(Bloomberg) — President Donald Trump’s administration signaled openness Sunday to a deal with China to quell fresh trade tensions while also warning that recent export controls announced by Beijing were a major barrier to talks.
Vice President JD Vance called on Beijing to “choose the path of reason” in the latest spiraling trade fight between the world’s two leading economies, claiming that Trump has more leverage if the fight drags on.
Most Read from Bloomberg
Trump later posted a statement that hinted at a possible off-ramp for Chinese President Xi Jinping while issuing a veiled threat that a full trade war would wound China.
“Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!” he wrote on Truth Social.
The remarks from Trump and Vance suggest that the US wants to keep up the pressure on China to reverse its most recent trade moves, while trying to reassure spooked markets that a tit-for-tat escalation isn’t inevitable.
“The recent policy moves suggest a wider range of potential outcomes than appeared to be the case ahead of the last few key US-China meetings,” Goldman Sachs Group Inc. economists including Jan Hatzius and Andrew Tilton wrote in a note.
“The most likely scenario seems to be that both sides pull back on the most aggressive policies and that talks lead to a further — and possibly indefinite — extension of the tariff escalation pause reached in May.”
Stocks, oil and crypto were hammered Friday by the flare-up, which was stoked by a social media post from Trump threatening the US would respond to China’s imposition of export curbs on rare earths and other trade measures. US futures jumped in early Asia trading Monday after Trump’s Sunday comments.
Vance cast it all as an ongoing negotiation.
“It’s going to be a delicate dance, and a lot of it is going to depend on how the Chinese respond,” Vance said on Fox News’s s. “If they respond in a highly aggressive manner, I guarantee you, the president of the United States has far more cards than the People’s Republic of China. If, however, they’re willing to be reasonable,” he said, then the US would, too.
China’s Ministry of Commerce said earlier Sunday the US should stop threatening it with higher tariffs and urged further negotiations to resolve outstanding trade issues.
“Threatening with high tariffs at every turn is not the right way to get along with China,” the Commerce Ministry said. “If the US persists in its own course, China will resolutely take corresponding measures to safeguard its legitimate rights and interests.”
Tensions flared over the past week when China announced new export controls and other measures — though some don’t take effect until November, or may not be widely enforced.
“I think it’s become very clear to everybody that this power grab by the Chinese won’t be tolerated,” US Trade Representative Jamieson Greer said on Fox News’s .
An apparently furious Trump announced Friday that he would add tariffs of 100% on Chinese goods and restrict certain US software exports, beginning Nov. 1, while also signaling he might halt shipments of aircraft parts. But Trump also said he picked a November date for negotiations.
“Let’s see what happens,” Trump told reporters Sunday on Air Force One as he headed to the Middle East. “You know for me, you know what November 1 is? It’s an eternity. November 1 is an eternity for me. For somebody else, is right around the corner. For me, when I hear November 1, it’s an eternity.”
Greer pointed to that deadline as a reason for hope that the market turmoil will settle this week.
“I think that is normal reaction for the markets to have some concern,” Greer said. “That being said, these measures aren’t in place yet. It’s scheduled for Nov. 1. So I think we’ll see the markets calm this coming week, as they see things settle out, hopefully.”
The Goldman economists said China’s recent moves may suggest a push for greater concessions from the US, potentially leading to a “market-positive outcome” where some US tariffs are lowered. However, there’s also the risk of a negative outcome where the US and China reimpose triple digit tariffs.
Leverage Bets
Vance, who said he had spoken with Trump Saturday and Sunday, said the president “appreciates the friendship that he’s developed with Xi,” but added, “We have a lot of leverage. And my hope, and I know the president’s hope, is that we don’t have to use that leverage.”
He added that the good relationship is threatened “if the Chinese go down this pathway of cutting off the entire world from access to some of the goods that they produce.”
Greer on Sunday cited wording in the Chinese Commerce Ministry statement that said export controls aren’t the same as a ban on exports.
“Clearly, the Chinese have realized that they have wildly overstepped the bounds of what’s acceptable,” he said.
The two superpowers engaged in a spiraling trade fight this spring, ratcheting up tariffs to at least 125% on each side, before striking a deal to retreat to current levels — Chinese levies of 10% on US goods, and a combined US levy of 30% on imports from China, on top of preexisting tariffs.
“We’re going to find out a lot in the weeks to come about whether China wants to start a trade war with us, or whether they actually want to be reasonable. I hope they choose the path of reason,” Vance said.
–With assistance from Malcolm Scott.
(Updates with comment from Goldman Sachs economists in sixth and seventh paragraphs, adds markets in eighth and quote from China’s Ministry of Commerce in 12th.)
Most Read from Bloomberg Businessweek
©2025 Bloomberg L.P.
The post Trump, Vance Open Door to China Deal as Trade Spat Drags On appeared first on Bloomberg.
