A potential breakthrough in the ongoing trade discussions between the United States and China may be on the horizon, as anticipation builds for a conversation between President Donald Trump and China’s President Xi Jinping. US officials, on Sunday, indicated that this call could materialize in the near future, suggesting a willingness on both sides to address persistent tensions that have hindered trade relations.
The backdrop of this renewed diplomatic engagement is marked by accusations from President Trump that China has not adhered to a preliminary agreement reached last month in Geneva. This agreement was intended to temporarily alleviate the steep tariffs that both nations had imposed on each other’s imports. The initial phase of this arrangement was to last for 90 days, providing a window for negotiation amid what many have called a trade war.
A source of contention has been China’s sluggish pace in approving export licenses for essential materials, such as rare earth elements, that are crucial for manufacturing not only automobiles but also advanced technology products like semiconductor chips. Reports from The Wall Street Journal, corroborated by US officials, highlight this friction-point as a significant factor driving US frustration with the trade dynamics. Rare earth metals, which are vital for a range of modern technologies, have emerged as a focal point in the discussions, underscoring the intricacies of global supply chains.
In a bid to mitigate the tension, US Treasury Secretary Scott Bessent expressed optimism on CBS’s “Face the Nation,” asserting that a conversation between the two leaders would help resolve existing gaps in the agreement. “I’m confident that when President Trump and Party Chairman Xi have a call, this will be ironed out,” Bessent stated, acknowledging, however, that China appeared to be withholding certain products that were expected to be released under the terms of the existing agreement.
Bessent specifically pointed to rare earths as one of these withheld products, adding, “Maybe it’s a glitch in the Chinese system. Maybe it’s intentional. We’ll see after the president speaks with Xi.” Such comments highlight the uncertainty surrounding the fulfillment of trade commitments, which could have broader implications not only for US-China relations but also for global markets.
In response to inquiries regarding the timing of the anticipated call, Bessent expressed hope that it would take place soon. Kevin Hassett, director of the White House’s National Economic Council, echoed this sentiment during an appearance on ABC, indicating the possibility that the call could occur within the week, although he clarified that no formal schedule had been established.
Under President Trump’s administration, tariffs on a wide range of imports have been a contentious issue, particularly with China. Prior to the recent de-escalation in trade tensions, tariffs on Chinese imports had reached formidable levels, with rates climbing as high as 145 percent. In a strategic move to foster dialogue, the US had agreed to temporarily lower these tariffs to 30 percent, while China reduced its additional duties from 125 percent to 10 percent.
U.S. Commerce Secretary Howard Lutnick characterized China’s recent actions as “slow-rolling the deal” during his appearance on “Fox News Sunday.” He expressed the administration’s resolve to take necessary measures to counter any perceived non-compliance, stating, “We are taking certain actions to show them what it feels like on the other side of that equation.” This rhetoric hints at a firm stance by US officials, aiming to project strength in negotiations.
Lutnick also addressed ongoing legal challenges related to the President’s tariff strategies, with one court’s ruling temporarily blocking certain tariffs pending appeal. He voiced confidence that the courts would ultimately back the President’s policies, reaffirming, “Tariffs are not going away.”
In a separate but related context, President Trump announced on Friday the intention to double targeted tariffs on steel and aluminum to 50 percent, effective June 4. This move has sparked backlash from the European Union, which has indicated it would retaliate against such measures. The broader implications of these tariffs extend to US trade partners and raise questions about the future of transatlantic relations.
Hassett elaborated on the rationale behind the steel tariffs, contending that China’s practice of exporting low-cost steel is detrimental to US industries and negatively impacts national security preparedness. He articulated a concern that the US must be adequately equipped for potential military conflicts, stating, “The bottom line is that we’ve got to be ready in case things don’t happen the way we want, because if we have cannons but not cannonballs, then we can’t fight a war.” The emphasis on steel production as a foundational element of national defense indicates the intertwining of economic and security considerations within the current trade framework.
This multifaceted landscape reflects the complexities facing US-China relations, as both nations navigate a delicate balance between cooperation and competition. The anticipated conversation between Presidents Trump and Xi may serve as a critical juncture, impacting not only bilateral trade but also shaping global market dynamics in a landscape increasingly characterized by geopolitical volatility.