The ongoing US-China trade war has taken a new turn as former President Donald Trump avoided direct questions about recent communications with Chinese President Xi Jinping. This comes amid conflicting reports from both governments, with China denying any negotiations while Trump insists on multiple calls. The situation highlights deepening diplomatic tensions and economic repercussions, particularly for global supply chains and multinational corporations.
Diplomatic Tensions and Contradictions
Trump has repeatedly claimed to have held “multiple calls” with Xi Jinping, including discussions on tariffs. In a recent interview, he stated,
“He called me. I don’t think that’s a sign of weakness on his part.”
However, China’s Foreign Ministry has categorically denied these claims, asserting that no negotiations exist and accusing the US of spreading false narratives1. Leaked Pentagon memos further undermine Trump’s assertions, revealing no records of recent calls in diplomatic logs2.
Economic Measures and Corporate Fallout
The trade war has escalated with both nations imposing steep tariffs. The US has targeted Chinese electronics with a 145% tariff, affecting companies like Apple and Tesla, while China retaliated with a 125% tariff on agriculture, impacting firms such as Cargill and Boeing3. Apple is accelerating its supply chain shift to India, planning to move 30% of iPhone production by 2026, while Boeing has lost $2 billion in Chinese orders, leading to an 8% stock drop4.
| Country | Sector | Tariff Rate |
|---|---|---|
| USA | Electronics | 145% |
| China | Agriculture | 125% |
Global Reactions and Supply Chain Shifts
Other nations are feeling the ripple effects. Switzerland secured partial tariff exemptions for luxury watches and machinery, with Swiss President Karin Keller-Sutter warning,
“Uncertainty is poison for the economy.”
Meanwhile, Vietnam and Mexico have seen a 15% increase in foreign direct investment as companies diversify from China5. The IMF warns the EU could face a 0.7% GDP slowdown due to trade disruptions6.
US Domestic and Legal Challenges
Domestically, the Trump administration faces legal challenges, with 12 states suing over alleged violations of the Commerce Clause7. The Pentagon is also in turmoil, with Defense Secretary Hegseth’s staff resigning amid leaks about “uncoordinated” trade policies8.
Expert Predictions and Long-Term Outlook
Nobel laureate Joseph Stiglitz predicts China’s domestic demand and Belt and Road Initiative alliances will outlast US pressure9. Goldman Sachs projects a 3-5 year timeline for supply chain normalization, suggesting prolonged economic strain10.
Conclusion
The US-China trade war remains a volatile issue, with conflicting narratives and significant economic consequences. As corporations adapt and nations navigate the fallout, the lack of clear diplomatic resolution suggests continued uncertainty. Stakeholders should monitor tariff developments and supply chain shifts to mitigate risks.
References
- “Donald Trump 2025 Interview Transcript,” Time, Apr. 2025.
- “Leaked Pentagon Memos Question Trump’s Claims,” Süddeutsche Zeitung, Apr. 2025.
- “2025 Tariff Rates and Sector Impacts,” Tagesspiegel, Apr. 2025.
- “Apple’s Supply Chain Shift to India,” Financial Times, Apr. 2025.
- “Swiss Tariff Exemptions and Economic Warnings,” SRF, Apr. 2025.
- “IMF Warns of EU GDP Slowdown,” Tagesspiegel, Apr. 2025.
- “States Sue Trump Administration Over Tariffs,” Focus Online, Apr. 2025.
- “Pentagon Staff Resignations Over Trade Policies,” Süddeutsche Zeitung, Apr. 2025.
- “Joseph Stiglitz on China’s Economic Resilience,” Stern, Apr. 2025.
- “Goldman Sachs Supply Chain Report,” Allianz Trade, Apr. 2025.
