[By GuanchaNet Columnist Jiang Yuzhou]
On May 12, 2025, both China and the United States issued a joint statement following the Geneva economic and trade talks. After more than forty days of tug-of-war, the U.S. side temporarily retreated its provocation line back to the status before April 4th, and confirmed that both sides would establish mechanisms to continue consultations on economic and trade relations.
Particularly worth mentioning is that after the issuance of the joint statement, the Ministry of Commerce specifically emphasized the importance of strengthening strategic mineral resource export control as it concerns national security and development interests. Not only should greater efforts be made in port inspections and crackdowns, but also the幕后illegal entities and smuggling networks should be thoroughly investigated. Violations must be handled strictly and promptly, with continuous enhancement of the enforcement effectiveness of export controls.
Upon reading this, readers with insight will surely smile knowingly and better understand our achievements this time.
A little earlier on the same day, China had already held a press conference announcing that the high-level economic and trade talks between China and the United States had "once again" achieved substantive progress. However, China also emphasized that if the U.S. side insisted on infringing upon China's rights and interests, China would firmly counteract and see it through to the end.
In contrast, the U.S. side appeared more hasty. The White House website could not wait to announce that a trade agreement had been reached with China. As early as the first day of the talks, when American officials were emphasizing to the media that the negotiations were still ongoing, everything needed to be kept confidential, and no comments should be made, Trump led by blowing that "significant progress" had been made.
As seasoned observers of the trade war, we must admit that Americans have truly redefined the word "substantive." In 2018, when substantial progress was announced, the conclusion was that the trade war would not be waged, yet just a few days later, Trump tore up the consensus with a single tweet.
In 2019, another substantial progress was made, leading to the signing of the first phase of the economic and trade agreement at the beginning of the following year. However, subsequent facts repeatedly proved that the U.S. violated relevant obligations of the agreement, all of which are recorded in the recently published "China's Position Paper on Several Issues of Economic and Trade Relations Between China and the United States."
With such recent history as a mirror, one can know that the value of the word "substantial" in talks with the U.S. needs to be separately planned.
Indeed, the credit records of the U.S. government and Trump himself in the trade war, if converted into Ant Credit scores domestically, wouldn't even be enough to register for Alipay to pay utility bills online.
Then, what is the significance of continuing such marathon talks with the U.S. government?
One: "Fight and talk" is both a declaration of position and highlights the contrast between the two sides
Before this economic and trade negotiation, senior Chinese leaders had several contacts with the U.S. side. Deputy Premier He Lijie had video calls with U.S. Treasury Secretary Bessent and U.S. Trade Representative Jamie Greeson on February 21st and March 26th respectively, stating China's position. Premier Li Qiang also met with Republican Senator Steve Daines and representatives of American business executives on March 23rd, urging communication between China and the U.S.
The Premier then mentioned at the time that "there is no winner in a trade war. No country's development and prosperity is achieved by imposing tariffs," and that "we should expand the cooperation cake and use more incremental benefits to address issues like trade imbalance."
To this extent, many words were not said just at Geneva.
With Trump's bottomless "reciprocal tariff" increase, Sino-U.S. communication fell silent in April, allowing us to see一幕幕 farces where the U.S. urged China to make phone calls. China's attitude has always been that attempts to negotiate under the guise of talking while continuing coercion and extortion will never be accepted by China.
For this reason, some friends worry whether starting talks before the U.S. makes concessions might be seen as weakness and weaken the trust of other countries cooperating with China in countermeasures.
In fact, those familiar with Sino-U.S. relations know that there is nothing strange about talks. "Fight and talk," seeking unity through struggle, has always been the norm in Sino-U.S. relations. Not to mention the well-known Panmunjom negotiations, from the 1950s to the 1970s, the U.S. and China once had a mechanism for ambassador-level talks lasting 15 years and totaling 136 sessions, initially held in Geneva. By 1960, People's Daily even published an article titled "100 Times of Sino-U.S. Talks."
Looking back to the past can help us understand that talks are not a sign of weakness. Image source: First Edition of People's Daily on September 8, 1960.
Many classic moments of China's defense of rights against the U.S., including the effort to bring home Qian Xuesen, occurred during these talks. For instance, in June 1962, amidst difficult circumstances where the domestic and international situation was described as "a hundred-foot cliff of ice," our representative Wang Bingnan still seriously pointed out to the U.S. side that "if Chiang Kai-shek launches a war against the mainland... the U.S. government must take full responsibility for Chiang's adventurous actions and all serious consequences arising therefrom." The U.S. representative immediately responded that "without U.S. consent, Chiang Kai-shek shall not launch an attack against the mainland" and that "if Chiang decides to act, the two of us will jointly stop him."
Therefore, holding talks during times of bullying itself is not a problem; the key lies in the stance adopted, the methods and approaches used, the spirit displayed, and the profound impact thereafter. The opening of the article "100 Times of Sino-U.S. Talks" introduces the significance of the negotiations, stating that they most powerfully demonstrate to the world who truly wishes to resolve international disputes through negotiation and who stubbornly enforces policies of armed aggression and intimidation.
The concluding two paragraphs of the article are堪称 echoes of the current situation:
"In the Sino-U.S. talks, China has consistently maintained a firm stance, earnestly negotiating with the U.S. to strive for agreements, while not indulging in unrealistic fantasies about the talks. We have never relaxed our vigilance against U.S. imperialism because of negotiations with the U.S."
"The Sino-U.S. talks have reached 100 rounds, spanning five years. As long as the U.S. government is willing to continue, China is ready to continue talks with it. However, we solemnly warn the U.S. government: If you have any sincerity for negotiations, you must conduct them seriously. Otherwise, you will inevitably face condemnation from the world and become increasingly passive."
Cartoonized depictions humorously recreate the scenes of the talks back then. Image source: Those Things Rabbits and Such.
Looking back at this round of talks, within just a month, both sides have already shown distinct differences.
On the American side, the part concerning China involves the president, vice president, secretary of state, treasury secretary, commerce secretary... a veritable swarm of people, all speaking variously. The body movements involved in signing documents and showing them around are even more exaggerated than those of the former German foreign minister who became a trampoline athlete.
In contrast, China has consistently issued announcements through relevant departments, with routine statements from spokespersons, and only when there is something particularly significant do relevant department leaders step forward to explain.
I don't know how Trump would feel when he sees that topics thrown out by him personally as president are mostly responded to by departmental spokespersons, and not until this point does he have the chance to react. A friend told me that in Trump's six bankruptcies during his commercial career, such experiences are commonplace, and his personality has long adapted to this; statehood is not something he cares about.
Regarding the content of the statements, China remains steady as a calm lake, essentially repeating over and over the phrase "talks are open, confrontations are inevitable." In January, before this round of provocations by the U.S., China had repeatedly emphasized that "it does not deliberately seek a trade surplus." When China says this much, those who still don't understand fundamentally lack understanding of negotiation artistry and should ask themselves about their species origins.
In stark contrast, the U.S. response showcased diplomacy performing Brownian motion. In early April, repeated messages were shouted, "this is China's last chance to negotiate," "reaching agreements with the whole world, isolation awaits if not talked about," then by mid-April, it transformed into a Lu Xun-like lament, "China really wants to call us," and by late April, it changed to "tariffs on China are unsustainable, we don't want decoupling."
Yet, despite this, small actions continued unabated. Take Bessent, who was portrayed by American media as a dove, for example. He said "an agreement is possible," then "the agreement will take 2-3 years"; he said "not wanting to decouple from China," then "hoping to decouple in 'strategic industries' affecting national security" (such as steel, semiconductors, pharmaceuticals).
As a disciple of Soros, why did he manage to manipulate his fund's scale with a 90% drawdown, scaring off investors faster than a scythe? We can perhaps find clues in such a mental state. This is still considered the "most moderate" among the Trump administration, which is claimed to be the most loyal-capable upgraded version.
Just this week, Trump was still boasting that his administration was meeting with "almost every country" and that some trade agreements "could be announced this week." I waited until Sunday, only to receive a mere agreement with the UK, which is framework-based, causing laughter and tears.
Now, calling a single talk an "agreement," Trump's definition of agreements is indeed extremely loose.
Besides, he continued his characteristic flip-flopping, at one moment trying to sneak certain Hong Kong traitors into the agenda, and at another fantasizing that reducing tariffs to 80% would guide China to "open its market to the U.S." The 80% figure is likely due to recent American economists calculating that even halving the existing tariff rates would be insufficient, possibly requiring a reduction to 50% to restore at least basic trade between the two countries.
Thus, Trump once again wielded the "art of deals," raising the price to prepare for bargaining. When China did not dance to his theatrics, he could not hide his resentment, constantly releasing venomous curses, such as "China deserves 145% tariffs" and "China's economy is collapsing," etc. So he was not just being arrogant at first and humble later, but alternating between arrogance and humility, staging farces. In a month of near silence, China allowed the U.S. to embarrass itself on the world stage, with even American media finding little advantage in this round of talks.
Trump and others sought to shape "uncertainty" to influence negotiations, but due to almost transparent cards, they increasingly leaned towards feigning madness and folly.
Groundedness poorly executed, they resorted to grounding themselves in the underworld. What a farce!
The entire world has witnessed this, for instance, Vietnam, which was initially shocked by equal tariffs, after stabilizing emotions over this month, no longer discussed inviting Trump for a visit.
With the publication of the joint communiqué, I believe everyone will see more clearly.
Two: Behind this round of talks lies increasing chaos in Trump's rhythm.
Behind the "equal tariff" farce lies a trend of collapse in Trump's various agendas.
Trump came to power as a critical government, and from the very start of his presidency, he had already shifted from "full-scale offensive" to "key offensive." There was no other reason: many of the issues he enthusiastically promised during the election campaign simply could not be fully implemented. Therefore, his main focus was twofold: domestically, forming a "government efficiency department" to implement fiscal "cutbacks" and establish his own authority. Internationally, launching a trade war to extort money from various countries while promoting fiscal "income growth" and the return of manufacturing.
The chaotic situation arrived faster than expected. Regarding the "government efficiency department," this column has already mentioned it in multiple previous articles, in short: not only did it fail to save much money, but the person in charge had to flee, effectively turning it into a half-completed project, greatly undermining Trump's government's authority.
Moreover, the external trade war turned into a farce, transforming the anticipated "one call, a hundred responses" into "one call, a hundred refusals."
Recently, the agreement with the UK is considered a rare achievement, but upon closer inspection, it is hard to bear. On one hand, the conditions are harsh; the UK has agreed to increase purchases of American goods, reduce tariffs on imports from the U.S., simplify customs procedures for American products, and commit to a series of additional promises, yet when exporting local products to the U.S., it still has to impose at least a 10% tariff (with a quota of only 100,000 vehicles, exceeding which the tariff will rise to 25%), and accept U.S. supply chain reviews of steel and aluminum products.
Such an agreement only shows that the UK lacks a unified large market after Brexit, has limited bargaining power with the U.S., and is bolstered by additional factors such as the UK's fiscal crisis and the special relationship between the UK and the U.S. It's no wonder that many experts point out that this agreement cannot be replicated in other countries.
Aside from that, even America's traditional Western allies, including Canada, Japan, and the EU, are either countering or delaying, making America's "reaching agreements" look like blowing soap bubbles. Trump can only repeatedly console himself with the same tongue-twister used in Sino-U.S. negotiations: "They want us, we don't need them," and modified his statement to say that he is not in a hurry to complete any deal.
How many countries Trump negotiates agreements with has become an international joke known to all.
Aside from the trade war topic, another new development worth noting is that Trump has started thinking about taxing the rich.
I still remember the Republican campaign platform during the election period, which was full of slogans but lacked details. Tax cuts were surprisingly detailed, even ranking highest and most comprehensive in Trump's economic platform. In response to Democratic doubts about the effects of tax cuts, Trump expressed two attitudes: first, cutting taxes for entrepreneurs and "the smartest people" would stimulate economic vitality. Second, the reduced fiscal revenue from tax cuts would be offset by tariffs.
Now he has gone back on his word! Although lying has become habitual for him, it is worth noting that Trump's signature slogan during his first term was "fulfilling core commitments." His broken promises now reveal how dire America's fiscal pressure has become!
Looking back at the recent agreements Trump has managed to reach, there are only two: the mineral agreement with Ukraine and the ceasefire agreement with the Houthis.
Articles about the mineral agreement were published just recently. Trump's humiliation in the White House debate did not lead to a change in Zelenskyy, already a sign of weakened control. Before the ink on the agreement dried, Ukraine showed signs of reneging. Despite明确规定that the dollar and the hryvnia should be freely convertible, Andriy Pyshny, the governor of the National Bank of Ukraine, recently publicly stated that they are considering replacing the dollar with the euro.
This news broke five days ago, yet Trump's administration has made no comment, acting like an ostrich.
Even more shocking is the ceasefire agreement Trump's administration reached with the Houthi rebels. Faced with a situation where they fought back and forth with the "flip-flop army," Trump continued to talk tough even as he withdrew, portraying the Houthis as begging for mercy.
Before his words faded, he received a slap in the face, as the Houthis emphasized their continued attacks on Israel, including Israeli ships in the Red Sea, and on May 11th, they still declared an air blockade against Israel. Meanwhile, it was reported that Trump had cut ties with Netanyahu, and according to the Times of Israel, due to dissatisfaction with Israel's instigation of the U.S. to get involved in the Iran war and the slow progress of normalizing relations with Saudi Arabia, Trump's administration plans to bypass Israel in its Middle East policy.
Trump, who has always had close ties with Jewish financiers and been labeled as a "hard-line pro-Israel" politician, even abandoned Israel's interests during peace talks with opponents. Personally, I consider this, along with the near-collapse of the "government efficiency department" and the move to tax the rich, as signs of severe internal weakening in Trump's administration, possibly a precursor to the collapse of this administration.
But this day came much faster than previously estimated!
Not long ago, a friend joked that watching Trump made me understand how Haunhao, a prince of the Han Dynasty, managed to commit 1,127 absurdities in 27 days. Indeed, just look at the White House website, and the number of times Trump "wins" each day can resonate with this historical record!
Due to a lack of "winning" materials, the White House website has recently begun fighting water-saving campaigns for faucets, showers, bathtubs, and toilets, as well as the common carp in the Great Lakes. Image source: The White House.
In this "win-win-win," the Trump administration, which has been in office for only a hundred days, is experiencing a shift from offense to defense.
Three: Who exactly is sitting across the table from us during our negotiations?
However bizarre Trump may be, one thing is clear: we are the biggest obstacle he faces in winning the trade war. This has been repeatedly predicted in my series of articles since last summer.
Moreover, looking at the series of statements from the Trump team, we can discover a consistent mindset: China's economic problems are bigger than America's, China depends on foreign trade, whereas the U.S. is "the largest consumer market in the world," so as long as the U.S. persists in cutting off trade with China for a few months, China's economy will collapse.
This group of people, none of whom have ever worked in basic manufacturing or truly experienced the hustle and bustle of fields, factories, or workshops, have thus turned a theoretical deduction into a repetitive mantra, forming psychological comfort until reality brutally educated them.
From the start of the trade war, the U.S. first-quarter economic data refreshed the worst record in recent years, with official GDP shrinking by 0.3%, far below the average annual growth rate of about 3%. The U.S. Bureau of Economic Analysis clearly stated that net exports dragged down GDP by nearly 5 percentage points, the largest negative impact on record. Consumer spending, which accounts for two-thirds of GDP, grew at only 1.8%, the weakest performance since mid-2023.
The most ironic aspect is that the rare growth point came from business inventories, contributing 2.25 percentage points to the first-quarter GDP, the highest since the end of 2021, as everyone was forced to stockpile due to the trade war.
According to the Consumer Price Index, the average grocery prices in March 2025 were approximately 2.41% higher than in March 2024. This is the highest year-over-year inflation rate for food and groceries since August 2023.
Take food and beverages as an example; if the price index from 1982-1984 is set at 100, the latest March 2025 index is as high as 312.71, further rising even after the great inflation of 2022. Chart source: U.S. Bureau of Labor Statistics, FRED.
In fact, the big reconciliation on Xiaohongshu at the beginning of the year has proven how much water there is in the U.S. politicians' claim of "the largest consumer market." Under the condition of earning and spending dollars, the real prices between China and the U.S. are far from the 1:7 exchange rate suggests.
Also, the view that the trade war would promote the return of manufacturing has been continuously disproved by reality. A poll conducted by CNBC showed that the majority of respondents estimated that establishing a new domestic supply chain in the U.S. would cost twice or more than the current cost. 61% of respondents said that moving supply chains to countries with lower tariffs would be more cost-effective than relocating them back to the U.S. Even with Trump's tax cuts, only 14% of respondents considered it the biggest factor in repatriation.
Looking at specific industries, two pieces of news from the U.S. media about a large and a small industry are quite thought-provoking:
The larger one is the automotive industry, which is expected to experience increased costs and reduced profits, caused by supply chain impacts. Last year, American factories produced millions of cars, none of which could achieve even partial domestic parts production, and more than half of assembled vehicles were imported, all affected by the U.S.-initiated trade war.
The Trump administration could only patch things up, exempting tariffs on automobile-related industries in addition to planning refunds. According to the White House, the plan is to refund 3.75% of car sales prices to automakers in the first year, reduce it to 2.5% in the second year, and "gradually eliminate" it starting the third year.
Let alone whether the U.S. Treasury can afford such expenses, according to CNN calculations, even with these refunds, the cost increase per vehicle due to tariffs would still amount to approximately $4,000.
Additionally, even on Mother's Day, Americans significantly reduced their flower purchases because about 80% of flowers purchased in the U.S. come from abroad, mainly from Colombia and Ecuador, with no relation to China, yet they still suffered collateral damage.
A new survey by the online lending market LendingTree found that by 2025, spending on Mother's Day will decrease by 14%. Among those planning to buy gifts, 56% said they would reduce spending due to inflation and broader economic conditions. Of these, 38% explicitly cited tariffs as the primary reason for their decision.
Already frustrated companies have directly taken Trump's administration to the U.S. International Trade Court, touching on deeper issues such as whether the president truly has the right to impose tariffs and the principle of separation of powers.
The current situation is deteriorating rapidly due to logistics impacts.
At the end of April, the U.S. container volume dropped by 43% week-over-week, a phenomenon unseen even during the pandemic.
According to Sea-Intelligence, a total of 90 voyages were canceled on Asia-to-U.S. trade routes between April and May. According to logistics suppliers and shipping carriers, booking volumes decreased by 30-50%. According to Sea-Intelligence's statistics on cancellations and changes in voyages and vessels, MSC's container capacity decreased by 28% year-over-year, while OA Alliance's container capacity decreased by 26% year-over-year.
Currently, among major U.S. ports, shipments from China generally account for more than 20%, with over 40% in Los Angeles, Seattle, and Tacoma, and over 60% in Long Beach. With the sharp decline in bilateral trade volumes, especially the emergence of "zero berthing," the impact continues to ferment.
In addition, due to the Trump administration's tariff policies being piled up and often changing overnight, scenes of customs struggling to cope and chaotic enforcement occur.
No wonder there is such a saying in the industry: U.S. maritime trade has become a sacrificial lamb of Trump's tariff war.
The impact of the trade war even hit Wall Street faster than expected, resulting in a triple whammy of stocks, bonds, and currency. According to statistics from compensation consulting firm Johnson Associates, most Wall Street employees' salaries will decrease, with the bonuses for IPO bankers dropping the most—up to 20% less than last year. Salaries are expected to decrease by up to 10% for hedge funds, private equity, asset management companies, and even employees working in mergers, commercial, and retail banking.
This in turn impacted the U.S. dollar. Although the dollar still holds an exalted position in the world currency, rampant trade protectionism undermines holders' confidence, reducing dollar allocations in settlements and investments, which then affects capital markets. The fluctuations in the U.S. capital market in April were a preview of this.
Trump's administration reversed cause and effect, consistently avoiding its own structural contradictions, hoping to raise income and pull back manufacturing by imposing tariffs. The consequence is that short-term tariff revenues are offset by elevated consumer costs, and long-term tariff revenues will be counteracted or even reduced due to declining trade volumes. As for manufacturing, it has not returned but instead, domestic suppliers are dying off first.
Moreover, the transmission of policies has been faster than expected, with chaos emerging within just over two months, proving once again that the fundamentals of the U.S. are not as good as some people boast.
At this point, the U.S. government can only hype up that the opponent's economy is also bad, and a one-point drop in China's PMI can be repeatedly hyped up for many days.
However, China's foreign trade data is still rising. Despite a 21% drop in exports to the U.S., the export growth rate in April still reached 8.14%, showing strong resilience and strongly supporting market demand in non-U.S. countries. This resilience was evident even before the trade war.
For China, the trade war is not new but has been an "ongoing new anti-Japanese resistance" for eight years. Before this round of the trade war, 62% of Chinese goods exported to the U.S. already had an average tariff rate of 16%, far higher than the MFN treatment rate, with most WTO arrangements already nominal. Add to that the encirclement by transshipment trade, along with the accompanying technology war and financial war.
Nevertheless, over the past eight years, it has not stopped the annual growth of bilateral trade between China and the U.S., nor has it weakened the position of Chinese goods in the U.S. market. Until February this year, Chinese goods accounted for over 20% of U.S. imports in categories such as electronics, motor products, textiles, clothing, plastics, and rubber, with footwear exceeding 40% and toys and sports equipment approaching 75%.
Tariff rates on Chinese goods before the current round of the trade war and the increases faced. With Trump's universal 145% tariff on Chinese goods, all these rates also need to increase by an additional 85%. Chart source: Peterson Institute.
When the Trump administration forcibly pushed for decoupling, an America unprepared for production and consumption naturally bore a higher cost than China.
So, the consequence of Trump's erratic moves is the "American Trade Circle" getting hotter. Faced with this situation, Trump could only continue to criticize the previous administration, even going so far as to say that the good parts of the U.S. economy are "Trump Economy" and the bad parts are "Biden Economy." Not long ago, Trump once again "released" the Kennedy files, which were still a gimmick with little substantial content, but reminded me of a memory.
Back then, when both John and Robert Kennedy and Martin Luther King Jr. were assassinated, American newspapers mourned, "Great America is struggling!" If the journalist who wrote this report saw this scene now, he would probably think that at most it was twitching back then, while today's America is truly struggling!
Back then, America still had Nixon, whose personal ethics were flawed but dared to bear political risks to make strategic shifts, pushing forward the "Great Society" reforms, with profound layouts influencing decades in Western Europe, the Middle East, Latin America, and the Asia-Pacific region. American manufacturing was still at the world-leading level, reportedly able to conduct the Apollo moon landing, and the computer revolution was brewing...
Which of these can America today even slightly compare to?
The current U.S. government has degenerated into a "three-weight three-light" government:
Heavy on administrative orders, light on economic laws: Persistently obsessed with changing tax rates, adjusting exchange rates, replacing personnel, and issuing orders, believing that doing so will produce a magical transformation of the global economy;
Heavy on reaching agreements, light on implementation: Persistently obsessed with signing grandiose agreements, accumulating frameworks, with propaganda on short-term "wins" overshadowing future operability, and investing vast administrative resources in this;
Heavy on disrupting order, light on construction plans: Unilaterally enforcing "my illness, you take the medicine," sacrificing the international order it once helped build for short-term gains, without proposing any constructive alternatives beyond zero-sum games.
Such an America has actually placed administrative commands above economic laws, essentially walking the path of command-type economies, albeit a low-end version, lacking rigorous mathematical calculations and solid arguments for the interrelations of various elements, thus sinking deeper into the quagmire.
Such an America lacks cognition and reverence for the negotiations and agreements it promotes, always ready to overturn predetermined arrangements for new needs, and due to its uncontrollability and the ambiguity of agreements, even negotiation counterparts are constantly prepared to renege, forming a mutual embrace of abandonment.
Such an America can resort to any means for short-term benefits but cannot consolidate its foundation, resembling a weak patient receiving sudden surges of large meals followed by slaps and starvation. In various disconnections and disruptions carried out without regard for domestic capacity, an American-style "shock therapy" is gradually forming, impacting not only the economic fundamentals but also the image carefully cultivated by America over the years.
This is the true appearance of the opponent sitting across from us at the negotiating table.
The current problems in Sino-U.S. relations stem from America's unwillingness to face its structural contradictions and its attempt to externalize these contradictions while expecting China to bear the brunt. These contradictions are unsolvable until the U.S. side is willing to face its own issues, making it impossible to reach significant consensuses or achieve breakthrough results.