Trump’s Trade Strategy Stalls Against China’s Resistance

 

President Donald Trump’s aggressive approach to global trade, which has yielded a series of framework agreements with allies, is running into a far more formidable obstacle: China.

Just days after the European Union agreed to a trade framework viewed by some EU leaders as a concession to Washington, talks between U.S. and Chinese officials in Sweden concluded without a breakthrough. Despite the White House’s recent celebratory tone, the failure to reach a deal with China underscores the limits of Trump’s leverage and the stakes of a trade relationship with the world’s second-largest economy.

Rather than securing another political win, Trump’s negotiators are expected to present him with a proposal to extend a pause on planned reciprocal tariff increases, set to take effect on August 12. The choice Trump faces: extend talks further or reignite a potentially damaging trade war.

Progress, But No Breakthrough

“We’re just going to give him the facts, and then he will decide,” said Treasury Secretary Scott Bessent, who led the U.S. delegation in Stockholm alongside Trade Representative Jamieson Greer.

Though the administration has scored victories with a series of bilateral agreements — with the EU, UK, Japan, Indonesia, and the Philippines — none carry the geopolitical and economic weight of a deal with Beijing. Trump’s gamble that other nations would ultimately capitulate to U.S. demands has largely worked. He has secured access to previously closed markets and reinforced America’s economic clout, all while reshaping the postwar trade order with sweeping tariffs.

In contrast, China’s response has been more complex and less pliable.

China Refuses to Fold

Chinese President Xi Jinping’s administration, unencumbered by the kind of political pressures faced by Western democracies, is determined not to appear weak in the face of U.S. pressure. Xi, who has staked his legitimacy on nationalism and China’s global resurgence, is unlikely to agree to terms that appear to be a surrender.

China also controls critical supply chains — including dominance over rare earth elements essential for electronics, weapons systems, and aerospace components. When the trade dispute escalated earlier this year, Beijing restricted rare earth exports, reopening the market later but continuing to slow-walk approvals for U.S. companies.

The Chinese delegation in Sweden, led by Vice Premier He Lifeng, included 75 officials — a stark contrast to the smaller U.S. team. Talks focused on export restrictions and supply chain hurdles, and both sides agreed to continue pushing for a 90-day extension to the current tariff truce. Still, any final decision rests with Trump, whose unpredictability looms over the process.

Trump’s Trade Strategy Faces Its Toughest Test

While Trump has upended decades of trade orthodoxy, the true impact of his policies — including steep tariffs — is still unfolding. Economists warn that higher prices for American consumers could emerge in the coming months, potentially complicating the political narrative ahead of midterm elections. Goldman Sachs has estimated that such effects could take eight months to fully materialize.

Trump’s administration, however, remains upbeat. “No one’s moved as fast as the world has moved with respect to Donald Trump,” Commerce Secretary Howard Lutnick said. “He has moved the world in a way that no one can imagine.”

Yet even Trump’s allies acknowledge that China is playing the long game — and may even view him as vulnerable to manipulation. His desire for a one-on-one summit with Xi later this year is viewed by some observers as both a personal and political goal. But China’s protocol-heavy diplomacy is unlikely to offer Trump the kind of made-for-TV deal he craves.

Framework Deals, But Few Details

Another risk for Trump is that his framework agreements with other countries may prove fragile. Trade deals typically take years to negotiate, but many of the administration’s recent announcements lack detail and leave critical issues unresolved. Future setbacks or partner nations pulling out could quickly undercut Trump’s narrative of success.

There are also emerging challenges. Canada, for example, appears unlikely to engage diplomatically, following Prime Minister Mark Carney’s election on an anti-American platform. Meanwhile, a sudden surge in inflation, potentially driven by a new Federal Reserve chair once Jerome Powell’s term ends, could also destabilize Trump’s economic foundation.

Why a China Deal Matters Most

For all these reasons, a comprehensive deal with China is pivotal. Without it, Trump’s larger trade agenda risks stalling. And Beijing knows it.

While China’s economy is not immune to damage from tariffs, its centralized political structure gives it the flexibility to endure more economic pain than a democratic system might allow. Trump, by contrast, will face growing political pressure if the costs of his trade wars begin to show up in American wallets.

Whether Trump can reach a deal with China — or whether China will simply wait him out — remains the central question. But for now, one thing is clear: Trump may have reshaped global trade, but without Beijing’s buy-in, his victory lap is far from complete.