China pushed back against the United States’ trade proposals on Thursday, demanding the complete removal of tariffs. Commerce Ministry spokesman He Yadong dismissed ongoing reports of trade talks, calling them “groundless.” He stated, “The US should thoroughly remove all unilateral tariffs if it really wants to solve the problem.”
In a separate statement, China’s central bank governor Pan Gongsheng warned that rising global tensions could create “high friction, low trust.” He stressed the need for stronger international cooperation as US-China trade discussions continue to stall, despite President Trump’s recent softer stance on tariffs.
Stocks fell on Thursday after a surge the previous day, which had been fueled by hopes of easing trade tensions between the two countries. On Wednesday, Treasury Secretary Scott Bessent denied reports suggesting the White House might unilaterally cut tariffs, insisting that both sides must take action. “This is the equivalent of an embargo,” he stated, adding that current tariff levels are unsustainable.
President Trump had previously hinted at a reduction in tariff levels, stating on Tuesday that “145% is too high” and that tariffs would be reduced substantially. He also expressed optimism about the ongoing talks, saying he planned to adopt a “very nice” approach to reach an agreement.
The trade conflict between the US and China has intensified in recent weeks. China raised its tariffs on US imports to 125% from 84%, while the US increased its tariffs on Chinese goods, implementing a 125% reciprocal tariff, a 20% tariff to address the fentanyl crisis, and Section 301 tariffs on specific products ranging from 7.5% to 100%.
In its latest earnings report, Tesla became one of the first major companies to report the impact of the trade war. The company said its production of the Optimus household robot was disrupted due to China’s recent rare earth export restrictions.
Meanwhile, on Tuesday, US Vice President JD Vance and Indian Prime Minister Narendra Modi signaled progress in their negotiations, covering areas like technology, defense, and energy.
Investors are also paying attention to potential delays and exemptions. Trump is reportedly planning to exempt some auto parts from tariffs after suspending duties on certain consumer tech items. However, he maintains that these tariffs will eventually take full effect. The baseline 10% tariff that took effect on April 5 remains in place for all affected imports into the US.
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