China Evaluating US Proposals for Trade Talks Amid Ongoing Trade War.

China is evaluating the US proposal for tariff negotiations to resolve the ongoing trade war, but wants the US to show "sincerity". Senior US officials have reached out to China through various channels to discuss the proposal. The trade war has unsettled financial markets and China wants to see evidence of the US's commitment to resolving the issue.

Ask Aime: "Will the US-China trade war affect the stock market?"

China's Ministry of Commerce has announced that it is assessing the possibility of tariff negotiations with the United States, following a week of back-and-forth between the two countries. The statement comes as the trade war between the world's two largest economies continues to escalate, with tariffs up to 245% on some Chinese exports to the US [1].

The US has repeatedly expressed its willingness to negotiate with China, but China has maintained that it is open to talks only if the US shows sincerity and is prepared to cancel its unilateral tariffs [1]. This stance is a response to recent comments from a Weibo account linked to Chinese state media, which suggested that the US had been seeking to initiate discussions [1].

The trade war has had significant implications for financial markets, with both Chinese exporters and American consumers feeling the impact of the tariffs. US retailers like Walmart have warned of price rises and empty shelves due to the dwindling trade [1].

Experts characterize the current situation as a game of chicken between US President Donald Trump and Chinese leader Xi Jinping. Both leaders are attempting to save face while covertly pursuing a mutually beneficial outcome, namely a de-escalation of the trade war [1]. The stalemate has resulted in a tactic of "constructive ambiguity," where each side uses vague language to avoid appearing desperate [1].

The US has not denied China's claims that it has been attempting to initiate talks, indicating some level of contact between the two sides [1]. However, the start of negotiations does not mean that the US-China relationship is close to being steadied. Experts believe that the two sides may be posturing and waiting to see which side blinks first [1].

Trump has assured Americans that his tariffs will not result in a recession, but has acknowledged that they could result in fewer and costlier products. The US economy contracted at an annual rate of 0.3% during the first three months of 2025, aligning with Trump's first 100 days in office [2]. The decline was due to the increase in imports as companies rushed to bring in goods before tariffs came into effect [2].

China has exposed the American luxury goods market in the wake of Trump's tariffs. Chinese suppliers have taken to platforms like X and TikTok to showcase their craftsmanship and offer direct-to-consumer sales at a fraction of the original prices [2].

The optics of de-escalation are important for both Trump and Xi, as they seek to deliver a win for their domestic audiences. Trump wants to show that he has made China capitulate, while Xi wants to portray himself as a strong leader who can make Trump more reasonable [1].

References:

[1] https://www.bbc.co.uk/news/articles/cg419qw9g15o
[2] https://www.business-standard.com/world-news/donald-trump-trade-tariffs-us-china-ties-american-goods-luxury-goods-market-125050100304_1.html

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