Is the Tariff Talk Between the US and China Over?

The tariff battle between the United States and China has been one of the most defining stories in global trade in recent years. 

From President Donald Trump’s aggressive tariff hikes on Chinese goods to Beijing’s equally strong retaliations, the so-called “tariff war” has often looked like a seesaw. 

But in recent months, the mood seems to have shifted. Both Trump and Chinese President Xi Jinping have eased their tones, with talks of ceasefires and ongoing negotiations. 

The question now is: are the tariff talks finally over, or is this just a temporary pause in a much larger economic chess match?

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The Shaky Ceasefire and Its Background

The U.S. and China agreed on a 90-day ceasefire in Geneva earlier this year, promising to reduce tariffs and continue negotiations on export controls and other trade issues.

While this was a welcome relief for global markets, tariffs remain at historically high levels. U.S. tariffs on Chinese goods still hover around 55 percent, while China has kept tariffs on American imports at nearly 33 percent. 

These numbers are not as extreme as the 145 percent tariffs once slapped on China by Trump, but they are still significant enough to strain businesses and consumers.

The Geneva ceasefire was later extended after further talks in London and Stockholm, signaling cautious optimism. The White House praised China for being flexible in negotiations, and Beijing returned the favor with cooperative rhetoric. 

However, beneath the smiles and handshakes, the tension remains. Neither side is fully prepared to let go of tariffs, and both are holding leverage in different areas. The history of these trade battles suggests that even moments of calm can quickly flip back into confrontation. 

That’s why it is important to see this ceasefire as a pause, not a permanent solution. Both Trump and Xi are playing a strategic game, where short-term gains might be masking longer-term rivalries.

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The Reasons Behind Trump’s Shift in Tone

The sudden change in Trump’s approach toward China has puzzled many observers. After all, his second term started with fierce tariff hikes and strong rhetoric. But three major reasons help explain his softer stance.

First, both the U.S. and China have discovered tools that can effectively restrain one another. For China, its control over rare earth minerals critical for tech and defense industries gave it a strong bargaining chip. 

For Trump, high tariffs proved to be unsustainable when markets reacted negatively. This balance of power has pushed both sides toward compromise rather than confrontation.

Second, domestic concerns are weighing heavily on both leaders. Xi faces overcapacity in industries and the threat of slowing economic growth, while Trump must manage inflation, voter concerns about exports, and fears of recession. Calming the tariff fight helps both leaders reassure their citizens.

Third, there is a political angle. Trump has signaled his desire to meet Xi in person later this year, with hopes of announcing a deal he can present as a victory at home. 

This meeting could focus not only on trade but also on issues like fentanyl trafficking. However, Xi has made it clear he does not want to appear weak or be disrespected, so detailed negotiations must come first. This mix of economic strategy and political calculation explains why tariff tensions are cooling for now.

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The Role of Rare Earth Minerals and Economic Leverage

One of the most powerful tools China wields in this trade conflict is its dominance over rare earth minerals. These materials are essential for producing high-tech goods, from smartphones to fighter jets.

By restricting rare earth exports, China has shown that it can hurt U.S. industries beyond just trade balances. This has forced Washington to take a step back and avoid escalating further.

On the other hand, the U.S. still has strong financial and technological advantages. By easing certain restrictions on companies like Nvidia and AMD, the Trump administration has signaled flexibility, but it retains the ability to tighten controls again if negotiations sour. 

Similarly, while the administration has allowed TikTok to continue operating in the U.S., this decision could easily be reversed as a bargaining chip.

Both sides are therefore trading concessions while holding their strongest cards in reserve. This dynamic suggests that neither Trump nor Xi sees this as the end of the tariff battle, but rather a period of controlled calm to serve their short-term needs.

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Why Tariff Talks Are Unlikely to Be Over

Despite the current ceasefire, it is hard to imagine tariff talks being “over” anytime soon. The U.S. and China have deep-rooted differences that go beyond trade balances. 

Issues like Taiwan, export controls, and global leadership continue to create friction. Even if tariffs are reduced further, the underlying competition between the two largest economies in the world will remain.

Experts warn that at some point, Beijing might push too hard, or Trump might decide to escalate again for political or economic reasons. 

Trump’s unpredictability adds to the uncertainty, making it risky to assume that today’s calm will last. Similarly, China understands that no deal with the U.S. is permanent. They will likely enjoy the current pause while preparing for the next wave of challenges.

For businesses, other governments, and investors, this means caution is essential. While it is tempting to relax during periods of calm, preparing for the next round of tariff hikes or restrictions is the smarter move.

Read also : Fed Holds Rates at 4.5% as Trade Risks and Inflation Persist

Conclusion: A Pause, Not an End

The tariff talks between the U.S. and China are not over. What we are witnessing is a temporary truce driven by domestic pressures, political calculations, and strategic restraint. 

Both Trump and Xi need this pause, but both know it cannot last forever. The fundamental tensions between Washington and Beijing remain unresolved, and new rounds of escalation are only a matter of time.

For now, the ceasefire provides some breathing room for global markets, but businesses and governments should remain vigilant. As history has shown, the U.S.-China tariff drama is far from finished.

FAQ

Are tariffs between the U.S. and China completely gone now?

No, tariffs remain very high 55% from the U.S. on Chinese goods and 33% from China on U.S. goods.

Why did Trump change his approach toward China?

Trump eased his tone due to domestic economic pressures, China’s rare earth leverage, and his goal of arranging a political win.

What role do rare earth minerals play in the tariff talks?

China controls most of the world’s rare earth supply, giving it strong leverage in negotiations with the U.S.

Will there be a Trump-Xi meeting soon?

Both sides are preparing for a possible meeting in the fall, but it depends on progress in detailed negotiations.

Is this the end of the U.S.-China trade war?

No. This is just a pause. The underlying tensions are still very strong, and future conflicts are likely.