deal with a very good group of people,” he added, saying it involved “multiple” investors.

The Chinese social media app had been ordered to shut down in America, but Trump ordered a delay on the US Congress-ordered ban in one of his first actions back in the White House. He has set a deadline for the TikTok divestment for Saturday.

The new deal is supposed to address American security concerns about the app by separating TikTok from its Beijing-headquartered parent company.

The deal is designed to address security concerns by separating TikTok from its parent company. Picture: AP

Reported new investors in the American proposal, which is closely co-ordinating with the Trump administration, reportedly include Andreessen Horowitz, Blackstone and Silver Lake, who would dilute the ownership stakes of Chinese investors.

They would join large existing investors, which include Coatue, General Atlantic, KKR and Susquehanna. Oracle, which is chaired by Trump supporter Larry Ellison, would provide data security to the company.

Trump’s new 34 per cent tariffs stunned Beijing. Adding to earlier waves, they take the total American tariff rate on Chinese goods to 65 per cent, a devastating blow for many exporters.

The American President also ended a loophole that had allowed a duty-free exemption on packages sent from China and Hong Kong valued below $US800 ($1270).

Chinese e-commerce companies Shein, a fast fashion chain, and PDD’s Temu, an e-commerce firm, had used the loophole to circumvent previous American tariffs.

Economists at Citi said the new imposts could knock 2.4 percentage points off China’s GDP growth and 15.4 percentage points off its overall exports in 2025, although that would be softened by measures Beijing is expected to take to mitigate the impact.

US President Donald Trump steps off Air Force One on his way to his Mar-a-Lago resort. Picture: AFP

Zhou Xiaoming, China’s former deputy representative to the United Nations in Geneva, said Beijing should not get distracted by prospects of short-term relief.

”We must look at the essence and the strategic goals of the United States toward China. In the eyes of politicians in Washington, there are unsolvable structural contradictions between China and the United States, and the dispute between China and the United States is a struggle for survival,” said Zhou, a senior research fellow at the Centre for China and Globalisation.

“As long as the strategic goals of the United States toward China remain unchanged, it is impossible to give up the containment strategy against China,” he said.

Many Chinese experts are advising their government to make the most of the international bad will against America.

“I think non-US countries will unite,” said Lu Xiang, an expert on American issues at the Chinese Academy of Social Sciences. “This year, trade between non-US countries will explode.”

Tu Xinquan, dean of the China WTO Research Institute at the University of International Business and Economics, said Trump was conducting “the largest economic experiment in history”.

“No one knows what results it will get,” Tu Xinquan told Chinese business magazine Caixin. “But my basic judgment is that the United States will become the place with the highest production costs in the world.”

He said that Trump’s many reversals had reduced the willingness of countries to negotiate with him.

“Who can trust him now?”

Chinese media has been full of stories about the harshness of America’s tariffs against many of the world’s poorest countries, including earthquake-ravaged Myanmar.

Propaganda workers have been jubilant.

“2025 is likely to be recorded in history as the ‘turning point of American decline’,” former Global Times editor-in-chief Hu Xijin told his millions of social media followers.