On June 2, 2025, tensions between China and the United States escalated sharply as Chinese authorities accused the US of seriously violating a trade truce that had been reached just weeks earlier in Geneva. According to the Associated Press and the Financial Times, China's Ministry of Commerce issued a statement condemning recent US actions, including new rules on chip export controls and threats to cancel student visas, as breaches of the agreements negotiated between Washington and Beijing.
The ministry declared that the US had "unilaterally provoked new economic and trade disputes," thereby increasing uncertainty and instability in the bilateral relationship. "These actions seriously contradict the consensus reached at the Geneva meeting in May," the statement said, emphasizing that China had fulfilled its part of the agreement while the US had violated the terms. The ministry warned that if the US continues to disregard its commitments, China may take "decisive measures" to protect its interests.
This latest flare-up is rooted in a series of tariff escalations and retaliations that began earlier in the year. On April 2, 2025, the Trump administration implemented "reciprocal" tariffs affecting roughly 185 countries, with minimum rates starting at 10%. For China, the initial tariff was set at 34%, which, combined with a 20% tariff imposed in March over alleged Chinese involvement in fentanyl supplies to the US, brought the total to 54%. In response, China quickly retaliated on April 4 by imposing a 34% tariff on all US goods and announced export controls on seven types of rare earth metals crucial for high-tech products such as computer chips.
President Donald Trump called China’s response a "mistake" and, starting April 9, raised tariffs on Chinese imports to 104%. China responded in kind by increasing tariffs on US goods to 84% the same day. Trump then further escalated tariffs on China to 125%, citing a "lack of respect for world trade," while simultaneously granting a 90-day pause on new tariffs for other countries.
Despite the rising tensions, Trump promised that tariffs on Chinese goods would be "significantly reduced, but they will not be zero," signaling some room for negotiation. US Treasury Secretary Scott Bessent suggested that the tariff restrictions could not last indefinitely, forecasting an eventual "de-escalation" in trade relations between the two economic giants.
Meanwhile, 12 US states filed a joint lawsuit against the Trump administration’s tariff policies, reflecting domestic opposition to the trade war. In an unexpected move, China began quietly rolling back some tariffs on US goods without official announcements. CNN sources revealed that tariffs on eight types of integrated circuits—covering most semiconductors except memory chips—were cut to zero. Bloomberg reported that Chinese authorities were considering removing additional tariffs on medical equipment and industrial chemicals such as ethane, as well as on at least eight categories of semiconductor-related products.
The two sides also discussed lifting tariffs related to aircraft leases, recognizing that many Chinese airlines do not own all their planes outright. On May 12, 2025, the US and China agreed to reduce mutual import tariffs for 90 days, a temporary truce aimed at easing tensions and fostering dialogue.
However, the fragile peace unraveled quickly. On May 30, President Trump publicly accused China of violating the trade agreement, reigniting hostilities. Beijing responded sharply, accusing Washington of a "serious violation" of the Geneva truce and pointing to a series of recent US measures that Beijing views as discriminatory and restrictive.
According to the Financial Times, the Chinese Ministry of Commerce criticized the US for canceling visas for Chinese students, restricting software supplies critical for microchip design, and intensifying pressure on Chinese tech giants like Huawei. These actions, China argued, directly contradict the spirit of the Geneva agreements, which were intended to halt the tariff escalation that had seen rates soar as high as 145%.
The ministry warned that if the US persists in its current course, China will continue taking "decisive measures to protect its legitimate rights." On the US side, President Trump announced plans to impose a 50% tariff on steel imports, doubling the existing rate, further escalating trade tensions.
This ongoing dispute reflects deeper geopolitical and economic frictions between the world’s two largest economies. The trade war has involved tit-for-tat tariff hikes, export controls, and diplomatic brinkmanship, with significant impacts on global markets and supply chains. Both sides have shown willingness to negotiate but remain far apart on key issues such as technology transfer, intellectual property rights, and market access.
As the summer of 2025 unfolds, the world watches closely. Will the US and China manage to de-escalate and find common ground, or are we witnessing the beginning of a prolonged and disruptive economic rivalry? For now, the stakes remain high, and the path ahead uncertain.