US, China resume trade talks after 2-month pause

The resumption of US-China trade dialogue after a two-month pause signals both sides are seeking to stabilize economic ties before further escalation.

China and the US held their first high-level economic talks in two months on July 30, with Vice Premier He Lifeng pressing Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer to remove a series of trade restrictions that have strained bilateral commerce.

"The two sides have maintained close communication since the London talks, confirming the framework established there and advancing its implementation," a spokesperson for China's Ministry of Commerce said in a statement.

The call follows incremental steps toward de-escalation. The US in early July approved Nvidia's H20 chip sales to China, while Beijing simultaneously cleared qualified export applications for controlled items. Those moves came after the US in May tightened export controls on Huawei's Ascend chips, a restriction China said "severely undermines the legitimate rights and interests of Chinese enterprises."

The resumption of dialogue matters because bilateral trade between the world's two largest economies has been buffeted by overlapping tariff and technology restrictions. China's Commerce Minister Wang Wentao met with Nvidia Chief Executive Officer Jensen Huang on July 17, underscoring Beijing's effort to keep multinationals engaged even as Washington tightens technology transfer rules. Both sides agreed to "further leverage the role of the Sino-US economic consultation mechanism" and push for "stable and improving" trade relations.

The July 30 video call — the first direct engagement between the two countries' top trade officials since the London talks in May — covered implementing consensus from President Xi Jinping's Beijing meeting with then-President Joe Biden. China used the platform to lodge what it called "serious concerns" over recent US trade restrictions, according to the readout from state-run Xinhua News Agency.

Tariff and Technology Tensions Persist

The current average US tariff on Chinese goods stands at roughly 19 percent across all sectors, according to the Peterson Institute for International Economics, after the Trump administration imposed additional levies in 2025. The previous round of escalation — a 10 percent across-the-board tariff in early 2025 — reduced bilateral trade flows by an estimated $63 billion over six months, Census Bureau data show.

China's semiconductor sector remains the focal point of friction. The May 2025 US export controls on Huawei's Ascend chips targeted China's most advanced AI chipmaker, restricting sales of processors exceeding specific performance thresholds. The US simultaneously approved Nvidia's lower-performance H20 chips for the Chinese market, a carve-out that allows American companies to maintain some revenue from China's $180 billion semiconductor market while limiting technology transfer.

"Win-win cooperation is the right path for China and the United States, while suppression and containment lead nowhere," the commerce ministry spokesperson said.

What Comes Next

Both sides agreed to continue using the economic consultation mechanism, though no date for in-person talks has been set. The next potential flashpoint is the review of the Phase One trade deal, which remains in effect but has seen declining Chinese compliance on agricultural purchases. China's purchases of US agricultural goods fell to 62 percent of the agreed target in the first half of 2026, according to data from the US-China Business Council.

For markets, the resumption of dialogue reduces the probability of near-term tariff escalation but does not resolve structural disagreements over technology, industrial policy, and market access. The offshore yuan traded at 7.24 per dollar on July 30, little changed on the day, suggesting investors are waiting for concrete follow-through before pricing in a sustained détente.

This article is for informational purposes only and does not constitute investment advice.