He Said, Xi Said: Accusations Fly As U.S. and China Tariff Truce Breaks Down

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Just weeks after U.S. and Chinese negotiators agreed to a temporary tariff truce, both countries are accusing each other of violating the agreed terms. The exchange of blame has reignited trade tensions and cast doubt on the prospect of any lasting deal between the world’s two largest economies.

China’s Ministry of Commerce said the U.S. “severely violated” the agreement reached in Geneva last month and called the breach a serious threat to Chinese interests. The ministry cited recent U.S. actions, including a new ban on selling computer chip design software to Chinese firms, warnings against using Huawei components, and the revocation of Chinese student visas.

The agreement in question had lowered tariffs on each side: the U.S. cut duties on Chinese goods from 145% to 30%, while China dropped its retaliatory tariffs from 125% to 10%. That deal had surprised analysts, who saw the sides as too far apart. Now, officials say even that narrow consensus may be collapsing.

The U.S. Position: China Didn’t Keep Its Word

President Trump accused China on Friday of “totally violating its agreement with us.” While he didn’t elaborate, U.S. Trade Representative Jamieson Greer later said Beijing had failed to remove key non-tariff barriers, a step it had pledged to take as part of the truce.

The Trump administration’s recent moves of doubling tariffs on steel and aluminum, tightening tech export controls, and suspending certain visa categories are being presented as responses to China’s alleged foot-dragging. National Economic Council Director Kevin Hassett and Treasury Secretary Scott Bessent both said a Trump-Xi phone call could soon happen to resolve these differences.

Yet, this strategy contrasts sharply with how Beijing prefers to operate. Chinese officials traditionally expect lower-level negotiations to wrap up before any direct contact between leaders. In that context, a presidential call without prior agreement would be seen not as diplomacy, but as pressure.

China’s Response: Washington Is Undermining the Deal

In response, China flatly denied the U.S. claims. It insisted that it had “strictly implemented and actively upheld” the Geneva agreement, canceling and suspending multiple tariff and non-tariff barriers. Chinese state media highlighted efforts to restrict rare earths mining and exports, arguing the U.S. had misunderstood Beijing’s compliance measures.

China also pushed back on the visa controversy. Officials said the revocation of student visas and academic restrictions on Chinese scholars were not only outside the terms of the trade truce but amounted to discriminatory treatment.

Analysts say China’s position is hardening. A spokesperson for the Commerce Ministry warned of “strong countermeasures” if Washington continues to escalate tensions. Economically, the Chinese government still sees the truce as worthwhile, but only if the U.S. stops what it calls unilateral provocations.

Global Fallout from a Fractured Truce

Markets have responded with concern. Stocks in Asia and Europe slipped Monday following the back-and-forth. Sectors tied to international trade, like steel and automobiles, have been especially sensitive. Gold prices rose as investors sought safer assets, while the dollar outlook weakened due to rate cut expectations and growing instability.

The damage isn’t limited to the U.S. and China. The European Union condemned the sudden increase in U.S. steel tariffs, saying the move jeopardizes its own trade talks with Washington. EU officials said retaliatory duties could follow if the Trump administration fails to reverse these measures.

From Trade Deal to Power Struggle

What was once framed as a technical agreement has now evolved into a broader power struggle. The Trump administration is using trade as leverage not just against Beijing’s economy but its global technology ambitions. Meanwhile, China is reinforcing its domestic supply chains, clamping down on resource exports, and signaling that it will not be bullied into compliance.

At the center of this conflict is the question of enforcement. With no neutral mechanism for verifying compliance, both sides are relying on political messaging instead of legal arbitration. That makes the current standoff less about the facts of the Geneva agreement and more about which side can frame the narrative more convincingly.

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