President Donald Trump has issued a stark warning regarding his planned meeting with Chinese President Xi Jinping, indicating he may withdraw from the engagement scheduled for later this month. Escalating geopolitical tensions between the United States and China have compelled this move. In recent statements, Trump has charged that Beijing is “becoming very hostile” and seeking to “hold the world captive.”
The prospective meeting will be a significant opportunity to deepen our diplomatic and trade relations. These bonds have been tenuous since May, making this time epic. In doing so, each country shared in a mutually beneficial short-term trade détente. They committed to removing the triple-digit tariffs that had long crippled trade.
Recent events have tested this fragile bond. This came on the heels of China tightening its regulations on the export of rare earths, critical materials used in clean technologies, defense applications, and more. New port fees will be imposed on ships affiliated with U.S. interests, directly impacting vessels owned or operated by American firms.
In light of these actions, Trump expressed skepticism regarding the upcoming meeting, stating he now sees “no reason to meet with President Xi later this month.” The consequences of these tensions reach far beyond diplomatic language. They have set off an alarm bell in global financial markets. After Trump’s comments — which are mostly focused on new restrictions on the tech industry — the S&P 500 was down about 1.4% in late morning trading on Wall Street.
To make matters worse, the Chinese government has continuously opened a monopoly investigation against U.S. tech giant Qualcomm. This probe would further postpone Qualcomm’s purchase of fellow chipmaker NXP. This will have greater repercussions for U.S. technology companies and investments in China.
President Trump’s latest threat is a “massive” increase on Chinese goods tariff rates. He will pursue this course of action if relations do not improve. This represents a dramatic turnaround from past joint American-Chinese initiatives designed to stabilize trade flows between the two new economic juggernauts.