State visit | Trade and tariffs in focus at Trump and Xi meetings

Trump and Xi at their last meeting in May. Photo: dpa/AP/Pool Reuters/Maxim Shemetov Beijing.  Trade tensions between China and the US are one of the dominant themes at the meeting of US President Donald Trump and his counterpart Xi Jinping in Washington this week. Washington and Beijing have been in talks since October, and very high tariffs have since been suspended. However, a permanent agreement is still pending.

When Trump took office in January 2025, he reignited the trade war with China and introduced high tariffs. China responded with counter-tariffs - Washington and Beijing subsequently continued to increase each other's surcharges. In April 2025, the US base tariff rate on Chinese goods reached 145 percent, and China temporarily imposed a 125 percent tariff. Since then there have been negotiations and a slight easing of tensions, and both sides have significantly reduced tariff rates again.

A complex network of industry-specific surcharges currently applies. According to July calculations by the research organization Penn Wharton Budget Model, the average US tariff rate on imports from China is 22.8 percent, making it the highest among the US's important trading partners. The highest duty goods include steel and aluminum.

China, on the other hand, imposes a 10 percent tariff on all US goods. Additional rates apply to certain sectors, such as 15 percent on liquefied natural gas.

Overall, bilateral trade between the USA and China hardly suffered from the markups. According to Chinese customs, the trade volume from January to August this year was a good $400 billion, 5.4 percent higher than the same period last year.

The trading relationship is extremely unbalanced. Chinese exports to the USA account for 75 percent of the trade volume. One of Trump's stated goals is to reduce China's imports to the US and increase its own exports.

According to Chinese sources, Beijing and Washington are in talks to reduce tariffs on goods worth $30 billion each. This goal was agreed upon at the last meeting between Xi and Trump in Beijing in May. Another point at that time was the establishment of special committees to clarify certain points of contention.

Trump recently said he would discuss “almost everything” with Xi at the summit. However, tariffs are "the main topic on the agenda," says Dan Wang, director in the China team of the consulting firm Eurasia Group. "Xi wouldn't come if there were no concrete results regarding tariffs or a trade peace."

Beijing managed to persuade Washington to back off its extremely high tariffs last year after imposing strict controls on rare earth exports. China controls global trade in the important materials needed for a wide range of high-tech products, from energy to armaments.

“China still has the upper hand before the talks,” says Wang. The country's supply chains are "very flexible" and its historic export boom has not been significantly affected by the tariffs so far.

With global oil prices rising due to further escalation in the Iran war, the Trump administration is particularly trying to allay concerns about the economy ahead of the crucial midterm elections in November. Specifically, Chinese purchase obligations for US agricultural products, especially soybeans, were a repeatedly mentioned concern in the trade negotiations with Beijing.

Trump also wants to demonstrate his statesmanship with a high-profile diplomatic meeting in the White House. It is Xi's first visit to the US capital in eleven years.

Several other thorny issues could derail a comprehensive agreement. Beijing's economic and diplomatic support for Iran is an important sticking point. According to recent reports in the Wall Street Journal, Chinese companies are said to have provided Tehran with satellite images of a military base in Jordan where US troops are stationed.

Added to this is technological competition, particularly in the closely watched area of ​​artificial intelligence (AI). The US government has repeatedly accused Chinese AI research labs of copying AI technology from US companies on an “industrial scale.”  AFP/nd

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