China just raised the stakes in its standoff with Washington. Despite President Trump's recent attempts to dial down the rhetoric and hint at possible tariff relief, Beijing isn't budging. A spokesperson from China's Commerce Ministry flatly rejected any notion of progress, calling U.S. claims of renewed dialogue “groundless.” The message: if the U.S. wants to talk, it needs to first undo the damage—starting with a full rollback of unilateral tariffs, now as high as 145%. China also made it clear that future talks hinge on more than just kind words; Washington needs to get serious about core issues like sanctions and Taiwan.
While Trump has publicly said “everything's active” and even tried reconnecting with Xi Jinping, Beijing is keeping its distance. Chinese officials, including central bank governor Pan Gongsheng, warned at the G20 that prolonged friction could erode trust in the global economic system. No face-to-face meetings have been scheduled. And even as Trump softens his tone, China's Defense Ministry blamed the U.S. for souring military ties, adding to the pile of unresolved tensions. From Beijing's perspective, symbolic gestures won't cut it—Washington must first “show sincerity” before anything moves forward.
On the economic front, China may hold off on launching new stimulus, at least for now. First-quarter GDP came in strong at 5.4%, giving policymakers breathing room. But pressure is building. The Politburo's upcoming meeting could reveal whether Beijing plans to prop up its export engine, especially if tariffs start to bite harder. Conglomerates such as Tesla (TSLA, Financial), heavily exposed to China's trade mood, remain vulnerable as the geopolitical fog thickens. Until both sides back their words with action, investors shouldn't expect a clear runway anytime soon.
