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Geopolitical Issues in US-China Trade Talks

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On July 21, US Treasury Secretary Scott Bessent stated that the Trump administration is in no rush to finalize a trade agreement with China, emphasizing that negotiations are still ongoing. Bessent also indicated that the talks may extend beyond tariff-related matters to include “other issues.”

Referring to these “other issues,” Bessent highlighted China’s cooperation with Iran and Russia. He noted that Beijing remains a significant purchaser of sanctioned Iranian and Russian oil, suggesting that these topics could also become part of the broader trade negotiations.

In response, Chinese Foreign Ministry spokesperson Guo Jiakun reiterated Beijing’s established stance on tariffs:

“We hope the US will work with China to implement the important consensus reached by the two heads of state during their phone call, make full use of the China-US economic and trade consultation mechanism, enhance mutual understanding through dialogue and communication, reduce misunderstandings, strengthen cooperation, and promote the stable, sound, and sustainable development of China-US relations.”

It is worth noting that, while the Trump administration has recently issued cautiously optimistic messages regarding trade negotiations, Chinese officials have maintained a more neutral tone. On July 18, Chinese Commerce Minister Wang Wentao stated that recent bilateral talks demonstrated there is “no need” for a tariff war between the two nations. He added that both parties now understand their mutual interdependence, as many of the goods and services they exchange are “irreplaceable.” Wang also underscored the burden imposed by the current US tariffs on Chinese goods, which stand at 53.6%.

Earlier, on July 17, Liu Pengyu, a spokesperson for the Chinese Embassy in Washington, commented that recent US-China engagements have fostered high-level dialogue. He emphasized that the economic and trade consultation mechanism should serve to strengthen bilateral relations based on “equal attitude,” mutual „respect,” and a commitment to a “win-win” outcome.

Recent remarks by Chinese officials suggest that Beijing remains reluctant to make concessions in the ongoing tariff dispute. In this context, any attempt to expand the scope of trade negotiations to include China’s oil trade with Iran and Russia could further strain relations between the two countries.

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Tensions Between the U.S. and China Over Fentanyl

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On July 16, U.S. President Donald Trump signed the Halt All Lethal Trafficking of Fentanyl Act, also known as the HALT Fentanyl Act. The legislation addresses a growing crisis in American society: the rising rates of fentanyl trafficking and fentanyl-related deaths. In 2023 alone, fentanyl usage caused the deaths of 76,282 Americans. As such, combating this critical problem has become a key priority for the Trump administration.

However, the fentanyl issue has extended beyond domestic policy and has become a source of heightened tensions with China. In February 2025, President Trump imposed a 10% tariff on Chinese imports, citing China’s alleged role in facilitating the production and distribution of fentanyl. In a post published on the social media platform Truth Social, Trump claimed: “A large percentage of these Drugs, much of them in the form of Fentanyl, are made in, and supplied by, China.“

Following the signing of the HALT Fentanyl Act, Trump stated that China is currently paying the U.S. billions of dollars in tariffs to compensate for the damage caused by its involvement in the fentanyl trade. His remarks, however, also included a degree of optimism. He acknowledged that China is taking “big steps” to address the fentanyl issue and expressed confidence that “China is going to end up going from that to giving the death penalty to the people that create this.”

In response, Chinese Foreign Ministry spokesperson Lin Jian reiterated China’s longstanding position, stating that fentanyl is fundamentally an American issue and that the responsibility for it lies within the United States.

Lin criticized the imposition of fentanyl-related tariffs, arguing: “The U.S. has ignored China’s goodwill and insisted on imposing fentanyl tariffs on China, which severely undermines China-U.S. dialogue and cooperation on counternarcotics and significantly harms China’s interests. If the U.S. genuinely seeks to cooperate with China, it must acknowledge the objective facts and engage in dialogue on the basis of equality, mutual respect, and mutual benefit.”

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China in Japan’s 2025 Defense White Paper

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On July 15, the Japanese Ministry of Defense released its annual white paper, Japan’s Defense 2025, in which it characterizes China as an “unprecedented and greatest strategic challenge.”

During the presentation of the document, Japanese Defense Minister Gen Nakatani emphasized that, for the first time since World War II, global peace is facing a serious threat, and Japan finds itself in the most severe and complex security environment of the postwar era.

The 34-page white paper presents a pessimistic outlook for the Asia-Pacific region, highlighting the intensifying strategic competition between the United States and China, a dynamic that is contributing to a “dramatic” shift in the global balance of power.

The document notes that China is rapidly increasing its defense spending and enhancing its military capabilities, both quantitatively and qualitatively. It also details China’s expanding military activities across the Asia-Pacific, particularly in the East China Sea and around the Senkaku Islands, a territory administered by Japan but claimed by China, which refers to them as the Diaoyu Islands.

The white paper identifies the growing cooperation between China’s military and its coast guard as a critical threat. It argues that the deepening collaboration between the People’s Liberation Army (PLA) and the China Coast Guard, part of the People’s Armed Police, is aimed at enhancing China’s operational effectiveness in so-called “gray zone” situations, where the line between war and peace is intentionally blurred.

Taiwan is cited as a key example of such gray zone activity. The document warns that the PLA may employ coast guard forces to enforce a blockade or carry out military interventions against Taiwan. It specifically references the military exercises conducted by China on May 23, 2024, just three days after the inauguration of Taiwan’s new president, as an example of Beijing’s increasingly aggressive posture toward the island.

In response, China’s Ministry of Defense strongly criticized the Japanese white paper, dismissing its assessments as “false narratives.” The Chinese government accused Japan of exaggerating the so-called “China threat” as a pretext to ease its postwar constitutional restrictions on military activity.

“We urge the Japanese side to deeply learn from history, cease slandering and accusing China,” a spokesperson for China’s Defense Ministry stated.

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Challenges Facing TikTok in the US and Canada

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In April 2024, the United States enacted a law requiring TikTok’s transfer to a U.S.-based owner. Originally set to take effect in January, the law’s implementation was postponed by President Trump, who granted an additional 90 days to facilitate a potential agreement.

According to the law, TikTok’s Chinese parent company, ByteDance, would be permitted to retain only a 20% stake in the „American TikTok “. Crucially, ByteDance would be prohibited from controlling American TikTok’s algorithm or accessing its user data.

On July 4, President Trump told reporters that a deal was “pretty much” finalized. However, he noted that it would likely require approval from the Chinese Communist Party and added that talks with the Chinese side, either President Xi Jinping or one of his representatives, were expected to begin on July 7 or 8.

Chinese Foreign Ministry spokesperson Mao Ning refrained from commenting directly on Trump’s remarks. Instead, she reiterated China’s general stance:

“China has reiterated its principle and position on issues related to TikTok on multiple occasions.”

The Chinese Foreign Ministry has consistently urged the United States to provide an “open, fair, and non-discriminatory business environment.” It maintains that acquisitions and business operations, including those involving TikTok, should be determined independently by companies in accordance with market principles.

TikTok remains a key point of tension in U.S.–China relations. As of July 15, no final agreement has been reached. Under current U.S. law, ByteDance must divest from the American branch of TikTok by September 17, or the app will be banned in the U.S..

Meanwhile, TikTok is also facing regulatory challenges in Canada. In November 2024, the Canadian government ordered a suspension of TikTok’s operations due to national security concerns stemming from ByteDance’s ownership.

On July 2, TikTok CEO Shou Zi Chew sent a letter to Canadian Industry Minister Mélanie Joly requesting a meeting regarding the federal order. Chew warned that if the law takes effect, TikTok would be forced to halt operations in Canada, resulting in the layoff of 350 employees, the end of direct investments, and the suspension of support for Canadian content creators.

Chew argued that the previous Canadian administration’s decision was heavily influenced by developments in the United States. He emphasized that the order was issued by “a different government” under different circumstances and urged the new administration to review the decision. However, as of mid-July, Canadian officials have not responded to TikTok’s appeal.

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Intensified Sino-Russian Diplomatic Ties: Sergey Lavrov meets Wang Yi

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A recent series of high-level diplomatic engagements between Russian and Chinese foreign ministry officials has drawn considerable international attention. Despite officially maintaining a “neutral” stance on the war in Ukraine, Beijing appears to be deepening its diplomatic alignment with the Kremlin.

Following their meeting in Kuala Lumpur, Malaysia, on July 10, Russian Foreign Minister Sergey Lavrov met again with his Chinese counterpart, Wang Yi, on July 12. Lavrov’s visit is part of a broader trip that includes participation in the Shanghai Cooperation Organization (SCO) foreign ministers’ meeting.

During the bilateral meeting on July 12, Wang Yi underscored the strategic significance of Sino-Russian relations, stating:

“China-Russia relations represent the most stable, mature, and strategically significant major-country relationship in the world today, and both sides consistently view and advance cooperation across all domains from a historical, strategic, and long-term perspective.”

According to a statement released by the Chinese Foreign Ministry, the two countries’ current diplomatic priorities include preparing for upcoming high-level exchanges, strengthening comprehensive strategic coordination, and jointly addressing the challenges of an increasingly turbulent and complex global environment.

In this context, Russian Presidential Aide Yuri Ushakov has confirmed that President Vladimir Putin will make an official visit to Beijing from August 31 to September 3. During the visit, Putin is expected to attend the SCO Leaders’ Summit and hold bilateral talks with Chinese President Xi Jinping.

Subsequently, on July 13, Lavrov and Wang Yi continued their discussions, focusing on the current dynamics of their respective countries’ relations with the United States and the prospects for ending the war in Ukraine. Both ministers also reaffirmed their intention to enhance coordination within major international forums, including the United Nations, G20, BRICS, and APEC.

These intensified diplomatic efforts between Moscow and Beijing come amid mounting Western pressure on Russia. The European Union is reportedly preparing its 18th package of sanctions against Moscow. Concurrently, U.S. President Donald Trump has recently intensified his criticism of Russian leadership. Furthermore, reports suggest that Trump is expected to announce a new aid package for Ukraine on July 14.

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US-China Dialogue at ASEAN: Tariffs and Geopolitical Challenges

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On July 11, 2025, a high-level meeting took place between U.S. Secretary of State Marco Rubio and Chinese Foreign Minister Wang Yi in Kuala Lumpur, the capital of Malaysia, on the sidelines of the Association of Southeast Asian Nations (ASEAN) Foreign Ministers’ Meeting.

The primary topic of discussion at the meeting was the extensive tariffs imposed by U.S. President Donald Trump’s administration, which have led to global economic uncertainty. Chinese Foreign Minister Wang Yi strongly criticized these measures, calling them “typical unilateral bullying behavior” and noting that they undermine the free trade system and hinder the stability of the global supply chain. He also stated that these U.S. actions deprive Southeast Asian countries of their legitimate right to development.

Malaysian Foreign Minister Mohamad Hasan emphasized the need to deepen regional economic integration to better protect against external shocks, as ASEAN countries are among the most affected by U.S. tariffs, potentially impacting the region’s projected economic growth. In a joint communiqué, ASEAN foreign ministers affirmed that unilateral tariffs are “counterproductive and increase the risk of global economic fragmentation.”

Beyond trade issues, other pressing geopolitical matters were on the agenda for the U.S.-China dialogue. U.S. concerns about China’s support for Russia in the war in Ukraine were highlighted, with the observation that China is “ready to help them as much as possible.” China, however, consistently maintains a neutral stance regarding the Ukraine conflict.

The issue of Taiwan was also discussed. The U.S. expressed concern about China’s increasing military pressure on the island. Regarding the South China Sea, Wang Yi stated that the territory is a “common home” for regional countries and not an “arena for major powers to demonstrate,” emphasizing the need for cooperation and peaceful resolution. Furthermore, China expressed readiness to expand cooperation with ASEAN countries in marine environmental protection, navigation safety, and maritime law enforcement. However, Rubio noted that many Southeast Asian countries are concerned about China’s dominance and wish to cooperate with the U.S.

At the ASEAN meeting, Wang Yi emphasized China’s importance as “the most reliable stabilizing force in a turbulent world” and “the most reliable partner for ASEAN members to overcome challenges.” He called on all parties to support multilateralism and strengthen cooperation in the digital economy, artificial intelligence, and green development. Although no detailed joint statement was released after the U.S.-China meeting, Rubio described the talks as “very constructive and positive.”

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China: A Hidden Actor in the Ukraine War

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While officially maintaining a stance of neutrality in the Ukraine conflict, China is increasingly under international scrutiny for its alleged support of Russian aggression. Recent developments suggest that Beijing is covertly leveraging the war for economic and political advantage, while simultaneously aiding Russia’s military efforts.

On July 9, Ukrainian authorities detained two Chinese nationals accused of attempting to transfer classified information to Chinese intelligence. According to Ukrainian officials, the individuals had recruited a Ukrainian citizen with access to sensitive defense technologies, including data related to the Neptune missile system.

In response, a Chinese Foreign Ministry spokesperson stated on July 10 that Beijing was “verifying” the information provided by Ukraine. The spokesperson added that if Chinese citizens were involved, their “lawful rights of Chinese citizens need to be safeguarded.”

These developments followed a July 8 Bloomberg investigation revealing a covert collaboration between the Russian drone manufacturer Aero-HIT, currently under international sanctions, and the Chinese company Autel Robotics. According to the report, the two firms have been in negotiations since 2023 with the goal of manufacturing 10,000 drones annually in Russia.

That same day, Ukrainian President Volodymyr Zelensky imposed sanctions on five Chinese companies: Central Asia Silk Road International Trade, Suzhou Ecod Precision Manufacturing, Shenzhen Royo Technology, Shenzhen Jinduobang Technology, and Ningbo BLIN Machinery. These firms were found to be supplying components to Russian entities for drone production. Some of these parts were reportedly discovered in Shahed drones used by Russia in airstrikes on Kyiv on July 4.

Since the start of Russia’s invasion of Ukraine, numerous reports have emerged alleging that Chinese companies and nationals are aiding Moscow’s war effort. Despite this, Beijing continues to deny any involvement, insisting it remains a neutral party. However, on July 4, Chinese Foreign Minister Wang Yi met with European Union representative Kaya Kallas and reportedly declared that a Russian defeat in the conflict would be unacceptable to Beijing. Accounts of the meeting confirm that China is making every effort to prevent such an outcome.

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China and South Korea seek to keep relations on the “right track”

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A telephone conversation on June 11 between Chinese President Xi Jinping and new South Korean President Lee Jae-myung aimed to deepen strategic cooperation. Xi Jinping noted that stable relations between the two countries contribute to regional and global peace.

The Chinese leader emphasized that China and South Korea are “close neighbors” who have successfully overcome ideological differences and achieved common development over 33 years of diplomatic relations. Both sides agreed to strengthen exchanges to foster strategic mutual trust. They also highlighted the importance of enhancing bilateral cooperation to protect the multilateral system and free trade, which ensures the stability of global supply chains.

For many countries in the Asia-Pacific region, including South Korea, China is a critical economic partner. Regional countries are significantly dependent on China’s market for their exports, as well as on Chinese investments and tourism. China’s economic growth and industrial power strengthen regional supply chains. Due to this interdependence, regional countries often try to balance their security interests within alliances with the U.S. and their economic interests with China, which necessitates a pragmatic diplomatic approach.

Lee Jae-myung’s victory in the South Korean elections potentially shifts Seoul’s foreign policy, particularly concerning China. Relations were strained under the previous administration due to the U.S. deployment of the THAAD missile system in Korea and South Korea’s participation in technology sanctions against China. Lee Jae-myung, who supports “pragmatic diplomacy,” seeks to balance relations between the U.S. and China. His government’s priority is to restore partnership with China, as China is South Korea’s largest trading partner, with bilateral trade reaching 328.08 billion USD in 2024. Lee Jae-myung also urged China to play a “constructive role” in the denuclearization of the Korean Peninsula.

During the telephone conversation, Lee Jae-myung noted that he affirmed his readiness to work with the Chinese side to deepen bilateral relations, including supporting the Confucian-Islamic Civilizations Dialogue initiative, which aims to enhance exchanges between peoples and deepen the integration of civilizations. This initiative, proposed by Malaysia, underscores the potential for strengthening cultural exchanges in the region.

Western analysts are cautiously assessing the diplomatic maneuvers of South Korea’s new president, Lee Jae-myung. Although Seoul supports “pragmatic diplomacy” and seeks to improve relations with China, there are concerns in the West that this approach could come at the expense of weakening its strategic alliance with the United States, especially as Washington seeks to contain China’s growing influence in the region. Furthermore, China’s role in the denuclearization of the Korean Peninsula is often viewed skeptically in the West, as Beijing remains North Korea’s main diplomatic and economic ally.

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China-US Tensions Over Taiwan

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Tensions continue to escalate in the relationship between the United States and China, particularly concerning the issue of Taiwan. The administration of US President Donald Trump actively supports Taiwan, which draws sharp reactions from Beijing. China’s Ministry of Foreign Affairs strongly protested over the weekend against the US Secretary of Defense’s statement, where he noted that China poses an imminent threat to Taiwan – a self-governing island that Beijing considers its own territory.

New initiatives aimed at strengthening Taiwan’s defense capabilities are likely being discussed in the American legislative bodies. These steps, set against the backdrop of restrictions imposed by the Trump administration on China (such as hindering access to critical technologies), further exacerbate the situation. China views any US interference in the Taiwan issue as a “serious provocation” and warns Washington that such actions threaten regional stability. Beijing firmly adheres to the “One China” principle, which it considers the inviolable foundation of its national sovereignty.

The White House asserts that President Trump and Chinese President Xi Jinping will likely speak this week, though there has been no confirmation from the Chinese side. A spokesperson for China’s Ministry of Foreign Affairs stated that Beijing has no information regarding such a call. Analysts speculate that China will only agree to such a call if assured that there will be no unexpected statements or actions from the US regarding the Taiwan issue.

Amidst this tension, US President Donald Trump noted in his Truth Social post that Xi Jinping is “extremely hard to make a deal with,” despite the fact that he has “always liked” the Chinese leader. This rhetoric once again highlights the deep disagreements between the two countries, particularly on issues of sovereignty and regional influence, where Taiwan occupies a central place.

The geopolitical tension is further amplified by the White House’s confirmation that a call between Trump and Xi will likely take place this week, as the two countries continue to argue over trade. The main point of contention appears to be critical minerals, as US officials complain that Beijing hasn’t accelerated the export of materials needed for cutting-edge electronics. These trade disputes are directly linked to the Taiwan issue, as Taiwan is a leading global producer of microchips, further increasing its strategic importance in global competition.

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China Launches New Economic Cooperation with ASEAN and GCC

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China, together with the Association of Southeast Asian Nations (ASEAN) and the Gulf Cooperation Council (GCC), announced new plans for economic cooperation during a trilateral summit held in Kuala Lumpur. This initiative comes in response to the high tariffs imposed by U.S. President Donald Trump, which have heightened tensions in global trade.

Chinese Premier Li Qiang stated at the summit that ASEAN and the GCC will jointly establish a “vibrant economic circle.” This cooperation aims to strengthen free trade and promote the free flow of resources, technologies, and investments.

The trilateral summit, held in Malaysia’s capital, highlights the unity among countries of the Global South. The combined GDP of ASEAN, the GCC, and China stands at $24.87 trillion, with a total population of 2.15 billion, accounting for a quarter of the global economy. Malaysian Prime Minister Anwar Ibrahim emphasized that this collaboration creates “tremendous opportunities” for innovation and investment.

China underlined the importance of free trade agreements. It was announced at the summit that the upgrade of the China-ASEAN Free Trade Agreement has been completed, while negotiations for a GCC-China agreement are nearing conclusion. These developments aim to reduce dependence on the U.S. market and enhance the economic resilience of the Global South. China also seeks to deepen cooperation in areas such as the digital economy, green energy, and finance. Premier Li Qiang proposed a “deep strategic development” framework with ASEAN and GCC countries and encouraged the use of local currencies to reduce reliance on the U.S. dollar.

Under Malaysia’s chairmanship of ASEAN for 2025, the summit also addressed global challenges, including the 32–49% tariffs imposed by the U.S., which have significantly affected six ASEAN member states. Prime Minister Anwar Ibrahim stated that ASEAN remains neutral but views cooperation with China as a “stable partnership”.

Other issues discussed at the summit included the civil war in Myanmar, where participants expressed support for bilateral solutions and ceasefire initiatives. China also backed Malaysia’s proposed Confucian-Islamic civilizations dialogue, aimed at fostering people-to-people exchanges and deeper civilizational integration.

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