With trade tensions flaring between the world's largest economy, communication between the US and China is so unstable that the two superpowers can't even agree whether they're talking.
At this week's White House economic briefing, Treasury Secretary Scott Bescent has been in the way multiple times as he slammed President Trump's recent claim that China's Xi Jinping nation had called him. The best economic officials may normally know such high levels of consultation, but Mr. Becent argued that he has not recorded the president's call.
“I do a lot of work around the White House, running a distribution board is not one of them,” Bescent joked.
However, the obvious silence between the US and China is a serious problem for the global economy.
The market is stuck to the mystery of whether back-channel debate is taking place. The two countries haven't cut all ties, but when it comes to conversations about tariffs, they seem to have become darker.
“China and the US have not discussed or negotiated the issue of tariffs,” Guo Zi-Kung, a spokesman for China's Ministry of Foreign Affairs, said at a press conference last Friday. “The United States should not confuse the public.”
However, China's Commerce Department said this Friday it is considering holding talks with the Trump administration after repeated attempts by senior U.S. officials to begin negotiations. White House and Treasury officials did not respond to requests for comment on whether such outreach occurred.
When and when Washington and Beijing hold economic talks, and whether Beijing will occur, as the Trump administration is rushing to reach trade deals with dozens of countries that could soon face high tariffs. On April 2, Trump imposed what he called “mutual” tariffs on countries he believes have unfair trade and other economic barriers. These taxes, which plunged global financial markets, have suspended 90 days to provide time to reach a country-US agreement.
China, which has reached a trade deal that is barely met in Trump's first term, shows little interest in talking about the new deal until it rolls back what the US considers as a barrage of offensive and unfair trade measures.
Trump increased tariffs on Chinese imports to a minimum of 145% last month to force China to trade negotiations. Chinese officials responded by issuing their own tariffs on American products and closing out the export of minerals and magnets needed by many industries.
The economic sacrifice of TAT's TIT is beginning to become clear. Last month, the International Monetary Fund warned that tariffs made economic recession more likely. Government data released this week showed that China's factory activity slowed in April and sluggish first quarter growth in the US.
At a cabinet meeting at the White House on Wednesday, Trump acknowledged that American children are less expensive dolls. However, he insisted that he would continue to promote “fair deals” with China. He described him as “a major candidate for the Chief Ripper of Far.”
The Trump administration focuses on trade transactions with around 18 most important trade partners in America, subject to mutual tariffs. Becent has indicated that talks with China will work on a separate truck from other negotiations.
The Treasury Secretary is expected to lead China's negotiations, but Commerce Secretary Howard Lutnick oversees most other consultations. But because Trump has not formally appointed or approved U.S. officials to negotiate on behalf of China, Chinese officials are making them believe the Trump administration is not ready or serious for trade talks.
Becent, who made an introductory call with his Chinese counterpart in February, said he had held informal consultations with Chinese officials last week on issues such as financial stability during the spring meeting of the International Monetary Fund and the World Bank. He said they spoke about more “traditional things” but did not say that trade was discussed. The Ministry of Finance issued no summary of the meeting with Chinese officials.
In an interview with Fox News this week, US trade representative Jamieson Greer said he had met his Chinese counterpart for over an hour by April 2, but had not met since Trump announced his “liberation day” tariffs.
Trump suggests that Xi should call him and call on them to start consultations, focusing on their strong personal relationships. But that's not how China handles economic issues that are generally important. The US and China have traditionally communicated economic differences through formal meetings and structured dialogues with working groups led by the nation's top economic staff.
Craig Allen, a fellow at the China Analysis Center at the Asian Association Policy Research Institute, said: “In the Chinese system, these things are carefully negotiated in advance, climbing multiple channels, highly controlled, scripted, and highly choreographed once they reach the leader stage.”
Allen, who was recently president of the US-China Business Council, noted the intense meeting Trump had with Ukrainian President Volodimia Zelensky in February, suggesting that Xi's nearest people are likely to be wary of situations that could lead to public conflict with Trump.
During the Biden administration, Treasury officials worked with China to create a mid-level staff member economic and financial working group aimed at preventing tensions over tariffs and export controls. These lines of communication do not appear to be used by the Trump administration. This tends to view them as a waste of time.
“That's exactly what these groups can do: make sure the policies they deploy are well coordinated to achieve their goals, make sure they are trying to achieve them before it's too late, and instead respond to unintended consequences or messages that are not intended to be sent.
During Trump's first term, the president assigned then-Treasury Secretary Stephen T. Munuchin to lead a trade delegation to China. He later appointed his trade representative, Robert E. Lighthizer.
The trade war veteran believes the current deadlock could last longer, as they believe the tariffs are higher and both sides are winning. As US growth continues to slow while prices begin to rise, the urgency for Trump to get real talks with China could increase.
“At some point, I think we have to give them an elegant off-ramp,” said Wilbur Ross, who served as Trump's secretary of commerce during his first term. “Is that calling them first from our side or simply appointing who will become our primary representative? At some point, we may need to make a symbolic gesture.
During his first term, Trump's top adviser Michael Pillsbury said that before Beijing gets engaged in direct engagement, it is likely that he will be waiting to see how the Trump administration has reached deals with other countries such as India and Japan.
“They don't want to start formal consultations because they want to know what other people's revenues first,” said Pillsbury, who told us and Chinese officials.
He said the trade battle will become a major point of public pride for China, and he believes that Trump's demands (which Beijing does not fully grasp) will soften as the US market shrinks and the US midterm elections approach.
“The delays are so many, and quick trading is very important to Trump's profits,” Pillsbury said.
