Dan Kitwoodnicholas Kamm / Pool / AFP / AFP via Getty Images
- President Donald Trump referred to a potential trade agreement with China in the midst of current pricing tensions.
- The trade war has increased prices on China up to 245%, affecting American-Chinese economic relations.
- China and the United States are looking for new global business partners to strengthen their positions.
President Donald Trump said Thursday that he expects an agreement “over the next three to four weeks” that would end the climbing of the trade war with China.
“I believe that we are going to have an agreement with China,” Trump said in a signature session of the order in the oval office alongside the Secretary of Commerce Howard Lux. “I think we have a lot of time.”
There was no immediate confirmation of Beijing on the question of whether an agreement is likely to occur. And Trump dodged questions about the question of whether the chief of China, Xi Jinping, opened to end the battle of the prices.
This is the first time that Trump has increased prices on China – up to 245% – that the possibility of an agreement has appeared on the horizon.
“It is a match between China and the United States in terms of which will flash first,” USC Marshall, Randall R. Kendrick Global Institute, Business Insider. “China believes that they have all the cards to continue to hold, and President Trump thinks he has power, because we consume more China than China consumes us.”
“These two cases are true, and you just have to wait and look at and see what reality will come to be accompanied at the end,” he added.
The top of China? Its government system
Experts from the supply chain and geopolitics told Business Insider that Xi could have more time and leverage than Trump.
“XI can make life difficult for certain American technological companies and for Midwest farmers, but damage to China by the United States could be much worse,” said Andrew Collier, principal researcher at Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School. “On the other hand, the political pressure on Trump in a democracy is probably much higher once people realize how serious the economy and the markets are.”
“China’s authoritarian system is an advantage here,” he added.
Vyas said that Trump’s mandate ends in the four years, XI is China’s lifetime president with a “long horizon”.
XI does not have to worry about the elections or feeling of consumers, which could make it a “long and trained battle,” added Vyas.
Vyas also noted that China has equipped electric vehicles on the market and controls 85% of the capacity to treat minerals in rare land, which would have an impact on the defense capacities of the United States and AI ambitions if China completely reduced this offer.
A story of trade conflict
Trump has a history of elevation of prices on China in attempts to reduce the American trade deficit and bring back manufacturing jobs.
In 2017, its administration began investigating Chinese business practices and, in 2018, imposed a 25% rate on certain Chinese exports, such as electronics and automotive parts.
In February of this year, Trump targeted China with prices twice, which resulted in 20% of China tasks by the end of the month. On April 2, Trump hit China again with 34% prices. After China responded with prices on American exports, he then brought this figure to 125%, then 145%, and now up to 245%according to a white house document.
China has announced a 125% counter-treatment on American products by April 11 and has interrupted exports of elements of rare land essential to American defense industries.
Previous efforts to reduce trade deficits with China have given limited results. In 2024, the trade deficit was around $ 295 billion, less than $ 375 billion in 2017, but even more than double the total amount of American exports to China in one year.
The United States and China are rooting other countries
The United States adopting a more difficult position on world trade, Ilaria Mazzocco, principal researcher in business and Chinese economy at the Center for Strategic and International Studies, told Bi that China saw “a diplomatic opportunity” to launch “a charming offensive”.
“Conversations between the EU and China seem to have taken a softer tone,” said Mazzocco. “There is hope on the Beijing side by showing that they are a more, stable and reliable status quo and a global partner, the countries will be reassured, and this will improve its foreign relations, as with the EU, where there has been a lot of tension.”
After meeting the Spanish Prime Minister Pedro Sánchez in Beijing last week, Xi embarked on a tour through Southeast Asia to sign agreements on infrastructure and trade. The XI Malaysia’s judgment led to AI agreements, rail connectivity and the export of coconut.
EU leaders also plan to go to Beijing for a summit at the end of July with XI, which, according to Mazzocco, could be an opportunity for China to recognize that it has a structural question of overproduction and to engage to remedy it.
However, Mazzocco added that it is unlikely that the countries of Southeast Asia will replace the United States by China as a trading partner, because China does not have sufficiently strong internal demand from consumers to absorb overseas imports.
The United States is also in talks with EU leaders. Trump told the Italian Prime Minister Giorgia Meloni on Thursday at the White House, an agreement between the EU and the United States would be “100%” at some point. “
Mazzocco stresses that the unpredictability of Trump policies can be harmful to conclude an agreement and covers the risk of ensuring that the allies are quietly withdrawing the long -term alliance.
“We seem to understand that part of the objective is to extract concessions from business partners, and these concessions can be linked to the economy or defense, but unpredictability is useless.” said Mazzocco. “It is really dangerous because it could really undermine the feeling of business on a global scale, and could also encourage American trade partners in the long term to be a little less dependent on the United States, diplomatically and on trade.”
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