As the US-China trade war deepens, India is rapidly emerging as a significant player in the restructured global trade architecture.&nbsp;Data released by China’s General Administration of Customs on June 10 and India’s Commerce Ministry on June 16 shows a sharp reorientation in international trade routes, with India gaining both as an export destination for Chinese goods and as a key supplier to the United States.While China’s overall exports rose by 4.6 per cent year-on-year in May 2025 to $316.2 billion, its exports to the United States plunged sharply by 34.5 per cent, falling from $44 billion in May 2024 to just $28.8 billion.&nbsp;To offset this decline, China has redirected its export flows toward markets like the European Union (EU) (up 12 per cent to $49.5 billion), ASEAN (Association of Southeast Asian Nations) (up 15 per cent to $58.4 billion), and India (up 12.4 per cent to $11.13 billion).<h2>India’s imports reveal a shift in composition</h2>India’s trade dynamics reflect the spillover effects of this redirection. Though India’s total merchandise imports marginally dropped by 1.8 per cent year-on-year in May—down from $61.7 billion in May 2024 to $60.6 billion this year—the fall was primarily due to lower imports of oil, gold, and diamonds. Excluding these three categories, imports surged 12 per cent, rising from $36.8 billion to $41.2 billion.The fastest-growing import segments were electronics and machinery. Electronics imports jumped 27.5 per cent to $9.1 billion, while imports of machinery and computer-related equipment rose 22 per cent to $5 billion.&nbsp;Much of this increase came from China and Hong Kong, with combined imports from the two rising 22.4 per cent, from $9.8 billion in May 2024 to $12 billion this May.This rise in imports was also reflected in domestic tax collections. India’s Integrated GST (IGST) revenue on imports surged by 72.9 per cent from ₹24,510 crore ($2.85 billion) in May 2024 to ₹42,370 crore ($4.92 billion) this May.&nbsp;As petroleum products are exempt from GST, the increase is largely attributed to higher import volumes of electronics, machinery, and industrial components.<h2>India’s exports to the US gain momentum</h2>India also benefited on the export side, capitalising on the void created by reduced Chinese shipments to the US. Indian exports to the United States rose by 17.3 per cent year-on-year in May 2025, reaching $8.8 billion.&nbsp;A significant portion of this growth came from electronics, particularly smartphones. Overall, India’s merchandise exports dipped slightly from $39.59 billion in May 2024 to $38.73 billion this year but registered a 54.1 per cent increase in electronics exports at $4.57 billion, partially offsetting the decline in other sectors.Engineering goods remained resilient, with a minor decline of 0.8 per cent in May 2025 compared to the previous year. However, cumulative engineering exports for April–May FY26 stood at $19.40 billion, up 4.7 per cent from the same period last year.<h2>A strategic advantage for India?</h2>The US tariff policy under the Trump administration is playing a critical role in the recent evolution in trade patterns. Washington has recently announced a 55 per cent tariff on Chinese goods, although only part of this constitutes new duties. When excluding pre-existing tariffs, the effective new rate is closer to 30 per cent.&nbsp;In contrast, Indian products face a 26 per cent duty at present, with prospects of this falling further under a potential US-India trade deal expected in July.This tariff differential could give Indian exporters a temporary edge over their Chinese competitors in the American market. However, the volatility of US trade policy, where tariff decisions can change rapidly, adds an element of uncertainty for long-term planning.<h2>Geopolitical risks and trade vulnerabilities</h2>Even as India capitalises on trade realignment, risks persist. Geopolitical tensions in West Asia, especially around the Strait of Hormuz, pose threats to energy security and logistics for Indian exporters.&nbsp;Additionally, concerns over potential dumping by Chinese exporters into alternative markets like India are growing, given China’s push to find new outlets amid restricted access to the US.China’s increasing exports to India, combined with its dominance in critical industrial inputs like electronics, machinery, and rare earth magnets, raise alarms over strategic dependence.&nbsp;Chinese restrictions on rare earths, which are essential for electric vehicles and other high-tech industries, have already triggered disruptions in the US, and similar risks loom for India.The May 2025 trade data reflects a global supply chain in flux, with India both benefiting from and adapting to the new order. While India’s rising exports is a promising sign, the nation must remain alert to new vulnerabilities and balance short-term gains with long-term strategic safeguards.

Sharp shifts in trade flows reflect realignment of global supply chains; surge in India’s imports, exports reveals deeper integration.

As the US-China trade war deepens, India is rapidly emerging as a significant player in the restructured global trade architecture. Data released by China’s General Administration of Customs on June 10 and India’s Commerce Ministry on June 16 shows a sharp reorientation in international trade routes, with India gaining both as an export destination for Chinese goods and as a key supplier to the United States. While China’s overall exports rose by 4.6 per cent year-on-year in May 2025 to $316.2 billion, its exports to the United States plunged sharply by 34.5 per cent, falling from $44 billion in May 2024 to just $28.8 billion. To offset this decline, China has redirected its export flows toward markets like the European Union (EU) (up 12 per cent to $49.5 billion), ASEAN (Association of Southeast Asian Nations) (up 15 per cent to $58.4 billion), and India (up 12.4 per cent to $11.13 billion). India’s imports reveal a shift in composition India’s trade dynamics reflect the spillover effects of this redirection. Though India’s total merchandise imports marginally dropped by 1.8 per cent year-on-year in May—down from $61.7 billion in May 2024 to $60.6 billion this year—the fall was primarily due to lower imports of oil, gold, and diamonds. Excluding these three categories, imports surged 12 per cent, rising from $36.8 billion to $41.2 billion. The fastest-growing import segments were electronics and machinery. Electronics imports jumped 27.5 per cent to $9.1 billion, while imports of machinery and computer-related equipment rose 22 per cent to $5 billion. Much of this increase came from China and Hong Kong, with combined imports from the two rising 22.4 per cent, from $9.8 billion in May 2024 to $12 billion this May. This rise in imports was also reflected in domestic tax collections. India’s Integrated GST (IGST) revenue on imports surged by 72.9 per cent from ₹24,510 crore ($2.85 billion) in May 2024 to ₹42,370 crore ($4.92 billion) this May. As petroleum products are exempt from GST, the increase is largely attributed to higher import volumes of electronics, machinery, and industrial components. India’s exports to the US gain momentum India also benefited on the export side, capitalising on the void created by reduced Chinese shipments to the US. Indian exports to the United States rose by 17.3 per cent year-on-year in May 2025, reaching $8.8 billion. A significant portion of this growth came from electronics, particularly smartphones. Overall, India’s merchandise exports dipped slightly from $39.59 billion in May 2024 to $38.73 billion this year but registered a 54.1 per cent increase in electronics exports at $4.57 billion, partially offsetting the decline in other sectors. Engineering goods remained resilient, with a minor decline of 0.8 per cent in May 2025 compared to the previous year. However, cumulative engineering exports for April–May FY26 stood at $19.40 billion, up 4.7 per cent from the same period last year. A strategic advantage for India? The US tariff policy under the Trump administration is playing a critical role in the recent evolution in trade patterns. Washington has recently announced a 55 per cent tariff on Chinese goods, although only part of this constitutes new duties. When excluding pre-existing tariffs, the effective new rate is closer to 30 per cent. In contrast, Indian products face a 26 per cent duty at present, with prospects of this falling further under a potential US-India trade deal expected in July. This tariff differential could give Indian exporters a temporary edge over their Chinese competitors in the American market. However, the volatility of US trade policy, where tariff decisions can change rapidly, adds an element of uncertainty for long-term planning. Geopolitical risks and trade vulnerabilities Even as India capitalises on trade realignment, risks persist. Geopolitical tensions in West Asia, especially around the Strait of Hormuz, pose threats to energy security and logistics for Indian exporters. Additionally, concerns over potential dumping by Chinese exporters into alternative markets like India are growing, given China’s push to find new outlets amid restricted access to the US. China’s increasing exports to India, combined with its dominance in critical industrial inputs like electronics, machinery, and rare earth magnets, raise alarms over strategic dependence. Chinese restrictions on rare earths, which are essential for electric vehicles and other high-tech industries, have already triggered disruptions in the US, and similar risks loom for India. The May 2025 trade data reflects a global supply chain in flux, with India both benefiting from and adapting to the new order. While India’s rising exports is a promising sign, the nation must remain alert to new vulnerabilities and balance short-term gains with long-term strategic safeguards.

Sharp shifts in trade flows reflect realignment of global supply chains; surge in India’s imports, exports reveals deeper integration.

India emerges as trade war beneficiary amid US-China rift

The latest round of US-China trade talks concluded in London with both sides declaring a new truce, but key issues surrounding national security-linked export controls remain unresolved, casting a shadow over hopes for a comprehensive long-term agreement.&nbsp;While US President Donald Trump hailed the deal as a “great success”, people familiar with the matter confirmed to Reuters&nbsp;that the compromise excludes crucial components like military-grade rare earth exports and advanced technology restrictions.According to two individuals briefed on the negotiations, Beijing has yet to commit to lifting its export restrictions on certain specialised rare-earth magnets essential to US military suppliers, particularly those used in fighter jets and missile systems.&nbsp;In parallel, the US maintains its export curbs on cutting-edge AI chips that it fears could have military applications in China. This unresolved tension forms a significant obstacle to any broader trade resolution.At the London discussions, Chinese negotiators reportedly linked progress on easing restrictions on rare-earth magnets with the longstanding US controls on AI chip exports. This marked a shift from the original trade dialogue, which had centred on tariff adjustments and China’s trade surplus.&nbsp;The emerging focus on export controls, especially in sectors vital to defence and next-generation technologies, signals a deeper strategic competition between the two powers.<h2>Limited gains on rare earths and tariff relief</h2>Although both sides emerged from the talks with what they described as a framework to de-escalate trade tensions, key concessions remain narrow in scope. China has agreed to expedite the approval of export licences for rare earths bound for non-military US manufacturers.&nbsp;These fast-track approvals are expected to be valid for six months and would apply to companies seen as “trusted” by Beijing. Additionally, a “green channel” has been proposed to facilitate smoother processing for select US firms.Chinese rare-earth magnet producer JL MAG Rare-Earth confirmed it had received export licences that included shipments to the United States, while the Chinese Commerce Ministry acknowledged approval of compliant applications.&nbsp;However, rare earth elements like samarium—vital for military applications—remain excluded from this arrangement. Automakers, who primarily use dysprosium and terbium in electric motors and braking systems, will benefit more directly from the current terms than the defence industry.Meanwhile, US officials indicated plans to extend existing tariffs on China by another 90 days beyond the August 10 deadline agreed in Geneva, signalling that a more permanent agreement is not expected before then.&nbsp;<h2>Rare earths as strategic leverage</h2>Rare earth elements—17 minerals crucial to modern manufacturing—have emerged as a strategic bargaining chip in the ongoing trade conflict. China mines around 70 per cent of the world’s rare earths and processes nearly 90 per cent, giving it a near-monopoly in this domain.&nbsp;Beijing’s dominance also extends to related products such as rare earth magnets, which are critical not only to the auto and electronics industries but also to advanced weapons systems.Earlier this year, China imposed export controls on seven key rare earths and related products in response to US tariff escalations. These restrictions, which affected elements such as samarium, dysprosium, and gadolinium, created significant bottlenecks for global manufacturers, particularly in the automotive sector.&nbsp;The impact was swift and deep: Chinese customs data revealed that US imports of rare earths dropped 37 per cent in April, while rare earth magnet imports fell by over 50 per cent.The Geneva truce in May temporarily eased tensions by reducing US tariffs from 145 per cent to 30 per cent and Chinese duties from 125 per cent to 10 per cent. However, the apparent stall in Beijing’s efforts to roll back its rare earth export controls led to renewed friction. The London agreement was widely seen as an effort to stabilise the situation before the tariff pause expired.<h2>Structural barriers and strategic deadlock</h2>Despite the temporary nature of the latest deal, structural issues remain entrenched. China’s control over the rare earth supply chain is backed by decades of investment, state support, and aggressive pricing strategies that forced global competitors out of business.&nbsp;Efforts by Western countries to diversify supply chains have made limited progress. Export licences issued by Beijing often apply to single shipments or are valid for only six months, making long-term planning difficult for manufacturers.Experts note that Beijing’s licensing regime, once seen as a retaliatory measure, is now being institutionalised as a permanent feature of China’s trade policy. This allows China to deter rare earth stockpiling by US firms and maintain strategic leverage in future negotiations.Furthermore, China has expanded its export control framework to other critical minerals such as tungsten, essential for semiconductor and military-grade tools. These moves, combined with the US’s continued efforts to curb China’s access to advanced AI technologies, signal a decoupling trend that extends beyond trade into strategic and technological spheres.While the US has secured some concessions, analysts remain sceptical about the prospects of a lasting resolution. Chinese commentators, including those at the Chinese Academy of Social Sciences, warn that the fundamental trade imbalance and broader geopolitical mistrust may prevent any comprehensive agreement during President Trump’s current term.In the meantime, industries reliant on rare earths, especially automotive, aerospace, and defence, are bracing for continued volatility. With Beijing unlikely to relinquish its dominance and Washington unwilling to compromise on technology exports, the London truce appears more like a tactical pause than a strategic breakthrough. (With inputs from agencies)

At the London discussions, Chinese negotiators reportedly linked progress on easing restrictions on rare-earth magnets with the longstanding US controls on AI chip exports.

The latest round of US-China trade talks concluded in London with both sides declaring a new truce, but key issues surrounding national security-linked export controls remain unresolved, casting a shadow over hopes for a comprehensive long-term agreement. While US President Donald Trump hailed the deal as a “great success”, people familiar with the matter confirmed to Reuters that the compromise excludes crucial components like military-grade rare earth exports and advanced technology restrictions. According to two individuals briefed on the negotiations, Beijing has yet to commit to lifting its export restrictions on certain specialised rare-earth magnets essential to US military suppliers, particularly those used in fighter jets and missile systems. In parallel, the US maintains its export curbs on cutting-edge AI chips that it fears could have military applications in China. This unresolved tension forms a significant obstacle to any broader trade resolution. At the London discussions, Chinese negotiators reportedly linked progress on easing restrictions on rare-earth magnets with the longstanding US controls on AI chip exports. This marked a shift from the original trade dialogue, which had centred on tariff adjustments and China’s trade surplus. The emerging focus on export controls, especially in sectors vital to defence and next-generation technologies, signals a deeper strategic competition between the two powers. Limited gains on rare earths and tariff relief Although both sides emerged from the talks with what they described as a framework to de-escalate trade tensions, key concessions remain narrow in scope. China has agreed to expedite the approval of export licences for rare earths bound for non-military US manufacturers. These fast-track approvals are expected to be valid for six months and would apply to companies seen as “trusted” by Beijing. Additionally, a “green channel” has been proposed to facilitate smoother processing for select US firms. Chinese rare-earth magnet producer JL MAG Rare-Earth confirmed it had received export licences that included shipments to the United States, while the Chinese Commerce Ministry acknowledged approval of compliant applications. However, rare earth elements like samarium—vital for military applications—remain excluded from this arrangement. Automakers, who primarily use dysprosium and terbium in electric motors and braking systems, will benefit more directly from the current terms than the defence industry. Meanwhile, US officials indicated plans to extend existing tariffs on China by another 90 days beyond the August 10 deadline agreed in Geneva, signalling that a more permanent agreement is not expected before then. Rare earths as strategic leverage Rare earth elements—17 minerals crucial to modern manufacturing—have emerged as a strategic bargaining chip in the ongoing trade conflict. China mines around 70 per cent of the world’s rare earths and processes nearly 90 per cent, giving it a near-monopoly in this domain. Beijing’s dominance also extends to related products such as rare earth magnets, which are critical not only to the auto and electronics industries but also to advanced weapons systems. Earlier this year, China imposed export controls on seven key rare earths and related products in response to US tariff escalations. These restrictions, which affected elements such as samarium, dysprosium, and gadolinium, created significant bottlenecks for global manufacturers, particularly in the automotive sector. The impact was swift and deep: Chinese customs data revealed that US imports of rare earths dropped 37 per cent in April, while rare earth magnet imports fell by over 50 per cent. The Geneva truce in May temporarily eased tensions by reducing US tariffs from 145 per cent to 30 per cent and Chinese duties from 125 per cent to 10 per cent. However, the apparent stall in Beijing’s efforts to roll back its rare earth export controls led to renewed friction. The London agreement was widely seen as an effort to stabilise the situation before the tariff pause expired. Structural barriers and strategic deadlock Despite the temporary nature of the latest deal, structural issues remain entrenched. China’s control over the rare earth supply chain is backed by decades of investment, state support, and aggressive pricing strategies that forced global competitors out of business. Efforts by Western countries to diversify supply chains have made limited progress. Export licences issued by Beijing often apply to single shipments or are valid for only six months, making long-term planning difficult for manufacturers. Experts note that Beijing’s licensing regime, once seen as a retaliatory measure, is now being institutionalised as a permanent feature of China’s trade policy. This allows China to deter rare earth stockpiling by US firms and maintain strategic leverage in future negotiations. Furthermore, China has expanded its export control framework to other critical minerals such as tungsten, essential for semiconductor and military-grade tools. These moves, combined with the US’s continued efforts to curb China’s access to advanced AI technologies, signal a decoupling trend that extends beyond trade into strategic and technological spheres. While the US has secured some concessions, analysts remain sceptical about the prospects of a lasting resolution. Chinese commentators, including those at the Chinese Academy of Social Sciences, warn that the fundamental trade imbalance and broader geopolitical mistrust may prevent any comprehensive agreement during President Trump’s current term. In the meantime, industries reliant on rare earths, especially automotive, aerospace, and defence, are bracing for continued volatility. With Beijing unlikely to relinquish its dominance and Washington unwilling to compromise on technology exports, the London truce appears more like a tactical pause than a strategic breakthrough. (With inputs from agencies)

At the London discussions, Chinese negotiators reportedly linked progress on easing restrictions on rare-earth magnets with the longstanding US controls on AI chip exports.

US-China trade truce leaves rare earths issue unresolved

The much-anticipated phone call between US President Donald Trump and Chinese Premier Xi Jinping was held on Thursday (June 5). In a post on Truth Social, Trump said that the call lasted for approximately one and a half hours. Trump revealed that the conversation was focussed on “trade” and it would have “a very positive conclusion for both countries.” Earlier, China's state-run news agency Xinhua reported that the telephonic conversation between the two leaders was held at Trump's request. Trump in his post revealed that both leaders discussed some intricacies regarding the trade deal and that teams from both the countries will meet at a location to discuss the terms.&nbsp;“I just concluded a very good phone call with President Xi, of China, discussing some of the intricacies of our recently made, and agreed to, Trade Deal. The call lasted approximately one and a half hours, and resulted in a very positive conclusion for both Countries. There should no longer be any questions respecting the complexity of Rare Earth products. Our respective teams will be meeting shortly at a location to be determined. We will be represented by Secretary of the Treasury Scott Bessent, Secretary of Commerce Howard Lutnick, and United States Trade Representative, Ambassador Jamieson Greer,” he wrote on Truth Social.&nbsp;The US President also said that the Chinese premier invited him and the First Lady for a visit to China. He also said that as leaders of great nations, he reciprocated the invitation. He clarified that there was no discussion with the Chinese head about Russia, Ukraine, or Iran.&nbsp;<figure class="image"><img src="https://cdn1.wionews.com/prod/wion/images/2025/20250605/image-1749136177433.png"></figure>&nbsp;“During the conversation, President Xi graciously invited the First Lady and me to visit China, and I reciprocated. As Presidents of two Great Nations, this is something that we both look forward to doing. The conversation was focused almost entirely on TRADE. Nothing was discussed concerning Russia/Ukraine, or Iran. We will inform the Media as to scheduling and location of the soon-to-be meeting. Thank you for your attention to this matter!”&nbsp;The phone call comes a day after Trump stated on Truth Social that he has “always liked” the Chinese president, but he is “extremely hard to make a deal with.” “I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” Trump wrote. This is also the first phone call between the two leaders after Trump imposed Liberation Day tariffs on China escalating global trade war.<h2>What Xi Jinping told Trump?</h2>Chinese President Xi Jinping warned his US counterpart that Washington should handle the issue of Taiwan "with caution" in order to avoid "conflict", Chinese state media reported. Xi told Trump that Washington "should handle the Taiwan question with caution" to avoid "'Taiwan independence' separatists dragging China and the United States into the danger of conflict and confrontation", state news agency Xinhua said.<h2>US-China relations&nbsp;</h2>The call comes amid strained US-China relations and the Trump administration's massive crackdown on people in the US having links with the Chinese Communist Party (CCP). Trump has increased the tariff rates for China to 145 per cent and Beijing, in a tit-for-tat tariff move, has taken the total percentage to 125 per cent. Earlier in May, both countries announced a 90-day truce amid tit-for-tat tariff announcements. The US Treasury Secretary Scott Bessent on May 30 said that trade negotiations with China have been stalled and may require direct involvement from Trump and Jinping.&nbsp;&nbsp;The Trump administration has also launched a crackdown on Chinese international students living in the US, and vowed to “aggressively revoke visas for Chinese students, including those with connections to the Chinese Communist Party or studying in critical fields.” &nbsp;More than 277,000 Chinese students were enrolled in US universities during the 2023-2024 academic year.&nbsp;The call also comes a day after two Chinese nationals were arrested by the FBI for smuggling a “dangerous fungus” into the US, that FBI director Kash Patel said can cause "significant health issues in humans and livestock as well as is responsible for billions of dollars of losses worldwide each year. Coming down heavily on the ruling Chinese Communist Party (CCP), Patel said, "This case is a sobering reminder that the CCP is working around the clock to deploy operatives and researchers to infiltrate American institutions and target our food supply, which would have grave consequences... putting American lives and our economy at serious risk."&nbsp;&nbsp;&nbsp;&nbsp;

The much-anticipated phone call between US President Donald Trump and Chinese Premier Xi Jinping was held on Thursday

The much-anticipated phone call between US President Donald Trump and Chinese Premier Xi Jinping was held on Thursday (June 5). In a post on Truth Social, Trump said that the call lasted for approximately one and a half hours. Trump revealed that the conversation was focussed on “trade” and it would have “a very positive conclusion for both countries.” Earlier, China's state-run news agency Xinhua reported that the telephonic conversation between the two leaders was held at Trump's request. Trump in his post revealed that both leaders discussed some intricacies regarding the trade deal and that teams from both the countries will meet at a location to discuss the terms. “I just concluded a very good phone call with President Xi, of China, discussing some of the intricacies of our recently made, and agreed to, Trade Deal. The call lasted approximately one and a half hours, and resulted in a very positive conclusion for both Countries. There should no longer be any questions respecting the complexity of Rare Earth products. Our respective teams will be meeting shortly at a location to be determined. We will be represented by Secretary of the Treasury Scott Bessent, Secretary of Commerce Howard Lutnick, and United States Trade Representative, Ambassador Jamieson Greer,” he wrote on Truth Social. The US President also said that the Chinese premier invited him and the First Lady for a visit to China. He also said that as leaders of great nations, he reciprocated the invitation. He clarified that there was no discussion with the Chinese head about Russia, Ukraine, or Iran. “During the conversation, President Xi graciously invited the First Lady and me to visit China, and I reciprocated. As Presidents of two Great Nations, this is something that we both look forward to doing. The conversation was focused almost entirely on TRADE. Nothing was discussed concerning Russia/Ukraine, or Iran. We will inform the Media as to scheduling and location of the soon-to-be meeting. Thank you for your attention to this matter!” The phone call comes a day after Trump stated on Truth Social that he has “always liked” the Chinese president, but he is “extremely hard to make a deal with.” “I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” Trump wrote. This is also the first phone call between the two leaders after Trump imposed Liberation Day tariffs on China escalating global trade war. What Xi Jinping told Trump? Chinese President Xi Jinping warned his US counterpart that Washington should handle the issue of Taiwan "with caution" in order to avoid "conflict", Chinese state media reported. Xi told Trump that Washington "should handle the Taiwan question with caution" to avoid "'Taiwan independence' separatists dragging China and the United States into the danger of conflict and confrontation", state news agency Xinhua said. US-China relations The call comes amid strained US-China relations and the Trump administration's massive crackdown on people in the US having links with the Chinese Communist Party (CCP). Trump has increased the tariff rates for China to 145 per cent and Beijing, in a tit-for-tat tariff move, has taken the total percentage to 125 per cent. Earlier in May, both countries announced a 90-day truce amid tit-for-tat tariff announcements. The US Treasury Secretary Scott Bessent on May 30 said that trade negotiations with China have been stalled and may require direct involvement from Trump and Jinping. The Trump administration has also launched a crackdown on Chinese international students living in the US, and vowed to “aggressively revoke visas for Chinese students, including those with connections to the Chinese Communist Party or studying in critical fields.” More than 277,000 Chinese students were enrolled in US universities during the 2023-2024 academic year. The call also comes a day after two Chinese nationals were arrested by the FBI for smuggling a “dangerous fungus” into the US, that FBI director Kash Patel said can cause "significant health issues in humans and livestock as well as is responsible for billions of dollars of losses worldwide each year. Coming down heavily on the ruling Chinese Communist Party (CCP), Patel said, "This case is a sobering reminder that the CCP is working around the clock to deploy operatives and researchers to infiltrate American institutions and target our food supply, which would have grave consequences... putting American lives and our economy at serious risk."

The much-anticipated phone call between US President Donald Trump and Chinese Premier Xi Jinping was held on Thursday

'There should no longer be any questions...': Trump holds call with China's Xi Jinping amid trade tensions, visa ban

US President Donald Trump has once again reignited tensions with Beijing, calling Chinese President Xi Jinping “very tough” and “extremely hard to make a deal with”.&nbsp;The remark was posted in the early hours of Tuesday on his social media platform, Truth Social.&nbsp;The US president's remark comes amid fresh trade and geopolitical flashpoints that threaten to undo the fragile truce achieved just weeks ago.

“I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” Trump wrote on the Truth Social website.<h2>US-China tariff tension continues</h2>The US-China trade relationship has remained turbulent in recent years. In early 2025, President Trump imposed a sweeping 145 per cent tariff on Chinese imports, citing trade imbalances and national security concerns.&nbsp;China responded with retaliatory tariffs of up to 125 per cent on US goods.&nbsp;A temporary easing of tensions came in May, when both countries agreed to scale back certain tariffs during talks in Geneva.However, Washington’s latest actions, including export bans, software curbs, and visa restrictions, have sparked renewed conflict.&nbsp;Last week, the Trump administration said it planned to start revoking visas for Chinese students, while moving to restrict sales of chip design software to China.&nbsp;According to the New York Times, the US has also barred exports of critical jet engine parts and aviation technology to China.&nbsp;Although Trump did not provide specifics when accusing Beijing of violating the trade truce on Friday, US Trade Representative Jamieson Greer said China had failed to accelerate exports of critical minerals used in advanced electronics, as per Bloomberg.&nbsp;According to a report by Bloomberg, China has accused the United States of “seriously violating” the trade truce established in Geneva in May 2025.&nbsp;The Chinese Ministry of Commerce criticised the US for introducing new trade and technology restrictions, including export controls on artificial intelligence (AI) chips, curbs on chip design software sales to China, and the revocation of Chinese student visas.&nbsp;Beijing said these actions undermined the consensus reached between President Donald Trump and President Xi Jinping during their last conversation in January.&nbsp;“If the US insists on its way and continues to damage China’s interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests,” the ministry stated, as quoted by Bloomberg.&nbsp;The ministry further stated it “resolutely rejects these unjustified accusations” and insisted that China has strictly implemented the Geneva consensus.&nbsp;According to Bloomberg, last week, the US Treasury Secretary Scott Bessent confirmed that trade talks had stalled and hinted that a direct call between Trump and Xi might be necessary to break the deadlock.&nbsp;The two leaders of the world’s largest economy have spoken in January, shortly before Trump returned to the Oval Office.&nbsp;Despite growing tension, the US reportedly said that Trump and Xi are likely to speak on a call.&nbsp; US President's adviser Kevin Hassett suggested a call could happen this week, according to Bloomberg.&nbsp;Whether Xi will entertain the outreach remains uncertain.&nbsp;&nbsp;Beijing has repeatedly stated that any high-level engagement must be based on mutual respect and the withdrawal of what it calls “unilateral and coercive measures”.&nbsp;For now, with tariffs rising, visas tightening, and rhetoric intensifying, the road to détente appears steeper than ever. &nbsp;

The US president remark comes amid fresh trade and geopolitical flashpoints that threaten to undo the fragile truce achieved just weeks ago.

US President Donald Trump has once again reignited tensions with Beijing, calling Chinese President Xi Jinping “very tough” and “extremely hard to make a deal with”. The remark was posted in the early hours of Tuesday on his social media platform, Truth Social. The US president's remark comes amid fresh trade and geopolitical flashpoints that threaten to undo the fragile truce achieved just weeks ago.

Amid US-China trade deal growing tension, US President Donald Trump has called negotiations with Chinese President Xi Jinping ‘very tough’.&nbsp;

Trump calls Xi ‘extremely hard to make a deal with’ as US-China trade war flares up again

Tensions between the United States and China have escalated once again as Beijing accuses Washington of breaching a recent trade agreement.&nbsp;The Chinese Ministry of Commerce issued a statement condemning the US’s actions, signalling a potential setback in ongoing efforts to stabilise bilateral trade relations.<h2>China’s accusation</h2>According to a report by Bloomberg, China has accused the United States of “seriously violating” the trade truce established in Geneva in May 2025.&nbsp;The Chinese Ministry of Commerce criticised the US for introducing new trade and technology restrictions, including export controls on artificial intelligence (AI) chips, curbs on chip design software sales to China, and the revocation of Chinese student visas. &nbsp;Beijing said these actions undermined the consensus reached between President Donald Trump and President Xi Jinping during their last conversation in January. &nbsp;“If the US insists on its own way and continues to damage China’s interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests,” the ministry stated, as quoted by Bloomberg.&nbsp;The ministry further stated it “resolutely rejects these unjustified accusations” and insisted that China has strictly implemented the Geneva consensus.<h2>China-US trade truce under pressure</h2>The US-China trade relationship has remained turbulent in recent years. In early 2025, President Trump imposed a sweeping 145 per cent tariff on Chinese imports, citing trade imbalances and national security concerns. &nbsp;China responded with retaliatory tariffs of up to 125 per cent on US goods. &nbsp;A temporary easing of tensions came in May, when both countries agreed to scale back certain tariffs during talks in Geneva.&nbsp;However, Washington’s latest actions—including export bans, software curbs, and visa restrictions—have sparked renewed conflict.&nbsp;Last week, the Trump administration said it planned to start revoking visas for Chinese students, while moving to restrict sales of chip design software to China.&nbsp;According to the New York Times, the US has also barred exports of critical jet engine parts and aviation technology to China.&nbsp;Although Trump did not provide specifics when accusing Beijing of violating the trade truce on Friday, US Trade Representative Jamieson Greer said China had failed to accelerate exports of critical minerals used in advanced electronics, as per Bloomberg . &nbsp;According to Bloomberg, the US Treasury Secretary Scott Bessent confirmed that trade talks had stalled and hinted that a direct call between Trump and Xi might be necessary to break the deadlock.&nbsp;Trump has recently reportedly voiced dissatisfaction with Beijing’s pace in fulfilling agreed commitments, particularly in boosting exports of critical minerals essential to the US tech and defence sectors.<h2>Impact on the Chinese Economy</h2>The ongoing trade tensions have had a tangible impact on China’s economy.&nbsp;&nbsp;Despite setting an ambitious GDP growth target of around 5% for 2025, analysts reportedly remain skeptical about China’s ability to achieve this goal amid external pressures.&nbsp; &nbsp;The International Monetary Fund (IMF) projects China’s economy will grow by 4.6% in 2025, down from 5% in 2024.&nbsp;Furthermore, China’s fiscal deficit target for 2025 has been set at approximately 4% of GDP, the highest level in over three decades, indicating increased public spending to support growth, according to Reuters.&nbsp;The Economist Intelligence Unit anticipates a 20% reduction in China’s exports to the U.S. over 2025-27, with the majority of the impact being felt in 2026.&nbsp;&nbsp;This contraction is expected to reduce GDP growth by 0.6 percentage points over the same period.<h2>What lies ahead?</h2>As both countries harden their trade stances, the path forward remains uncertain.&nbsp;The risk of further escalation is real, but diplomatic backchannels could still pave the way for renewed dialogue between Trump and Xi.&nbsp;With global markets, supply chains, and developing economies exposed to fallout from any US-China fallout, the world is closely watching how the next chapter of this economic standoff unfolds.&nbsp;

Citing a possible setback in the stabilization of bilateral economic relations, the Chinese Ministry of Commerce denounced the US actions. 

Tensions between the United States and China have escalated once again as Beijing accuses Washington of breaching a recent trade agreement. The Chinese Ministry of Commerce issued a statement condemning the US’s actions, signalling a potential setback in ongoing efforts to stabilise bilateral trade relations. China’s accusation According to a report by Bloomberg, China has accused the United States of “seriously violating” the trade truce established in Geneva in May 2025. The Chinese Ministry of Commerce criticised the US for introducing new trade and technology restrictions, including export controls on artificial intelligence (AI) chips, curbs on chip design software sales to China, and the revocation of Chinese student visas. Beijing said these actions undermined the consensus reached between President Donald Trump and President Xi Jinping during their last conversation in January. “If the US insists on its own way and continues to damage China’s interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests,” the ministry stated, as quoted by Bloomberg. The ministry further stated it “resolutely rejects these unjustified accusations” and insisted that China has strictly implemented the Geneva consensus. China-US trade truce under pressure The US-China trade relationship has remained turbulent in recent years. In early 2025, President Trump imposed a sweeping 145 per cent tariff on Chinese imports, citing trade imbalances and national security concerns. China responded with retaliatory tariffs of up to 125 per cent on US goods. A temporary easing of tensions came in May, when both countries agreed to scale back certain tariffs during talks in Geneva. However, Washington’s latest actions—including export bans, software curbs, and visa restrictions—have sparked renewed conflict. Last week, the Trump administration said it planned to start revoking visas for Chinese students, while moving to restrict sales of chip design software to China. According to the New York Times, the US has also barred exports of critical jet engine parts and aviation technology to China. Although Trump did not provide specifics when accusing Beijing of violating the trade truce on Friday, US Trade Representative Jamieson Greer said China had failed to accelerate exports of critical minerals used in advanced electronics, as per Bloomberg . According to Bloomberg, the US Treasury Secretary Scott Bessent confirmed that trade talks had stalled and hinted that a direct call between Trump and Xi might be necessary to break the deadlock. Trump has recently reportedly voiced dissatisfaction with Beijing’s pace in fulfilling agreed commitments, particularly in boosting exports of critical minerals essential to the US tech and defence sectors. Impact on the Chinese Economy The ongoing trade tensions have had a tangible impact on China’s economy. Despite setting an ambitious GDP growth target of around 5% for 2025, analysts reportedly remain skeptical about China’s ability to achieve this goal amid external pressures. The International Monetary Fund (IMF) projects China’s economy will grow by 4.6% in 2025, down from 5% in 2024. Furthermore, China’s fiscal deficit target for 2025 has been set at approximately 4% of GDP, the highest level in over three decades, indicating increased public spending to support growth, according to Reuters. The Economist Intelligence Unit anticipates a 20% reduction in China’s exports to the U.S. over 2025-27, with the majority of the impact being felt in 2026. This contraction is expected to reduce GDP growth by 0.6 percentage points over the same period. What lies ahead? As both countries harden their trade stances, the path forward remains uncertain. The risk of further escalation is real, but diplomatic backchannels could still pave the way for renewed dialogue between Trump and Xi. With global markets, supply chains, and developing economies exposed to fallout from any US-China fallout, the world is closely watching how the next chapter of this economic standoff unfolds.

As Beijing accuses Washington of breaking a trade agreement, tensions between the US and China have increased.&nbsp;