Washington: China and the United States have agreed to resume tariff negotiations amid an ongoing trade standoff and concerns over rare earth minerals, President Donald Trump announced on Thursday following a call with Chinese leader Xi Jinping. The conversation comes at a time when stalled trade talks between the two nations have unsettled global markets.
The Chinese Foreign Ministry confirmed the call, stating that Trump initiated the discussion. The White House did not immediately comment on the matter. Just a day prior, Trump had expressed skepticism about reaching an agreement with Xi, describing the Chinese leader as “VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH” in a social media post.
Trade negotiations had reached an impasse following a May 12 agreement, in which both countries had reduced their tariff rates to facilitate talks. However, tensions remain high due to competition for economic dominance. The United States has accused China of restricting exports of critical minerals, while China objects to American limits on advanced chip sales and access to student visas for Chinese college and graduate students.
In a bid to encourage negotiations, Trump temporarily reduced his tariffs on Chinese goods from 145% to 30% for 90 days. China reciprocated by lowering its taxes on US goods from 125% to 10%. This back-and-forth has caused significant volatility in global markets and threatens bilateral trade.
Treasury Secretary Scott Bessent suggested that a direct conversation between Trump and Xi was necessary to resolve lingering differences and restart meaningful talks. Despite the agreement to resume discussions, fundamental tensions remain. Trump seeks to reduce America's dependence on Chinese manufacturing and revive domestic industry, while China aims to continue advancing in strategic sectors like electric vehicles and artificial intelligence, crucial for its long-term economic ambitions.
In 2024, the United States recorded a trade deficit of \$295 billion with China, according to the Census Bureau. While China has grown into a major economic and geopolitical power through its manufacturing focus, its economy has recently slowed due to a real estate crisis and the impact of pandemic-related lockdowns, which have dampened consumer spending.
Trump and Xi last spoke in January, just days before Inauguration Day, discussing trade and the US demands for China to curb the flow of synthetic opioid fentanyl into America. While Trump had previously expressed hope for a major deal, he recently accused China of violating its agreements, stating, “The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!”
With PTI inputs