Failed Agreement? China Says Trump is Undermining the Latest Trade Pact!

China has accused the Trump administration of undermining the temporary trade agreement reached between the two nations on May 12. In a statement released on Monday by its Commerce Ministry, China asserted that the U.S. is violating the spirit of the agreement by issuing new export control guidelines for AI chips, halting the sale of chip design software to China, and planning to revoke the visas of Chinese students.

The Chinese Commerce Ministry stated that these actions by the Trump administration “seriously undermine the existing consensus reached at the Geneva economic and trade talks, and seriously damage China’s legitimate rights and interests.”

This accusation follows President Trump’s statement on Friday that Beijing was violating the trade agreement, just weeks after both countries announced a temporary easing of tariffs on each other’s imports. Experts suggest that this renewed escalation in rhetoric could further complicate ongoing trade negotiations between the world’s two largest economies.

Arthur Kroeber, a China analyst at Gavekal Research, noted in a report that these “fresh hostilities” indicate that many unresolved issues remain despite the recent “Geneva ceasefire.” He also raised questions about the consistency of U.S. trade policy.

Despite the tensions, U.S. Treasury Secretary Scott Bessent expressed confidence on Sunday that a U.S.-China trade dispute would be resolved once President Trump and Chinese President Xi Jinping engage in conversation, suggesting that progress could be made soon.

The temporary trade agreement reached on May 12 was intended to last for 90 days, providing a window for negotiators to work towards a more comprehensive agreement. However, even with the pause, tariffs remain higher than they were before President Trump began increasing them last month, creating uncertainty for businesses and investors regarding the longevity of the truce.

Under the May 12 agreement, the U.S. agreed to reduce the tariff imposed on China from 145% to 30%, while China agreed to lower its tariff rate on U.S. goods from 125% to 10%.

On Monday, the Chinese Commerce Ministry claimed that China has upheld its commitments under the agreement by canceling or suspending tariffs and non-tariff measures on U.S. goods. However, it alleged that the Trump administration has “unilaterally provoked new economic and trade frictions and exacerbated the uncertainty and instability” in the trade relationship between the two countries.

Adding to the friction, the Trump administration announced last week that it would begin revoking visas for Chinese students studying in the U.S., a country that hosts over 275,000 students from China.

Experts warn that this renewed turmoil between the U.S. and China poses significant economic risks due to the deep interconnections between the two nations and their crucial roles in global trade. Carl Weinberg, chief economist at High Frequency Economics, cautioned investors that a complete disengagement between the U.S. and China through escalating tariffs would have a major impact on the global economy, potentially causing demand for industrial commodities to plummet and disrupting supply chains.