Thursday

06-05-2025 Vol 1982

Tensions Rise as China and U.S. Trade Truce Faces Accusations

HONG KONG — In a significant escalation of tensions between China and the United States, Beijing has accused Washington of violating a recent 90-day trade truce, which was intended to de-escalate the ongoing trade war between the two largest economies in the world.

The Chinese Ministry of Commerce’s statement on Monday came in response to comments made by President Donald Trump, who claimed that China had “TOTALLY VIOLATED” the agreement.

This dispute follows a weekend marked by heightened rhetoric, including a speech by U.S. Defense Secretary Pete Hegseth, who asserted that China aims to become a hegemonic power in Asia, further straining relations.

The 90-day pause on tariffs, which had previously escalated to above 100%, was announced last month, with Trump initially referring to the agreement as a “total reset” of trade relations.

However, the Chinese government argued that it had adhered to the terms of the truce, while accusing the U.S. of enacting a series of discriminatory measures that undermined the agreement.

Among these alleged violations, the Chinese Ministry highlighted U.S. export controls on AI chips and restrictions on the sale of chip design software to China, as well as U.S. plans to revoke visas for Chinese students.

“The U.S. has introduced a series of discriminatory and restrictive measures against China which severely undermine the agreement,” the Chinese Commerce Ministry stated.

In a pointed rebuttal, the ministry asserted that instead of reflecting on its own actions, the U.S. had falsely accused China, which it described as a serious distortion of facts.

The ministry further urged U.S. authorities to “immediately correct its erroneous practices” and warned of the potential for strong and resolute measures should Washington continue to act unilaterally and harm China’s interests.

This fierce exchange marks the second consecutive day of Chinese criticism aimed at the U.S., following Hegseth’s statement regarding China’s military intentions, particularly concerning Taiwan.

During the Shangri-La Dialogue, an annual security forum in Singapore, Hegseth indicated that China is credibly preparing to use military force to alter the balance of power in the Indo-Pacific region.

In response, China lodged a formal protest against Hegseth’s remarks, which it described as filled with provocations and intended to sow discord in the region.

According to a statement from the Ministry of Foreign Affairs, Hegseth consciously ignored the call for peace and development made by countries within the region while promoting a Cold War mentality.

“The U.S. has deployed offensive weaponry in the South China Sea and kept stoking flames and creating tensions in the Asia-Pacific, which are turning the region into a powder keg,” the ministry added.

Amidst these tensions, U.S. Treasury Secretary Scott Bessent accused China of holding back exports of rare earths, which were supposed to be released under the terms of the trade truce.

“That is not what a reliable partner does,” Bessent stated during an appearance on CBS’s “Face the Nation.”

Rare earth minerals are crucial to multiple facets of the U.S. economy, prominently impacting the tech sector, energy industry, and automobile manufacturing.

China currently accounts for 60% of the world’s rare earth elements and is responsible for refining 90% of them, according to the International Energy Agency.

Bessent expressed optimism that discussions between Trump and Chinese President Xi Jinping might resolve issues related to rare earth exports, though he acknowledged uncertainty about whether the trade disturbances were due to glitches or intentional actions within the Chinese system.

Conversations between the two leaders might take place within the coming week, as speculated by Kevin Hassett, director of the National Economic Council.

While he confirmed ongoing expectations for a productive dialogue, no specific date was mentioned for the conversation.

The last known communication between the U.S. and Chinese presidents occurred on January 17, just days before Trump was inaugurated.

Even if a Trump-Xi phone call could temporarily settle trade disputes, experts warn that economic frictions between the U.S. and China are likely to persist in the long term.

James F. Downes, an assistant professor of international relations at Hong Kong Metropolitan University, emphasized the importance of both nations negotiating to find optimal policy solutions to this ongoing impasse for the sake of global economic stability.

In light of recent events, the state of U.S.-China relations remains precarious, with each nation navigating its respective interests while the world watches closely.

image source from:https://www.nbcnews.com/world/asia/china-hits-back-trump-saying-us-actions-severely-undermine-trade-truce-rcna210294

Abigail Harper