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Straits Times
a minute ago
- Straits Times
Trump softens tone on China to secure a summit and trade deal with Xi
US President Donald Trump is now focused on cutting purchase deals with Beijing instead of addressing root causes of the trade imbalances. WASHINGTON – President Donald Trump has dialed down his confrontational tone with China in an effort to secure a summit with counterpart Xi Jinping and a trade deal with the world's second-largest economy, people familiar with internal deliberations said. Six months into his second term, Mr Trump has softened his harsh campaign rhetoric that focused on the US's massive trade deficit with China and resulting job losses. The warmer posture contrasts with his threats against other trading partners to ravage their economies with crushing tariffs. Mr Trump is now focused on cutting purchase deals with Beijing – similar to one he forged during his first term – and celebrating quick wins instead of addressing root causes of the trade imbalances. China posted a record trade surplus in the first half of 2025 amid booming exports. On July 15, the US president said he would be fighting China 'in a very friendly fashion.' In meetings with his staff, Mr Trump is often the least hawkish voice in the room, some of the people said. Top stories Swipe. Select. Stay informed. Singapore HSA launches anti-vaping checks near 5 institutes of higher learning Singapore Over 600 Telegram groups in Singapore selling, advertising vapes removed by HSA Business Singapore key exports surprise with 13% rebound in June Business Market versus mission: What will Income Insurance choose? Life First look at the new Singapore Oceanarium at Resorts World Sentosa Opinion AI and education: We need to know where this sudden marriage is heading Singapore Coffee Meets Bagel's Singpass check: Why I'll swipe right on that Singapore Jail for man who fatally hit his daughter, 2, while driving van without licence Administration officials stressed that Mr Trump has always liked Mr Xi personally and pointed to moments in his first term when he nevertheless imposed sweeping restrictions on Huawei Technologies Co. and tariffs on the majority of Chinese exports. Mr Trump's fluid playbook and his departure from promised hawkish policies have worried policymakers inside his administration as well as outside advisers, the people said. This week only exacerbated concerns that previous US red lines with China are now negotiable. Allowing Nvidia Corp. to sell its China-focused, less-advanced H20 chip once again – something multiple senior officials had said was not on the table – reversed the administration's own stated approach of keeping the most critical American technologies out of Beijing's hands. Treasury Secretary Scott Bessent in June cited H20 controls as evidence of the administration's toughness on China when pressed by senators who worried the US could trade advanced semiconductors for the Asian country's rare-earth minerals. While the US will still require approval for such exports – a restriction former President Joe Biden declined to impose – some Trump officials have privately objected to granting licenses they say will only embolden China's tech champions, the people said. Others have argued successfully that allowing Nvidia to compete with Huawei on its own turf is essential to winning the AI race with China. That view, championed by Nvidia Chief Executive Officer Jensen Huang, has gained traction inside the administration, people familiar with the matter said. 'Productive' talks Mr Trump has the final say in all trade decisions, an administration spokesman said. The president has 'consistently fought to level the playing field for American workers and industries, and the Administration continues to have productive discussions with all of our trading partners,' White House spokesman Kush Desai said. In a further effort to ease tensions, US officials are preparing to delay an Aug 12 deadline when US tariffs on China are set to snap back to 145 per cent after the expiration of a 90-day truce. Mr Bessent signalled in a Bloomberg Television interview this week that the deadline was flexible. One person familiar with the plans said the tariff truce could be extended another three months. This comes as Mr Trump is rolling out duties for other countries – including key allies – and threatening more actions on industries including pharmaceuticals and semiconductors. Last week, US Secretary of State Marco Rubio said a summit between Mr Trump and Mr Xi is likely. Mr Rubio, once among the staunchest China hawks in the Senate, said he had a 'very constructive and positive' sit-down on July 11 with Chinese Foreign Minister Wang Yi. 'Big steps' On July 16, Trump praised China's moves to tighten controls on chemicals used to make fentanyl, part of steps taken after the US president imposed a 20 per cent tariff on the nation for facilitating flows of the drug. 'China has been helping out,' Mr Trump told reporters. 'I mean, it's been, it's been a terrible situation for many years with fentanyl. But since I came here, we're talking to them, and they're making big steps.' Some administration officials, meanwhile, are focused on getting China to agree to purchase some volume of to-be-determined US goods and services, people familiar with the matter said. That could satisfy Mr Trump's concerns about the trade deficit but won't do much to close the yawning trade gap over the longer term. Mr Trump's gentler handling of China is causing a rift among his advisers. Some members of his trade team want to hold a tough line against Beijing and have promised privately that export controls would never be part of trade discussions, people familiar with their deliberations said. Yet during the trade talks in London in June, Commerce Secretary Howard Lutnick openly said that recent export controls – officially justified on the basis of national security – were also designed to 'annoy' Beijing. And this week, he – along with Bessent and White House AI and Crypto Czar David Sacks – said plainly that allowing some less-advanced Nvidia chip sales to China is indeed part of ongoing trade negotiations. This development is raising questions about how far Trump would go in negotiating away national security actions if the Chinese demanded it. Some hawkish advisers fear that a further rollback of chip controls is now inevitable, people familiar with the matter said. Others have maintained that allowing sales of H20s – which are far less capable than Nvidia's best models – is a far cry from exporting that leading-edge hardware, which they say is not up for discussion. 'You want to sell the Chinese enough that their developers get addicted to the American technology stack,' Mr Lutnick said on July 15 on CNBC. Closely watching the situation are allies and companies across Europe and Asia whose help the US wants to squeeze China's tech sector. Government and industry officials in those regions have gotten the message that Washington's strategy is subject to change, people familiar with the matter said. A half-dozen tech industry officials who've interacted with Mr Trump's team on China said they often leave meetings wanting details only to see core goals evolve in later discussions. Surprise reversals In many cases, those in charge of China tech policy have made decisions without involving offices that historically have played a role. Restrictions imposed in May on sales of chip design software to China – which have since been reversed – were part of a raft of Commerce Department measures that came as a surprise to many within the administration, Bloomberg has reported. The decision on H20 chips was also tightly held, people familiar with the matter said. Other actions that have been under consideration for months – including sanctions on Chinese chip giants and an effort to slap curbs on Chinese tech subsidiaries – have been delayed as officials pursue a trade deal. But Mr Trump is also known for reversing course on China often and sometimes quickly after taking a position – as was the case when he fulfilled Mr Xi's personal request to lift sanctions on Chinese telecom giant ZTE Corp. in 2018. He's also susceptible to criticism of his approach, which might indicate Mr Trump could change his tone yet again. 'President Trump is set on a China deal, but it may be short-lived,' said Dr Derek Scissors, a China expert at the American Enterprise Institute. 'The US trade deficit is well higher to date this year and the new budget will boost demand for imports in the fourth quarter. If a record 2025 trade deficit gets reported, all bets are off, including with China.' Beijing has made no secret it believes it has the upper hand. In London, US officials were taken aback by their Chinese counterparts' gloating over the position they find themselves in, people familiar with the exchange said. The Asian country's leverage stems from its grip on rare earth magnets and its ability to weaponize America's dependence on those supplies. China now requires companies to hand over sensitive data and reapply for rare-earth export licenses every six months. BLOOMBERG
Business Times
2 hours ago
- Business Times
Trump softens tone on China to secure Xi summit and a trade deal
[HONG KONG] US President Donald Trump has dialled down his confrontational tone with China in an effort to secure a summit with counterpart Xi Jinping and a trade deal with the world's second-largest economy, sources familiar with internal deliberations said. Six months into his second term, Trump has softened his harsh campaign rhetoric that focused on the US's massive trade deficit with China and resulting job losses. The warmer posture contrasts with his threats against other trading partners to ravage their economies with crushing tariffs. Trump is now focused on cutting purchase deals with Beijing, similar to one he forged during his first term, and celebrating quick wins instead of addressing the root causes of the trade imbalances. China posted a record trade surplus in the first half of the year amid booming exports. On Tuesday (Jul 15), the US president said he would be fighting China 'in a very friendly fashion'. In meetings with his staff, Trump is often the least hawkish voice in the room, some of the sources said. Administration officials stressed that Trump has always liked Xi personally and pointed to moments in his first term when he nevertheless imposed sweeping restrictions on Huawei Technologies and tariffs on the majority of Chinese exports. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Trump's fluid playbook and his departure from promised hawkish policies have worried policymakers inside his administration as well as outside advisers, the sources said. This week only exacerbated concerns that previous US red lines with China are now negotiable. Allowing Nvidia to sell its China-focused, less-advanced H20 chip once again – something multiple senior officials had said was not on the table – reversed the administration's own stated approach of keeping the most critical American technologies out of Beijing's hands. Treasury Secretary Scott Bessent last month cited H20 controls as evidence of the administration's toughness on China when pressed by senators who worried the US could trade advanced semiconductors for the Asian country's rare-earth minerals. While the US will still require approval for such exports, a restriction former president Joe Biden declined to impose, some Trump officials have privately objected to granting licenses they say will only embolden China's tech champions, the sources said. Others have argued successfully that allowing Nvidia to compete with Huawei on its own turf is essential to winning the AI race with China. That view, championed by Nvidia chief executive officer Jensen Huang, has gained traction inside the administration, sources familiar with the matter said. 'Productive' talks Trump has the final say in all trade decisions, an administration spokesperson said. The president has 'consistently fought to level the playing field for American workers and industries, and the Administration continues to have productive discussions with all of our trading partners', White House spokesperson Kush Desai said. In a further effort to ease tensions, US officials are preparing to delay an Aug 12 deadline when US tariffs on China are set to snap back to 145 per cent after the expiration of a 90-day truce. Bessent signalled in a Bloomberg Television interview this week that the deadline was flexible. One source familiar with the plans said the tariff truce could be extended another three months. This comes as Trump is rolling out duties for other countries, including key allies, and threatening more actions on industries including pharmaceuticals and semiconductors. Last week, US Secretary of State Marco Rubio said a summit between Trump and Xi is likely. Rubio, once among the staunchest China hawks in the Senate, said he had a 'very constructive and positive' sit-down Friday with Chinese Foreign Minister Wang Yi. Some administration officials, meanwhile, are focused on getting China to agree to purchase some volume of to-be-determined US goods and services, sources familiar with the matter said. That could satisfy Trump's concerns about the trade deficit but will not do much to close the yawning trade gap over the longer term. Trump's gentler handling of China is causing a rift among his advisers. Some members of his trade team want to hold a tough line against Beijing and have promised privately that export controls would never be part of trade discussions, sources familiar with their deliberations said. Yet during last month's trade talks in London, Commerce Secretary Howard Lutnick openly said that recent export controls, officially justified on the basis of national security, were also designed to 'annoy' Beijing. And this week, he, along with Bessent and White House AI and Crypto Czar David Sacks, said plainly that allowing some less-advanced Nvidia chip sales to China is indeed part of ongoing trade negotiations. This development is raising questions about how far Trump would go in negotiating away national security actions if the Chinese demanded it. Some hawkish advisers fear that a further rollback of chip controls is now inevitable, sources familiar with the matter said. Others have maintained that allowing sales of H20s, which are far less capable than Nvidia's best models, is a far cry from exporting that leading-edge hardware, which they say is not up for discussion. 'You want to sell the Chinese enough that their developers get addicted to the American technology stack,' Lutnick said on Tuesday on CNBC. Closely watching the situation are allies and companies across Europe and Asia whose help the US wants to squeeze China's tech sector. Government and industry officials in those regions have gotten the message that Washington's strategy is subject to change, sources familiar with the matter said. A half-dozen tech industry officials who've interacted with Trump's team on China said they often leave meetings wanting details only to see core goals evolve in later discussions. Surprise reversals In many cases, those in charge of China tech policy have made decisions without involving offices that historically have played a role. Restrictions imposed in May on sales of chip design software to China, which have since been reversed, were part of a raft of Commerce Department measures that came as a surprise to many within the administration, Bloomberg has reported. The decision on H20 chips was also tightly held, sources familiar with the matter said. Other actions that have been under consideration for months, including sanctions on Chinese chip giants and an effort to slap curbs on Chinese tech subsidiaries, have been delayed as officials pursue a trade deal. But Trump is also known for reversing course on China often and sometimes quickly after taking a position, as was the case when he fulfilled Xi's personal request to lift sanctions on Chinese telecom giant ZTE in 2018. He's also susceptible to criticism of his approach, which might indicate Trump could change his tone yet again. 'President Trump is set on a China deal, but it may be short-lived,' said Derek Scissors, a China expert at the American Enterprise Institute. 'The US trade deficit is well higher to date this year and the new budget will boost demand for imports in the fourth quarter. If a record 2025 trade deficit gets reported, all bets are off, including with China.' Beijing has made no secret that it believes it has the upper hand. In London, US officials were taken aback by their Chinese counterparts' gloating over the position they find themselves in, sources familiar with the exchange said. The Asian country's leverage stems from its grip on rare earth magnets and its ability to weaponise America's dependence on those supplies. China now requires companies to hand over sensitive data and reapply for rare-earth export licenses every six months. BLOOMBERG
CNA
3 hours ago
- CNA
Commentary: India and ASEAN are growing apart. Blame tariffs
NEW DELHI: It's still far from clear what US President Donald Trump's tariffs will eventually look like. But the pressures they will put on stable trading relationships – even those that don't directly involve the US – are already visible. Ties between India and the 10-member Association of Southeast Asian Nations (ASEAN) are already fraying: They're being pushed into different camps, and the free trade agreement they signed in 2010 could become an unexpected victim of the turmoil. Trump might be the immediate cause of this rift, but, as always, China's massive manufacturing overcapacity is at the heart of the problem. Even if no country knows what rates they or others will face, everyone can be reasonably certain that Beijing's tariffs will be the highest of all. Unfortunately, this also means that there's a big incentive to help Beijing game the system enough that we all trust each other less. GAINING FROM CHINA'S OVERCAPACITY Many Asian countries are reasonably pleased at the thought that duties on their exports will be lower than on those out of China: They've all been searching for a way to regain a sliver of competitiveness, and this might help. But the same nations are also a little scared. They fear a flood of underpriced Chinese goods, once meant for the US, will inundate their fledgling manufacturing sectors. In fact, that's already happening to an extent, and policymakers are responding. Vietnam has introduced anti-dumping tariffs on certain kinds of Chinese steel; Indonesia has banned direct-shipping e-commerce apps like Temu. But, for some, there's also the tempting possibility that China's overcapacity can be turned from an enemy into an ally. Any country that remains integrated both with China and those that are putting up tariff walls could, if it wanted, become a location for the trans-shipment of goods. Instead of paying the higher China levies, importers would pay lower ones imposed on the third country – and share a bit of the take with local partners. Tariff arbitrage could become as profitable in the future as interest rate arbitrage is today. The more countries that impose anti-dumping duties on China, the more money the successful trans-shipper would make. The US, for one, is already very concerned that parts of ASEAN might take this route – which is why Trump's trade deal with Vietnam included a clause that any goods suspected of being trans-shipped would pay double tariffs. CLOSED-OFF BLOCS A NIGHTMARE FOR INDIA For countries like India, it's an even greater fear. India's commerce minister caused a bit of a stir recently when he described ASEAN as 'China's B-team'. That was certainly impolitic. But, perhaps, not entirely unjustified. New Delhi has been trying to update its free trade agreement with ASEAN for a while. Its particular focus has been to tighten rules-of-origin requirements – the way in which you ensure that a free trade agreement only benefits local producers in both countries, not those shipping goods that originate elsewhere. Indian officials feel that ASEAN has been going slow on these discussions. Meanwhile, news broke in May that the bloc had expanded the scope of its parallel FTA with China. They achieved that in double-quick time – negotiations only started in November 2022 – which raised a few eyebrows in New Delhi. Some in India, clearly including its commerce minister, now seem to think that tariff-free trade with Southeast Asia is the same as opening your market to China. That isn't true – or, at any rate, not yet. But the fact is that member states simply aren't doing enough to reassure their other trading partners, including India. It would be a nightmare for most countries, including India, if closed-off blocs were to replace today's open trading system. Yet Trump's actions, when combined with China's overcapacity, are taking us there. Any country that wants to trade with both sides of the divide – which, clearly, many in Southeast Asia would prefer – will also need to be able to be very transparent about the goods it is exporting, and how much value has been added domestically. In other words, it's ASEAN's move: They will have to step up and give most of their trading partners, not just India and the US, a clearer view into their supply chains. The US is clearly worried that some countries will evade its tariffs. Those concerns will be shared, especially by India. New Delhi seems to believe that, if world trade blocs form, then ASEAN has already chosen its side – and it won't be the one India picks. Trade's impossible without trust, and these two partners will have to work to rebuild it.
