Trump Accuses China of Violating Tariff Truce Amid Trade War Escalation

Strategic Insights -

Donald Trump on Thursday accused China of violating the two-week-old tariff truce it had agreed to with the US, threatening to restart the trade war between the world's two largest economies. The US had agreed to temporarily reduce tariffs on Chinese goods in exchange for China removing non-tariff trade barriers, but China's foreign affairs ministry declined to comment on the US claims. Trump's statement followed reports from the US trade representative that China had been slow to remove its non-tariff trade countermeasures, including blacklisting US companies and restricting exports of rare earth magnets.

Key Takeaways:

  • The US and China agreed to a tariff truce in Geneva two weeks ago, which temporarily reduced tariffs as high as 145 per cent.
  • Trump accused China of violating the agreement, citing unspecified actions that breached the deal.
  • US trade representative Jamieson Greer stated that China had been slow to remove non-tariff trade countermeasures, including blacklisting US companies and restricting exports of rare earth magnets.
  • A US trade court ruled that Trump did not have the legal powers to impose tariffs, but the decision was stayed pending an appeal.
  • US Treasury secretary Scott Bessent stated that trade talks with China were "a bit stalled" and may require a call between Trump and President Xi Jinping to reinvigorate discussions.
  • The US Census Bureau reported that imports for April fell to $276.1bn, a 19.8 per cent drop from March, marking the largest decline in Census Bureau data since 1992.
  • The Bureau of Economic Analysis reported that consumer spending growth slowed from 0.7 per cent in March to 0.2 per cent in April.

Statistics:

  • Tariffs as high as 145 per cent were imposed by the US on Chinese goods, according to the US and Chinese trade agreement.
  • April imports totalled $276.1bn, a 19.8 per cent drop from March.
  • The drop in imports is the largest since 1992, according to the US Census Bureau.
  • Consumer spending growth slowed from 0.7 per cent in March to 0.2 per cent in April, according to the Bureau of Economic Analysis.

Sources:

  • Trump's statement on Truth Social
  • US trade representative Jamieson Greer's comments to CNBC
  • US Census Bureau's advance economic indicators report
  • Bureau of Economic Analysis's economic report
  • FT View & Opinion