Truce Cracks WIDEN – Deal or DISASTER?

China and the United States clash over trade agreement violations as technology restrictions and visa curbs threaten to derail their recent trade truce, raising doubts about the future of diplomatic relations.

At a Glance

  • China accused the United States of “severely undermining” the trade truce reached last month amid new restrictions on technology and visas
  • The trade deal had temporarily reduced U.S. tariffs to 30% and China’s to 10% for 90 days, down from 145% and 125% respectively
  • President Trump claimed China was not adhering to deal terms, while U.S. trade representative Jamieson Greer accused China of “slow-rolling their compliance”
  • China’s Ministry of Commerce called these accusations “baseless” and warned it would protect its rights if the U.S. continued harmful policies
  • Tensions center on U.S. restrictions on chip design software, AI chips for Huawei, and potential visa revocations for Chinese students

Escalating Tensions and Mutual Accusations

The fragile trade truce between the world’s two largest economies appears to be unraveling just weeks after it was established. China formally accused the United States on Monday of violating terms of their recently negotiated trade agreement through new technology restrictions and visa limitations. The 90-day rollback of tariffs, which temporarily reduced American tariffs to 30% and Chinese tariffs to 10%, now faces significant challenges as both sides trade accusations of non-compliance.

China’s Ministry of Commerce issued a strong rebuke of President Trump’s claims that Beijing wasn’t adhering to the deal’s terms. The statement from Beijing directly challenged the administration’s narrative and highlighted growing frustrations with American policy decisions targeting Chinese technology companies and students. This marks a significant escalation in rhetoric since the truce was announced last month. 

Technology Restrictions at the Center of Dispute

China specifically pointed to U.S. restrictions on chip design software and AI chips for Huawei as discriminatory practices that violate the trade agreement. These technology controls are part of a broader American strategy to limit China’s advancement in critical tech sectors. The dispute reflects deep concerns in Washington about national security implications of Chinese technological development, while Beijing views these measures as attempts to stifle its economic growth and development.

“The U.S. side has unilaterally escalated new economic and trade frictions, exacerbating the uncertainty and instability of bilateral economic and trade relations. Instead of reflecting on its own actions, it has turned the blame onto China,” said China’s Ministry of Commerce.

U.S. Trade Representative Jamieson Greer defended American actions by accusing China of “slow-rolling their compliance” with the agreement. The administration appears particularly concerned about access to rare earth magnets, which are crucial for various American industries including defense, electronics, and renewable energy. China’s near monopoly on rare earth metals production gives it significant leverage in negotiations.

Visa Restrictions Add Educational Dimension to Trade Conflict

Beyond technology concerns, China strongly objected to U.S. plans to revoke visas for Chinese students and increase scrutiny of future applications. This move represents a significant shift in American educational policy that has traditionally welcomed hundreds of thousands of Chinese students to U.S. universities. The potential visa restrictions would impact not only educational exchanges but also represent another front in the increasingly complex economic relationship. 

The confrontation raises serious doubts about the possibility of reaching a permanent trade agreement within the 90-day window established by the truce. With both sides digging in on their positions and expanding the scope of the dispute beyond traditional trade issues, the path to resolution appears increasingly difficult. China has already warned it will take necessary measures to protect its rights and interests if the United States continues policies that harm Chinese interests.

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