US President Donald Trump is set to speak with Chinese President Xi Jinping as soon as this week, according to White House press secretary Karoline Leavitt. This will mark their first official discussion since Trump took office on January 20, although they had spoken before his inauguration. The upcoming exchange comes at a critical juncture as both nations navigate a rapidly intensifying trade conflict.
Trump’s Tariff Crackdown on China, Mexico, and Canada
Over the weekend, Trump ordered sweeping tariffs on goods from Mexico, Canada, and China, demanding action to curb the illegal flow of fentanyl into the United States. However, by Monday, he had softened his stance on Mexico and Canada, delaying the planned tariffs. Meanwhile, the tariffs on Chinese goods remain on track to take effect within hours.
New US Tariffs on Chinese Imports
On Saturday, Trump imposed a 10 per cent tariff on all Chinese imports, describing the move as an “opening salvo.” Despite earlier campaign promises to introduce tariffs as high as 60 per cent, the administration opted for a lower initial rate but warned of further increases if China fails to meet US demands.
The tariffs are intended, in part, to pressure China to prevent the export of precursor chemicals used to produce fentanyl, a drug fueling a major crisis of overdose deaths in the US.
Trump’s Stance on Fentanyl and China’s Response
Trump has repeatedly criticised China’s role in supplying chemicals used in fentanyl production.
“China hopefully is going to stop sending us fentanyl, and if they’re not, the tariffs are going to go substantially higher,” Trump said. “China will be dealt with.”
China, while historically opposing tariffs, has responded with relatively muted criticism this time. The Chinese government has emphasised its existing efforts to crack down on illegal drug trade and has shown a willingness to negotiate to avoid further economic retaliation from the US.
According to sources familiar with the situation, China appears willing to discuss a potential agreement that could delay or prevent additional US tariffs. This signals a possible diplomatic opening for negotiations between the two economic superpowers.
Economic Impact
The ongoing tariff threats have had immediate financial repercussions. The U.S. dollar surged to a record high against the offshore-traded Chinese yuan on Monday, reflecting investor concerns over escalating tensions between the two nations.
As Trump and Xi prepare for their high-stakes call, the global markets and diplomatic community will be watching closely. Whether the conversation leads to de-escalation or a further escalation in trade conflict remains to be seen. The next few days could prove pivotal in shaping U.S.-China relations for the foreseeable future.