US-China Trade Outlook: Summit Pledges vs. Persistent Tensions
Despite recent summit agreements, ongoing US actions suggest trade relations may not improve significantly.
Quick Look
Despite pledges for a stable relationship at the recent Beijing summit, US actions like investigations into trade status, investment restrictions, and blacklisting of firms indicate persistent economic tensions with China, suggesting no real trade truce.
AI-generated summary
Why It Matters
Following a recent summit in Beijing where US and Chinese presidents pledged to improve relations and establish new trade councils, there are hopes for easing bilateral economic tensions. However, historical patterns and recent US actions suggest otherwise.
Despite summit pledges, don’t expect US-China trade to improve
The near-term trajectory of China-US economic ties rests on several key timelines, any of which could trigger new tensions
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Zhou Xiaoming is a senior fellow at the Centre for China and Globalisation in Beijing and a former deputy representative of China’s Permanent Mission to the United Nations Office in Geneva.
Published: 8:30pm, 19 May 2026
At last week’s summit in Beijing, the presidents of China and the United States pledged to steer towards a stable and constructive relationship. The two sides announced new joint trade and investment councils. This combination of high-level commitment and institutional progress has stirred hopes that long-running bilateral economic tensions will ease substantially, if not take a turn for the better.
But will the world’s largest economies live happily ever after? History offers a sobering parallel. At the conclusion of his November 2017 visit to China, US President Donald Trump described the trip as successful. With over US$250 billion in deals, his host agreed. Yet months later, Trump launched the trade war that continues to this day.
His record since last year’s summit in Busan, South Korea, is similarly revealing: talking the talk, but not walking the walk. Washington’s pattern has been clear: diplomatic niceties paired with unrelenting pressure. The script is familiar – promise stability while tightening the screws.
The US International Trade Commission has launched an investigation into revoking China’s Permanent Normal Trade Relations status. A US Treasury rule restricts American investment in artificial intelligence, quantum computing and semiconductors. The 2026 National Defence Authorisation Act bans Chinese AI models from US defence systems.
The Federal Communications Commission has adopted a new rule that will no longer recognise telecommunication test reports issued by laboratories in China. Just days before the latest Xi-Trump summit, nine more Chinese firms were blacklisted over Iran links.
In essence, there has been no real trade truce, only a tariff truce.
What to Watch
AI outlook — possibilities, not facts
Continued US pressure on China through trade and investment measures.
High likelihood · Short term
No significant improvement in US-China trade relations in the near future.
High likelihood · Short term
Open Questions
- Will the US International Trade Commission's investigation lead to concrete actions against China's trade status?
- What will be the full impact of the US Treasury's investment restrictions on specific Chinese companies?
- Will the FCC's new rule significantly disrupt Chinese telecommunication test reports?
- Are there further Chinese firms that may be blacklisted due to Iran links or other reasons?
