Heat Check: US-China Trade Truce Under Threat
The Latest Spat
Trade Agreements Imperiled - Reciprocal Action Between Trump and China - Trump and China engage in a heated conflict
In the ongoing economic battle between the US and China, both nations have engaged in a fresh round of barbs. Following US President Donald Trump's accusation against China for allegedly abandoning the agreements struck in Geneva roughly two weeks ago, Beijing has fired back with strong criticism of the US.
As stated by the Chinese Ministry of Commerce, the US has imposed more stringent discrimination against China in terms of AI chip sales, chip design software, and visa cancellations for Chinese students studying in the USA, since the Geneva talks. The ministry also expressed concern over unjustified criticism from the US, portraying itself as the party that violated the consensus [1].
Trump's Take
The US and China had agreed to a tariff reduction truce during a mid-May trade dispute in Switzerland, with the largest economies in the world agreeing to a 115% tariff reduction. To clarify, this means that both countries now have a 10% reciprocal tariff in place instead of the higher rates that were imposed earlier. This agreement is a temporary measure, allowing both nations to discuss economic and trade-related matters for a period of 90 days[2].
President Trump once described opening up China as his top priority and claimed that China had agreed to it. However, in a recent social media post, Trump asserted that China had broken their agreement with the US [3]. Trump did not specify the basis upon which he reached this conclusion.
Direct Dialogue
According to various media outlets, other US government representatives have pointed fingers at China for failing to adhere to the tariff reduction commitments, while maintaining blocking measures such as rare earth exports restrictions [4].
Speaking at a press conference later, Trump affirmed that China had violated a significant part of the agreement [3]. Despite this, Trump expressed hope that he would speak with Chinese President Xi Jinping, with the aim of finding a resolution to the issue [3]. There was no official confirmation from Beijing regarding such a conversation at the time.
A Complex Web
- US
- China
- Trade Truce
- Donald Trump
- USA
- Trade Dispute
- Beijing
- US President
- Trade Barbs
- Tariff Reduction
- Export Controls
Enrichment Data:
Key Factoids
- Timeline: The agreement was announced on May 12, 2025, and goes into effect immediately.
- Tariff Adjustments: The joint statement outlined a reduction in tariffs on both sides; the US decreased from 145% to 10%, while China's tariffs dropped from 125% to 10%.
- Duration: The agreement lasts for a 90-day period during which both parties will negotiate on matters related to trade and the economy.
- Futures Uncertain: If no further agreement between the US and China is reached by August 14, 2025, US tariffs could revert from 10% to 34%, with the total rate peaking at 54% when combined with other existing tariffs [2].
- The ongoing trade dispute between the US and China has escalated, with both countries accusing each other of violating the agreement reached in Geneva, raising concerns about the stability of the tariff reduction truce, especially within the context of the employment policies of European countries, considering the potential impact on global trade and investment.
- The prolonged US-China trade spat, culminating in the imposition of stringent measures against China in areas such as AI chip sales and visa cancellations for Chinese students studying in the US, could have a significant impact on employment policies in the European Congress (EC) countries, particularly those with robust ties with China in the technology sector, necessitating a broader discussion among global policymakers to ensure economic stability and growth.
