A fragile trade truce between the world’s two largest economies, the US and China, is under threat after US President Donald Trump accused China of breaching a tariff agreement reached earlier this month. The deal, announced on May 12 after breakthrough negotiations in Geneva, aimed to suspend most new duties imposed since early April, pending further talks. However, Trump took to his Truth Social platform to express his concerns, stating that China had “totally violated its agreement with the US.”
The controversy surrounding the trade agreement has been escalating, with multiple outlets reporting that the Trump administration has ordered US companies to halt shipments of high-end goods to China, including chip design software and specialty chemicals. Experts warn that this decision could further escalate tensions with Beijing. The May 12 agreement had paused the 34% tariff hikes introduced on April 2 for 90 days, with Beijing taking reciprocal action. Both sides also committed to rolling back tariff increases introduced since April 8, while keeping a baseline 10% duty on mutual imports.
US Trade Representative Jamieson Greer expressed concerns that China had not removed certain non-tariff barriers as agreed under the deal, stating that “they removed the tariff like we did, but some of the countermeasures they’ve slowed on.” Treasury Secretary Scott Bessent echoed this concern, telling Fox News that the negotiations were “a bit stalled” and may now require direct involvement from Trump and Chinese President Xi Jinping. He expects talks to resume in the coming weeks.
China has urged Washington to “immediately correct its erroneous actions, cease discriminatory restrictions against China, and jointly uphold the consensus reached at the high-level talks in Geneva.” As part of the consensus, Beijing had agreed to ease non-tariff measures such as export controls on US goods, with changes due to take effect on May 14. The creation of a bilateral consultation mechanism for future trade steps was also part of the agreement.
The trade dispute between the US and China began on April 2, when Trump imposed sweeping new tariffs on more than 90 countries, including China, citing trade imbalances. Beijing retaliated, triggering a tit-for-tat standoff that saw final US duties climb to 145% and Chinese tariffs to 125%. The dispute has rattled global markets, driving volatility across equities and commodities. As the situation continues to unfold, the world watches with bated breath, hoping for a resolution that will ease tensions and restore stability to the global economy.
