Beijing Claims Victory in US Tariff Truce – What is Its Next Moves?

Chinese pundits hailed a surprise truce in the US-China tariff war last week as a success for the country. However, Beijing is bracing for a rocky road in relations and negotiations ahead.

Key Highlights

• Beijing views the U.S.-China tariff truce as a strategic win, signaling negotiation leverage.
• China aims to counter U.S. tech restrictions with enhanced self-reliance and export control measures.

Already, in the days following the May 12 agreement reached in Geneva by American and Chinese negotiators, Beijing has reacted negatively toward Washington.

Following the Trump administration's warning to businesses not to use AI chips manufactured by national tech champion Huawei, China's Commerce Ministry accused the United States on Monday of "undermining" the Geneva talks. Two days later, it stated that Washington was "abusing export controls to suppress and contain China," again referring to Trump's AI chip guidelines.

Additionally, Beijing has stuck to its position on fentanyl, calling the drug problem the "US's problem, not China's" — despite the fact that Beijing may be able to lower the remaining US tariffs on its goods if it continues to work with Washington to reduce the production of chemicals that can be used to make the drug.

Ahead of anticipated negotiations, China's tough talk makes it clear that, despite the fact that trade frictions could have serious economic repercussions for Beijing, it is not in the mood to make hasty concessions at the expense of its own interests or reputation.

It's also a reminder that, despite the temporary pause, an entrenched US-China strategic rivalry will cast a long shadow over those discussions.

Washington now sees an increasingly assertive China as a threat and has moved to tighten controls on Chinese access to American technology and investment, while strengthening its Asian alliances, which Beijing regards as "containment."

The clock is already ticking on trade talks, as the truce reached by American and Chinese officials earlier this month only lasts 90 days. Under that agreement, the two sides agreed to reduce tariffs by 115 percentage points, resulting in a de facto trade embargo between two highly integrated economies, halting assembly lines, quieting ports, and companies on both sides scrambling for solutions.

There has been no announcement of further trade talks between the United States and China, though US trade representative Jamieson Greer and Chinese trade envoy Li Chenggang met on the sidelines of an APEC trade ministers' meeting in South Korea last week, according to reports. China's Ministry of Foreign Affairs announced on Friday that Vice Minister Ma Zhaoxu discussed China-US relations with US State Department Deputy Secretary for Management and Resources Richard Verma.

"The revival of US-China trade ties benefits both sides and the global economy," China's state broadcaster CCTV said amicably on May 14, when the reductions went into effect, taking a more measured tone than pundits like Hu Xijin, the former editor of a state-linked nationalist tabloid, who had called the outcome a "huge victory" for China.

However, CCTV added that the US must "completely correct" its "wrongdoing of using excuses to recklessly impose tariffs." Dialogue can start, but hegemony must end."