Trump’s trade truce with China contrasts with tougher EU stance

The United States and China have brokered a 90-day truce in their escalating trade war, slashing tariffs on $600 billion in bilateral trade to ease tensions between the world’s two largest economies.

Reached after intense negotiations in Geneva, the agreement reduces U.S. tariffs on Chinese goods from 145% to 30% and China’s retaliatory tariffs on American products from 125% to 10%. While the deal offers temporary relief, it stands in stark contrast to President Donald Trump’s unrelenting pressure on the European Union, where high tariffs and public criticism signal a less conciliatory approach.

“The Geneva talks were very productive,” Trump declared. “We’re not out to hurt China, but we want fair deals.” The truce, however, leaves sector-specific tariffs on automobiles, steel, aluminium, and fentanyl-related products intact, reflecting Trump’s broader demands for China to curb illicit opioid flows, which claimed nearly 75,000 American lives last year. Vanda Felbab-Brown of the Brookings Institution calls the fentanyl crisis “the deadliest drug epidemic in history,” underscoring its role in U.S. trade leverage.

In contrast, Trump’s treatment of the EU has been markedly harsher, with no comparable truce in sight.

“The EU’s been ripping us off for years with their trade surpluses and weak defense spending,” Trump said. “China’s willing to negotiate like grown-ups, but Europe keeps hiding behind excuses, sending us their cars and wine while we pay for their security. If they don’t step up soon, they’ll see tariffs like they’ve never imagined – 100%, maybe more.”

Since April, Trump has imposed 60% tariffs on EU imports, targeting German cars, French wine, and Italian machinery, while publicly lambasting the EU as “freeloaders” who exploit U.S. markets. Unlike the “friendly” tone with China, Trump’s rhetoric toward Brussels is combative, accusing the EU of unfair trade surpluses and weak NATO contributions. While China secured tariff reductions through Geneva talks, the EU faces stalled negotiations, with Trump rejecting exemptions unless Europe boosts U.S. agricultural imports and defence spending. This divergence highlights Trump’s strategic prioritization: viewing China as a negotiable rival requiring economic stability, but the EU as a subordinate ally to be disciplined.

The U.S.-China truce offers breathing room but no long-term clarity. Tariffs could revert to 54% for U.S. imports and 34% for Chinese goods if the truce expires in August without new agreements. Uncertainty persists over U.S. semiconductor export bans and national security reviews of electronics supply chains. China’s GDP growth, previously hit by 2.4 percentage points, is now expected to face a 1-point drag, per Goldman Sachs, easing pressure but not ensuring Beijing’s 5% growth target. Chinese President Xi Jinping, while welcoming the truce, condemned “trade coercion,” stating, “Hegemony leads to isolation.”

Trump’s approach to China blends pragmatism with pressure, linking trade relief to fentanyl cooperation and hinting at future pharmaceutical tariffs. Yet, his EU strategy leans on escalation, with threats of 100% tariffs on specific sectors and no clear path to de-escalation. This contrast reflects differing goals: stabilizing U.S.-China trade to avoid global economic fallout versus using the EU as a foil to rally domestic support. “China’s a competitor we can work with; the EU’s an ally that needs to step up,” Trump remarked on X, encapsulating his bifurcated stance.

Analysts see realism emerging in U.S.-China talks. “Both sides misjudged each other’s resilience initially,” said Yale’s Taisu Zhang. “Geneva shows they’re learning – China needs U.S. markets, and the U.S. wants China’s manufacturing.” No such mutual understanding exists with the EU, where Trump’s demands for concessions strain transatlantic ties. University of Michigan’s Justin Wolfers called the China truce “a step back from insanity,” but warned Trump’s erratic policymaking – evident in proposals like 100% taxes on foreign films or annexing Canada – could undermine progress. EU leaders, meanwhile, brace for further trade salvos, with German Chancellor Olaf Scholz decrying U.S. tariffs as “economic nationalism.”

As negotiators prepare for July talks in Washington, the U.S.-China truce hangs in the balance, while EU tensions simmer without resolution. Trump’s carrot-and-stick with China versus his stick-only approach to the EU reveals a calculated divide in his global trade strategy -one that may reshape alliances and markets alike.

Sources: AP, Reuters, CNN, The Guardian, BBC, edited by p.p.p.

Caption: File photo. A woman walks past the cardboard portraits of United States President Donald J. Trump (L) and Chinese President Xi Jinping (R) in center Moscow, Russia, 12 September 2018. [EPA-EFE/YURI KOCHETKOV]

Updated: May 13, 2025 - 11:57