Trump accuses China of violating trade truce, escalating tensions

President Donald Trump suggested Friday that the trade truce between the United States and China was not holding and accused Beijing of breaking an agreement that was brokered this month to temporarily roll back trade restrictions that the countries had imposed on each other.

In a post on Truth Social, Trump said that China violated the pact and suggested that he could return to a more confrontational approach: “So much for being Mr. NICE GUY!”

The accusations threatened to derail hopes of a broader trade agreement between the world’s largest economies. China has continued to restrict exports of critical rare earth minerals, straining ties between the countries. In response, the United States this week ratcheted up its own restrictions of critical components. And each country has targeted imports from the other with round after round of tariffs in recent months.

The standoff between the United States and China has created significant concern for businesses and investors and raised fears of a global downturn.

Stocks fell slightly on Friday in the wake of Trump’s post.

The new dispute arrives at a moment of great uncertainty for Trump and his ability to brandish steep tariffs to force other countries to make trade concessions. A federal trade court this week declared many of the president’s duties to be illegal, including some that he imposed on China on emergency grounds. An appeals court later restored that power temporarily.

The United States had ratcheted tariffs on Chinese imports to 145% this year, and China had hit American products with a 125% import tax. Beijing also moved to set up a licensing system for exports of rare earths, which are needed by U.S. manufacturers of cars, semiconductors and airplanes, including the defense industry. Those restrictions threatened to cripple vital U.S. industries, which lobbied the Trump administration for relief.

In early May, Treasury Secretary Scott Bessent and Jamieson Greer, the U.S. trade representative, met in Switzerland with their Chinese counterparts in a bid to defuse the tensions. Both sides agreed to walk back the measures they had taken, including by lowering high tariffs for 90 days, and to hold additional talks on a more comprehensive agreement.

U.S. officials had also expected the Chinese to relax restrictions they had imposed on critical minerals, but they do not appear to be pleased with China’s efforts.

In recent days, the Chinese have restarted some shipments of rare earth magnets, but they have been limited, a person familiar with the sales said. American companies remain concerned about their access to critical Chinese supplies.

In response, the United States has begun reviewing its own exports of critical products to China. It has paused issuing licenses that allow U.S. companies to sell a range of products and technologies to China, including software used to design semiconductors, aviation technology and other goods like machinery, people familiar with the matter said.

China appears to be continuing to build out a government system that would monitor and dole out global minerals to companies worldwide. China dominates the processing and production of many critical minerals. Earlier this week, the Chinese government met with domestic and European chip companies to brief them on how to request licenses for rare earths, according to Chinese state media.

In a statement this week, the Chinese commerce ministry said that the security and stability of the global chip supply chain was “facing severe challenges” and that it “resolutely” rejected “unilateralism and bullying.”

Amid the standoff, diplomatic ties between the United States and China have become even more strained in recent days. Secretary of State Marco Rubio announced Wednesday evening that the Trump administration would work to “aggressively revoke” visas of Chinese students, including those with ties to the Chinese Communist Party or who are studying in “critical fields.”

Bessent said Thursday evening that the economic talks had “stalled” and suggested that Trump and Xi Jinping, China’s president, would need to engage directly.

“I believe that we will be having more talks with them in the next few weeks,” Bessent said on Fox News.

Greer said Friday that the president’s concern stemmed from the fact that China did not appear to be honoring its commitments under a deal brokered between the two nations in Geneva.

“We’re very concerned with it,” he said on CNBC. “The Chinese are slow -rolling their compliance which is completely unacceptable and has to be addressed.”

Greer said that U.S. officials “haven’t seen the flow of some of those critical minerals, like they’re supposed to be doing.” Later, he added, “We’re seeing them to export curbs. We’re not seeing major changes.” The impact of Trump’s tariffs was apparent in trade-related data, which on Friday showed that imports of goods dropped nearly 20% in April. That is the largest monthly decline on record. The goods trade deficit nearly halved, to around $88 billion.

Trump’s post followed legal proceedings that cast doubt over his ability to issue steep tariffs on China.

But Greer rejected the assertion that an early defeat had harmed U.S. negotiations, though he had told the court only days earlier that such an adverse ruling would harm diplomatic efforts.

“All the other countries I’m dealing with in negotiations are just treating this as just kind of a bump in the road, rather than any fundamental change,” Greer said Friday morning on CNBC. “So I feel pretty confident about the case, and if the case goes the other way, we have other tools as well.”

Speaking at the White House this week, Trump was defensive when asked if he had “chickened out” on his tariff threats. He said that he was aware that the tariff rates that he had imposed on China were too high and that it was part of a broader strategy to force the Chinese to negotiate.

In his post on Friday, Trump vented that China was not living up to its end of the bargain.

“I saw what was happening and didn’t like it, for them, not for us,” Trump wrote.

“I made a FAST DEAL with China in order to save them from what I thought was going to be a very bad situation, and I didn’t want to see that happen.

“The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US.”

This article originally appeared in The New York Times.