US-China Trade Ties Remain Tenuous as Both Nations Navigate Interests and Differences

In April 2024, U.S. Treasury Secretary Janet Yellen visited China, emphasizing shared interests while expressing concerns over China's "excess capacity" in emerging fields. Subsequent developments include discussions on rare earth exports and related restrictive measures in June 2025, and the U.S. maintaining a services trade surplus with China, reaching $27.3 billion in 2024.

The essence of China-U.S. economic and trade relations is characterized by mutual benefit and win-win cooperation. Although differences and frictions exist, both sides believe that cooperation is the only correct choice for the two countries. Recently, the China-U.S. commerce working group held its second vice-ministerial level meeting, engaging in professional, rational, and pragmatic communication on policy and business issues of concern. China specifically expressed concerns regarding U.S. Section 301 tariffs, the generalization of national security, and sanctions on Chinese enterprises.

The relationship impacts industries, societies, and political landscapes profoundly. Industrially, the trade friction has led to a reshaping of global supply chains and industrial chains, forcing companies to adjust production and procurement strategies. Tariffs and trade barriers have affected the costs and competitiveness of related industries in both countries. The competition in the technology sector, particularly in high-tech industries, has prompted China to increase its investment in independent research and development, though it may also result in technological barriers and market segmentation.

Socially, the trade tensions have potentially caused employment fluctuations in affected industries, influenced consumer purchasing power due to increased prices of imported goods, and might have stirred social debate and pressure, especially in severely impacted regions and sectors. The competition in the technology domain could affect scientific research cooperation and talent exchange, with long-term implications for technological innovation and educational development in both countries.

Politically, the politicization of economic and trade issues has complicated China-U.S. relations, bringing their relationship to a new "critical point," with intensified competition and confrontation in certain areas. The U.S. imposition of economic and trade restrictions on its trade partners has disrupted the existing free trade rules, adversely affecting the global economic order and the multilateral trading system. Trade policies are often influenced by domestic politics and elections, as seen in the U.S. government's politicization of economic and trade issues, possibly driven by domestic political considerations. Moreover, the interaction between economic and trade issues and geopolitical tensions has exacerbated global uncertainties, with the China-U.S. economic and trade relationship becoming a crucial component of the global power play between the two nations, influencing international power dynamics and global governance patterns.