YouTube Transcript:
Xi says China is ‘not afraid’ as Beijing hits US with 125% tariff

China is digging in.
Americans are waking up
to a whole new escalation
in the global trade war.
Beijing is hiking its retaliatory
tariffs on U.S.
goods today from 84% to 125%.
And for the first time
since this all started
actually
hearing from the Chinese
president XI Jinping himself,
he's saying that
his nation is quote unquote, not afraid.
And also warning, well,
there are no winners in a trade war,
and going against the world
will only lead to self-isolation.
This after President Trump
raised tariffs on Chinese goods
even higher, 145%.
Now, as we're all trying to keep track,
the white House says
they're waiting for China
to pick up the phone.
China says essentially the same thing
about the United States.
This very clearly showing
what a tit for tat
looks like sending markets
tumbling Thursday.
But President Trump,
still optimistic
when meeting with his cabinet.
We think we're in very good shape.
We think we're doing very well.
Again, there'll be a transition cost
and a transition in problems.
But in the end it's going to be
it's going to be a beautiful thing.
Stock futures are right now
up across the board.
Let's see if they stay
a beautiful thing today.
But what is concerning investors
a lot right at the moment.
The U.S.
dollar falling to its weakest level
against the euro in three years.
CNN's Linda Green at the white House.
For us once again, CNN's Mark Stewart.
We're not letting him go.
He's in Beijing for his mark.
Tell us more about China's counterpunch
and what it's going to mean.
1.3. Okay.
Good morning.
Look, none of this is a surprise.
These latest tariffs are very much
in the Chinese playbook.
But what's very attention
getting to me is the fact
that China is now saying
it's not going to raise tariffs
any higher, saying it has other weapons
almost making fun of the United States
for raising the stakes,
raising the number so high.
Let me share with you some remarks.
We got late today from a government
official here in Beijing
who said that the United States
is engaging in
nothing more
than a numbers game
with no real economic significance,
going on to say the United States
is exposing itself
as a participant in weaponizing tariffs
as a tool of bullying and coercion,
turning itself into a joke.
So that is the latest,
where China stands in this back
and forth, tit for tat.
The other big headline of the day
is that we are hearing from Chinese
President XI Jinping,
really the first time
since this whole trade war
escalated to such a high level.
The big headline is that he is saying
China is not afraid.
These are remarks that were made
with the Spanish
prime minister here in Beijing.
And according to state media,
he said that China is going to continue
to remain confident,
it's going to remain
focused,
saying there are no real winners
in the trade war.
Kate, the language
that we're hearing from XI
Jinping is very consistent
with what we've heard
from other government
officials over the last few days.
And as you mentioned,
as far as the possibility
of a phone call
between XI Jinping and President Trump,
not in the near future.
That's the messaging
that we're feeling
from Beijing, at least.
And that is quite a statement
that you got from
that government official
just to be there.
I mean, the gloves are off
now in terms of
how the two sides
are going to be talking about it.
we will need to stand by
and see how Donald Trump
response to that,
but also stand by with me.
Mark, I want to get to the white House
and get related to here.
Are you getting any reaction yet
this morning to
this escalation from China?
So, so far, the white
House has not responded
to the latest remarks,
from China or from President XI.
But what I will say
is that the white House
has been very dug in on its position
as itrillionelates to China.
They are acting very defiant.
in this kind of trade, tit for tat
that we are seeing.
But I think what's been very clear
so far, Kate, is that this position
is not going to be tenable
for much longer at some point to the both
the two sides are going to need
to really open lines of communication.
Now we actually have
a story out this morning kind of breaking
all of this down.
But at the crux of it, Kate,
is this two white House officials
tell me that the president, and the U.S.
will not reach out to China. First.
The president has made it
clear to his team
and to his advisors
that he wants China to come to them.
And really,
he wants to have a high level
meeting directly between him
and President XI himself.
Now, this has been
what the white House
has been communicating
to Beijing for several months now.
But on the other side,
we also know
that Beijing does
not really
want to have that high level meeting.
What they've been trying to do is open
communications at a lower level.
And so
really there's been this stalemate
and no talks at all going on right now
between the Trump administration
and that of President XI.
Now, one hurdle of what
we're hearing behind
the scenes here at the white House
is that the president believes
that President XI
does not want to be seen as weak.
and that's really as well
kind of what's coming into this refusal
and waiting to see who blinks first here.
Now, we've also heard,
President Donald Trump
say that he is confident
that he can reach a deal at some point.
He said that he believes
China will come around.
He said China wants to make a deal.
They just don't know how to go about it.
They're proud people.
We've heard similar rhetoric
from some of his top
economic advisers,
saying that the ball is now in
China's court.
It's clear
that's not how China sees this.
But I think the key question now
moving forward
is that really how this all is
decided is going to be on
how much pain are they willing to take?
How much more pain
are they willing to see
in this escalation of these tariffs
without any real communications
to ensure there's an off ramp?
Yeah. Exactly.
How much pain is the Trump
administration willing to endure
and also the American people,
how much pain is China
willing to endure as well?
Stick with me, Mark. In this moment.
This has been going
this tit for tat has been going on.
Now, you know, for more
for quite some time.
Why do you think
and what are you hearing about?
Why is he
Jinping is speaking out in this moment.
I think really two reasons, Kate.
Number one, simply being it's time
the Chinese economy,
in addition to what's happening
now, is already dealing.
For XI Jinping to continue
to build national unity,
to build national pride
as it deals with yet
another economic headwind.
And then the other reason
if we look at the calendar, XI
Jinping is about to embark on a trip
to Cambodia, to Vietnam and Malaysia.
These are key trading partners.
These are relationships
that he has been
strengthening over the years.
So as he builds bridges
to these other nations,
it's a way to also project some stability
and to let the world
know where China stands
and that it is a strong,
formidable player.
That's Vietnam, one of the nations
also that
the Trump administration
is trying to prioritize
in renegotiating a trade deal.
Now, all of it related. Likely.
None of it is coincidence in this moment.
Mark, thank you so much.
Elena at the white House
for us, as always.
Thank you guys very, very much
while I have you.
And this is,
actually some information
that we just received right now
from the State Council Tariff
Commission, saying in a statement
a short while ago
that China will be raising
retaliatory tariffs on
US imports to 125%.
This is information
that's just coming in to CNN right
now, again, citing the state
Council Tariff Commission.
I'm curious
what your immediate reaction
is with your expertise,
this, counterstrike,
shall we call it from China directed at,
at the US business market?
It's not
so surprising, you
know, in the sense that they'll do
Delta dissent.
The key,
of course, is that
the US is the big importer.
the Chinese don't import
anything like as much
from the United States
as the United States imports from China.
So, other countries
come back with the tariff response,
but the whole starting point from this
in the United States
was we're running a massive
trade deficit.
and we don't run big surpluses
with anybody.
So, we can raise tariffs on you.
And if you retaliate,
it has less impact on us. net.
So I'm not massively surprised.
It just keeps the whole thing
the that the chance of quick resolution
and of us
getting back to a world of free trade,
seem to be fading.
And there will be a negative
growth effect around the world,
but we're not.
It's going to be hard to avoid. Yeah.
Fascinating.
And finally, kid,
I'm curious,
what are some of those factors
in speaking of foreign investment?
What are some of those factors
that can tend
to scare foreign investors away from U.S.
assets? Is it this this, talk of tariffs?
no, I
think it's it's
it's if the tariffs reduce
the profitability of U.S.
companies, do I need to own
so many of my US equities?
They've done fantastically.
am I worried that if the Chinese decide
they no longer want to hold U.S.
treasuries to the size that they used to,
that I'm
going to cause, a loss of the US
Treasury markets
really important status
as the safest asset in the world.
and the rising US yields,
some of it reflects weaker demand.
So people are going
to pay much more attention
to Treasury, auctions
going forwards from here.
but but you know,
another part of it, quite simply, is we,
you know,
foreigners have accumulated $65 trillion
worth of U.S assets.
That's a lot of your money
to have parked in one place.
And if you're worried that the US
is withdrawing
into itself a little bit more now,
you know,
maybe you want to lighten up
and put some of it
somewhere else if you can.
We gotta leave it there.
Dukes,
thank you so much for your expertise.
We're really glad that
we have that insight. Appreciate you.