China has accused the United States of violating a recent trade agreement and announced plans to protect its interests.

The Chinese Ministry of Commerce rejected claims by President Trump that Beijing breached a Geneva consensus.

The ministry criticized new US restrictions, including AI chip export controls, limits on chip design software sales, and Chinese student visa revocations.

It also accused the US of breaking a January 17 agreement between Trump and President Xi Jinping. “If the US insists on its own way… China will continue to take resolute and forceful measures,” the ministry warned.

The dispute has strained trade ties, contributing to a drop in Asian shares and US stock-index futures.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Historical pattern of temporary trade deals followed by renewed tensions

The latest US-China trade tensions follow a well-established cycle of temporary agreements and subsequent breakdowns that has characterized relations since 2018.

The current dispute mirrors previous cycles when the US imposed three rounds of tariffs in 2018 totaling $250 billion on Chinese goods, leading to retaliatory measures from China 1.

Despite the May 2025 agreement that reduced some tariffs and established a mechanism for continued discussions 2, history suggests such temporary truces rarely address underlying structural issues.

Between 2018 and 2025, multiple negotiation attempts have followed similar patterns: initial agreements, followed by accusations of violations, and then renewed escalation, indicating the fundamental challenges remain unresolved 3, 4.

The US trade deficit with China, while decreasing to $295 billion in 2024 (the lowest since 2009), remains the largest with any country and continues to drive American policy concerns 5, 6.

This recurring cycle reflects the difficulty in reconciling fundamentally different economic systems and strategic priorities, even as bilateral trade has grown from $230 billion in 2003 to approximately $585 billion in 2024 7, 8.

2️⃣ Beyond tariffs: The multilayered nature of US-China competition

The current dispute demonstrates how US-China competition has evolved beyond traditional trade issues into a comprehensive rivalry spanning technology, education, and geopolitics.