China has publicly rebuked the United States, accusing it of reneging on their recent trade consensus and threatening to take decisive countermeasures to safeguard its national interests. The statement, issued by China’s Ministry of Commerce, marks a significant escalation in already-tense relations and casts doubt on the likelihood of any imminent high-level engagement between U.S. President Donald Trump and Chinese President Xi Jinping.
China Condemns U.S. Actions as Unilateral and Discriminatory
In a strongly worded statement released on Monday, China’s Ministry of Commerce firmly rejected President Trump’s claim that Beijing had breached the interim trade understanding reached during talks in Geneva just weeks ago. Instead, the ministry pointed the finger at Washington, accusing the U.S. of launching “unilateral and discriminatory” measures aimed at Chinese economic and technological sectors.
Among the grievances listed were the Biden administration’s decision to tighten export restrictions on advanced artificial intelligence (AI) chips, limit sales of chip design software to Chinese companies, and revoke student visas for Chinese nationals pursuing science and technology programs in the U.S.
“If the U.S. insists on its own way and continues to damage China’s interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests,” the Commerce Ministry warned, underscoring the seriousness with which Beijing views the current dispute.
Dispute Threatens High-Level Dialogue and Derails Market Confidence
The deepening rift has effectively stalled the prospect of a much-anticipated phone call between the two leaders, which President Trump had suggested could help ease tensions and pave the way for renewed trade talks. But with Beijing voicing sharp criticism and no indication of a compromise, diplomatic efforts appear to have hit a standstill.
The market reaction to the latest standoff was swift and stark. Asian equities took a sharp tumble, with Hong Kong-listed Chinese stocks plunging as much as 2.9%—the steepest one-day drop in nearly two months. Meanwhile, U.S. stock-index futures slumped, signaling investor jitters and growing concerns about the outlook for global trade.
China Accuses U.S. of Undermining Earlier Commitments
Beijing further accused Washington of backtracking on commitments allegedly made during the last phone call between Trump and Xi on January 17. Although China did not provide detailed evidence of specific breaches, it called on the U.S. government to “immediately correct relevant wrong practices” in order to restore trust and stabilize relations.
The Ministry of Commerce emphasized that Beijing had remained consistent and sincere in implementing the Geneva consensus and dismissed the latest U.S. accusations as “baseless and misleading.”
U.S. Officials Cite National Security and Export Concerns
In Washington, officials offered a different narrative. President Trump reiterated his stance that China had broken the terms of a tariff truce and voiced concerns over the slow pace of rare earth exports, which are essential for manufacturing high-tech electronics, electric vehicles, and defense equipment.
While Trump did not elaborate on which aspects of the agreement China had allegedly violated, U.S. Trade Representative Jamieson Greer expressed dissatisfaction over Beijing’s failure to ramp up shipments of critical minerals. “We are not seeing the level of responsiveness we expected under the current agreement,” Greer said during a press briefing.
Michael Hart, President of the American Chamber of Commerce in China, echoed those concerns. He acknowledged that China had made some moves to loosen its grip on rare earth exports but noted that progress was “slower than industry would like.”
Geopolitical Tensions Compound Trade Disputes
The trade clash is further complicated by worsening geopolitical relations. Over the weekend, China’s Foreign Ministry issued a scathing response to comments by U.S. Defense Secretary Pete Hegseth, who characterized Beijing as an immediate threat to Taiwan’s sovereignty. China considers Taiwan a breakaway province and has repeatedly condemned any foreign involvement in its affairs.
The rhetoric around Taiwan and export restrictions on sensitive technologies has only deepened the standoff, fueling speculation that trade issues are becoming increasingly intertwined with national security considerations on both sides.
Backdrop: A Fragile Trade Truce at Risk
The current discord follows a tentative trade reprieve announced in May. Under the deal, Washington reduced tariffs on Chinese goods from 145% to 30%, while Beijing responded by slashing its retaliatory tariffs from 125% to 10%. The 90-day agreement was meant to provide breathing space for negotiators to work toward a more permanent resolution. However, developments since then suggest that the temporary truce may be unraveling.
U.S. Treasury Secretary Scott Bessent confirmed that trade negotiations have stalled, stating that while both sides remain in contact, substantial progress has been elusive. Bessent hinted that a direct call between Trump and Xi could help revive the talks, but recent developments have likely diminished that possibility.
Outlook: A Risky Road Ahead
The escalating war of words and mounting trade barriers underscore the fragility of U.S.-China relations. While both countries have voiced support for diplomacy, actions on the ground tell a different story. Export bans, visa revocations, and security rhetoric continue to fuel mistrust, and neither side appears ready to make meaningful concessions.
Economists warn that prolonged tensions could have far-reaching consequences for global trade and economic stability. With both economies deeply interlinked—particularly in technology, energy, and consumer goods—any further escalation could disrupt supply chains, delay innovation, and dampen investment confidence.
As Beijing threatens firm retaliation and Washington hardens its stance, the possibility of reaching a lasting agreement appears increasingly remote. For now, markets, manufacturers, and policymakers across the globe are left bracing for another round of uncertainty in the world’s most consequential bilateral relationship.
