Exactly one week ago on 11 May 2025, The White House announced that the United States and China will slash tit-for-tat tariffs for 90 days as they temporarily suspend or lift the import tariffs they imposed on each other in April, pending further negotiations on a trade agreement.
The announcement offered temporary long-awaited relief to businesses and has boosted market confidence as stock markets, the dollar and oil prices rallied the next day fuelling hopes the two sides will pull back from a standoff that has rattled global markets.
Using tariffs as a bargaining chip, President Trump seemed convinced that aggressive escalation will force US trading partners to offer significant concessions and enable him to declare a major political victory. But negotiating a trade agreement is not the same as striking a real estate deal. The process is slower, messier and far more consequential.
There are great mutual economic dependence between the United States and China:
- The U.S. is one of China's largest export markets.
- China is a vital supplier of goods, rare earths, and manufacturing capabilities.
- Both economies benefit from stability and trade continuity.
The U.S. may ease tariffs to help reduce consumer prices while China seek stable export channels amid slowing domestic growth as both nations work on more predictable frameworks to stabilize disrupted global supply chains.
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A US-China trade agreement is possible, but achieving a comprehensive and lasting one is highly complex due to deep-rooted tensions and competing global interests because The United States sees China as a strategic competitor and is restricting tech access, e.g., semiconductors, AI, etc while China deeply resents and resists U.S. influence on China's internal policies e.g., Taiwan, Xinjiang.
Tech dominance, sovereignty and difference in values are deep-rooted sources of tension between these two giants. Conflict over emerging tech sectors like 5G, EVs, and AI is intensifying, with both sides enforcing export controls and investing in self-reliance. Lack of transparency, intellectual property issues and geopolitical mistrust remain unresolved.
Below are some priorities and clashes these two superpowers have to work on before they can agree on a comprehensive trade agreement.
U.S. versus China – Trade Agreement Priorities & Clashes
A conflict between the U.S. and China doesn't stay confined to their borders — it impacts global markets, supply chains, geopolitical alliances and even everyday prices for goods around the world.
"Yes, a deal is possible, but likely a limited, tactical agreement. To reach a comprehensive, trust-based trade partnership between the United States and China will still be a long shot in the current climate," said Kiwi Lim, Associate Group Director of the largest listed real estate company in Singapore, Propnex Realty.
"I do not expect a broad trust-based partnership between the United States and China in the near term. I think likely they will agree on small deals or sector-specific arrangements by the 3rd quarter of this year to avoid economic collapse, manage inflation and keeping trade open."
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