May
2025
On the heels of a purported agreement to cool down the trade war between the United States and China, both sides now claim that the other has violated the terms of the tentative Geneva trade deal, marking a deterioration in talks between the world's two largest economies. The Geneva agreement was reached following a meeting between U.S. Treasury Secretary Scott Bessent and his Chinese counterpart He Lifeng in Switzerland, which led them to suspend most tariffs for 90 days. The Trump administration has since ratcheted up export restrictions on semiconductor design software and chemicals to China, while announcing it would revoke visas for Chinese students, which China says “seriously undermine” the Geneva deal. President Trump accused China on Friday of violating the preliminary trade agreement, writing on social media that “China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US.” China has maintained firm control over its rare earths exports contrary to Washington's expectations, while Chinese officials claim they have “strictly implemented and actively upheld” the agreements.
Summary
The breakdown of the Geneva trade deal illustrates the fundamental structural problems plaguing U.S.-China relations, where short-term tactical agreements cannot address deeper strategic competition and mistrust between the superpowers. The dispute reflects different negotiating norms and expectations, with the Chinese side favoring leader meetings only after lower-level officials reach major agreements, while the U.S. side seems more keen on a high-level Trump-Xi meeting or phone call. Tensions have expanded beyond trade to military and security issues, with Pentagon chief Pete Hegseth warning that China's threat in the Indo-Pacific was "real" and "imminent", demonstrating how economic disputes are increasingly intertwined with broader geopolitical rivalry. The Geneva deal's rapid collapse suggests that Beijing is comfortable taking a harsher stance in these negotiations because of a belief that a deal reached with the U.S. will only buy stability in the short term, suggesting both sides view their relationship as fundamentally competitive rather than cooperative.
Analysis
