Trump criticized Europe on trade matters severely. Attempting a similar approach with China could prove challenging.
The current state of trade negotiations between the United States and China remains in a precarious position, with recent talks ending without a new trade deal but both sides agreeing to continue working towards extending the existing 90-day tariff truce, set to expire on August 12, 2025.
The most recent negotiations in Stockholm concluded on July 29, 2025, without an immediate agreement to extend the deadline. The decision now lies with U.S. President Trump, who is expected to review a briefing before deciding whether to prolong the truce.
Several factors make a deal challenging for President Trump. Persistent unresolved disputes, tariff complexities, political and economic stakes, a waiting strategy, and geopolitical rivalry are key obstacles in reaching a comprehensive agreement.
Despite several rounds of talks since May 2025, including those in Geneva and London, substantial disagreements remain, with no fundamental changes in negotiation positions evident. The trade war involves multiple tariff layers, including a 34% reciprocal tariff on Chinese goods, earlier imposed 20% and 25% tariffs, and Trump's threats to increase baseline reciprocal tariffs to 15-20%.
Trump's 2024 campaign proposals include imposing very high tariffs on China (up to 60%), highlighting a political incentive to take a tough stance on trade with China. These tariffs could reduce U.S. economic output but increase federal revenue significantly, making concessions politically sensitive.
Analysts suggest both countries may be "waiting it out" for changes in domestic or global conditions rather than making immediate compromises, indicating a strategic deadlock. The tensions between the two largest economies encompass broader geopolitical competition beyond just trade issues, which complicates reaching a comprehensive agreement.
China, unlike other global trading powers, ignored Bessent's admonition not to retaliate after Trump's tariff outburst in April. The White House has proposed to extend a pause on mutual tariff hikes between China and the US. However, the Chinese authoritarian system means Xi can impose more pain on his people than Trump might risk inflicting on Americans.
A real deal with China is so important because it could undermine the fragile foundation on which Trump's trade wins rest. Treasury Secretary Steven Mnuchin stated that the administration will present Trump with the facts, and he will decide.
On a positive note, Trump has secured significant political victories with trade deals with the EU, the UK, Japan, Indonesia, and the Philippines. The EU has agreed to a framework trade deal with the White House. Tariffs may not kill economic growth and cause a recession, and businesses may adapt to the new certainty of duties between 15% and 20%.
China's leaders understand US politics more than they did decades ago, but the current impasse in trade negotiations underscores the complexity of the issues at hand. As the deadline for the tariff truce approaches, the world watches with bated breath to see how the negotiations unfold.
- Despite the ongoing trade impasse between the United States and China, both countries continue to agree on the necessity of extending the existing tariff truce, highlighting the political importance of reaching a deal.
- The current trade war between the United States and China involves not only economic stakes but also complex geopolitical rivalries and general-news issues, making a comprehensive agreement challenging for both sides, as evidenced by the strategic deadlock.
