Trump's Trade Truce Tango Is China Stepping on His Toes?

Trump Accuses China of Trade Truce Violation, Renewing Trade War Fears

Just weeks after a fragile trade truce was established between the United States and China, tensions are once again on the rise. President Trump has publicly accused China of failing to uphold its end of the bargain, casting a shadow over recent progress and sending ripples of concern through the global economy.

The President's allegations, voiced on Friday, immediately impacted the stock market, leading to a slight dip as investors reacted to the renewed uncertainty. This development comes at a particularly sensitive time, given the recent legal challenges to the administration’s tariff policies. A federal trade court had initially deemed several of Trump's duties illegal, including some imposed on China, before an appeals court temporarily reinstated that power.

A Rocky Road to Truce

The trade conflict between the two economic giants has been escalating for months. Earlier in the year, the United States had increased tariffs on Chinese imports to a staggering 145 percent, prompting China to retaliate with a 125 percent import tax on American products. Further complicating matters, Beijing moved to establish a licensing system for exports of rare earths – crucial minerals essential for U.S. manufacturers in sectors like:

• Cars
• Semiconductors
• Airplanes
• The defense industry

These restrictions threatened to severely impact vital American industries, leading to intense lobbying efforts aimed at securing relief from the Trump administration.

A Glimmer of Hope, Now Dimming?

In early May, Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer met with their Chinese counterparts in Switzerland, seeking to de-escalate the conflict. The outcome was a tentative agreement: both sides pledged to roll back the measures they had implemented, including lowering high tariffs for a 90-day period, and to engage in further discussions aimed at reaching a more comprehensive agreement.

A key component of the expected concessions from China was the relaxation of restrictions on critical minerals. However, U.S. officials now appear dissatisfied with China's progress in this area.

Limited Shipments and Lingering Concerns

While China has reportedly resumed some shipments of rare earth magnets in recent days, these shipments have been limited, according to sources familiar with the sales. This has done little to assuage the concerns of American companies, who remain anxious about their access to these vital Chinese supplies.

The Future of US-China Trade

The renewed tensions highlight the fragility of the current trade truce and underscore the significant challenges that remain in achieving a long-term, mutually beneficial trade agreement between the United States and China. The stakes are high, not just for the two countries involved, but for the entire global economy. Whether both sides can navigate these turbulent waters and find a path towards cooperation remains to be seen, but the latest developments certainly warrant close attention.

Tags: Stock market, Trump tariffs, Trade dispute, US China trade, Import tax, Rare earths, China exports, Trade concessions, US economy, Global trade

Source: https://www.nytimes.com/2025/05/30/us/politics/trump-china-trade.html