Trump Rekindles Hope For A US-China Trade Deal

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Trump said on Tuesday that he had spoken to Chinese President Xi Jinping days before his second inauguration, in a call in which they discussed trade, fentanyl and TikTok, according to news reports .“We didn't talk too much about tariffs, other than he knows where I stand,” Trump said according to reports.

“Look, I put large tariffs on China. I've taken in hundreds of billions of dollars. Until I was president, China never paid not 10 cents to the United States,” Trump said.

China's leadership appears to understand that Trump's transactional approach to international relations often leaves room for deals. His hinted linkage of trade tariffs to the future of TikTok-a Chinese-controlled social media platform that has drawn scrutiny from US security hawks-underscores this point.

A deal that addresses Washington's security concerns while preserving some economic ties could serve as a template for broader agreements. The Chinese government, already faced with a slowing economy, entrenched property crisis and mounting debt pressures, has little appetite for a full-scale trade war with the US.

The fallout from the last round of US-China tariff battles, which strained supply chains and weighed on growth, will be fresh in policymakers' minds. With global demand uncertain and domestic challenges piling up, Beijing likely sees negotiations as a way to stabilize its economic outlook.

For Trump, a deal with China represents a significant political opportunity. While his base often celebrates his confrontational stance, it also values results. A trade agreement that delivers concessions on issues like intellectual property theft, fentanyl exports or market access for US firms would allow Trump to claim victory without tipping the global economy into chaos.

At the same time, Trump's tendency to view economic policy through the lens of personal branding complicates the picture. His willingness to reverse course or shift priorities based on perceived political gains could undermine the consistency needed for successful negotiations.

Yet, this unpredictability may also work in his favor, creating opportunities to extract concessions from Beijing in exchange for scaling back his more extreme threats. The critical question now is what kind of deal would satisfy both sides.

For the US, a meaningful agreement would need to address longstanding grievances such as forced technology transfers, intellectual property theft and the two sides' yawning trade imbalance. For China, the priority will be securing relief from tariffs while preserving its sovereign control over key industries and technologies.

One possible area of compromise could be technology regulation. If Beijing agrees to stricter controls on data security, Washington might ease restrictions on Chinese tech companies now operating in the US, not least TikTok. Another potential avenue is joint commitments to supply chain resilience, which could help both economies weather future disruptions while fostering a sense of mutual benefit.