US President Donald Trump described Chinese President Xi Jinping as “extremely hard” to negotiate with in a post on Truth Social on June 4, 2025.

This statement comes amid ongoing trade tensions between the US and China, as discussions appear to have stalled.

A senior White House official informed CNBC earlier this week that Trump and Xi are expected to speak soon.

US Treasury Secretary Scott Bessent acknowledged on Friday that trade talks were “a bit stalled.” He suggested that input from both leaders may be necessary to progress.

.source-ref{font-size:0.85em;color:#666;display:block;margin-top:1em;}a.ask-tia-citation-link:hover{color:#11628d !important;background:#e9f6f5 !important;border-color:#11628d !important;text-decoration:none !important;}@media only screen and (min-width:768px){a.ask-tia-citation-link{font-size:11px !important;}}

🔗 Source: CNBC

🧠 Food for thought

1️⃣ US-China trade tensions follow a cyclical pattern despite leadership changes

Trump’s characterization of Xi as “extremely hard to make a deal with” echoes similar frustrations from his first term, when he initiated the trade war in January 2018 with tariffs on Chinese goods, citing unfair practices and intellectual property theft 1.

The current impasse mirrors previous cycles, including the 2020 “phase one” agreement that temporarily eased tensions but ultimately failed to resolve fundamental issues, with China falling short of its commitment to purchase an additional $200 billion in US goods 1.

Despite the change in US administration between 2020-2024, core trade issues remained unresolved, with the Biden administration maintaining many Trump-era tariffs and introducing new ones on specific sectors like electric vehicles 1.

The recent May 12 agreement to suspend most tariffs for 90 days represents the latest attempt to break this cycle, but accusations of violations from both sides suggest the fundamental challenges in US-China trade relations persist regardless of who occupies the White House 2.

2️⃣ Economic interdependence complicates aggressive trade tactics

The trade relationship between the US and China has expanded dramatically from just $4 billion in 1979 to over $750 billion by 2022, creating deep economic entanglements that make decoupling extraordinarily difficult 3.

This interconnection extends beyond merchandise trade, with China being a major holder of US Treasury bonds, creating financial dependencies that constrain both nations’ negotiating positions 1.

Previous rounds of tariffs demonstrated that aggressive trade tactics often produce unintended consequences. Economists found that tariffs failed to significantly reduce the trade deficit (which stood at US$295 billion in 2024) while increasing costs for US consumers and businesses 2.

The trade war has already caused significant economic disruption, with the OECD warning that trade policies are contributing to the slowest global growth since the COVID-19 pandemic, particularly affecting G20 economies 4.

3️⃣ Beyond tariffs: technology and rare earths emerge as critical leverage points

The current trade dispute has evolved beyond traditional tariffs to focus on strategic resources and technologies, with China withholding promised easing of rare earth export restrictions that are critical for advanced manufacturing 5.

This represents a significant shift in negotiating tactics, as rare earth minerals, where China controls approximately 85% of global processing capacity, provide Beijing with powerful leverage in trade discussions 5.

Simultaneously, the US has suspended licenses for sales of critical technologies to China and implemented new export controls, transforming what began as a tariff dispute into a broader technology competition with national security implications 5.

These developments suggest both sides are seeking more sophisticated forms of economic pressure beyond traditional tariffs, with technology transfer and critical resource supply chains becoming central battlegrounds in the ongoing trade relationship 2.

……