As the U.S. Supreme Court ruled invalid the reciprocal tariff that President Donald Trump imposed on each country, assessments said the framework of U.S.-China trade talks is tilting toward China. As a result, Chinese President Xi Jinping is seen to have secured a negotiating edge ahead of a summit with President Trump about a month away.
According to Bloomberg and others on the 22nd local time, the White House said President Trump will visit China for three days from Mar. 31 to Apr. 2 for a summit with Xi. It will be the first time in nine years since 2017, Trump's first term. Trump also said he plans to invite Xi to the White House at the end of this year, signaling a desire to stabilize relations. The two leaders recently spoke by phone and discussed key issues including trade, Taiwan, the Russia-Ukraine war, and tensions with Iran.
A U.S. Supreme Court ruling ahead of Trump's visit to China next month is expected to have a significant impact on the negotiating landscape. On the 20th, the Court invalidated the broad tariff measures the Trump administration had imposed on various countries under the International Emergency Economic Powers Act (IEEPA). The Court found the measures illegal as they exceeded presidential authority. With this decision, the 20% tariff that the Trump administration applied to China (a 10% fentanyl tariff and a 10% reciprocal tariff) has been removed. Itemized tariffs on Chinese products imposed under trade law remain in place.
With the tariff threat—once as high as 145%—removed, experts said it will become much harder for Trump to press China to expand purchases of U.S. soybeans, aircraft and energy.
Wu Xinbo, director of the Center for American Studies at Fudan University, told Bloomberg, "With this Supreme Court ruling, China will have a much stronger negotiating position," adding, "In the past, China's pledge to buy about 25 million tons of soybeans was linked to tariff talks, and if the tariffs are deemed illegal, the 'soybean card' goes back into China's hands." Darin Fessler, senior adviser at Lakefront Futures, also told Reuters, "U.S. soybeans are still more expensive than Brazil's," adding, "If it isn't forced, why would China buy American?"
In future talks with the United States, China is expected to push harder for expanded access to U.S. advanced semiconductors, the lifting of trade sanctions on Chinese corporations, and a scaling back of U.S. military support for Taiwan. There is also talk that China could again brandish rare earth exports as leverage.
However, because the Trump administration is still moving to impose tariffs using Sections 301, 232 and 122 of trade law, some say the ruling will not lead to a fundamental shift in the U.S.-China power struggle. China is also under a Section 301 investigation over whether it has complied with the first-term trade deal.
Zhou Mi, a researcher at a think tank under China's Ministry of Commerce, said, "The ruling made clear that administrative authority cannot be exercised beyond the scope originally granted, but the Trump administration can still pursue its policy goals through other authorities."