US-China Trade Tensions Flare Again as Talks Stall
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China accused the U.S. of violating their recent trade deal and vowed to take measures to defend its interests, dimming the prospect of an immediate leadership call that Donald Trump wants to have to further bilateral talks.
The Chinese Ministry of Commerce issued a statement June 2 rebuking the U.S. president’s claim that Beijing breached the consensus reached in Geneva in May. The dust-up threatened to upend trade relations even as Trump expressed hope May 30 he will speak with Chinese President Xi Jinping, with White House economic adviser Kevin Hassett expecting a call to take place this week.
Beijing accused the U.S. of unilaterally introducing new discriminatory restrictions, including new guidelines on AI chip export controls, curbs on chip design software sales to China and the revocation of Chinese student visas.
“If the U.S. insists on its own way and continues to damage China’s interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests,” the ministry said. It also said the U.S. violated the consensus reached between Trump and Xi on Jan. 17, when they last spoke, without elaborating.
Asian shares dropped along with U.S. stock-index futures, with a gauge of Chinese stocks traded in Hong Kong falling as much as 2.9%, the most in nearly two months.
(Bloomberg Television via YouTube)
Tensions between the world’s largest economies are ratcheting up again after the tariff thaw in May. The Trump administration last week said it planned to start revoking visas for Chinese students while moving to restrict the sale of chip design software to China. They have also barred the export of critical U.S. jet engine parts and technology to China, the New York Times reported.
Beyond strains in economic ties, geopolitical friction is also growing. China’s Foreign Ministry over the weekend protested U.S. Defense Secretary Pete Hegseth’s assertion at a gathering of military chiefs that China poses an imminent threat to Taiwan, a self-ruled island claimed by Beijing.
Trump didn’t elaborate when he accused Beijing of violating the tariff truce on May 30, but U.S. Trade Representative Jamieson Greer complained that China had not sped exports of critical minerals needed for cutting-edge electronics.
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China has been loosening the grip on its exports of rare earths over the past week at a pace that’s “slower than industry would like,” said Michael Hart, president of the American Chamber of Commerce in China.
In the statement, the Commerce Ministry said it “resolutely rejects” the U.S. accusations and that the country has strictly and sincerely implemented the consensus.
Trump’s comments came a day after U.S. Treasury Secretary Scott Bessent said talks with China on trade had stalled and suggested that a call between Trump and Xi might be necessary to break the deadlock.
The U.S. president “is going to have a wonderful conversation about the trade negotiations this week with President Xi,” Hassett, director of the White House National Economic Council, said Sunday on ABC’s This Week. “That’s our expectation.”
Trump has signaled a wish to have a call with his Chinese counterpart as early as February and later said he was willing to travel to the Asian nation to meet with Xi, although no such engagement has been scheduled so far.
