Trade Truce Unravels: U.S. and China Spar Again

Back to Brinkmanship

The fragile calm between the United States and China was short-lived. Following a surprise agreement last week to resume high-level economic discussions, tensions have rapidly resurfaced between the two superpowers. A new dispute broke out after the U.S. Commerce Department unveiled fresh export restrictions targeting semiconductor technologies, prompting an angry response from Beijing. Chinese officials characterized the move as a violation of the spirit of cooperation and again accused Washington of economic suppression tactics. U.S. officials, in turn, defended the policy as necessary for national security, underlining the widening trust deficit that continues to plague U.S.-China relations.

Economic Stakes, Political Pressures

The renewed sparring casts fresh doubt on whether the two nations can achieve real progress on trade, investment, or industrial policy. With both leaderships under intense domestic pressure—President Biden facing election-year scrutiny and President Xi navigating a rocky post-COVID economic recovery—any compromise could come at a political cost. The disputes extend beyond tariffs to technological sovereignty and supply chain control, underscoring that the battle is as much about strategic dominance as economics. Experts warn that without genuine concessions from both sides, the flicker of détente seen last week could quickly extinguish, further straining global markets.