In the careful choreography that precedes great-power summitry, U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng spoke by phone in late July to prepare the ground for Xi Jinping's September visit to America — a conversation that revealed as much about the fragility of their détente as its durability. The world's two largest economies have spent eighteen months constructing a provisional peace, yet the foundations remain contested: rare earths, agricultural commitments, artificial intelligence, and the shadow of potential Chinese arms flows to Iran all press against the
The Japan Times
· Jul 31, 2026
· economy
· 2 min read
High
Sourcing: Verified
U.S., China Discuss Trade Tensions Ahead of Xi's September Visit
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Economy & Finance
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Bias & Framing
⚖
Article presents balanced coverage of U.S.-China trade discussions with roughly equal weight to both sides' stated positions and concerns.
Bias Direction
center
Confidence
MED
Diplomatic reporting with parallel structure: presents U.S. expectations and Chinese concerns sequentially without editorial judgment. Uses neutral language like 'flashpoints' and 'fragile detente' to describe tensions.
emerging cracks in their trade truce
fragile detente
fresh import duties as Trump moves to rebuild his tariff wall
Analysis from independent trade economists on the sustainability of the truce
Perspective from U.S. agricultural exporters affected by the disputes
Views from rare earth industry stakeholders
Impact assessment on third countries affected by U.S.-China trade dynamics
Geopolitical Impact
🌎
U.S.-China trade truce shows strain as officials prepare for Xi's September visit, with disputes over rare earths, tariffs, and AI threatening fragile détente.
Escalation Risk
moderate
Confidence
HIGH
United States
China
Iran
Taiwan
Global supply chains
Bilateral competition intensifying despite diplomatic engagement. U.S. reasserting economic leverage through tariffs and export controls on critical technologies (rare earths, AI). China pushing back on unilateral measures while seeking dialogue. Both powers attempting managed competition through high-level talks, but structural tensions (tech dominance, resource access, regional influence) remain unresolved.
Similar to 1970s détente between superpowers—periodic high-level summits masking underlying strategic competition and mutual suspicion; risk of breakdown if either side perceives bad faith.
Economic Lens
📈
U.S.-China trade tensions persist despite diplomatic efforts, with disputes over rare earths, tariffs, and AI threatening a fragile truce ahead of Xi's September visit.
Market Signal
mixed
Confidence
HIGH
Technology and semiconductors
Agriculture
Rare earth minerals and mining
Defense and aerospace
Artificial intelligence
Retail and consumer goods
Energy
Consumers face potential price increases on electronics, agricultural products, and manufactured goods if tariffs escalate. Supply chain disruptions could affect availability and costs of tech products, rare earth-dependent devices, and food imports.
Expect potential new U.S. sanctions on Chinese AI exports and rare earth trade restrictions. Both nations may implement retaliatory tariffs. Regulatory frameworks around technology transfer and critical minerals access will likely be strengthened. Trade negotiation mechanisms (Trade and Investment Boards) will be tested.