U.S.-China Trade Talks Stall – Bessent Says It’s Time for Trump and Xi to Step In

• U.S.-China trade talks are stalled, with Treasury Secretary Scott Bessent indicating a need for direct leader-to-leader communication to resolve ongoing issues.
• A May 12, 2025, agreement in Switzerland temporarily rolled back tariff increases exceeding 100% until mid-August, but tensions persist over U.S. tech restrictions and China’s rare earth policies.
• Bessent remains optimistic about future discussions, anticipating a potential call between Presidents Trump and Xi to address the complex trade dynamics.

The ongoing trade negotiations between the United States and China, the world’s two largest economies, have hit a roadblock, according to U.S. Treasury Secretary Scott Bessent. In a Fox News interview on Thursday, Bessent indicated that the talks are currently stalled, necessitating direct communication between the leaders of both nations to move forward. He expressed optimism about resuming discussions, suggesting that a call between U.S. President Donald Trump and Chinese President Xi Jinping could occur in the coming weeks to address the impasse.

The trade relationship between the U.S. and China has been fraught with complexity, marked by a delicate balance of cooperation and competition. A significant milestone was achieved on May 12, in Switzerland, where both nations agreed to a temporary rollback of tariff increases exceeding 100% for a 90-day period, extending until mid-August. This breakthrough followed a rapid escalation in trade tensions last month, underscoring the high stakes involved. Diplomatic officials from both sides held a call late last week, but progress remains limited. Bessent emphasized the need for direct leader-to-leader engagement, citing the strong relationship between Trump and Xi, who last spoke in January 2025, just before Trump’s second-term inauguration.

Despite the tariff rollback, unresolved issues continue to strain negotiations. The U.S. has maintained pressure on China through technology restrictions, prompting frustration from Beijing. Meanwhile, China has not significantly relaxed its controls on rare earth minerals, which are critical for industries ranging from electronics to renewable energy, contrary to U.S. expectations. These sticking points highlight the multifaceted nature of the trade dispute, which extends beyond tariffs to encompass strategic technological and resource-based concerns.

Bessent’s confidence in future talks hinges on Trump’s ability to clearly communicate his priorities, which could bring China back to the negotiating table. However, analysts suggest that China may be cautious, agreeing to a leader-level call only if assured of no unexpected U.S. policy shifts. This cautious approach reflects the broader uncertainty in global markets, as investors closely monitor U.S.-China relations for their impact on supply chains, commodity prices, and economic growth. The temporary tariff reprieve provides a window for dialogue, but the mid-August deadline looms, adding urgency to the need for a resolution.

The global economic landscape remains sensitive to these developments. Trade tensions between the U.S. and China have historically influenced market volatility, affecting sectors from technology to manufacturing. While no specific publicly traded companies were mentioned in the context of these talks, the broader implications could ripple across industries reliant on cross-border trade and rare earth supplies. As negotiations progress, the outcome of a potential Trump-Xi call will be pivotal in determining whether the two nations can bridge their differences and stabilize their economic relationship.

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