Chinese President Xi Jinping's promise to reduce auto tariffs is not the win for President Donald Trump that it appears to be.

While Trump praised Xi’s proposals on Twitter — “Very thankful for President Xi of China’s kind words on tariffs and automobile barriers,” he posted — analysts and business leaders shrugged off Xi’s promises to open markets as old pledges that have yet to be fulfilled. They also dismissed his vow to reduce auto tariffs as inconsequential without other, larger changes.


“The Chinese are great at saying what folks want to hear,” said a U.S. industry aide, who spoke on condition of anonymity to be more candid. “Hope springs eternal, and it would be great if the takeaway from this speech is that the Chinese are truly now committed to a level playing field. I think it’s really, quite frankly, a stretch to make that case.”

Xi’s offer to cut auto tariffs could be interpreted as “the Chinese version of an olive branch,” but any reductions could be negated by other, non-tariff barriers, said Derek Scissors, resident scholar and China economy expert at the American Enterprise Institute.

The problem is the Chinese want to placate Trump by increasing imports without addressing their massive subsidies and regulations that make it hard for foreign firms to compete in their market, Scissors said.

Xi’s speech is less of a bending toward Trump administration concerns than an “olive twig” likely to spur only marginally greater market access, said Scott Kennedy, a China analyst at the Center for Strategic and International Studies.

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“If the administration’s goal is to modestly move the needle on the trade balance and improve market access somewhat, then this would be a starting point of a negotiation,” Kennedy said. “But if their goal is to constrain China’s industrial policy, then this doesn’t even get China to the table.”

As a political statement, Xi’s speech played well to those worried about a trade war. The forum provided him an opportunity not only to speak to the White House but to try to win allies among other world leaders who align themselves more with Xi’s stated vision of open markets and a strong trading system than with Trump’s zero-sum worldview, Kennedy said.

Xi seemed attuned to Trump’s trade priorities, even if he never mentioned the American president by name. He promised to boost imports to cut China’s trade surplus, strengthen intellectual property protections, improve the investment climate and remove market access barriers.

“This year, we will significantly lower the import tariffs for automobiles and reduce import tariffs for some other products,” Xi added. “We will import more products that are competitive and needed by our people.”

New White House chief economic adviser Larry Kudlow said he was encouraged by Xi’s speech in an interview Tuesday on “The Hugh Hewitt Show.”

Xi talked “about all of the things that we’ve been saying are wrong” and promised that change is coming, Kudlow said. “If it does, it changes the whole game.”

As recently as Monday, Trump had railed about the terms of China’s agreement to enter the World Trade Organization back in 2001, which allow it to keep a 25 percent tariff on foreign-made cars, while the United States only has a 2.5 percent tariffs on auto imports. “Does that sound like free or fair trade. No, it sounds like STUPID TRADE - going on for years!” Trump wrote on Twitter.

But even White House officials stressed that words alone would not stop Trump from moving forward on possible tariffs on Chinese goods.

“Certainly we are encouraged by President Xi’s words," White House press secretary Sarah Huckabee Sanders told reporters. "But at the same time, we want to see concrete actions from China, and we’re going to continue moving forward in the process and in the negotiations until those things happen.”

Several business leaders were more critical, saying they heard little new and are increasingly frustrated with Chinese pledges to speed up reform with little or no follow-through.

“The business community wants to see China move forward with implementing the promised reforms, not just talk about them,” said John Frisbie, president of the U.S.-China Business Council. “The lack of implementation is creating uncertainty and undermining business confidence.”

Kennedy warned that praising Xi’s remarks “as a big step forward” could actually lead to a worsening of tensions between the two countries.

“The big challenge is having the administration speak with clarity and consistency about what its goals are,” he said. “Because it’s certainly possible that Xi Jinping could be reading market reaction and the comments from Kudlow and others and thinking, ‘Oh, what we need to do is just make a limited offer on market access, and that should be acceptable.’”

Scissors said it is essential that the U.S. convey specific requests of Xi to reform China’s industrial policy.

“Even in private discussions over the past week, the administration has been unable or unwilling to identify specific changes they want from the Chinese,” he said.

Scissors added that the ball is in the U.S.’ court to push Beijing toward a more substantive discussion.

That could include moving ahead with imposing tariffs on the first $50 billion worth of Chinese imports that came as a result of an investigation into China’s intellectual property practices and identifying the list of an additional $100 billion of products Trump said he wants to hit with duties, he said.

“We can inflict more pain on them than they can inflict on us,” Scissors said, noting that the U.S. imported more than $500 billion worth of goods from China last year, compared to the $130 billion worth of U.S. goods that China imported. “So their advantage is thinking we won’t stick to it. That very well may be true.”