Tensions escalate between Trump and China over trade deal negotiations

Tension Over Trade Agreement: Trump and China Face Off in Escalating Disputes - Trump and China locked in a dispute

Get ready for a rollercoaster ride! The trade war between China and the United States has taken another twist with both sides trading barbs. After US President Donald Trump accused China of violating agreements made in Geneva a few weeks back, Beijing has fired back with a barrage of criticism towards the US.

The US side has been accused of imposing more restrictive policies on China since the Geneva talks. These policies include tightening the sale of AI chips and chip design software, as well as canceling visas for Chinese students studying in the US.

The Chinese Ministry of Commerce stated that instead of examining its own actions, the US is baselessly accusing China of breaking the consensus.

Trump takes aim at China

China and the US reached a tentative agreement in mid-May amidst the ongoing trade dispute in Switzerland. The agreement proposed a mutual reduction in tariffs for 90 days. This deal would reduce US tariffs on Chinese imports from 145% to 30%, while China's tariffs on imports from the US would fall from 125% to 10%.

At the time, President Trump described China's opening up as the most crucial aim and claimed that China had agreed to it. However, the US government's stance towards China has taken a harder edge recently. "Regrettably, China, as some might expect, has breached its agreement with us," Trump declared on his Truth Social platform on a Friday. He did not specify how he thought the agreement had been violated.

Direct conversation?

According to media reports, other US government representatives pointed out that China had indeed lowered tariffs as agreed, but other trade barriers such as rare earths export restrictions remained unchanged.

During a press conference at the Oval Office, Trump merely stated that China had violated a substantial part of the agreement. He was confident, however, that he would speak directly with Chinese President Xi Jinping – "and we hope to find a solution". There was no confirmation from Beijing regarding such a conversation.

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Background:

The current status of the trade agreement between the USA and China reflects a recent attempt to lessen tensions and reduce tariffs. Key developments include:

Tariff Reductions and Suspension:
A U.S.-China agreement on May 12, 2025, resulted in a 115% decrease in tariffs since April 2, 2025, with a base reciprocal tariff of 10% remaining in place for 90 days starting May 14, 2025[1][2].
China-originating goods are subject to a baseline tariff of 30%, with a 20% tariff related to alleged fentanyl trafficking and a 10% reciprocal tariff[2]. If a long-term agreement is not reached by August 14, 2025, the reciprocal tariff could increase to 34%[2].
Non-Tariff Measures:
China agreed to remove its non-tariff countermeasures against the US that were imposed since April 2, 2025[3].
The US also adjusted its de minimis rate for low-value imports from China[2].
Future Discussions:
The agreement established a mechanism for ongoing bilateral talks on trade and economic matters over a 90-day period[1][3].
The dialogue seeks to address concerns and strive towards a sustainable trade relationship, though long-term success is uncertain due to deep-rooted tensions and selective decoupling strategies[1][3].

Despite these efforts, significant challenges remain, including the potential for future tariff increases and ongoing tensions that could negatively impact global economic stability[1][2].

In the midst of the escalating trade war between the US and China, allegations of violated agreements have been exchanged. After President Trump accused China of breaking the Geneva agreements regarding employment policies in technology sectors, China has retaliated with criticisms toward the US for imposing restrictive policies on China. The US has been accused of tightening the sale of AI chips and chip design software, as well as canceling visas for Chinese students studying in the US, which the Chinese Ministry of Commerce claims are baseless accusations and a diversion from examining the US's own actions.

As tensions continue to rise, it remains uncertain whether direct conversations between President Trump and Chinese President Xi Jinping will occur to find a resolution to the ongoing dispute. With the potential for future tariff increases and ongoing tensions, the success of a sustainable trade relationship between the EC countries and China is uncertain, and the global economic impact will remain significant.