Tensions Resurface As China Accuses U.S. Of Undermining Recent Trade Agreement
Jun 03, 2025
Tensions Resurface as China Accuses U.S. of Undermining Recent Trade Agreement
The 90-day trade truce reached on May 12 between the United States and China was intended to create space for more substantive negotiations. However, the pause leaves tariffs significantly higher than they were before President Trump escalated them last month, and uncertainty continues to loom over whether the ceasefire will hold.
Under the terms of the deal, U.S. Trade Representative Jamieson Greer stated that the United States agreed to reduce tariffs on Chinese goods from 145% to 30%, while China committed to lowering its own tariff rate on U.S. imports from 125% to 10%.
On June 2, China's Ministry of Commerce said Beijing had honored its side of the agreement, suspending or canceling various tariffs and non-tariff measures against U.S. goods. However, the ministry accused the Trump administration of acting unilaterally to provoke new economic frictions, citing recent U.S. export restrictions on AI chips and chip design software bound for China.
Beijing also criticized Washington's threat to revoke visas for Chinese students studying in the United States. Last week, the Trump administration confirmed plans to begin canceling student visas, a move that could impact over 275,000 Chinese nationals currently enrolled at American universities.
Experts warn that the renewed tensions could have far-reaching consequences for the global economy. "If the United States and China were to disengage completely in another blitz of escalating tariffs, it would be a really big deal for the global economy," said Carl Weinberg, chief economist at High Frequency Economics. "Demand for industrial commodities would plummet. Supply chains spanning multiple borders would shut down."
While the temporary agreement remains in place for now, growing hostilities raise doubts about whether both sides can reach a more durable solution before the 90-day deadline expires.
