China Changes Time It Starts Trade War Against US To Avoid Striking First

  • Written by Zero Hedge
  • Published in Economics

With the US set to launch the first salvo in the trade war against China at 12:01am on Friday when Washington imposes 25% tariffs on $34 billion in Chinese products, and with Beijing set to immediately respond, a logistical issue emerged: who gets to strike first?

Due to Beijing being 12 time zones ahead of the US, and because China also planned to launch retaliatory tariffs against the US on Friday at midnight, it would mean Beijing would technically start the trade war, because 12:01 a.m. in Beijing on Friday would mean noon Thursday in Washington. So upon reflection, and realizing that the earth's curvature could make China appears as the aggressor, China said that it wouldn’t implement tariffs ahead of the U.S. on Friday, after previous arrangements put it on course to do so.

The earlier arrangement, a Chinese official said Wednesday according to the WSJ, reflected Beijing’s determination to start its tariffs on July 6, the same date set by the U.S. for its tariffs. And since China's plans a tit-for-tat escalation, a statement issued by the China’s State Council on June 16 said that retaliatory extra duties on $34 billion of U.S. imports are set to take effect on July 6.  "It’s the U.S. that started all this,” a Chinese official said. “China is fully prepared.”

However, in a statement published late on Wednesday, the Ministry of Finance said "we will never fire the first shot and will not implement tariffs ahead of the U.S.," after media reported that Beijing would start levying tariffs hours ahead of the U.S. due to the time zone difference.

So, as a result of the timezone difference, it means Beijing would actually implement its tariffs from midday Friday in China—an unusual practice for Chinese customs, which generally assess levies on a full-day basis.

Beijing’s plan shifted as it was wary of being seen as provoking the battle, and as Bloomberg adds, in the brewing trade war between the U.S. and China, "Beijing officials consistently seek to portray their nation as simply being on the defensive against Donald Trump’s aggressive tactics."

Moving ahead of Washington to impose tariffs would have entailed risks for Beijing, analysts said, making it harder for both sides to resume negotiations stalemated for the past month. A first strike would go against the Chinese leadership’s public position that China doesn’t want a trade war with the U.S. President Donald Trump has threatened to levy duties on an additional $400 billion in Chinese products if Beijing retaliates for his first batch of tariffs. - WSJ

Commenting on the 12 hour delay, Timothy Stratford, a lawyer at Covington & Burling in Beijing said that a Chinese head start "would not be moving hearts and minds on both sides toward the positive direction of de-escalation."

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