NEW YORK (AP) – For months, the trade tensions that had been simmering between China and the United States appeared to subside as words like “thaw” and “truce” replaced warnings of economic “war.”
Now, it appears that hostilities are returning to full swing.
a This week’s series of tit-for-tat moves Trade hostilities between the two superpowers have once again captured global attention, disrupting markets and raising alarm about what will happen next.
“Let’s poke the bear again,” said economist Alexander Tomic, an associate dean at Boston University, of the restarted sparring. “Let’s stir up the hornet’s nest.”
Let’s take a look at the current state of the US-China trade conflict.
Signs of escalating trade war Oil market
Tensions between China and the United States transcend any presidency or political party. But Donald Trump’s return to the White House has brought a new level of hatred. a Bulk tariffs were introducedwas raised and lowered in the first half of this year, sparking retaliation from Chinese leader Xi Jinping. However, recent months have been relatively calm.
But the ceasefire showed signs of stalling this week with China’s announcement Tough new restrictions on exports of rare earth minerals Indispensable for high-tech products. In response, President Trump threatened to impose 100% additional taxes on Chinese imports by November 1st and impose export restrictions on American software. both sides too Attack each other’s ships with new port fees.
It is unclear whether the official actions by the US and Chinese governments are intended to advance informal talks between the two countries. But on Friday, the stock market was in turmoil. A bad day for the S&P 500 Since April, there has been renewed uncertainty about what will happen next.
“Either the so-called tariff ceasefire ends and both sides escalate quickly, or there are negotiations ahead of a meeting between Mr. Xi and President Trump,” said Mark Chandler, chief market strategist at Bannockburn Capital Markets in Cincinnati, Ohio.
Compete for superiority using exports as a bargaining chip
There are many unknowns about potential behind-the-scenes negotiations between the two countries, and it is difficult to determine which side will have the upper hand.
However, China may sense an opening with the arrival of President Trump. facing a government shutdown and the impact of the ongoing trade war.
American soybean farmers have long relied on sales from China. Currently being handed over for export From Brazil, Argentina, etc. While U.S. investors have happily watched the market rise on excitement about artificial intelligence, China dominates the world in rare earth minerals, which are key to technology hardware. American consumers, who have come to expect an endless supply of cheap goods rolling off China’s conveyor belts, are bracing for price hikes.
“The question becomes who can replace the supply chain faster. And I think China wins on that, at least for now,” Tomic said. “I don’t know what the soybean cycle is, but I’m sure we can grow soybeans faster than it takes to build a toy factory.”
Are tariff threats empty or a negotiating strategy?
President Trump has indicated that a deal is still possible.
He repeatedly made threats as part of his negotiating strategy, but they ultimately came up empty. Trump has so far not formally canceled his meeting with Xi scheduled for later this month to coincide with the Asia-Pacific Economic Cooperation meeting, but said nothing is certain.
“I don’t know if that’s going to happen,” he said Friday from the Oval Office. “I’m going to go there regardless, so I think I’ll probably get it.”
Chandler said that while this may seem like a sudden and dramatic outburst between the United States and China, it is actually more like the two countries embroiled in an acrimonious and long-running feud.
“It’s like a divorce, where the wife and husband are blaming each other, but from the outside it looks more complicated,” Chandler said. “There are no good guys in these kinds of stories. We want to have good guys and bad guys. But these two great powers are both just looking out for their national interests.”
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Matt Sedensky can be reached at (email protected) and https://x.com/sedensky
