How Trump and Xi Went From Tariff War to Trade Truce

The relationship between the United States and China has gone from an intense tariff battle to a fragile trade truce, as President Donald Trump and Chinese President Xi Jinping prepare for another high-level meeting in Washington.

The two economic powers spent much of 2025 escalating tariffs and restricting key exports. But after months of negotiations, both sides began pulling back from the brink, seeking to stabilize trade and avoid another major economic confrontation.

How the trade war began

In February 2025, Trump imposed a 10% tariff on Chinese goods, citing concerns including fentanyl and immigration. China responded with tariffs on American coal, liquefied natural gas, crude oil and automobiles, while also restricting exports of several metals important to defense and clean-energy industries.

The confrontation intensified in March and April. Trump’s so-called “Liberation Day” tariffs pushed U.S. duties on Chinese goods sharply higher, while Beijing retaliated with its own increases. At the peak of the escalation, tariffs on both sides reached as high as 125%. China also tightened controls on rare-earth exports.

The first pause

By May 2025, Washington and Beijing began looking for a way to stop the escalation.

Negotiations in Geneva produced a 90-day pause. U.S. tariffs on Chinese goods were reduced from 145% to 30%, while China’s tariffs on U.S. goods fell from 125% to 10%.

The pause was later extended, giving both governments more time to negotiate a broader arrangement.

From confrontation to a truce

Tensions returned later in 2025, particularly over China’s restrictions on rare-earth exports.

But in October, Trump and Xi reached a trade truce following talks in South Korea. Trump agreed to reduce some tariffs, while Beijing pledged measures involving fentanyl precursor chemicals, purchases of U.S. agricultural products and rare-earth export restrictions.

The agreement did not resolve every dispute, but it helped prevent another major tariff escalation.

A new phase in 2026

The relationship entered another phase in 2026.

After the U.S. Supreme Court struck down Trump’s emergency tariffs in February, the administration introduced a temporary 10% global tariff under a different legal authority.

In May, Trump visited Beijing for a summit with Xi. The two governments announced plans for new trade and investment mechanisms, while China agreed to purchases involving Boeing aircraft and U.S. agricultural products.

Now, attention is turning to Trump’s planned September 24 meeting with Xi at the White House.

What comes next?

The current truce remains fragile and is due to expire in November. U.S. and Chinese officials have been holding preparatory talks covering tariffs, trade, critical minerals and artificial intelligence.

Officials are also discussing possible tariff reductions on selected non-sensitive goods. Reuters reports that Washington and Beijing have discussed a broader framework involving roughly $30 billion in tariff cuts on each side, although the discussions are not yet final.

The upcoming Trump-Xi meeting is therefore less about declaring an end to the trade war and more about determining whether the current period of relative stability can continue.

After reaching the highest levels of tariff confrontation in decades, Washington and Beijing now appear focused on managing their differences without allowing the relationship to spiral back into another full-scale trade war.