Tensions between the United States and China flared once again on Monday, June 2, 2025, as Beijing accused the Trump administration of breaching the terms of a recently established trade truce by introducing new restrictions on artificial intelligence chip exports, halting access to chip design software, and proposing visa revocations for Chinese students.
In a strongly worded June 2 statement, China’s Ministry of Commerce claimed that the U.S. actions “seriously undermine the existing consensus reached at the Geneva economic and trade talks, and seriously damage China’s legitimate rights and interests.”
The accusations follow President Donald Trump’s remarks last Friday, in which he alleged that China had violated the May 12 trade agreement—a temporary arrangement that eased certain tariffs imposed by both countries earlier in the year. The escalating rhetoric between the two economic superpowers has reignited concerns among analysts and investors over the durability of the fragile truce and the broader implications for global trade.
Arthur Kroeber, a China specialist at Gavekal Research, said in a recent analysis,
“Fresh hostilities between the U.S. and China show that the many questions left hanging after the Geneva ceasefire in mid-May still have no satisfactory answers.”
He continued, “It is not clear whether U.S. trade policy is being run by President Donald Trump, his trade negotiators or his national security team.”
“The overall objectives of the trade aggression, other than the display of raw power, are as muddled as ever,” Kroeber added.
Despite these developments, U.S. Treasury Secretary Scott Bessent struck a more optimistic tone on Sunday, telling CBS’s Face the Nation that he remained hopeful about the resolution of the dispute.
“I’m confident a U.S.-China trade dispute will be ironed out,” Bessent stated.
“I believe we’ll see something very soon,” he said, referring to a potential conversation between President Trump and Chinese President Xi Jinping.
The May 12 agreement temporarily paused the escalating tariff war for 90 days, giving negotiators time to work toward a more permanent solution. However, the truce still left tariff levels significantly higher than before the dispute intensified. Under the agreement, the United States reduced its tariffs on Chinese goods from 145% to 30%, while China lowered its rates on U.S. imports from 125% to 10%, according to U.S. Trade Representative Jamieson Greer.
China, in its latest remarks, asserted that it had fulfilled its obligations under the agreement by suspending or reversing both tariff and non-tariff measures. Nonetheless, it argued that the Trump administration had “unilaterally provoked new economic and trade frictions and exacerbated the uncertainty and instability” in bilateral trade relations.
Further inflaming the situation, the U.S. last week announced plans to revoke student visas for some Chinese nationals—a move that could affect more than 275,000 Chinese students currently enrolled in American institutions.
Experts warn that a renewed breakdown in trade relations could have far-reaching effects.
“If the United States and China were to disengage completely in another blitz of escalating tariffs, it would be a really big deal for the global economy,” said Carl Weinberg, Chief Economist at High Frequency Economics.
“Demand for industrial commodities would plummet. Supply chains spanning multiple borders would shut down.”
The latest developments point to increasing instability in the U.S.-China trade landscape, leaving the global business community wary of what may come next.
