US President Donald Trump (L) and China\u2019s President Xi Jinping shake hands as they arrive for talks at the Gimhae Air Base, located next to the Gimhae International Airport in Busan on October 30, 2025. Donald Trump and Chinese leader Xi Jinping will seek a truce in their bruising trade war on October 30, with the US president predicting a \u201cgreat meeting\u201d but Beijing being more circumspect. (Photo by ANDREW CABALLERO-REYNOLDS \/ AFP) (Photo by ANDREW CABALLERO-REYNOLDS\/AFP via Getty Images) <\/p>\n
Andrew Caballero-reynolds | Afp | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
The U.S. Supreme Court\u2019s decision to strike down President Donald Trump\u2019s sweeping tariffs has strengthened China\u2019s hand ahead of a summit with his counterpart Xi Jinping, where Beijing is expected to push for reduced U.S. support for Taiwan, analysts said. <\/p>\n
In a ruling Friday, the court said<\/a> Trump wrongfully invoked the International Emergency Economic Powers Act (IEEPA) to implement broad tariffs. <\/p>\n That decision has weakened Trump\u2019s negotiating leverage as he prepared for a trip to Beijing in April, said Wendy Cutler, senior vice president at the Asia Society Policy Institute.<\/p>\n \u201cHe has effectively had his wings clipped on his signature economic policy,\u201d said Cutler, who was also a former U.S. trade representative. <\/p>\n Trump will visit China from March 31 to April 2, the first trip by an American president since his last visit in 2017. Xi is also expected to make a state visit to Washington later this year. <\/p>\n Analysts said the ruling could change the dynamics around efforts to extend a trade truce negotiated last year and complicate Trump\u2019s push for Beijing to buy large quantities of U.S. soybeans, Boeing aircraft and energy exports.<\/p>\n \u201cIt limits Trump\u2019s ability to deploy tariffs at will, reduces pressure on Beijing to expand soybean purchases or ease rare earth access, and gives China leverage to push for the removal of the remaining 10% tariffs linked to fentanyl,\u201d said Dan Wang, China director of Eurasia Group. <\/p>\n For Beijing\u2019s part, it could use the opportunity to press Washington to\u00a0ease technology export controls, remove certain Chinese entities from U.S. sanctions lists, and cut back arms sales to Taiwan, said Xinbo Wu, director at Fudan University\u2019s Center for American Studies.<\/p>\n \u201c[The ruling] certainly helps strengthen China\u2019s position in its negotiation with the U.S,\u201d Wu said.<\/p>\n<\/div>\n While Trump\u2019s tariff authority may be somewhat diminished, he could deploy non-tariff measures, such as technology controls and sanctions against Chinese entities, as negotiating tools, experts said. <\/p>\n \u201cThe measures with real structural impact remain non-tariff tools,\u201d said Wang. These include expanded export controls on advanced chips and broader restrictions against Chinese tech firms, Wang said.<\/p>\n The U.S. stance on the Taiwan issue, disputes over the South China Sea and security ties with Japan and Korea still rest largely with Trump, he added. <\/p>\n In a statement<\/a> Monday, China\u2019s commerce ministry said it is currently assessing the impacts from the implementation of the ruling, while urging the U.S. to remove all unilateral tariffs against its trading partners. <\/p>\n \u201cChina and the U.S. both stand to gain from cooperation and lose from confrontation,\u201d according to the ministry\u2019s statement translated by CNBC. <\/p>\n<\/div>\n Following the Supreme Court\u2019s ruling, Trump responded with a 10% global tariff under Section 122 of the Trade Act of 1974 \u2014 before raising it further to 15%, which the president said would be \u201ceffective immediately.\u201d<\/a> <\/p>\n In a Truth Social post<\/a> on Saturday, Trump dangled a warning that more tariffs would follow: \u201cDuring the next short number of months, the Trump Administration will determine and issue the new and legally permissible Tariffs.\u201d <\/p>\n It remains unclear if any official documents have been signed detailing the timing. A White House fact sheet issued Friday<\/a> said the original 10% tariffs would go into effect on Tuesday, Feb. 24, at 12:01 a.m. ET. <\/p>\n Before the ruling, Washington had imposed an additional 20% tariff on Chinese exports last year \u2014including a 10% reciprocal tariff and a 10% fentanyl-related tariff \u2014 citing IEEPA authority. The Supreme Court\u2019s ruling implies a net reduction of around 5% in U.S. tariffs on China, according to Goldman Sachs. <\/p>\n \u201cOverall, this development suggests upside risk to our positive outlook on Chinese exports this year,\u201d Goldman said. <\/p>\n A study by the trade monitoring body Global Trade Alert<\/a> also named China among the top winners under the revised Section 122 tariff regime, with a 7.1 percentage point reduction in tariff rates. <\/p>\n John Gong, a former consultant to China\u2019s commerce ministry, said that Beijing is not \u201cbetting their strategy on the dispute between the executive and judicial branches of the [U.S.] government, although a lower tariff rate \u2018is something nice to have.'\u201d <\/p>\n<\/div>\n The Office of the U.S. Trade Representative said in October last year that China\u00a0appeared not to have met its commitments<\/a>\u00a0to expand market access, lower non-tariff barriers, and ramp up purchases of U.S. goods and services, despite repeated U.S. engagement to address implementation concerns. <\/p>\n \u201cOnce the U.S. has decided that a country is an \u2018unfair\u2019 trade partner, Section 301 comes with substantial flexibilities to use tariffs or other measures,\u201d said Deborah Elms, head of trade policy at the Hinrich Foundation. <\/p>\n China said Monday that it is \u201cwatching closely\u201d the U.S. move in using trade investigations to maintain higher tariffs, vowing to \u201cfirmly safeguard\u201d Chinese interests.<\/p>\n The ruling may have a limited impact on broader U.S.-China relations, said Scott Kennedy from the Center for Strategic and International Studies, who noted that tensions extend beyond tariffs. <\/p>\n \u201cThe [Supreme Court] ruling doesn\u2019t upend U.S.-China relations the way it might to U.S. ties with its allies and others, because China had already gained the upper hand,\u201d he said. <\/p>\n<\/div>\n Kennedy expects the April summit to yield limited results, such as an extension of the ceasefire and sales of U.S. products, but progress is unlikely on thornier issues such as clear guidelines for export controls or rebalancing China\u2019s economy.<\/p>\n During a phone call earlier this month, Xi asserted to Trump that Taiwan is the \u201cmost important issue\u201d<\/a> in U.S.-China relations \u2014 overshadowing the commercial deals Trump touted at the time, including Chinese purchases of American energy and agricultural products.<\/p>\n Upcoming talks between the two leaders may prove more political than economic, said Minxin Pei, a\u00a0professor of political science at Claremont McKenna College. <\/p>\n Xi might be \u201copen to giving Trump a better commercial deal\u201d in exchange for a statement on Taiwan that Beijing could claim as a victory, Pei said. <\/p>\nNon-tariff tools <\/h2>\n
301 Section investigation<\/h2>\n
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