A surprise tariff truce between the U.S. and China may have eased tensions. Beijing views the U.S. tariff truce as a win, but tensions remain high. China prepares for tough negotiations in trade talks and global competition ahead, while aiming to protect its economy and global image.
Just days after the May 12 truce agreement between the U.S. and China in Geneva, Chinese officials began criticizing Washington again showing that underlying tensions between the world’s two biggest economies haven’t gone away.
Beijing Claims a “Victory” but Keeps Pressure On
Chinese state media and commentators were quick to call the deal a “huge victory” for China. The agreement rolled back steep tariffs that had nearly frozen trade between the two countries and disrupted global supply chains.
But despite celebrating the breakthrough, Beijing wasted no time pushing back on Washington’s latest moves.
On May 13, China’s Commerce Ministry accused the U.S. of undermining talks after the Biden administration warned businesses about using AI chips made by Huawei, a key Chinese tech company.
Two days later, Beijing claimed the U.S. was “abusing export controls” to contain China’s rise.
China also refused to accept blame for the ongoing fentanyl crisis, calling it “America’s problem.”
These strong reactions suggest that while China is pleased about the truce, it won’t give in easily during future negotiations.
A Fragile Peace with a 90-Day Deadline
The current truce only lasts 90 days, giving both countries a tight window to find long-term solutions. The temporary deal reduced tariffs by 115 percentage points, offering some relief to struggling companies and economies on both sides.
Still, no formal trade talks have been scheduled since the Geneva meeting, though U.S. and Chinese officials met informally during a recent APEC gathering in South Korea. On May 17, China’s Vice Minister Ma Zhaoxu also discussed relations with U.S. Deputy Secretary Richard Verma.
China’s state broadcaster CCTV welcomed the tariff reduction but urged the U.S. to stop using excuses to impose new tariffs. “Dialogue can begin,” it said, “but hegemony must end.”
China’s Tough Strategy Against U.S. Trade Pressure
When Trump announced broad tariffs last month, China didn’t back down. Instead, it responded aggressively with retaliatory tariffs of its own.
Even when the U.S. paused tariffs for other countries but increased them for China, Beijing stood firm. This approach allowed China to portray itself as a global power resisting unfair pressure.
Now, Chinese leaders feel confident that their approach is working. According to Brian Wong, a strategist at the University of Hong Kong, Beijing likely believes it is on the right track with its U.S. strategy.
But that doesn’t mean they expect smooth sailing.
“There is absolutely no delusion,” Wong said, adding that China’s leadership knows tensions with the U.S. won’t disappear anytime soon.
High Stakes for China’s Economy and Jobs
The outcome of these trade talks is crucial for China’s economy. If tariffs go back up, it could cause major damage.
A full return of tariffs could cut U.S.-China trade in half
China’s economic growth could drop by 1.6%
Up to six million jobs in China could be lost
That’s why Beijing is carefully balancing a firm public stance with a willingness to negotiate, hoping to minimize economic pain without appearing weak.
What Does the U.S. Want?
So far, the U.S. hasn’t clearly laid out its demands. But Trump has long complained about:
The $300 billion U.S. trade deficit with China
The loss of American jobs due to offshoring
Unfair trade practices and lack of access to China’s market
China might offer to buy more U.S. products, especially high-tech goods, but many of those are restricted by current U.S. export bans.
Beijing is also unlikely to agree to deep changes to its economic model, which has long been criticized by Western countries for favoring state-run companies and limiting foreign competition.
China Has Leverage Too
Despite its challenges, China holds some powerful cards:
Control of rare earth minerals critical for global industries
A political system less vulnerable to public backlash than the U.S.
Global diplomacy efforts building strong trade ties beyond the U.S.
China’s President Xi Jinping has been leading efforts to boost trade with Europe, Latin America, and Southeast Asia, presenting China as a stable and reliable partner on the global stage.
According to analyst Suisheng Zhao, if the U.S. continues its aggressive trade stance, it might actually boost China’s influence worldwide.
Looking Beyond August
With the 90-day window closing on August 12, both countries are under pressure to reach a lasting deal. But many observers say even a successful negotiation won’t end the deep strategic rivalry between the U.S. and China.
Both countries are trying to become less dependent on each other. As Zhao put it:
“It doesn’t matter what they talk about in negotiations both sides would rather reduce trade with the other. That’s the trend.”
Final Thoughts
While China is celebrating a short-term win, it is clear that long-term challenges remain. The next few months will be critical for determining whether the world’s two economic giants can find common ground or if they’re headed for a deeper, more damaging split.
