China & Washington D.C.
In a notable recalibration of his approach to global trade, Trump’s administration appears to be pivoting its strategy with China, emphasizing the pursuit of bilateral trade deals over the imposition of broad tariffs. While tariffs remain a significant tool in the administration’s arsenal, recent developments suggest a more nuanced and deal-centric engagement with Beijing.
The initial months of President Trump’s current term saw a continuation and, in some cases, an escalation of the tariff-heavy stance that characterized his previous administration. Universal reciprocal tariffs were introduced, and discussions around imposing further duties on specific sectors, including copper and automobiles, gained traction. Indeed, the US tariff rate on Chinese goods had previously peaked significantly.
However, recent movements indicate a shift in focus. While the threat of tariffs continues to loom as leverage, particularly with a looming August 1st deadline for certain “reciprocal tariffs,” the White House has actively engaged in negotiations to secure specific trade agreements. This pragmatic approach seeks to achieve desired outcomes—such as market access for American goods and reduced trade imbalances—through direct talks rather than solely relying on the punitive measure of tariffs.
A key indicator of this evolving strategy is the recent “framework deal” announced between the U.S. and China in May. This agreement reportedly led to a reduction in baseline reciprocal tariffs between the two economic giants, signaling a willingness from both sides to find common ground through negotiation. While the full details of this “handshake” agreement have not been released, it is understood to include concessions from the U.S. on certain sensitive product exports and a resumption of Chinese student visas, in exchange for China easing restrictions on critical minerals.
This move aligns with the administration’s broader push for bilateral trade agreements across Asia. Japan, the Philippines, Vietnam, and Indonesia have all reportedly reached deals that reduce the tariff threats they initially faced. These agreements, while not comprehensive free trade agreements, demonstrate a preference for tailored solutions and direct engagement.
Treasury Secretary Scott Bessent recently affirmed this stance, stating that the administration is “more concerned with the quality of trade agreements rather than their timing,” and is not going to “rush for the sake of doing deals.” This suggests a patient but firm approach, where tariffs serve as a catalyst for negotiations rather than an end in themselves.
Despite the shift towards deal-making, challenges persist. Overcapacity in Chinese industries, particularly in steel and solar, remains a significant concern for U.S. policymakers and is expected to be a primary focus in future discussions. Furthermore, the legality of some of the administration’s broader tariff measures continues to be challenged in U.S. courts, adding a layer of uncertainty.
Nevertheless, the emerging strategy suggests a renewed emphasis on the “art of the deal” in U.S.-China trade relations. While the specter of tariffs will undoubtedly remain a potent negotiating tool, the administration appears to be increasingly prioritizing direct agreements and market opening over blanket punitive measures, seeking to achieve its trade objectives through more targeted and negotiated outcomes.