US-China trade negotiations have recently lost significant momentum, raising concerns over the future of economic relations between the two global superpowers. US Treasury Secretary Scott Bessent conceded that talks today are “somewhat deadlocked right now.” This ambiguous reality has resulted in analysts losing hope in seeing tangible progress anytime soon.
The United States has intensified its stance by restricting the sale of artificial intelligence (AI) chips and semiconductor design software to Chinese companies, notably including Huawei. The new escalation has further complicated the picture. Both countries are now facing crises stemming from forced technology transfers and lack of intellectual property protections.
Amidst these tensions, some observers believe a phone call between former President Donald Trump and Chinese President Xi Jinping could be instrumental in reviving the stalled negotiations. Some reports indicate that China is ready to retreat back to the negotiating table, especially as they hear more directly from Trump on what he plans to do. The time-honored, privileged bond that has existed between Xi and Trump should offer some solace for any trade problems that remain outstanding.
Even in light of the current stalemate, just last week China committed to suspending some non-tariff barriers to US goods. But Chinese officials have stopped short of spelling out the details behind these commitments, fueling doubts about their sincerity. Beijing officials have not missed an opportunity to play down or emphasize recent statements made by US officials. This silence plays into the sense of a continuous deadlock.
The last five rounds of negotiations in Geneva raised hopes. In this sort of handshake, both sides committed to slashing tariffs across the board for 90 days. In this brief ceasefire, the US reciprocated by agreeing to bring tariffs around Chinese goods down to 30%. In retaliation, China lowered their retaliatory tariffs to 10%. These concessions on each side increased buzz and optimism for what would be a historic thaw in relations.
In light of what has transpired, the short-lived reparations of US-China trade relations now seem all but extinguished. Observers say Chinese officials likely are preparing for a much longer stretch of negotiation lacking any concrete outcome. This rapidly changing reality exemplifies the convoluted nature of the international trade environment. Now, both countries are facing pressure as they race to arrive at an agreement that benefits both sides.