Trade War Escalates: Biden Strikes China With Massive Tariff; Shocking Debt Scale In China's Economy

CCP cheating, Biden plans to triple tariffs on Chinese steel. Revealed, the alarming depth of CCP local government debt by a prominent scholar. A new wave of political chill in China's financial sector. Guangzhou transforms from day to night instantly, lightning in Jiangxi claims a life. German Chancellor's China visit, did Xi Jinping set a trap? It's all covered in today's China Truths. CCP cheating, Biden plans to triple tariffs on Chinese steel. On April 17 in Pittsburgh, known as Steel City, President Biden announced plans to significantly increase tariffs on imported Chinese steel and aluminum products due to unfair competition. President Biden stated, The CCP is not competing, they are cheating, just cheating. And we see the harm this does to America. I will urge the U.S. Trade Representative to consider tripling the tariffs on steel and aluminum materials imported from China. Biden proposed tripling the tariff on Chinese steel and aluminum imports from the current 7.5% to 25%. Simultaneously, the U.S. is pressuring neighboring Mexico to prevent the Chinese Communist Party from circumventing these tariffs by selling steel and aluminum products through Mexico. Epoch Times columnist Wang Yi commented, China currently produces over half of the world's steel, and such massive scale contributes to low priced dumping internationally, striking a huge blow to the global steel industry. The political implications of this U.S. policy are significant, even more so than its economic implications, thus it will certainly deter the CCP. In response to the CCP's government subsidies and non-competitive dumping of steel overseas, the U.S. government has initiated an investigation. Lael Brainard, director of the White House National Economic Council, noted that China's steel production accounts for half of the global output. This excess capacity, subsidized and sold at artificially low prices, undermines the sales of U.S. steel products. Professor Xie Tian from the University of South Carolina's Aiken School of Business said, it appears the U.S. government has new evidence to propose these tariffs, which are two to three times higher. This effectively counteracts many of the CCP's subsidies. Faced with this, the CCP must either increase subsidies or abandon steel dumping. We will see if the CCP can withstand continuing its subsidies. Wang Yi added, if it were only a few hundred thousand tons of steel exported to the U.S., it wouldn't impact China's steel industry much. But now that Biden has made this move, and the U.S. has taken the lead, will other countries like Europe, Japan, and South Korea follow suit? If they do, the CCP's international steel dumping will face strong backlash, which is what the CCP fears. During former President Trump's administration, a Section 232 investigation was already launched against Chinese steel and aluminum products, imposing a 25 percent national security tariff, along with anti-dumping duties on specific steel and aluminum products. It is understood that Biden's new tariffs will be in addition to these existing ones. Additionally, on April 17, the U.S. Trade Representative announced the initiation of a Section 301 investigation into Beijing's maritime, logistics, and shipbuilding sectors, to which the Chinese Ministry of Commerce vehemently objected. Wang Yi concluded, the CCP is strong on the outside but weak on the inside. As long as the U.S. truly takes action against the CCP, which has learned its lesson, it will make concessions when necessary. So its current defiance is just a superficial struggle, a mere bluster. If the U.S. takes substantial action, the CCP can only watch helplessly, as it has no countermeasures. According to the U.S. Trade Act of 1974's Section 301, the U.S. President is authorized to take all appropriate measures, including tariff and non-tariff actions, to address other countries' violations of international trade agreements or discriminatory, unfair, and unreasonable practices affecting U.S. commerce. Revealed, The Alarming Depth of CCP Local Government Debt by a Prominent Scholar Recently, a video that circulated online has caught the attention of netizens, in which well-known Chinese scholar Wen Taijun unusually exposed the severe In this lecture, Wen Taijun said, Since the reform and opening up in 1978, almost every leadership of the CCP has encountered crises. We call the leadership transition cycle a political cycle, which coincides with the economic crisis cycle. When Xi Jinping and Li Keqiang took over in 2013, the economy began to decline. Therefore, each leadership has experienced economic crises and faced very severe challenges. Regarding the financial status of local governments under the CCP, Wen Taijun disclosed in his speech the debt crisis they are facing. He said, I have a pilot town in a developed province in the south, where my students serve as deputy town mayors, and in some counties as deputy county mayors. We understand their local financial situation, some developed counties, which are county-level cities, have debts amounting to hundreds of billions or even over a trillion. County-level and town-level units can have debts of tens of billions, even over a hundred billion. Wen Taijun also mentioned how CCP officials handle the massive debts incurred by their predecessors. He explained, Leaders who pursued high growth would leave behind a huge amount of debt when they handed over their duties. The previous officials attracted investment, earned achievements, and were promoted. The next ones to take over faced a pile of debt. To keep this debt from blowing up, what do you do? Expropriate land. Once you have the land, you mortgage it at the bank and can cover 70% of the land price. Only then can you balance the previous accounts. It's not about repaying the debt, but making a deal with the bank. I pay the interest, and you turn the previous debt into a new loan for my term. Banks are willing to do this because it evens out their books, and their non-performing or overdue assets do not show up, thus not exposing the local debt conflicts. The previous term has been promoted, offending them does you no good. In your term, you must continue to bring in resources for mortgaging at the bank to get more loans for development funds. Wen highlighted the current government debt being between 50 to 60 trillion yuan, a significant portion of China's GDP, not including private debts, which exacerbate the issue. He noted the economic downturn in southern China, famously dubbed the world's factory, where mass layoffs and company bankruptcies are leading to increased private debt and social instability. High-interest loans and debt disputes are spreading, particularly affecting Henan, Shandong, and Hebei. Wen also explained that these financial issues are causing severe social conflicts, which could potentially escalate into broader crises. His observations were part of a lecture made in 2015, which gained broader exposure recently through social media. This disclosure comes at a time when the U.S.-China trade war under President Trump further pressured China's economy, already struggling with internal financial imbalances and policy challenges. Furthermore, during the pandemic, the CCP authorities aggressively pushed a zero-COVID policy, causing China's economy to shrink dramatically, real estate companies to burst one after another, and the financial industry to be impacted, with hundreds of Chinese banks seeing a spike in bad debts. A Chinese bank staff member recently revealed some chilling details about the bank's bad debt and overdue loan rates in a video. The bank staff member disclosed, just got off work from the bank and really hoped the housing prices in Dalian don't fall any further. If they do, some people really won't be able to handle it, especially those who have loans for buying houses. The bad debt rate and overdue rate at the bank are beyond your imagination. Those numbers are scary to even look at. Better not say more. The specific figures for China Bank's bad debt and overdue rates were not detailed by the staff member, as these real data are considered state secrets by the CCP. However, international rating agencies Fitch and Moody's downgraded the outlook for several Chinese banks from stable to negative within six months. A new wave of political chill in China's financial sector On April 16, the CCP Central Committee stationed inspection teams in the party committees of 34 financial bodies, including the PBOC, with a focus on upholding two safeguards as their primary task. The so-called two safeguards, a political slogan post Xi's rise to power, signify maintaining Xi's central party status and unified leadership. According to CCP official media, the head of the third central inspection team stationed at the PBOC, Wang Lishan, mentioned a search for political deviations in the role of political supervision to ensure security. PBOC Governor Pan Gongsheng called it a comprehensive political checkup, committing to immediate and substantial rectification of any issues found during the inspections. China expert Wang Yi told The Epoch Times on April 18 that a feature of today's central bank systems around the world is their significant independence, which allows them to function effectively. However, in the CCP's financial system, the central bank is controlled by the party. Yet, most of the senior management at the PBOC are professionals trained in the West, and they find some of the politically-driven policy goals imposed by the CCP absurd, leading them to delay or avoid implementing them whenever possible. Wang Yi added, this leads the authorities to believe that the PBOC is straying from party leadership, which has been a severe conflict. Therefore, since the inspections began in 2021, Xi has been cracking down. Wang Yi said that after the CCP's 20th Congress, the authorities began a new round of external management over experts, which actually backfired and triggered further passive resistance within the central financial system. For example, He Lefeng, the director of the Central Financial Affairs Office and one of Xi's closest confidants, demanded banks lend to real estate firms to save the housing market, but the banks, from their professional and commercial perspectives, saw these loans as unlikely to be recovered, thus they were not actively pursued. This frustrated Xi Jinping. Therefore, political inspections are necessary, but they actually devastate the financial system. Wang Yi further stated that due to the shaky state of China's economy, the authorities need to revitalize finance and the capital market to stabilize the economy. However, they are failing to do so, and the stock, real estate, bond, and foreign exchange markets are all in disarray, so the third plenary session cannot be convened. Xi believes that the various departments are not exerting enough effort, hence the need for political inspections, where each department must be scrutinized. On April 16, the same day CCP's central inspection teams launched reviews of 34 financial entities, the office of the CCP Central Financial Commission underscored the need for centralized leadership over finance, highlighting the critical role of maintaining Xi Jinping's Observers note a decline in the influence of central bank leaders within the party, emphasizing that real financial authority rests with Xi's inner circle. Lai Rongwei, CEO of the Taiwan Inspiration Association, indicated that there is considerable opposition to Xi among financial elites, who have been historically dominated by princelings. These groups, once peers to Xi, now find themselves under his titan rule, leading to widespread dissatisfaction within the sector. Lai Rongwei criticizes the centralization of power, suggesting that a dynamic economy needs less concentrated control. Lai Rongwei also observes that the CCP's tendency to place non-experts in charge of technical sectors, aiming to curry favor with Xi, neglects actual economic needs and focuses instead on ideological control, which he believes is inefficient. China's economic outlook is worsening, evidenced by Fitch Rating's recent downgrades of the credit outlooks for major Chinese banks and the nation's sovereign credit, reflecting growing concerns about the government's ability to manage economic pressures and the ongoing real estate crisis. Moody's also adjusted the CCP government's credit outlook to negative last December, citing the financial strain from supporting local governments and state-owned enterprises. Guangzhou transforms from day to night instantly, lightning in Jiangxi claims a life. Extreme and bizarre weather conditions are occurring across many areas in southern China. Recently, a squall line swept across Guangdong, turning Guangzhou from day to night in an instant. In Jiangxi, one person outdoors was killed by lightning amid hail the size of chicken eggs, while in Guangxi, car roofs were battered as if sieved. This round of fierce storms is set to sweep across the Pearl River Delta region, becoming a hot topic of discussion. According to China Weather on April 18, a bow-shaped squall line is sweeping across Guangdong, currently affecting Foshan, Chinyuan, and other areas, and has now reached Guangzhou, turning day into night instantaneously. The skies darken as intense thunderstorms and strong convective weather approached. The squall line will continue moving east, bringing fierce storms to Zhuhai, Shenzhen, Macau, Hong Kong, Zhongshan, Dongguan, and other areas of the Pearl River Delta, urging residents to stay indoors. From April 18 to 23, southern Jiangnan, Guizhou, and southern China are forecast to face heavy rains and severe weather phenomena, such as thunderstorms and hail. In Guangzhou, winds have reached level 10, prompting the city to start a level 3 emergency response for meteorological disasters. Guangzhou's Qimlong Safari Park observed unusual animal behavior before the storm, with animals running wildly, hinting at the approaching extreme weather. Local residents described the weather as eerie, with the sky turning ominously dark. Moreover, on April 16, areas in Xiangzhou and Ichuan in Jiangxi also faced severe thunderstorms and hail, with the largest hailstones measuring about 4-5 cm in diameter, causing damage to houses, cars, and vegetable greenhouses. An elderly man in Lun County, Fuzhou, Jiangxi, was killed by lightning while returning home from the fields. On the evening of April 16, several areas in Hechi, Guangxi, also experienced strong convective weather, with hail ranging from the size of peanuts to quail eggs, damaging car roofs and shattering windows. China has activated a level 3 emergency response due to the ongoing severe weather, affecting at least 10 provinces with potential thunderstorm gales and hailstorms. The Central Meteorological Station issued multiple warnings and forecasts, emphasizing the intensity of the expected weather conditions across the affected regions. German Chancellor's China Visit Did Xi Jinping Set a Trap? On April 16, Xi Jinping, the head of the Chinese Communist Party, hosted Scholz and his delegation at the Diaoyutai State Guesthouse in Beijing. The two took a walk after the meeting, highlighting its importance. However, according to the German newspaper Dagbladet, Scholz's visit was characterized as all talk, little outcome. Both sides stuck to their respective scripts on various issues. Scholz pointed out that Russia's war endangers Europe, to which Xi did not respond directly, only vaguely agreeing to a peace conference rejected by Russia. However, he also refuted the claim that China was supplying Russia with dual-use products that could be used for military purposes. On the issue of China's non-transparent government subsidies and the dumping of photovoltaic products and electric vehicles at low prices on the international market, Xi denied this. He cleverly pointed out that Chinese-made new energy products could help Europe achieve its climate goals. Scholz stated that Germany has no intention of decoupling from China, but hoped that China would make progress in resolving structural issues and improve the quality of cooperation. Europe wants to reduce risks while deepening existing engagements and forging new ties. Xi indicated that the industrial and supply chains between China and Germany complement each other deeply, and both markets are highly dependent on each other. He reminded everyone to be vigilant against rising protectionism and called for a fair, transparent, open, and non-discriminatory business environment for Chinese companies in Germany. During Scholz's visit, which coincided with the EU's investigation into China's dumping of low-priced electric vehicles and other products, he stated his disagreement with EU sanctions against Chinese products. Deutsche Welle commented that Scholz's visit once again showed Germany's dependency on China, rather than the other way around, and that China has been exploiting this long term. Germany has long pursued a policy of promoting change through trade, which posits that the more a country trades, the more open and democratic it becomes. However, this policy has faced challenges when applied to Russia and China. Liu Yan, a former investor from Beijing now living in Canada, told The Sound of Hope, Germany has deeply tied itself to China's economy over the decades of so-called reform and opening up. And now, all of Germany's investments, such as in the automotive industry, would be hard to fully withdraw from China if China's economy were to collapse, due to China's foreign currency reserves and political landscape. Scholarly Yuan Hua, residing in Australia, stated, Actually, Germany is now somewhat appeasing. It sees only the present and disregards the fundamental interests and universal values of Germany and the free world. This approach is similar to the appeasement policies of World War II, which ultimately allowed authoritarian regimes to rise quickly and disrupt world order, ultimately making everyone bear the consequences. If you don't stick to the basic principles of free trade but give up what you should uphold just for immediate benefits promised by the CCP, it's very dangerous and will have severe consequences later. During the talks, Xi Jinping stated, The current rapid changes in the world century require cooperation among major nations. China and Germany, as the world's second and third largest economies, play a significant role beyond bilateral relations and have a major impact on the Eurasian continent and the entire world. Liu Yuan Hua pointed out that the CCP's enemy is the United States. If the West were to unite, the CCP would be facing a dead end. Asian countries, except North Korea when it needs assistance, are aligned with it, and the relationship with Russia is also one of mutual use. There are no neighboring countries that are truly on good terms with it. The CCP is not truly aligned with Germany, but now that the United States is comprehensively containing it, it has no way out. So, it is looking for loopholes in Europe, such as Germany and France, and is also exploiting the free world's concerns about climate change to find opportunities. It is actually trying to break free from being isolated in the world. German Chancellor Scholz's visit to China also drew domestic criticism. Dr. Andreas Fulda, a political scientist at the University of Nottingham in the UK, believes that the German Chancellor should explicitly state Germany's values and interests because our values are also our interests. Submitting to an authoritarian regime does not bring sustainable cooperation and will damage various interests including economic and security. Don't forget to leave a comment in the section below to share your opinions on today's topic with us. Make sure to like and subscribe to see more interesting topics from China Truths.