U.S. and China trade talks set to resume amid ongoing economic tensions

The world’s two largest economies, the United States and China, remain mired in a trade war, with experts suggesting that a call scheduled for Friday between the two leaders is likely to address issues including the social media app TikTok, tariffs, and technology.

Shaun Rein, founder of the China Market Research Group, noted that U.S. President Donald Trump “needs a deal to stabilise the trading system,” adding that high tariffs are damaging both China and the US economy.

The call between Chinese President Xi Jinping and President Trump comes after a flurry of diplomatic exchanges, including separate discussions involving top diplomats and defence chiefs from both nations. It marked the first call between U.S. Defence Chief Dong Jun and Pete Hegseth under Trump’s second term, during which Washington clarified it “does not seek conflict with China nor is pursuing regime change or strangulation” of the world’s second-largest economy.

Elizabeth Freund Larus, adjunct senior fellow at the Pacific Forum, said, “Both sides recognise that the trade war is not beneficial for their citizens. Americans are paying more for Chinese imports, negatively affecting consumers and businesses, while the slowdown in trade is harming Chinese exports and impacting China’s economy.”

Earlier this week, trade negotiators held a fourth round of talks in Spain, signalling progress towards a deal on TikTok. Experts note that China is willing to make concessions in technology and algorithms to U.S. firms, but remains intent on retaining control over intellectual property.

TikTok faces a potential ban if not sold to the U.S., although Trump has postponed the penalty for a third time.

Meanwhile, China has managed to replace American suppliers in its supply chain, sourcing soybeans from Brazil, beef from Australia, and oil from Canada, while ramping up domestic chip production.

Analysts suggest that the call may resolve smaller trade issues, such as TikTok ownership and tariffs, but larger challenges – including Taiwan, China’s support for Russia, and tensions in the South China Sea – remain unresolved.

It is expected that the Xi-Trump discussion will focus primarily on three matters: reducing tariffs, access to technology, and the U.S. reaffirming its One-China policy regarding Taiwan.

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