US-China Trade Issues Still Up In The Air After Trump's Visit

KEY TAKEAWAYS

• President Donald Trump’s visit to China ended without a major trade deal, but also avoided any escalations.

• China committed to purchasing U.S. goods, including oil, soybeans, and Boeing airplanes, and proposed investment and trade boards.

• The trade war truce is set to expire in October, with another round of talks planned for September.

President Donald Trump returned from his big diplomatic trip to China Friday without much in the way of concrete progress on trade talks—but experts say the quiet summit was still a favorable outcome for the economy.

Trump traveled to China on Wednesday to meet with his counterpart, Xi Jinping, and negotiate a resolution to the trade war that roiled the U.S. and global economies last year. The meeting ended without a major deal, but there were some agreements, according to Trump’s comments and interviews with cabinet officials.

Trump said China promised to buy oil, soybeans, and 200 Boeing airplanes from the U.S, and Treasury Secretary Scott Bessent suggested the two countries could form a trade board that would exempt $30 billion worth of products from tariffs.

The commitments were minor on the scale of global trade, but without major setbacks, some experts called the summit’s outcome a win.

“I’d say the relationship, at least on the economic and broader economic security perspective, is being stabilized, at least temporarily. It’s not being repaired,” Rush Doshi, senior fellow for Asia studies at the Council on Foreign Relations think tank, said in a media briefing Friday. “And I think that actually matters a lot economically, because companies and investors, they do need the U.S.-China relationship to be at least calm.”

Why This Matters

A stable U.S.-China relationship could help businesses avoid another wave of supply chain disruptions and tariff-related price increases.

At the very least, the summit left intact a truce in the trade war that flared up between the world’s two largest economies last year after Trump imposed punishing tariffs on Chinese products, and China retaliated by restricting supplies of crucial rare earth minerals used in all kinds of manufacturing. The rare earth embargo could have caused a major supply chain disruption and even sent the U.S. into a recession had it gone fully into effect, economists say.

The truce is set to expire in October, and the two sides have agreed to another round of talks in September. In the meantime, the issue of tariffs and rare earth minterals is still unresolved.

“It’s hard to imagine it did not come up behind closed doors,” Heidi E. Crebo-Rediker, senior fellow at the CFR, said at the briefing. “I do think that the fact that there was important consensus on maintaining stable economic and trade relations alluded to the fact that we’re probably going to see an extension of this. But I think this vulnerability is not going away anytime soon.”

Still, the board of trade could provide a framework for more concrete benefits, Yan Bennett, international affairs expert and lecturer at American University, wrote in a commentary.

“So what was achieved in the summit? On the surface, very little,” she wrote. “It was telling that Trump himself wasn’t being very ‘Trumpian’ on what could be achieved during the summit. He wasn’t promising the moon.”

And the fact that the two sides are talking the issue over rather than reigniting the threats and trade wars that raged last year suggested progress could be made at some point, or at least that the truce remains intact.

“We can all breathe a sigh of relief as the Trump-Xi summit appears to have been a success,” Shelly Kaushik, an economist at BMO Capital Markets, wrote in a commentary. “While there were few concrete items coming out of the meetings, there’s been plenty of praise, greetings, compliments—and an invite to visit Washington in September. If anything, nothing looks to have gone wrong.”

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