Why China is talking with the US but refusing to make trade concessions

Why China is talking with the US but refusing to make trade concessions

Trade negotiations between the United States and China remain stuck in place, with Beijing adopting a strategy that emphasizes dialogue without significant concessions. The approach was underscored by the recent Washington visit of Li Chenggang, a senior member of China’s trade team, who repeated Beijing’s longstanding demands but offered little in return. The result is a fragile détente that keeps tensions in check while leaving the prospect of a trade deal distant, the Wall Street Journal reported.

Beijing’s new approach

Li Chenggang met only with deputy-level US officials at the Treasury, Commerce Department and the Office of the US Trade Representative, bypassing top policymakers. According to people familiar with the talks, he reiterated Beijing’s calls for the US to roll back tariffs and ease technology export controls. The meetings produced no breakthroughs, but they reflected Chinese leader Xi Jinping’s directive to project engagement while standing firm.

Strategic signalling

China’s stance is meant to signal that it remains open to discussion while portraying the US as the intransigent party. The timing coincided with Xi welcoming leaders from Russia, India, North Korea and other developing countries, part of his effort to promote Beijing as the hub of a new multilateral order in contrast to Trump’s America-first agenda. For China, maintaining dialogue while avoiding unilateral concessions helps buy time and reinforces its image as a responsible global actor.

Sticking points

Washington has pressed Beijing to crack down on precursor chemicals used in fentanyl production, but China has tied any action to the removal of Trump’s 20 percent tariffs on Chinese imports. The White House has also demanded greater purchases of American agricultural goods, particularly soybeans, but Chinese officials have shifted imports toward Brazil and other suppliers. US farmers, weeks away from harvest, worry China will buy little, if any, of their crops this season.

Domestic pressures in China

China’s reluctance to cut a deal reflects both politics and economics. With its property market under severe strain and consumer spending weak, Beijing is eager to avoid new tariffs that could worsen the slowdown. At the same time, Xi is determined not to repeat the 2020 trade agreement struck with Trump’s first administration, which committed China to large US purchases without securing equivalent concessions. That deal is now widely seen in Beijing as one-sided and politically costly.

The US response

The Trump administration says it is satisfied with the status quo. Treasury Secretary Scott Bessent recently remarked that “the situation with China is working pretty well,” pointing to the leverage tariffs provide. White House officials emphasize that Trump’s negotiating strategy is designed to keep pressure on Beijing while pursuing deals with other nations, including provisions to block Chinese firms from evading tariffs through third countries.

China’s playbook of “talk but don’t yield” underscores how the world’s two largest economies are locked in a stalemate. Both sides see value in maintaining dialogue, but neither is willing to make the concessions required for a breakthrough. With midterm politics shaping Trump’s posture and domestic weakness constraining Xi, the likelihood of a major trade deal remains slim. What is more certain is that the US-China rivalry will continue to define the global economic order.