Leaders and elder statesmen of the Chinese Communist Party (CCP) gathered at the balmy seaside resort of Beidaihe just east of Beijing Saturday to kick off their annual summer retreat. It’s a famously clandestine affair, with roads closed, checkpoints erected and burly security officers prowling every corner of the town. Still, it’s no secret what subject will dominate this year’s conclave after a startling escalation in the Asian superpower’s trade war with the U.S.
Markets plunged this week after President Donald Trump vowed to slap 10% tariffs on $300 billion of Chinese imports—including consumer goods like smartphones, toys and children’s clothes—from Sept. 1. This comes on top of the $250 billion he has already hit with 25% import taxes.
The escalation shocked Chinese officials who, not for the first time, believed negotiations were bearing fruit, especially since Trump had agreed a truce in late June. But rather than be cowed, China hit back Monday by slashing purchases of American soybeans to their lowest levels since 2004 and depreciating the national Renminbi currency by 1.4%, thereby lessening the blow of Trump’s tariffs by making exports cheaper.
