Trump Draws Hard Line on China Trade Deficit, Signals Renewed Trade War

US President Donald Trump has made it clear that no deal with China will be made unless the longstanding China trade deficit is addressed. In a statement made on Sunday, Trump emphasized the need to resolve what he considers an unfair trade relationship between the world’s two largest economies. "Unless the China trade deficit is solved, there will be no deal," he told reporters, according to Reuters.

The comments come amid rising fears of a renewed trade war—dubbed by analysts as Trade War 2.0—that threatens to disrupt global supply chains and add pressure to the consumer price index (CPI). The situation follows Trump’s return to the presidency as the 47th President of the United States after the 2024 election. During his campaign, Trump promised to impose 60% tariffs on Chinese imports, a pledge he has quickly moved to honor since taking office on January 20, 2025.

Trump brushed off concerns over market volatility, stating that “sometimes you have to take medicine,” signaling his administration’s readiness to bear short-term economic pain for long-term trade reform. He dismissed the notion that recent market declines were intentionally provoked by his policy actions, insisting that the course of action is necessary to rebalance US-China trade.

US Commerce Secretary Howard Lutnick backed the President’s approach, stating on Sunday that existing tariffs would not be postponed and will remain in effect for the foreseeable future. “The policy will remain in place for days and weeks,” Lutnick confirmed, reinforcing Trump’s commitment to confront China’s trade practices head-on.

Treasury Secretary Scott Bessent also weighed in, noting that over 50 countries have approached the US for negotiations since the new administration took office. However, he remained skeptical, stating, “They’ve been bad actors for a long time, and it’s not the kind of thing you can negotiate away in days or weeks.”

The renewed US-China economic conflict reflects a continuation of tensions that first escalated in early 2018 when Trump, in his first term, launched an aggressive trade campaign against China. Alleging intellectual property theft and other unfair commercial practices, Trump imposed a series of tariffs on Chinese goods. Beijing responded with retaliatory actions, targeting key US exports like soybeans and automobiles. The standoff eventually led to the signing of the US-China Phase One trade deal in January 2020. However, the outbreak of the COVID-19 pandemic soon diverted global attention from the issue.

Now, with Trump back in office, a new chapter in the US-China protectionism saga appears underway. As both countries brace for further economic fallout, businesses and investors worldwide are preparing for the renewed uncertainty that may accompany Trump’s hardline stance on trade.