The recent China-U.S. trade negotiations show characteristics of both phase relaxation and competition, mainly reflected in the following aspects:

1. Negotiation Progress and Core Issues

Tariff adjustments and mechanism construction: According to the consensus from the Geneva talks (May 2025), China and the U.S. have simultaneously reduced 91% of additional tariffs and suspended 24% of the increased tariffs for 90 days. The current London consultations (June 9) mark the first structured meeting following the call between the two heads of state, aimed at implementing the consensus and deepening discussions on issues such as technology restrictions, rare earth exports, and supply chain coordination. The U.S. side attempts to incorporate artificial intelligence and chip controls into the negotiations, while the Chinese side emphasizes the legitimacy of countermeasures.

Structural contradictions are evident: Although tariff pressures have eased in the short term, fundamental differences in areas such as technology security (e.g., semiconductor export controls) and industrial subsidies remain unresolved. The U.S. continues to intensify sanctions against Chinese tech companies, while China uses rare earth export controls as a countermeasure, creating a competitive landscape of "chip encirclement" versus "rare earth countermeasures."

2. Negotiation Dynamics and Challenges

Economic pressure drives: High inflation in the U.S. (CPI has exceeded 3% for 15 consecutive months) and rising supply chain costs force the Trump administration to seek a phased agreement. Meanwhile, China enhances its bargaining power through transshipment trade (e.g., via ASEAN) and upgrading domestic industrial chains (e.g., rare earth processing technology).

External variables impact: Allies like Japan attempt to exchange a "China containment plan" for U.S. tariff exemptions, but China firmly opposes third-party sacrifices of Chinese interests. Furthermore, domestic legal disputes in the U.S. (e.g., constitutional lawsuits over tariff policies) and global market fluctuations (e.g., oil prices) add complexity to the negotiations.

3. Outlook

In the short term, both sides may achieve further tariff reductions on certain goods (e.g., electric vehicles, agricultural products), but the trend of "limited decoupling" in the technology sector is hard to change. In the long term, China and the U.S. need to explore a balance of competition and cooperation through a normalized negotiation mechanism (such as the framework established in the London meeting) to avoid an economic split reminiscent of a "new Cold War." The negotiation results will depend on whether the U.S. can abandon unilateralism and how China balances its strategies between countermeasures and openness.