China’s foreign policy in 2025 was dominated by trade tension and economic disputes triggered by U.S. President Donald Trump’s efforts, in his second term, to use tariffs to reshape global commerce in Washington’s favor.
Relations between the world’s two largest economies were debated less around political flashpoints than around trade and the economy, with commerce advisers and economic officials taking center stage in talks that once belonged to diplomats and defense figures.
The disputes widened on multiple fronts. On one side, Washington increased tariffs and imposed restrictions in the chip sector, while on the other side, Beijing moved to control critical minerals and rare earth elements that underpin global supply chains.
As commercial frictions grew and uncertainty rose over shifting global power balances under Trump’s new term, Beijing also sought to safeguard its ties with Russia.
At the same time, China pushed a foreign-policy message of multipolarity against what it cast as unilateralism.
The trade confrontation accelerated after Trump imposed additional duties on trade partners on April 2, including China, prompting Beijing to retaliate and igniting a tariff war.
After weeks of escalation, the U.S. raised tariffs on China to 145 percent, while China lifted tariffs on U.S. goods to 125 percent.
With tensions climbing, U.S. and Chinese officials held negotiations in different parts of the world to address tariffs and broader economic disputes.
In those talks, the sides twice suspended mutual tariff increases for 90-day periods and, after a fifth round of negotiations, said they had agreed on a provisional framework for resolving economic disagreements.
The understanding was presented at a meeting between Trump and Chinese President Xi Jinping on Oct. 30 in Busan, South Korea.
The Busan talks did not settle the core disputes. Instead, they effectively deferred issues ranging from tariff hikes and technology restrictions to controls on rare earth elements and tit-for-tat measures in maritime trade.
On tariffs, Washington said it would cut an additional 20 percent duty imposed on China over fentanyl and precursor chemicals to 10 percent, while postponing an additional 24 percent tariff for one year from Nov. 10.
On export controls, the U.S. said it would delay by a year the application of a rule expanding sanctions to subsidiaries majority-owned by foreign firms on its export blacklist, while China agreed to delay by a year measures linked to its controls on rare earth exports.
Shipping also became part of the standoff. After a Section 301 probe targeting China’s maritime, logistics and shipbuilding sectors, the U.S. moved toward port fees on Chinese vessels using U.S. ports, and Beijing announced retaliatory steps — with both sides later saying they would postpone these measures for one year.
China also approved the transfer of TikTok — which faced possible closure in the United States over data security concerns — from its Chinese owner to a consortium of U.S. and international partners.
Trump’s second term also brought a shift in how Washington framed competition with China, with the president openly favoring tariffs as a tool to attract investment, revive domestic manufacturing and strengthen economic security.
In a March interview with Fox News, Trump argued that closer China-Russia ties were the result of misguided policies by previous U.S. administrations and warned against the two powers moving closer.
Beyond China policy, Trump’s new term also saw high-profile statements — including threats to “take back” the Panama Canal, as well as remarks on Greenland, Canada and Gaza — that added to global uncertainty watched closely in Beijing.
Against that backdrop, China kept stressing “multilateralism against unilateralism” and “multipolarity against hegemony,” while highlighting closer alignment with the non-Western developing world it calls the “Global South.”
