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Trade tensions between the world’s two largest economies are set to dominate next week’s meeting between US President Donald Trump and Chinese President Xi Jinping at the White House, with both sides yet to reach a lasting trade agreement.
The summit, expected on September 24, follows a fragile truce reached last October that halted a rapid escalation in tariffs but failed to produce a comprehensive settlement.
US tariffs on Chinese goods reached as high as 145 per cent in April 2025, while China imposed retaliatory tariffs of up to 125 per cent. Both sides have since lowered the rates, but a complex mix of sector-specific duties remains.
The effective US tariff rate on Chinese imports stood at 22.8 per cent in July, the highest among major US trading partners, according to the Penn Wharton Budget Model. Tariffs on some products, including steel and aluminium, were as high as 40.5 per cent.
China continues to impose a 10 per cent tariff on all US goods, with additional duties on selected products, including a 15 per cent levy on US liquefied natural gas.
Despite the trade tensions, bilateral commerce has continued. Chinese customs data showed total two-way trade reached $400.8 billion in the first eight months of this year, up 5.4 per cent from the same period in 2025. Chinese exports accounted for about 75 per cent of the total.
Tariffs are expected to be the main issue at the summit. China and the United States are discussing a framework to reduce tariffs on $30 billion worth of products from each side, China’s commerce ministry said last week.
The target was agreed during Trump’s meeting with Xi in Beijing in May, when the two leaders also agreed to establish trade and investment councils to help manage bilateral economic tensions.
US Treasury Secretary Scott Bessent is due to meet Chinese Vice Premier He Lifeng this weekend, with the talks expected to prepare the ground for the Trump-Xi summit.
China retains important leverage through its control of rare earths and other critical minerals used in high-tech industries. Beijing’s export restrictions on rare earths previously contributed to Washington reducing some of its steep tariffs.
Analysts say China’s resilient export sector and diversified supply chains could strengthen Beijing’s position in the negotiations.
For Washington, securing Chinese commitments to purchase more US agricultural products, particularly soybeans, remains a key objective. The talks also come as the Trump administration faces economic pressures ahead of the November midterm elections.
Beyond tariffs, disagreements over technology, artificial intelligence and China’s relations with Iran could complicate efforts to reach a broader deal.
The United States has accused Chinese AI companies of acquiring US technology on a large scale, while Beijing’s economic and diplomatic ties with Tehran remain another source of tension.
The meeting would be Xi’s first visit to Washington in 11 years, giving both leaders an opportunity to address a wide range of economic and diplomatic disputes.
