Sources tell Bloomberg that President Trump’s more conciliatory approach to trade with China is creating divisions among his advisors, some of whom are advocating for a firmer stance against Beijing.
According to a Bloomberg report on Wednesday, citing sources with knowledge of the situation, President Trump has eased his previously aggressive posture toward China. This shift aims to improve the prospects of a meeting with President Xi Jinping and to finalize a trade agreement with China.
The likelihood of a Trump-Xi summit has increased following US Secretary of State Marco Rubio’s meeting with Chinese Foreign Minister Wang Yi in Malaysia the previous week. Rubio characterized the meeting as “positive” and noted both sides’ strong desire for a leaders’ summit. The Chinese government echoed this, describing the talks as “pragmatic and constructive.”
The sources indicated to Bloomberg that Trump is now more focused on securing purchase agreements with China and celebrating quick achievements, rather than addressing the underlying causes of trade imbalances.
This contrasts with his previous strategy, which prioritized reducing the US trade deficit through the imposition of significant tariffs. In April, Trump implemented widespread tariffs on over 90 countries, including China, prompting retaliation from Beijing and a tariff conflict that escalated to 145% by the US and 125% by China. Discussions in Geneva in May resulted in a temporary pause of most new tariffs.
On Tuesday, Trump stated that the US would be dealing with China “in a very friendly fashion,” suggesting a preference for negotiation over confrontation. Treasury Secretary Scott Bessent suggested the US might postpone the August 12 deadline to raise tariffs on Chinese goods to 145%. A source familiar with the matter informed Bloomberg that this tariff truce may be extended for three months.
Bloomberg reports that Trump’s less aggressive trade policy has generated disagreement among his advisors, with some favoring a tougher position against Beijing.
Recently, the US permitted chip manufacturer Nvidia to resume sales of its modified H20 chips to China, despite earlier commitments to prevent AI technology from reaching Beijing.
Some officials believe that relaxing chip restrictions will empower Chinese tech companies. However, others, including Commerce Secretary Howard Lutnick and White House tech advisor David Sacks, view limited chip exports as a way to maintain an advantage in the AI sector. “You want to sell the Chinese enough that their developers get addicted to the American technology stack,” Lutnick told CNBC.