The Chinese-American agreement, mediated by Swiss mediation in Geneva, resolved several trade issues between the two sides by suspending a portion of customs duties for 90 days. This represents an opportunity to rebuild trust between the two countries and open broader horizons for future economic cooperation. In a joint statement, the two countries announced the establishment of a “mechanism to continue discussions on economic and trade relations” led by US Treasury Secretary Scott Besant and Chinese Vice Premier “Hu Lifeng,” emphasizing that “ongoing talks can address each party’s concerns.” The agreement stipulated a reduction of US tariffs on Chinese goods to 30% for 90 days. Meanwhile, China announced a reduction in tariffs on Washington from 125% to 10% for a period of 90 days. The massive tariffs imposed by the United States on China and China’s double-digit retaliation have raised fears of a collapse in trade between the two powers, with US ports officially announcing for the first time a sharp decline in the number of ships expected to arrive from China. It should be noted that lifting the new tariffs imposed by “Trump” on China does not mean a resolution to the conflict, as the realistic goal, in the best-case scenario, is to de-escalate the current situation without ending the high tariffs and other restrictions between the two parties. Hundreds of American companies are also awaiting the results of the Swiss talks with China, led by American technology companies operating in the Idaho-based women’s sportswear sector. Wide Ray, which has production lines in China, previously announced that it was affected by the US-China trade war and halted its operations in China as a result.
The agreement between China and the United States stipulated a mutual reduction of tariffs by 115%. This agreement also included a mechanism for ongoing trade talks between the two sides to ensure the implementation of the understandings and monitor developments between the two parties. Through this agreement, the United States seeks to achieve a greater trade balance with China and push it to become more open to imports of American goods, thus boosting American exports and reducing the trade deficit, which increased significantly during the term of former US President “Joe Biden.” However, the US measures still include an additional 20% tariff aimed at pressuring Beijing to do more to curb the illicit trade in fentanyl, which causes the deaths of thousands of Americans annually after being smuggled across the Mexican border into the US. Beijing consistently denies this.
Washington seeks to reduce its $295 billion trade deficit with Beijing and persuade China to abandon what the United States describes as a mercantilist economic model and contribute more to global consumption. This shift requires politically sensitive domestic reforms, according to the American approach, but Beijing has reservations about it, in accordance with the principle of non-interference in Beijing’s internal affairs, particularly by the US.
Chinese state media praised the trade agreement with the United States, and the first comments from the Chinese Broadcasting Corporation (CCTV) were that the meeting between China and the United States in the Swiss capital, Geneva, was “balanced and beneficial to both sides.” The Chinese Ministry of Commerce announced that “the agreement with the United States represents an important step in resolving differences and laying the foundation for overcoming differences and strengthening cooperation between the two countries.” Chinese Vice Foreign Minister “Hua Chunying” also affirmed that “Beijing is fully confident in its ability to manage trade issues with Washington and that China is ready for the upcoming negotiations with it.” While some economists in China, through a number of published analyses, doubt that the 90-day pause is temporary and that outstanding issues may resurface if a comprehensive agreement is not reached between the two parties.
Chinese President Xi Jinping’s first political speech after the trade agreement with Washington was that “American bullying and hegemony will only backfire,” an implicit reference to the United States. This came just one day after a temporary truce was agreed upon in the trade war between the world’s two largest economies. Chinese President “Xi Jinping” said that “there is no winner in tariff wars or trade wars. American bullying or hegemony will only lead to self-isolation,” reiterating his warning throughout the trade confrontation with US President “Trump.” President Xi added that “great changes unseen in a century are accelerating, making unity and cooperation among countries indispensable, rather than the language of competition and conflict.”
On the Chinese side, China has several winning cards in the face of the US trade war. As the world’s second-largest economy, it can better absorb the effects of tariffs than other smaller countries. With a population of over one billion, China also has a massive domestic market that could relieve some of the pressure on exporters suffering from US tariffs. Trump’s tariffs on China have given the leadership of the ruling Communist Party of China even greater impetus to unleash the country’s consumer potential. The Chinese Communist Party “CPC” leadership has declared that China is fully prepared to endure pain to avoid surrendering to what it perceives as US aggression. The ruling Communist Party has used nationalist sentiment to justify its retaliatory tariffs against the United States, with Chinese state media urging the Chinese people to “weather the storms together.” Chinese President Xi Jinping’s tone has been defiant and confident. President “Xi” has reassured his people that “the sky will not fall.”
Under Chinese leader “Xi Jinpin”g, China has entered a race with the United States for technological dominance. China has invested heavily in domestic technology, from renewable energy sources to microchips to artificial intelligence. One example is the Chinese chatbot DeepSeek, which China celebrated and officially presented as a strong competitor to the American chatbot ChatGPT and the American company BYD. China thus announced its overtaking of Tesla, owned by American billionaire “Elon Musk,” to become the world’s largest electric car manufacturer. Meanwhile, the American smartphone company Apple has lost valuable domestic market share to its Chinese competitors (Huawei and Vivo).
Beijing recently announced plans to spend more than $1 trillion over the next decade to support innovation in artificial intelligence to outpace Washington. Although American companies have attempted to shift their supply chains away from China, they have struggled to find similarly skilled infrastructure and labor elsewhere. Chinese manufacturers at every stage of the supply chain have given China a comparative advantage that has spanned decades, and it will take time for Americans to replicate or replace it. This unique Chinese supply chain expertise and government support have made China a formidable adversary in this trade war with Washington. In some ways, Beijing has been preparing for this anticipated trade war since Trump’s previous term and his knowledge of his hostility toward China.
China’s plans to counter US trade hostility have diversified across a variety of sectors. For example, since “Trump” imposed tariffs on Chinese solar panels in 2018, Beijing has accelerated its plans for a future beyond the US-led global order. Beijing has also pumped billions of dollars into the trade and infrastructure program of China’s Belt and Road Initiative to strengthen relations with the so-called “Global South” countries and support them in the face of Washington.
China has also expanded its trade with Southeast Asia, Latin America, and Africa in an attempt to reduce its dependence on the United States. For example, American farmers used to supply China with 40% of its soybean imports, but that share has now fallen to around 20% due to the US trade war with China. China responded to Washington after the Trump administration’s recent trade war by intensifying domestic soybean cultivation. To this end, China purchased record quantities of the crop from Brazil, now China’s largest supplier of soybeans, strengthening China’s position in global food security.
Following reports in China that the White House would use bilateral trade negotiations to isolate China, Beijing warned countries against reaching an agreement at the expense of China’s interests, lest they enter into an open trade war with everyone. This would be an impossible option for most countries in the world. The United States is no longer China’s largest export market; its position has now become subordinate to Southeast Asia. China is the largest trading partner for 60 countries around the world, nearly double the number of the United States. As the world’s largest exporter, China achieved a record $1 trillion surplus by the end of 2024. China also holds more than $700 billion in US government bonds. This gives Beijing leverage, and Chinese media has been promoting the idea of ??selling or withholding US bond purchases as a weapon.
Among the US’s greatest weaknesses vis-à-vis Beijing is China’s near-monopoly on the extraction and refining of rare earth minerals, a group of important components in the advanced technology industry. China possesses vast deposits of these minerals, and in response to Trump’s recent tariffs, China restricted exports of seven rare earth minerals, including some essential for the manufacture of artificial intelligence chips, which are important to the United States. China accounts for approximately 60% of rare earth production and 90% of its refining, according to estimates by the International Energy Agency.
Thus, we understand that the trade wars between China and the United States during the “Trump administration” are one of the most influential economic conflicts in the world. This war has disrupted global markets, reshaped global trade, and increased technological competition between Washington and Beijing. Despite subsequent trade agreements between the two parties, the economic conflict between the two countries continues, especially in the areas of technology and investment. This war is expected to continue to impact the future of the global economy, financial markets, and international relations in the coming years, as both Washington and Beijing seek to impose their economic influence globally.
