I refer to the CNA’s Commentary: Trump blinked again on tariffs, but China isn’t in the clear. (May 15)
One deniable fact: There are no winners on either side (between China and the United States) in the trade and tariff war. Yet, Trump still persists to do it.
It is not surprising that Trump has increased China’s reciprocal tariffs from 10% to 145% since April 2, 2025. This is because he is good at and always raises the bargaining chips to the extreme, and then lets the other party bargain, and finally obtains the more ideal benchmark in his mind. However, China doesn’t buy it.
Instead, China has already had contingency measures or mechanisms before Trump’s second term. In addition to advocating domestic consumption, China is also trying its best to expand its bilateral trade and export markets in the EU, South America, the Middle East and ASEAN to reduce its past reliance on exports to the United States and hoping this will cut the negative impact on its economy.
On May 12, the US and China reached a temporary trade tariff agreement in Geneva, Switzerland. The two sides reduced their tariffs from the original 145% to 34% (including a 10% reciprocal/basic tariff), and suspended the implementation for 90 days.
This is not surprising to China. Because Chinese ambassador to the World Trade Organization Li Chenggang once said, “Good food is never too late.” On the contrary, for the United States, the biggest feature of this temporary tariff truce on Monday (May 12) is that the vast majority of American people have the opportunity to buy the cheap and good Chinese products they want to spend their traditional shopping season: Halloween, Thanksgiving and Christmas and temporarily relief their consumption burden.
Otherwise, this will trigger a chain reaction that will affect the success or failure of the 2026 US Republican mid-term elections. This is really what Trump is most concerned about.
The Chinese government has long been wary of successive US administrations’ attempts to suppress/contain China’s economic development, and is particularly distrustful of the Trump administration’s consistent stance of going back on its word. Today, China has established itself on the world’s political stage and, most importantly, China has strictly adhered to the World Trade Organisation’s framework, policy and rules and regulations. It proactively advocates for multilateral trade.
Besides, China has been helping many developing countries to develop their economies and getting rid of their poverty as well as building their domestic infrastructure. This has undoubtedly helped China gained their trust, support, and endorsement. This time, China is the first and only country that dared to confront Trump’s bullying strategy and won.
Certainly, during this crucial period of Trump’s high tariffs, China has endured mounting costs from the trade war and domestic political pressure from within, especially as its economy struggles with deflation and weak consumer confidence. However, all these factors are temporary.
As for whether the second round of negotiations on China-US trade tariffs on June 10 (or later) can achieve substantial results and breakthroughs, it all depends on the sincerity of the US and Chinese governments and whether the two sides can reach mutually beneficial goals and intentions.
However, I have reservations or pessimistic thoughts on the following points:
1) I still do not think that the United States will lift restrictions on the export of semiconductors to China. Because this will undoubtedly give China the upper hand that the United States has always used to curb China’s high-tech development.
2) Even if China’s high-tech and infrastructure industries with brilliant business performance want to invest and set up factories in the United States, it is not necessarily that the United States will accept all orders/offers.
3) China will gradually sell its holding or shares of U.S. Treasury securities bonds (US$784 billion) to reduce risks.
4)The United States will not easily give up Taiwan to China because the US firmly holds Taiwan as its powerful bargaining chip.
5)China is unlikely to relax its strict control over rare earth exports to the United States unless the United States is also willing to relax its control over high-tech chips. So these two things are the trump cards of the two sides in the negotiation.
6)China will only impose tariffs on certain relatively important items of U.S. exports to China, such as a 15% tariff on U.S. natural gas and soybeans respectively, 10% tariff on US pickup trucks.
7)The American people will eventually be dragged down by Trump’s unwise policies and measures.
Teo Kueh Liang (Mr)
